Ram Rachhpal And Others v. Union Of India And Others

Grover, J.:— This is a petition under Articles 226 and 227 of the Constitution in which it is necessary to state the facts in order to decide the points that arise for determination. The Bombay Agricultural Produce Markets Act, 1939 (hereinafter referred to as the Act), was extended to Delhi territories on 25th July 1957. A notification under section 3 of the Act of intention of exercising control over purchase and sale of agricultural produce in the area known as Najafgarh Mandi which was previously within the jurisdiction of the Notified Area Committee but was later on brought within the jurisdiction of the Delhi Municipal Corporation on the enactment of the Delhi Municipal Corporation Act, 1957, was issued on 22nd April, 1959. Thereafter a declaration was made under section 4 specifying Najaigarh Mandi to be a market area for the purposes of the Act on 24th August 1959. On the same date the aforesaid market area was declared to be the principal market yard under section 4A(2). A market committee was established under section 6(2)(b). That Committee issued a public notice to all shopkeepers dealing in agricultural produce in Najafgarh to obtain licences relating to purchase and sale of agricultural produce. The date for the applications for licences was specified in that notice. The petitioners who are nine in number instituted the present petition in this Court on 11th January 1960 praying mainly for appropriate writs or directions to the respondents requiring them to forebear from giving effect to and taking any action under the Act and the rules and bye-laws framed thereunder.

2. The first point that has been raised by the learned counsel for the petitioners relates to the validity of the Act.

3. It is submitted that the Act is invalid and unconstitutional as violative of Articles 14 and 19(1)(g) of the Constitution. It is urged that the proviso appearing in section 4(2) gives unfettered and unrestricted powers to the Chief Commissioner to grant a licence to any person to use any place in the market area for the purchase and sale of agricultural produce pending the establishment of a market Committee in such area. Section 5A. gives similar power and discretion to the market committee when a market is established in the matter of issuing licences. It is further pointed out that the proviso to section 5A makes it unnecessary for a licence to be granted by a market committee where a licence has already been granted by the Chief Commissioner under the provisions of sub-section (2) of section 4. The main challenge is founded on the decision of their Lordships of the Supreme Court in Dwarka Prashad Laxmi Narain v. The State of Uttar Pradesh 1954 S.C.R 803. In that case under Page: 614clause 4(3) of the Uttar Pradesh Coal Control Order, 1953, the licensing authority had been given absolute power to grant or refuse to grant, renew or refuse to renew, suspend, revoke, cancel or modify any licence under that Order and the power could be exercised by any person to whom the State Coal Controller might choose to delegate the same. The petitioners' licence having been cancelled the validity of the Coal Control Order was impugned. Their Lordships expressed the view that when power conferred on public officers was an arbitrary power unregulated by any rule or principle and it was left entirely to the discretion of particular persons to do anything they liked without any check or control by any higher authority, particularly in the matter of regulating trade or business in normally available commodities it could not but be held to be unreasonable. As the provision which gave that power to the Controller founded an integral part of the entire structure of the Control Order, the Order was struck down as unconstitutional in its entirety.

4. The learned counsel for the petitioners contends that certain bye-laws have been framed under section 27 of the Act and bye-law No. 22 gives the power to the market committee to grant licences. This bye-law provides for the form in which the applications for licences have to be made which have to be accompanied with full fee in all cases. Then the particulars are given which must appear in all applications for licences and clause (iv) gives power to the market committee to suspend or cancel the licence of any dealer or the commission agents for misconduct or insolvency or non-compliance with the requirements of the rules or the bye-laws or orders in writing of the market committee. Clause (vi) however, provides that every order of the market committee refusing the grant of a licence or suspending or cancelling a licence already granted shall be recorded in writing with a brief statement of reasons of the same and a copy of such order shall be supplied free to the person so affected on application by him to the market committee. The grant of the licence under the bye-law is further made subject to the rules. The rules which have been framed under section 26 of the Act were promulgated prior to the bye-laws in August 1959 The relevant rules are 71 to 75. Rule 71 deals with licenced traders and general commission agents. It may be mentioned at this stage that according to the allegations contained in paragraph 1 of the petition the petitioners would fall within either of those categories. Other rules deal with other categories. Rule 74 provides for refusal, cancellation or suspension of licence and rule 75 provides for appeal agairst such action taken by the market committee to the Director or any other officer authorized by the Director in this behalf within the period specified in the rule. Apart from the appeal, section 28 of the Act confers power on the Chief Commissioner to call for proceedings of market committee and pass such orders as he thinks fit. It is open to the Chief Commissioner to delegate his powers under section 25 to any officer. It is in the light of these provisions that it has to be determined whether the Act can be regarded to be violative of either Article 14 or Article 19(1)(g) keeping in view the observations of their Lordships of the Supreme Court in the case referred to before.

