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Anumathi Sadhukhan Petnr v. A.K Chatterjee Opp. Party.

Calcutta High Court

Apr 11, 1951

Judgment

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Factual and Procedural Background

The petitioner, a license-holder of three husking mills in Barasat Sub-Division (District of 24 Parganas), challenged a notification dated 7-12-1950 issued under the opposite party's signature. The notification (headed "Order") stated that husking mill owners were authorised to husk half of their previous permitted quantities up to 14-12-1950 and that no husking mill should be run after that date without obtaining further orders. As a result of the notification the petitioner was compelled to close his mills from 15-12-1950 and alleges loss of livelihood. The petitioner sought relief under Article 226 of the Constitution, asking (inter alia) for revocation of the 7-12-1950 order and for permits/licenses to run the mills without the contested quantity restrictions. The petitioner also attacked specific clauses (Nos. 9, 11, 13 and 15) of the West Bengal Rice Mills Control Order, 1949 as infringing fundamental rights under Articles 19(1)(g) and 14. The opposite party filed a counter-affidavit; the government counsel contended the 7-12-1950 notification was advisory rather than a binding order, and also suggested the opposite party was a ministerial officer acting under superior directions.

Legal Issues Presented

Whether the notification dated 7-12-1950 constituted a binding prohibitory order that unlawfully prevented the petitioner from carrying on his trade, thereby infringing the petitioner's fundamental right under Article 19(1)(g).
Whether Clauses 9 and 13 of the West Bengal Rice Mills Control Order, 1949 (permitting cancellation or refusal of a license without assigning reasons) are reasonable and valid under the Constitution, or whether they overstep the limits of reasonableness and are invalid.
Whether Clause 15 of the Rice Mills Control Order, 1949 (the permit system) infringes Article 14 of the Constitution.
Whether the opposite party had authority to issue the 7-12-1950 notification and whether mandamus could issue against him given the contention that he acted only under superior directions.

Arguments of the Parties

Petitioner's Arguments (Mr. Das)

The 7-12-1950 order forbids running husking mills after 15-12-1950 without further orders, thereby prohibiting the petitioner from carrying on the business that is the sole means of livelihood of the petitioner and his family, and thus invades the protection afforded by Article 19(1)(g).
Clauses Nos. (9), (11), (13) and (15) of the West Bengal Rice Mills Control Order, 1949 infringe the Constitution; in particular, the system of issuing permits (Clause 15) violates Article 14 (equal protection/non-arbitrariness).

Opposite Party / Government's Arguments (Mr. Sen, Senior Govt. Pleader)

The 7-12-1950 notification was not an order but an advice to husking mill owners to refrain from husking after 15-12-1950; owners could disregard it and continue husking.
The opposite party is a ministerial officer carrying out superior authorities' directions; the superior authorities who purportedly gave the direction are not before the court, and therefore mandamus cannot issue against the opposite party.

Table of Precedents Cited

Precedent	Rule or Principle Cited For	Application by the Court
Chintamanrao v. The State of Madhya Pradesh, A.I.R. (38) 1951 S.C. 118 : (1950 S.C.R. 759)	The Supreme Court held that an Act imposing a total prohibition on carrying on a particular business (manufacture of biris during the agricultural season) arbitrarily interferes with private business and cannot be regarded as a reasonable restriction under Article 19(1)(g); such prohibition is void as not in conformity with Part III of the Constitution.	The court relied on this authority to show that a total prohibitory order interfering arbitrarily or excessively with the right to carry on business cannot be reasonable; the 7-12-1950 order, which effectively stopped operation of the mills, was compared to such an arbitrary prohibition and held to be in excess of power.
Chiranjit Lal v. The Union of India, A.I.R. (38) 1951 S.C. 41 : (1950 S.C.R. 869)	Sets out the correct meaning and import of Article 14 of the Constitution (principles concerning equality, non-arbitrariness and reasoned decision-making).	The court referred to this decision when considering the petitioner's challenge to Clause 15 under Article 14, observing that the principles enunciated in Chiranjit Lal clarify Article 14; the court declined to hold Clause 15 inherently unconstitutional and relied on the established interpretation of Article 14 as stated in that authority.

