Citation Codes

Equivalent Citations

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Case Number

Criminal Revn. No. 378 of 1948

Advocates

N.K. Basu and Pashupati Ghose - for Petitioner
P.B. Mukherjee and N.C. Talukdar

Judges

R.P Mookerjee
Das Gupta, JJ.

Acts

Sections 222(1) and 265 of the City of Bombay Municipal Act, 1888 (the corresponding sections of the Calcutta Municipal Act, Bengal Act III[3] of 1923
provisions contained in Section 421 of the Calcutta Municipal Act,
Section 386 read with sch. 19 of the Calcutta Municipal Act,
Section 123 of the Bengal Muncipal Act (Bengal Act XV[16]
SECTION 205 GOVERNMENT OF INDIA ACT
Section 366 of the Calcutta Municipal Act. Summons
Section 386(1)(a) of the Calcutta Municipal Act;
Section 386 of the Calcutta Municipal Act,
Section 176 of the Calcutta Municipal Act,
provisions of the Calcutta Municipal Act
sections of the Bombay Municipal Act.12.
26, Calcutta Municipal Act,
GOVERNMENT OF INDIA ACT
INCOME TAX ACT

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Smart Summary

Structured Summary of the Provided Opinion

Factual and Procedural Background

A complaint was filed by the Corporation of Calcutta alleging that premises No. 43, Dharam Tola Street, Calcutta, was being used (or permitted to be used) as a grains, flour and atta shop without obtaining a licence for the year 1945–1946 under Section 366 of the Calcutta Municipal Act. Summons were issued against the opposite party. The Municipal Magistrate, Calcutta, by order dated 1 March 1948, acquitted the accused on two principal grounds: (1) the storing of grains in the premises was done by the Post and Telegraphs Department of the Government for the benefit of its employees and not for trade; accordingly it was not "storing" as contemplated by Section 386(1)(a) of the Calcutta Municipal Act; and (2) the statutory provisions could not bind the Crown. A rule was then issued challenging that order of acquittal and the present opinion decides that rule.

Legal Issues Presented

Whether Section 386 of the Calcutta Municipal Act (read with the relevant schedule) applies to the storing of specified articles irrespective of whether the storing is for purposes of trade.
How the sectional and sub‑headings (in particular the heading "Factories, trades and places of public resort") affect the scope and interpretation of Section 386.
Whether the Crown (Central Government) is bound by the licensing provisions of the Calcutta Municipal Act (specifically the provisions referred to in the opinion, including Section 421), in the absence of the Crown being expressly named in the statute.
Whether the admitted facts (storage of grains for distribution among Government department employees at concession rates) amount to "storing" or "trade" within the meaning of the statutory provisions.

Arguments of the Parties

Petitioner (Corporation of Calcutta) — Mr. Basu

Section 386 read with Schedule 19 is attracted whenever any of the items mentioned in the schedule are stored, irrespective of whether the storing is for the purposes of trade.
The provisions of Section 386 ought to be interpreted without reference to the sub‑heading "Factories, trades and places of public resort" (i.e., the heading should not limit the operation of the section).
Implicitly (from submissions seeking certification), questions of law of general importance arise but not necessarily under the Government of India Act.

Opposite Party (Respondent / Government department)

The storing of grains at the premises was by the Post and Telegraphs Department for the benefit of its employees (distribution at concession rates), and therefore not in the course of trade or business as intended by Section 386.
The statutory provisions cannot bind the Crown because the Crown is not expressly named in the Calcutta Municipal Act; by necessary implication the Crown is not bound.