5. On giving the matter full consideration, I have little doubt that the provisions of the Act which have been impugned as unconstitutional cannot be held to be so nor can the Act be held to be invalid for these reasons. The powers of granting the licence have been conferred on the market committee which is a representative body and does not consist of a single individual. While exercising discretion in the matter of issuing licences it may not be possible to eliminate the Page: 615element of arbitrariness in case of an individual but when there is a committee consisting of a number of individuals it is expected in normal course of business that they will not act on whim or caprice. Then taking the provisions contained in the Act, the rules and the bye-laws to which reference has already been made it is clear that the market committee when refusing or cancelling a licence is to give reasons in writing a copy of the order is to be supplied to the person so affected. Actually rule 74 provides that the committee is bound to communicate such a decision to the person concerned by delivering or tendering him personally a copy of such decision or order or by sending the same to him by registered post. The party aggrieved can file an appeal under rule 75 to the Director or the officer authorised in this behalf. Finally the Chief Commissioner has the overall revisional powers by which he can correct or set right any errors or mistakes made by the subordinate authorities. Thus there is hierarchy of tribunals before whom the question of refusal to grant a licence or cancellation of it is and can be brought up which is an ample safeguard against the exercise of any arbitrary, unrestricted or unfettered power of the nature that could be exercised in the U.P Coal Control Order case. It also appears from bye-law No. 22 that there is no specific provision with regard to refusal of a licence although class (vi) indicates that the market committee might refuse the grant of a licence or suspend or cancel it in particular cases. The suspension or cancellation is, however, confined by clause (iv) to misconduct or insolvency or non-compliance with the requirements of the rules or the bye-laws or orders in writing of the market committee. Therefore, so far as refusal to grant, cancellation or suspension of the licence are concerned, it would seem that certain conditions and requirements have been laid down and the committee is not left with any unfettered and arbitrary powers in that respect. Rule 73(3) provides that on receipt of an application together with the prescribed fee the market committee may after making such enquiries as may be considered necessary for the efficient conduct of the market, grant the licence applied for. Thus so far as the grant of the licence is concerned, the policy has been laid down by the rule itself, namely, the necessity for the efficient conduct of the market. It cannot in these circumstances be said that no standard has been laid down according to which the licensing power is to be exercised. Moreover, the provisions for an appeal and a revision further fulfill the essential requirements for making such laws constitutionally valid (vide Basu's Constitution of India, page 240, Vol. I). The validity of the Act which was originally enacted by the Bombay State and which has been extended to Delhi was impugned before the Bombay High Court in Bapubhai Rattanchand Shah v. The State of Bombay I.L.R 1955 Bom. 870, and it was held to be a valid piece of legislation. It may be mentioned that the point that has been agitated before me was not raised in the Bombay High Court. The validity of similar legislation which was in force in Madras, namely, the Madras Commercial Crops Market Act, 1933, came up for consideration before Rajamannar C.J and Venkatarama Aiyer J. in P.P Kutti Keya v. The State of Madras A.I.R 1954 Mad. 621 some of the licensing provisions in that statute were held to be unconstitutional. In that case also the main reason why those provisions were struck down was that section 5(4)(a) of that Act conferred power on the Collector to grant licences, suspend or cancel them in his discretion. There was no right of an appeal or revision Page: 616given to anyone aggrieved by such refusal to grant or cancellation or suspension of the licence. Thus the contentions with regard to the constitutionality and validity of the provisions of the Act must fail.