Court's Reasoning and Analysis

The court proceeded in a stepped analysis, confined to the materials and arguments before it:

Nature of the 7-12-1950 document: The court rejected the government's contention that the notification was merely "advice." It noted the document bore the heading "Order", referred to itself as continuing previous orders (giving numbers and dates), and contained the clear phrase that "no husking Mill should be run after that date (without obtaining further orders)". On that textual basis the court concluded the notification was intended as a general prohibitory order and that the petitioner reasonably understood that existing licenses were cancelled or suspended and no permits would be issued unless the government decided otherwise.
Scope of the Rice Mills Control Order (Clauses 9 and 13): The court examined Clauses 9 and 13 which permit the Commissioner or Provincial Government to refuse or cancel/suspend licenses "without assigning any reason". The court held that while the Control Order confers power to cancel or refuse licenses, it does not contemplate or authorise total closing down of the husking mills or a blanket prohibition on the husking trade. The court stressed that provisions which allow cancellation or refusal without reasons provide scope for arbitrary or capricious exercise of power and thereby overstep the limits of reasonableness fixed by the Constitution.
Reasonableness and arbitrariness: The court emphasized the legal principle that an arbitrary or capricious exercise of power is not a valid exercise of power. If no reasons are assigned for administrative action, the court cannot judge whether the order is valid or mala fide. The court drew on Chintamanrao to underline that total prohibition interfering with trade can be void as an unreasonable restriction on Article 19(1)(g).
Clause 15 and Article 14 challenge: Petitioner's contention that the permit system under Clause 15 infringed Article 14 was considered. The court found nothing inherently unconstitutional in Clause 15 and relied on the Supreme Court's exposition of Article 14 in Chiranjit Lal. The court explained the permit system's object: to control trade, prevent unfair competition and malpractices like black marketing. While noting that abuse of permit power can be corrected by courts, the court found there were insufficient materials before it to hold that the specific quantities allowed to the petitioner were unreasonable or that the licensing authority had acted improperly.
Authority of the opposite party: The court reviewed the counter-affidavit and the definition of "Commissioner" in the Control Order (which allows the Food Commissioner or any officer authorised by him to perform the Commissioner's functions). As there was nothing to show the opposite party lacked authority or was merely ministerial, the court presumed the opposite party was authorised to issue the order.
Conclusion of legal effect: Applying these principles to the facts, the court held the 7-12-1950 order to be in excess of the opposite party's powers and therefore set it aside. The court simultaneously accepted that Clauses 9 and 13, insofar as they permit cancellation or refusal without any reasons, overstep constitutional limits and are invalid; but it did not declare Clause 15 inherently unconstitutional and left assessment of particular permit quantities to be determined on adequate materials.

Holding and Implications

Core Ruling: The notification dated 7-12-1950 was held to be in excess of the opposite party's powers and is set aside.

Additional specific holdings and direct consequences (as stated in the opinion):

The court held that Clauses 9 and 13 of the West Bengal Rice Mills Control Order, 1949—so far as they permit cancellation, suspension or refusal to grant or renew licenses without assigning any reasons and without giving an opportunity to be heard—overstep the limits of reasonableness and are invalid in the face of the written Constitution.
The court rejected the petitioner's contention that Clause 15 (the permit system) is inherently violative of Article 14; the court found Clause 15 to be constitutionally acceptable in principle, noting its legitimate object to control trade and prevent malpractices, while observing that abusive exercise of permitting power can be corrected by courts when supported by adequate material.
The court directed that the petitioner is entitled to apply for a license and ordered the opposite party to deal with such application in accordance with law (the Rule was made absolute in terms of prayer a & B of the petition as stated in the judgment).
The petitioner was awarded costs (the hearing fee being assessed at three gold-mohurs) and a certificate under Article 132 of the Constitution was granted to both sides.

The decision addresses the direct rights and remedies between the parties: the 7-12-1950 order is set aside and the petitioner may seek a fresh license to be considered according to law. The court applied existing Supreme Court precedents in reaching its conclusions; it did not purport to lay down a novel constitutional principle beyond applying those authorities to the facts before it.

Show all summary ...

1. This is a petn. under Article 226 of the Constitution for an order on the opposite party to revoke or cancel the order, dated 7-12-1950, issued under his signature, notifying & directing that husking mill owners were authorised to husk half of their previous permitted quantities upto 14-12-1950 & no husking mill should be run after that date without obtaining further orders, & also for issue of permits for running such husking machines without imposing restrictions on the quantities to be husked, & for issue of licenses to run the husking machines for husking paddy of the local consumers. The petnr. is the license-holder of three husking mills situate at Duttapukur, Beliaghatta & Ohangdana in the Barasat Sub-Division within the District of 24 Perganas, holding License Nos. 35 A.L.P, 34 A.L.P & 31 A.L.P respectively. Barasat Sub-Division is a deficit & non-procurement area. The petnr. had been carrying on the business of husking paddy at the said mills for about the last 20 years & he was first given licence about the year 1945. Previous to that the petnr. used to obtain permits for husking paddy to the extent of about one thousand maunds per month in each mill. The quantity of paddy permitted to be husked was reduced from time to time until, it is alleged, it has reached the figure of 90 maunds & 75 maunds per month in respect of the first two mills. The petnr. was carrying on the business of husking paddy & was charging 10 annas only per maund. It is alleged that the sole means of livelihood of the petnr. & his family is the income derived from this husking business.