Table of Precedents Cited

Precedent	Rule or Principle Cited For	Application by the Court
In re Carlton (1945) Ch. 372; 114 L.J. Ch. 289	Headings or prefatory words in statutes are regarded as preambles to the sections and may explain or limit the enactment when ambiguity exists.	The court relied on this authority to support the proposition that the sub‑heading "Factories, trades and places of public resort" must be taken into account in interpreting Section 386 and therefore that the section is not of general application to all premises.
Corporation of the City of Toronto v. Toronto Railway Co. (1907) A.C. 316 (76 L.J. P.C. 67)	Supports the principle that headings can explain or limit statutory provisions.	Cited with In re Carlton to justify using the chapter/sub‑heading as an aid to interpretation, limiting Section 386 to the class described by the heading.
Cooke v. Charles A. Vogeler Co. (1901) A.C. 107	Where statutory provisions are clear and unambiguous a court should not substitute considerations of reasonableness; but where two meanings are possible a meaning making the provision reasonable is preferable.	Invoked to explain the interpretive approach: if there is ambiguity, choose the construction that avoids unreasonable or inconvenient results (thus favoring a limited application of S. 386).
Municipal Commissioners of Barnagore v. Barnagore Jute Factory Ltd. (41 C.W.N. 662 : A.I.R. 1937 Cal. 824)	Considered in relation to whether "trade" necessarily implies transactions with a view to profit; that case concerned whether a concern transacted business "for profit or not."	The court noted this case does not support the wider proposition that "trade" must always mean a transaction for profit; it was restricted to the specific statutory test in the Bengal Municipal Act.
Burmah Shell Oil Storage & Distributing Co. v. Hawrah Municipality (40 C.W.N. 766 : A.I.R. 1936 Cal. 477)	Explains that while "trade" in its ordinary sense involves exchange for profit, a licensing provision is intended to regulate the carrying on of a trade simpliciter and need not be tied to profit-making.	The court used this authority to hold that for the purposes of Section 386 a licence requirement may apply even where the activity is not undertaken to make a profit, because the statute's dominant purpose is regulation for public health and convenience.
Province of Bombay v. Municipal Corporation of the City of Bombay (73 I.A. 271 : A.I.R. 1947 P.C. 34)	Establishes the test (as applied by the Judicial Committee) for deciding whether the Crown is bound by a statute: the Crown is bound only if expressly named or by necessary implication; a statute for public good is not by itself sufficient to bind the Crown.	The court treated this Judicial Committee decision as authoritative and binding, adopting its formulation that the Crown is not bound unless the statute clearly so indicates or binding is a necessary implication.
Gorton Local Board of Health v. Prison Commissioners (1904) 2 K.B. 165	Illustrates that a statute clearly for public benefit may nonetheless not bind the Crown.	Referenced to show English authorities where statutes for public benefit did not bind the Crown; used to support the broader statement adopted from other authorities and the Judicial Committee.
Attorney-General v. Hancock (1940) 1 K.B. 427 : 1940-1 ALL E.R. 32	Affirms the principle that an Act should not be construed as applying to the Crown unless the Crown is mentioned expressly or by necessary implication.	Quoted to reinforce that divesting the Crown of property, rights or prerogative requires express mention or necessary implication; used as part of the reasoning that Crown was not bound by the municipal provisions here.
Hornsey Urban District Council v. Hennell (1902) 2 K.B. 73	One of the English authorities considered regarding whether statutes bind the Crown.	Referred to alongside other English authorities to demonstrate the consistent approach that the Crown is not ordinarily bound absent express words or necessary implication.
Cooper v. Hawkins (1904) 2 K.B. 164	Shows that regulations affecting the mode or manner of doing something (e.g., running a Crown locomotive) may not bind the Crown even if they do not affect Crown property.	Used to rebut the argument that only statutes affecting Crown property are relevant; the court relied on this case to show that the Crown is not ordinarily bound even by regulations concerning mode or manner.

Court's Reasoning and Analysis

The court proceeded through a sequence of interpretive and jurisdictional analyses strictly on the basis of the materials and authorities presented:

Statutory context and headings: The court observed that Chapter 26 of the Calcutta Municipal Act is headed "Inspection and Regulation of premises, and of factories, trades and places of public resort" and that the chapter is sub‑divided: Sections 380–384 are under "Premises generally" while Sections 386–391 are under "Factories, trades and places of public resort." Relying on authorities (In re Carlton; Corporation of Toronto v. Toronto Railway Co.), the court held that headings are properly used as aids to interpretation and must be treated as preambles that may explain or limit the scope of a provision where ambiguity exists. Consequently, Section 386 is to be read in light of the sub‑heading and is not of unlimited or general application to every premises.
Practical consequence and reasonableness: The court reasoned that a literal, wide interpretation of Section 386 (applying to all storing of items in any premises irrespective of purpose or quantity) would lead to absurd or impracticable results, e.g., householders would need licences for keeping small domestic quantities. Adopting Cooke v. Vogeler Co., the court indicated that where more than one interpretation is possible the construction that avoids unreasonable consequences should be preferred.
Meaning of "trade": The court examined whether storage for distribution among Government employees at concession rates constituted "trade." Referring to Burmah Shell and distinguishing Municipal Commissioners of Barnagore, the court concluded that while "trade" in its ordinary sense often involves exchange for profit, a statutory licensing provision may regulate the carrying on of a trade simpliciter and need not be dependent on a profit motive. Hence, the primary and dominant purpose of the statute—regulation for the health and convenience of the public—controls. On the admitted facts, the court held that the articles were stored for trade (in the regulatory sense), and therefore Section 386 would be attracted unless its application was barred by Crown immunity.
Crown immunity: The court turned to the contention that the Crown (Central Government) was not bound by the municipal licensing provisions. It accepted the binding authority of the Judicial Committee in Province of Bombay v. Municipal Corporation of the City of Bombay, which formulated the accepted test: the Crown is bound by a statute only when expressly named or by necessary implication; statutes enacted "for the public good" do not, without more, bind the Crown. The court surveyed English authorities (including Hornsey, Gorton, Cooper, Attorney‑General v. Hancock) to show the principle is not limited to statutes affecting Crown property. Applying that test, the court concluded that Section 421 (and related provisions) of the Calcutta Municipal Act did not bind the Crown by necessary implication.
Outcome based on combined analysis: Although Section 386 could apply to the admitted facts of storage for trade, the Crown's non‑liability meant that the statutory licensing requirement could not be enforced against the Crown department acting in the premises. Accordingly, the rule challenging the Magistrate's acquittal (which had included the Crown‑immunity rationale) was discharged.
Certificate under Section 205: The court also considered but refused to grant a certificate under Section 205 of the Government of India Act because the questions of law decided did not involve interpretation of that Act, any Order in Council thereunder, the Indian Independence Act, or any Order made thereunder.

Holding and Implications

Holding: The court DISCHARGED the rule issued against the Municipal Magistrate's order of acquittal.

Implications:

Direct effect: The Magistrate's acquittal is sustained insofar as the statutory provisions challenged cannot be applied against the Crown by necessary implication; the Crown (Central Government department) is not bound by the municipal licensing provisions relied upon in this prosecution.
Statutory interpretation: The decision affirms that Section 386 must be read in the light of its chapter and sub‑heading and is not of unlimited application to all premises; statutory headings may legitimately limit or explain the scope of a provision.
No certificate under Section 205 was granted because the questions decided did not involve the Government of India Act or orders under it.
Broader precedent: The court treated the Judicial Committee's decision in the Province of Bombay case as binding authority on when the Crown is bound; the opinion applies that established test rather than creating a new rule. The opinion does not purport to lay down a novel general principle beyond the application of existing authorities.

If any particular detail (e.g., fuller factual narrative, additional party contentions, or extra legal authorities) is absent above, this reflects the absence of that information in the provided opinion.

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Corporation Of Calcutta Complainant, v. Sub. Post Master, Dharamtola Post-Office Accused, Opposite Party.

1. This rule was issued against an order of acquittal passed by the Municipal Magistrate, Calcutta and raises some very important questions of law. A complaint was filed on behalf of the Corporation of Calcutta against the opposite party station inter alia that premises No. 43, Dharam tola Street, Calcutta was being used or permitted to be used as grairs, flour and atta shop without taking out a license for the year 1945-1946 under Section 366 of the Calcutta Municipal Act. Summons was accordingly issued against the opposite party. The learned Magistrate by his order dated 1st March 1948 held that the storing of grains in the premises was by the Post and Telegraphs Department of the Government for the benefit of the employees of that Department, and not for trade, and to that purpose could not be taken to be “storing” as contemplated under Section 386(1)(a) of the Calcutta Municipal Act; and that the prosecution was also bad in law as the ??? provisions could not bind the Crown. The Magistrate accordingly acquitted the accused of the charges.

2. Mr. Basu appearing on behalf of the Corporation contends that Section 386 read with sch. 19 of the Calcutta Municipal Act, is attracted if any one of the different items mentioned in the schedule are stored, irrespective of the fact whether such storing is for purposes of trade.