6. The next point that has been raised is that the Act has been pro tanto repealed by the Delhi Municipal Corporation Act of 1957. Section 42 provides that it shall be incumbent on the Corporation to make adequate provision by any means or measures which it may lawfully use or take, for each of the following matters, namely, “* * * *(k) the construction and maintenance of municipal markets and slaughter houses and the regulation of all markets and slaughter buses; it is submitted that the market area which has been established under the Act would be covered by the words “Municipal markets” or ‘markets’ appearing in the aforesaid clause and because of the enactment of the aforesaid Act the Act itself which was enacted prior to it would be repealed pro tanto. It is not possible to accede to this argument, particularly when it is borne in mind that the Act is for the better regulation of buying and selling of agricultural produce and the establishment of markets for agricultural produce. The purpose and object of its enactment have been very fully discussed by Chagla C.J in Bapubhai Ratanchand Shah v. The State of Bombay I.L.R 1955 Bom. 870, referred to before, and with regard to the Madras Commercial Crops Markets Act, 1933, by their Lordships of the Supreme Court in Arunachala Nador v. State of Madras A.I.R 1939 S.C 300, The Act is a special enactment for a specific purpose and object, whereas the provision contained in the Delhi Municipal Corporation Act is a general one. I am not at all satisfied that there is any repugnance between the two enactments. This contention also must be rejected.

7. The third point that has been raised by the learned counsel for the petitioners relates to the notification that was issued under section 3 on 22nd April, 1959. It was specifically alleged in paragraph 12(v) of the petition that the condition precedent obtained in proviso of section 3, namely, consultation with the municipality conceited had not been fulfilled before the notification was issued and that no such consultation had in fact been made nor was any resolution passed either by the Delhi Corporation or its Standing Committee or any other authority competent in law to do so on behalf of the Corporation. The respondents produced two letters. Exhibits R. 3 and R. 2, to show that the Corporation had been consulted. Exhibit R. 3 is a letter dated 20th February 1959 sent by the Assistant Development Commissioner to the Commissioner Delhi Municipal Corporation, saying that a comprehensive survey of the Najafgarh market was conducted with regard to the volume of trade, assembling, handling, and transportation of agricultural produce etc. prevalent in that market. It had been found that if the market was regulated under the Act, the producers and sellers would be benefited to the extent of lacs of rupees annually and in addition they would also be able to enjoy the facilities and amenities provided to them by the market committee. Before issuing notifications it was essential that the Corporation should be consulted as to whether there was any objection in regulating the market. The Deputy Commissioner who was performing the functions of the Commissioner, Delhi Municipal Corporation, wrote thus on 25th February 1959:—

“I am directed to say that we have no objection if the Najafgarh market is regulated under the Bomoay Agricultural Produce Markets Act, 1939, (Act XXII of 1939)”

The learned counsel for the petitioners submits that consultation involves an exchange of views after full details and particulars of a scheme or a project have been placed before the person or body whose consultation is required. He has placed reliance on the manner in which consultation took place in Fletcher v. Minister of Town and Country Planning (1947) 2 All. E.R 496, and Rollo v. Minister of Town and Country Planning (1948) 1 All. E.R 13, Section 1(1) of the English New Towns Act, 1946, laid down that if the Minister was satisfied after consultation with any local authorities that it was expedient in national interest that any area of land should be developed as a new town etc., he might make an order designating that area as the site of the proposed new town. In the second case it was laid down by Bucknill L.J that “consultation” meant that, on the one hand, the Minister must supply sufficient information to the local authority to enable them to tender advice, and, on the other hand, a sufficient opportunity must be given to the local authority to tender that advice. In the first case Morris J. expressed the view that the word “consultation” was one that was in general use and no useful purpose would be served by formulating the words of definition. Nor would it be appropriate to seek to lay down the manner in which consultation must take place. If a complaint was made of failure to consult, it would be for the Court to examine the facts and circumstances of the particular case and to decide whether consultation was in fact held. Consultation might often be a somewhat continuous process and the happenings at one meeting might form the background of a later one. It is apparent in the present case that there was hardly any consultation in the real sense of the word as there is nothing to indicate that any details and particulars of the survey which had been made of the Najafgarh market were sent to the Municipal Corporation or such other information was supplied with regard to the volume of trade, assembling, handling any transportation of agricultural produce as was available nor is there anything to show that it was the Corporation which took into consideration all the relevant factors and than directed the Deputy Commissioner to write the letter referred to before. There is a good deal of substance in the objection raised on behalf of the petitioners that the consultation of the Corporation did not main the consultation of its Chief Executive Officer, namely, the Commissioner who has not been shown to be competent to discharge the functions of the Corporation in this respect. No resolution has been produced to show that the matter had received the consideration of the Standing Committee constituted under section 45 of the Delhi Municipal Corporation Act or any other authority which could give the decision of the Corporation as such. According to Section 3 of the Act the consultation necessary is of the municipality concerned. Now the word “municipality” does not appear in the Delhi Municipal Corporation Act which came into force in 1957. “Corporation” is defined by section 2(7) of that Act which means the Municipal Corporation of Delhi established under that Act. It is contended by the respondents that the word “municipality” as defined in the Act is stated to include a notified area committee. It is thus confined to any municipality which has been established under any local or other enactment in any area to which the Act applies. Prior to the enactment of the Delhi Municipal Corporation Act, 1957, the Punjab Municipal Act, 1911, as extended to Delhi was in force and in that Act the word “municipality” was defined by section 3(9) to mean any local area declared by or under that Act to Page: 618be a municipality. The learned counsel for the petitioners maintains that the word “municipality” as employed in she Act is used in a general sense and that its dictionary meaning should be taken into consideration and it should not be confined to any particular definition given in the Punjab Municipal Act. According to the Shorter Oxford Dictionary the word “municipality” has two meanings—