2. On 7-12-1950, the opposite party issued a general notice to the following effect:

Further to this office order No. 11181(8) VII-14, dated 16-10-50, 11848 (10) A.P VII-V(50), dated 2-11-50, & 11971(10) A.P VII-7(50), dated 16-11-50, it is notified for general information that the husking mill owners are authorised to husk half of their previous permitted quantities up to 14-12-1950. No husking Mill should be run after that date (without obtaining further orders).

Sd. A.K Ghose.

for A.R.C.P Alipore

24-Perganas,

dated 7-12-50.”

3. This Notice appears to have been forwarded to several Police Stations of different Sub-Divisions.

4. By reason of the said order, the petnr. was compelled to close down his mills with effect from 15-12-1950. It is stated that the petnr. had been seeing the A.R.C.P, Alipore, & demanding justice from him by cancellation of that Order & by granting of fresh permits & licenses but to no effect. It is stated that the sole business of the petnr. is to husk boiled paddy brought by the customers who are permitted by the authorities to husk their paddy for their own consumption. It is further stated that the system of issuing these permits is that a list of persons who require the paddy to be husked for their own consumption is prepared in duplicate & the list is carefully check-ed & verified by the local procurement officer who sends the list for issuing husking permits in favour of such interested persons. In fact, however, it appears from the permits which have been annexed to the petn. that these permits are issued in the name of the proprietor of the mill & a list of persons who are to get their paddy husked in these mills is attached to such permit. It is stated that as a result of this Order & the closing down of the husking mills, the price of rice shot up in the locality to a certain extent. It is stated that the restriction imposed by the A.R.C.P, Alipore, regarding the amount of paddy to be husked is an unrsasonable restriction. It is pointed out that the quantity allowed to be husked in the neighbouring District of Nadia & in the Sub-Division of Basirhat is a minimum of about 800 maunds.

5. The petnr. challenges the Order, dated 7-12-1950, as illegal & in violation of the fundamental right of the petnr. guaranteed under Article 19(1)(g) of the Constitution & he challenges clauses Nos. (9), (11), (13) & (15) of the West Bengal Bice Mills Control Order, 1949 as infringing the Constitution. The petnr. also challenges the system of issuing permits under the Rice Mills Control order as violating Article 14 of the Constitution.

6. It is argued by Mr. Das, learned Counsel for the petnr. that the Order directing that no husking mill should run after 15-12-1950, without further orders & thus forbidding the carrying on of the business which provides the only means of livelihood of the petnr. is an invasion on his fundamental right given under the Constitution of carrying on his trade & business freely & must be held to be illegal. Mr. Sen, the Senior. Govt. Pleader, submits that what was notified on 7-12-1950, is not an Order but it is an advice which was given to the husking mill owners that they should refrain from husking any paddy from 15-12-1950. He contends that it was open to the owners of the husking mills to disregard this advice & go on husking in spite of the Notfn.

7. I am unable to accept this interpretation put by Mr. Sen upon the Notfn. in question. The Notfn. bears the heading “Order” & it purports to be “in continuance of previous orders”, of the same office of which numbers & dates are given & it states in clear & unambiguous language that no husking mill should be run after the 14th December “without obtaining further orders”, I have no doubt that the Notfn. dated 7-12-1950, was intended to be a general prohibitory order directing the stoppage of the running of the husking mills after 15-12-1950. The petnr. was clearly given to understand that the Govt. had decided to cancel all existing licenses & therefore, the A.R.C.P, although approached, was unable to issue any permit, or to do anything else unless the Govt. decided otherwise (See para. 8 of the petn).

8. Now Cl. 9 of the Rice Mills Control Order is as follows:

“Notwithstanding anything contained in this order, the Comr. may, without assigning any reason, direct any appln. for the issue of a license, or for the renewal of a license be refused.”

& Cl. 13 of the order is as follows:

“(1) No licensee shall contravene any of the conditions of his license. If any such licensee contravenes any of the said condition, then without prejudice to any other action that may be taken against him, his license shall be liable to be cancelled, or suspended by the Comr.

(2) Notwithstanding anything contained in sub-para (1) the Provincial Govt. may, in special circumstances, without giving any previous notice, or without assigning any reason, cancel or suspend a license issued under this Order.”