3. Chapter 26, Calcutta Municipal Act, is headed as for “Inspection and Regulation of premises, and of factories, trades and places of public resort.” This chapter is sub-divided into two parts. Sections 380 to 384 are under the sub-blading ‘Premises generally.” Sections 386 to 391 are under the sub-heading “Factories, trades and places of public resort.” It is contended on behalf of the Corporation that the provisions of S. 386 are to be interpreted without any reference to the sub-heading “Factories, trades and places of public resort.” This contention cannot be upheld. The headings prefixed to a section or a set of sections in modern statutes are regarded as preambles to those sections. It is now a settled rule that the function of the preamble is to explain what is ambiguous in the enactment and it may either restrain or explain it as best suits the intention. In re Carlton, (1945) Ch. 372 : 114 L.J Ch. 289; citing Corporation of the City of Toronto v. Toronto Railway Co., (1907) A.C 316 at p. 324 : (76 L.J P.C 67).

4. On an examination of S. 385 and those follow it, it is clear that each one of those section relates to either factories, trades and places of public resort. If the provisions of S. 386 are not taken to be limited and applicable only to factories, trades and places or public resort the result would be that whenever anything is stored, however small the quantity and for whatever purpose such storing may be made, a license will have to be taken out: Every householder must then take out a licence for keeping, in his house even small quantities of articles for ordinary and daily use—an interpretation which, is neither reasonable nor can be deemed to be, convenient to the society at large. If the provisions are clear and unambiguous, a Court of law has nothing to do with the reasonableness or unreasonableness of such statutory provisions, except so for as it may help it in interpreting what the legislature has said. (Cooke v. Charles A. Vogeler Co., (1901) A.C 107. But while interpreting a provision in a statute when two meanings are possible, and one of the interpretations is neither convenient nor reasonable, then such intendment as would make the provision reason, able and just, would be more acceptable than the other. Coke on Littleton 97A. In our view, on the plain reading of S. 386 that section is not of general application. Even if there be any doubt as to the proper effect and scope of the section, we have to refer to the special heading “Factories, trades and places of public resort” and it must be held that S. 386 will be attracted not with reference to storing in every premises, but only in those which are limited by the description given by the sub-heading.

5. It is conceded that grains etc., in the premises are stored. But it is contended that such, storing is not for purposes of trade, inasmuch as, these articles are meant for distribution, amongst the employees of a particular Government Department at concession rates and such, transactions, it is argued cannot be deemed to be in course of trade or business. ‘Trade’ in its primary sense means the exchange of goods for goods or goods for money. Reference is made to the Municipal Commissioners of Barnagore v. Barnagore Jute Factory Ltd., 41 C.W.N 662 : (A.I.R (24) 1937 Cal. 824) as an authority for holding that trade must always connote transactions with a view to earn profit only. In the case cited above Section 123 of the Bengal Muncipal Act (Bengal Act XV[16] of 1932) read with cl. 1 of sch. 4 of that Act, fell to be considered. Clause 1 is in the following terms:

“Company transacting business within the Municipality for profit or as a benefit of society.”

6. The test to be applied in that case was whether? the concern transacted any business “for profit, or not.” This case, therefore, is no direct authority for the wider proposition that trade musk always mean a transaction for profit.

7. In Burmah Shell Oil Storage & Distributing Co. v. Hawrah Municipality, 40 C.W.N 766 : (A.I.R (23) 1936 Cal. 477) this Court has occasion to consider Section 176 of the Calcutta Municipal Act, which requires a license to be taken out by a person who carries on a profession, trade or calling indicated in Sch. VI of the Act. Jack J. observed that though “trade” under S. 175 is used in its ordinary sense viz., exchange of goods for money or goods for goods with the object of making a profit, a statutory provision for taking out a licence is intended to control the carrying on of a trade simpliciter and is not meant to be a tax on the profits. In taxing statutes, as under the Income-tax Act, where the making of profits makes a person liable for the tax, “trades” must always be considered in the context of earning profits. But where a statute provides for a license or a permit being taken out for carrying on a business or a trade it is neither necessary nor relevant to consider whether the persons concerned actually earn a profit or even intended to make a profit out of the trade or carried on the business from some motive or other for benefiting the public or a section thereof by selling at a loss. The word “trade” is one of a very general application, and must always be considered along with the context in which it is used. Hals, bury, Laws of England, vol. 32 pp. 303-4.