1. A town, city, or district possessed of privileges of local self government, also applied to its inhabitants collectively.

2. The governing body of such a town or district

In Webster's New International Dictionary the following meanings are given:—

1. A town, city or other district having powers of local self-government, a municipal corporation; also, the community under there jurisdiction of a municipal government; specif; a municipium.

2 The administrative area into which provinces are divided, comprising a number of barriers.

8. It is true that in the definition of “municipality” given in section 2(1)(viii) of the Act itself it is stated to include a notified area committee and the suggestion of the learned counsel for the respondents is that there was no need of including a notified area committee in the definition of “municipality” if the word was intended to be employed in a general sense and not in the specific sense of the definition contained in the Punjab Municipal Act. Reading the definition, however, as given in the Act and the use of the word “municipality” in the proviso to section 3, no doubt is left in my mind that the word “municipality” is used in two senses in the proviso. Where it refers to the limits, it essentially has the meaning of a town, city or district possessed of privileges of local self government and when it is employed with reference to consultation, it cannot possibly have that meaning and the only meaning that it can have is the second meaning given in the Shorter Oxford Dictionary referred to before, namely, the governing body of such a town or district. If the meaning of the word “municipality” is to be confined to the definition given in the Punjab Municipal Act then that could certainly apply to that word in the first part of the proviso with reference to the limits but it cannot be made applicable to the other part of the proviso where the consultation of the municipality has been made a condition precedent for issuing the notification under section 3. In the Punjab Municipal Act the governing body of a municipality is a committee which is separately defined by section 3(4) to mean a municipal committee. Section 4 of that Act lays down the procedure for constituting a municipality which essentially has reference to the local area. The constitution of the Committee is provided for by section 11. If the intention in section 3 of the Act had been to provide for consultation with the committee constituted under the Punjab Municipal Act, then the word “committee” would have been employed where consultation is mentioned in the proviso. In other words, instead of the words “except after consultation with the municipality concerned”, the words “except after consultation with the committee of the municipality concerned” would have been found in the proviso. This shows that the legislature never intended that the consultation should be only of the body exercising functions of a committee under the Punjab Municipal Act over a local area defined to be a municipality under that Act. The use of the word “concerned” makes it further clear that the intention was to have the consultation of the governing body of a municipality used in the general sense according to its dictionary meaning. Sub-section (2B) of section 4 also lends support to this view. It provides that on or after the date on which and Page: 619area is declared to be a market area under sub-section (1), no municipality or any other local authority notwithstanding anything contained in any enactment relating to such municipality or authority, snail be competent to establish, authorise or allow to be established any place in the said area for the purchase or sale of any agricultural produce specified in the notification issued under sub-section (1). The words “municipality or any other local authority” are used clearly in a general sense and would cover the Municipal Corporation of Delhi. Municipal Corporation is included in the meaning of the word “municapality” according to Webster's New International Dictionary (Supra). It cannot be denied that the Municipal Corporation of Delhi constituted under the Delhi Municipal Corporation Act is a municipality in the general sense of that word and the consolation in the proviso to section 3 of the Act would have reference to the corporation charged with the municipal government I of Delhi consisting of councillors and aldermen.