9. It is under these two sections that a license issued under the Control Order can be cancelled or suspended by the Provincial Govt. without assigning any reasons & an appln. for a fresh license may be refused by the Comr. without assigning any reason therefor. It is submitted that the effect of the order of 7-12-1950, is that the license of this trader stands suspended or cancelled & his business has come to a standstill & the mills have to be closed down. There can be no doubt that the Rice Mills Control Order does not contemplate the total closing down of the husking mills, nor does it confer power on the authorities responsible for carrying out the provisions of the Act to make any order prohibiting the carrying of the business of the husking mills, or of the husking trade. It may be noted that no reasons are set forth in the counter-affidavit filed on behalf of the opposite party as to why the order dated 7-12-1950, was issued. An order which arbitrarily or excessively invades the right of an individual cannot be said to contain the quality of reasonableness. Cls. 9 & 13 of the Rice Mills Control Order which no doubt empower cancellation or refusal of a license already issued & refusal to issue a new license without assigning any reasons. But there can be no doubt that these provisions overstep the limits of reasonableness & must be held to be invalid in the face of the written Constitution of India. These provisions do not give any opportunity to the license-holder to make any representation against the action taken by the authorities concerned, or to protect their interest against any wrongful action of the authorities & they further provide scope for the exercise of the power conferred on the authorities in an arbitrary & capricious manner, if they so choose to do it. It is clear law that an arbitrary or capricious exercise of the power is no exercise at all. If no reasons are assigned, it is not possible to know or judge whether the order is a valid or a mala fide or arbitrary order. It may be noted that the S.C, in the case of Chintamanrao v. The State of Madhya Pradesh, A.I.R (38) 1951 S.C 118 : (1950 S.C.R 759), has held that an Act imposing total prohibition of carrying on the business of manufacture of Biris during the agricultural season arbitrarily interferes with the private business & cannot be said to be reasonable restrictions on the fundamental right conferred by Article 19(1)(g) & is, therefore, void, as not being in conformity with Part ill of the Constitution.

10. I hold that the order dated 7-12-1950, is in excess of the powers of the opposite party in this case & must be set aside.

11. It was also contended by Mr. Das that the system of granting permits as provided by Cl. 15 of the Rice Mills Control Order infringes Article 14 of the Constitution. I am unable to accept this contention. There is nothing in cl. 15 of the Control Order which makes it inherently unconstitutional. As to what is the true meaning & import of Article 14 of the Constitution has been brought out very clearly by the decision of the S.C in the case of Chiranjit Lal v. The Union of India, A.I.R (38) 1951 S.C 41 : (1950 S.C.R 869). It is unnecessary to reiterate the propositions which have been enunciated in that case over again. (Per Mukherjea J.) Para. 64 p. 57-58.

12. It may be noted that the system of permit has the object of controlling the carrying of the trade by the Govt. & the system seeks to prevent unfair competition & any wrongful practice, such as blackmarketing or other similar practices. It is undoubtedly a salutory system but if the exercise of this power of issuing permits is abused, the person aggrieved has the right to have it controlled, or set right by the Ct. The petnr.'s grievance is that the quantity which he is allowed to husk is uneconomical & unreasonable. But this question depends on various factors such as the capacity of the mills, the number of Mills in the locality the number of consumers & other factors. There are not enough materials before this Ct. to enable it to come to any definite finding that the quantity allowed was unreasonable or the officer responsible had not exercised his power properly or reasonably.

13. It was contended by Mr. Sen that the opposite party is a ministerial officer who is carrying out the directions of the superior authorities & the order, dated 7-12-1950, is an order of these superior authorities who are not before the Ct. & so mandamus cannot issue against the opposite party.

14. The order itself shows that it is issued by the opposite party. There is nothing in the counter-affidavit to suggest that the opposite party had no authority to make or issue this order, or that he is only a ministerial officer who has purported to have issued the order in obedience to the directions of his superior officers. On the other hand, para. 8 of the counter-affidavit makes it quite clear that the opposite party takes upon himself the responsibility of making or issuing this order & the other paras, in the counter-affidavit proceed on the footing that the order is his order. The west Bengal Rice Mills Control Order, 1949, defines the term “Commissioner” in Cl. 3(a) as follows:

“It means the Food Comr. the Govt. of West Bengal, or any other officer authorised by him in writing in this behalf to perform all or any of the functions of the Comr. under this Order.”

15. The definition shows that any officer authorised by the Comr. can perform his functions or duties under the Rice Mills Control Order, 1949. In the absence of anything to show to the contrary, it should be presumed that the opposite party is authorised to issue or pass the order that he has purported to do in this case.

16. In the result, the petn. succeeds in part & the Rule is made absolute in terms of prayer a & B of the petn. The petnr. is entitled to apply for a license & the opposite party is directed to deal with such appln. in accordance with law.

17. The petnr. is entitled to costs of these proceedings, the hearing fee being assessed at three gold-mohurs. Certificate under Article 132 of the Constitution is granted to both sides.

K.S

18. Petition parly allowed.