8. In the case now before us the intendment of the Legislature was to regulate and restrict, for the sake of health and convenience of the public, storing of particular articles meant to be utilised for trade. So far as the particular provisions are concerned, it is immaterial whether the persons storing intend to or actually derive profit or not. The primary and dominant purpose of the statute is to be taken into consideration. In this view it must he held, on the facts admitted, that the articles were stored for trade, and accordingly Section 386 of the Calcutta Municipal Act, is attracted unless its application is otherwise barred.

9. It is urged on behalf of the opposite party that the storing and sale in this case or by and on behalf of the Central Government and as the Crown is not expressly named in the Calcutta Municipal Act the Crown is not bound by the provisions. Reference is in this connection made to Province of Bombay v. Municipal Corporation of the City of Bombay, 73 I.A 271 : (A.I.R (34) 1947 P.C 34) which overruled the judgment of the Bombay High Court reported in Province of Bombay v. Municipal Corporation of the City of Bombay, I.L.R (1944) Bom. 96 at p. 101 : (A.I.R (31) 1944 Bom. 26). In this case the Bombay Corporation had under Sections 222(1) and 265 of the City of Bombay Municipal Act, 1888 (the corresponding sections of the Calcutta Municipal Act, Bengal Act III[3] of 1923 being Ss. 244 and 252) attempted to lay watermains along Antop Hill Road, the property in which road belonged to Government. The test to be applied for deciding whether the Crown is bound by a statute or not, was held to be in no way different in the case of the Indian Legislature from that which has long been applied in England. It is incontrovertible that when the Crown is expressly named in a particular statute the Crown is bound thereby but difficulty arises when it has to be ascertained whether the Crown is bound by “necessary implications.” The Judicial Committee also held that if it were manifest in the terms of the statute that it was the intention of the Legislature that the Crown should be bound the result would be the same as if the Crown had been expressly named.

10. On behalf of the Bombay Municipal Corporation, it had also been contended before the Judicial Committee that whenever a statute is enacted “for the public good” the Crown, though not expressly named, must be held to be bound by its provisions and as the Act was manifestly intended to secure public welfare it must bind the Crown. Though this proposition is supported by early authority and is to be found in Bacon's Abridgement and other text books the Judicial Committee held that view could not now be regarded as sound, except in a strictly limited sense. Reference was made to Gorton Local Board of Health v. Prison Commissioners (1904) 2 K.B 165 (n) and the Attorney-General v. Hancock, (1940) 1 K.B 427 : (1940-1 ALL E.R 32) as instances where the Crown was held not to be bound although the statute in question was clearly for the public benefit. Their Lordships further observed as follows:

“Their Lordships prefer to say that the apparent purpose of the statute is one element, and may be an important element, to be considered when an intention to bind the Crown is alleged. If it can be affirmed that, at the time when the statute was passed and received the royal sanction, it was apparent from its terms that its beneficent purpose must be wholly frustrated unless the Crown were hound, then it may be inferred that the Crown has agreed to be bound. Their Lordships will add that when the Court is asked to draw this inference, it must always be remembered that that, if it be the intention of the Legislature that the Crown shall be bound, nothing is easier than to say so in plain words.”

11. The distinction made in Scottish cases, between property held jure corona and other property of the Crown, was further held as not to have been adopted in England and does not seem to their Lordships to be in accordance with a body of English authority which, where an ancient doctrine of the common law of England is in question, ought in their Lordships' opinion to prevail. The law of England and of India was held to be the same, and their Lordships could find no reason to say by necessary implication the Crown was bound by the relevant sections of the Bombay Municipal Act.