9. The question still remains whether the notification issued under section 3 will be illegal and void in the absence of consultation with the municipality concerned. The learned counsel for the respondents contend that such consultation is merely directory and not mandatory and, therefore, even if the Chief Commissioner issued the notification without the consultation of the municipality concerned, the notification would not become illegal. My attention has been invited to a decision of the Federal Court in Biswanath Khetmka v. Emperor A.I.R 1945 F.C 67, in which the provisions contained in section 256 of the Government of India Act, 1935, came up for consideration. That section was in the following terms:—

“No recommendation shall be made for the grant of magisterial powers or of enhanced magisterial powers to or the withdrawal of any magisterial powers from, any person save alter consultation with the District Magistrate of the District in which he is working, or with the Chief Presidency Magistrate, as the case may be.”

The appointment of the Additional Presidency Magistrate trying the cases was made without consulting the Chief Presidency Magistrate and the contention raised was that the appointment was ineffective and inoperative for that reason. Their Lordships expressed the opinion that the consultation of the Chief Presidency Magistrate was not necessary and the authority to be consulted in pursuance of the direction contained in the section was the District Magistrate of the District in which the person concerned was working at the time when the recommendation was made. Although the consultation of the District Magistrate was required, it was observed that there was nothing on the record to indicate that such consultation did not take place. Their Lordships proceeded to observe as follows:—

“We are further of the opinion that the direction laid down in section 256 is directory and not mandatory and that non-compliance with it would not render an appointment otherwise regularly and validly made ineffective or inoperative. It seems to us that any other view would lead in many cases to results which could not have been intended by Parliament and would entail general inconvenience and injustice to persons who have no control over those entrusted with the duty of making recommendations for the grant of magisterial powers; see Montreal Street Railway Co. v. Normandin A.I.R 1017 P.C 142”

It is noteworthy that section 256 of the Government of India Act employed the words which were of as emphatic and prohibitory nature as the words employed in the proviso to section 3 of the Act. In State Of U.P v. Manbodhan Lal Srivastava A.I.R 1957 S.C 912, the question was whether the provisions contained in Article 320(3)(c) were mandatory, non-compliance with which would afford a cause of action to a civil servant in a Court of law. Page: 620It was decided that although the word “shall” was used and although that word should be taken as mandatory in a general sense, it did not necessarily mean that in every case it should have that effect. The Federal Court judgment referred to above appears to have been accepted as laying down the correct law. It is true, as stated in Crawford on “Statutory Construction” at page 516, that the question as to whether a statute is mandatory or directory depends upon the intent of the Legislature and not upon the language in which the intent is clothed. The meaning and intention of the Legislature have to be ascertained not only from the phraseology of the provision but also by considering its nature, its design, and the consequences which would follow from construing it the one way or the other, but there is nothing in the proviso to section 3 except the prohibitory nature of the language employed that the necessary result and effect of not consulting the municipality concerned would be to make the notification issued by the Chief Commissioner under section 3(1) altogether null and void. It is significant that such words as prior consent or approval were not employed by the Legislature in the proviso. I am, therefore, of the opinion that the consultation with the municipality concerned was merely directory and would not render the notification issued under section 3 illegal and void.

10. One of the objections that was raised on behalf of the respondents which need not be decided but which may be mentioned is that the petitioners would not be entitled to any of the reliefs claimed in the petition on account of acquiescence, laches or delay. The learned counsel for the petitioners, however, submits that if the notification issued under section was illegal and void, the subsequent notifications would be equally void and inoperative, with the result that the fundamental rights of the petitioners to carry on the business of merchants or commission agents in agricultural produce in the area concerned would be affected and in those circumstances acquiescence and delay would not disentitle the petitioners to appropriate reliefs. Reference has been made in this connection to Shri Bhagwat Dayal v. Union of India (1959) 61 P.L.R 609 and Basheshar Nath v. Commissioner of Income Tax, Delhi and Rajasthan A.I.R 1959 S.C 149, in which cases it has been laid down that there can be no waiver of fundamental rights by a party and mere laches will not deprive him of that right. This question, however, needs no further discussion in view of what has been held above, namely that non-compliance with the conditions laid down in the proviso to section 3 did not make the notification issued under that section or the subsequent notifications illegal and void.

11. In the result, this petition fails and is dismissed, but keeping in mind the nature of the points raised, I leave the parties to bear their own costs.

Petition dismissed.