12. Mr. Basu appearing on behalf of the petitioner Corporation contends that the case before the Judicial Committee as also the decisions the Hornsey Urban District Council v. Hennell (1902) 2 K.B 73 : (71 L.J.K.B 479) and Attorney-General v. Hancock, (1940) 1 K.B 427 : (1940-1 ALL E.R 32) refer to instances — where the relevant statutory provisions interfered with the right to property of the Crown but in the case now before us there is no question of any interference with any right to property. The provisions under consideration require certain licenses to be taken out these provisions, it is urged do not in any way affect rights over property or prerogative of the Crown. No doubt this aspect of the question was not argued before the Judicial Committee in the Province of Bombay v. Municipal Corporation of the City of Bombay, 73 I.A 271 : (A.I.R (34) 1947 P.C 34). Oar attention is particularly drawn to the observations in Attorney-General v. Hancock, (1940) 1 K.B 427 at p. 439 : (1940-1 ALL E.R 32):

“The Rule be now well written and clear that if an Act of Parliament when otherwise divest the Crown of its property, rights, interest or prerogative, it is not to be construed a applying to the Crown unless the Crown has been mentioned either expressly or by necessary implication.”

13. It is further pointed out that the relevant provisions of the Calcutta Municipal Act which are now before us for consideration only deal with the mode or manner of carrying on a business or trade and not with the carrying on the business itself.

14. Although this particular line of argument now advanced before us was nit considered by the Judicial Committee, its decision, however, is in very general terms and is not in any way limited to proceedings affecting rights to property or prerogative of the Crown. The judicial Committee came to the conclusion as stated above without making any distinction between provisions affecting rights to property or otherwise. It was laid down that the law is not in any way different in the case of Indian Legislation from that which has long been applied in England. If we analyse the various decisions of the English Courts, it will be apparent that the principle has not been limited to provisions affecting rights to property only. One of the cases in point is Cooper v. Hawkins, (1904) 2 K.B 164 : (73 L.J.K.B 113). The question in issue in this case was whether regulations regulating the speed of locomotives within certain areas applied to the running of a locomotive owned by the Crown and driven by a servant of the Crown or Crown service. Lord Alverstone C.J referred to his early observations in Hornsey Orban District Council v. Hennel, (1902) 2 K.B 73 : (71 L.J.K.B 479) and applying the same tests to the facts of the later case, held that the regulations did not affect the Crown. In Cooper v. Hawkins, (1904) 2 K.B 164; (73 L.J.K.B 113) (Supra) the provisions affected the mode or manner of running a locomotive and did not affect any property belonging to the Crown. The observations of Lord Alverstone C.J, and Wills J. make it abundantly clear that the Crown is not ordinarly bound by statutory provisions and the question of right to property is not a determining factor.

15. In our view, the decision by the Judicial Committee in the Province of Bombay v. Municipal Corporation of the City of Bombay, 73 I.A 271 : (A.I.R (31) 1947 P.C 34) must be taken to be an authority on the general question as to when the Crown is bound by statutory provisions. Decisions given by the Judicial Committee are binding on us and it is not open to this Court to go into the reasons or the absance of reasons supporting the decisions of the Judicial Committee.

16. Had the question been res integra and had it been open to us to insider the question untrammelled by a decision of the Judicial Committee we might have considered the reasonableness and propriety of applying the principles as enunciated by the English Courts and also how far they should be applied to Indian conditions. For some years past, the position of the Crown with regard to liability and procedure has been considered by the lawyers in England as being “antiquated and absurd as contrasted with that of ordinary individuals” and reform in this respect has been considered to be long overdue. The directions given by Lord Birkenhead L.C in 1921 and Lard Haldene L.C in 1924, may be referred to in this connection. With the growing nationalization of industries and the Government itself undertaking trade and commerce, the question has assumed greater importance. The Courts, however, are not concerned with the policy underlying such legislation or reform; we are only to apply the law as it stands. As state already we are bound by the decision of the Judicial Committee and we must hold that the Crown is not affected by the provisions contained in Section 421 of the Calcutta Municipal Act, as it cannot be said that by necessary implication the Crown is bound by this Section of the Act. This Rule must accordingly be discharged. On behalf of the petitioner Corporation we have been moved to grant a certificate under Section 205 of the Government of India Act. Section 205 refers only to cases involving substantial question of law as to the interpretation of the Government of India Act or any Order in Council made thereunder, or of the Indian Independence Act or of any Order made thereunder. Questions of law raised and decided in the appeal now before us do not touch any of the Acts or Orders referred to in Section 205 of the Act. Certificate is accordingly withheld.

D.H

17. Rule discharged.

Corporation Of Calcu... v. Sub. Post Master, Dh...