B.N. Chowdappa Chetti vs President, Panchayat Board

Alfred Henry Lionel Leach, C.J.—Since the year 1930 the petitioner has been carrying on a rice milling business at Karimangalam in

premises which had been used for the same purpose from 1920 to 1930 by his brother. By virtue of the provisions of Section 193 of the Madras

Local Boards Act, 1930, the Panchayat Board of Karimangalam was empowered to require the petitioner to take out a license in respect of the

premises. Licenses were issued to the petitioner from year to year but in 1939 the Board refused a further renewal. The petitioner says that in

doing so the Board has acted in excess of its powers and asks that its order be quashed.

Sub-Section (1) of Section 193 states that the Panchayat Board may notify that no place within the limits of the village shall be used for any one

or more of the purposes specified in Schedule VII without a license issued by the President of the Board and except in accordance with the

conditions specified in the license, provided that no notification shall take effect until 60 days from the date of publication. The purposes for which

premises may hot be used without a license include the ""using for any industrial purpose any fuel or machinery"". Sub-Section (2) says that the

owner or occupier shall within thirty days of the publication of the notification under sub-Section (1) apply to the president of the Board for a

license for the use of the premises for the purpose intended. Sub-Section (3) says that the president may, by an order and under such restrictions

and regulations as he thinks fit, grant a license or refuse to grant it.

On the 20th September, 1932, the Panchayat Board caused a notification to be issued u/s 193(1) to the effect that no place within the limits of

its jurisdiction should be used for specified purposes without a license from the president. The notification applied expressly to rice mills and the

license fee was fixed at Rs. 5. In pursuance of this notification the petitioner applied for and was granted a license by the Board and he renewed his

application every year. On the 21st January, 1938, avfresh notification was published by the Board. It differed from the earlier notification only in

that it increased the license fee from Rs. 5 to 10. On the 18th February, 1938, the Board issued a notification u/s 215-A of the Act. This section

says:

Whenever a local board sets aparr any place for any purpose or prohibits the doing of anything in any place, the president shall forthwith cause to

be put up a notice in the chief vernacular language of fee locality specifying the purpose for which such place has been set apart or the act

prohibited in such place

The notification purported to create an industrial area within the jurisdiction of the board.

On the 19th February, 1938, the board; issued to the persons having Mills in Karimangalam a notice in these terms:

As the sites noted in the margin have been declared as the Industrial area of this Board with the approval of the District Health Officer and Director

of Town Planning and as the District Health Officer insists upon removing all the mills to the Industrial area in the interest of Public Health, I hereby

give you three months notice to shift your mills to the Industrial areas approved by this Board failing which action will be taken to remove the mills.

On this date there were six persons carrying on milling businesses in Karimangalm, of which the petitioner was one. The record discloses that

the Health Officer considered, that from the standpoint of health it was undesirable to have s mills in the residential part of Karimangalam. In his

opinion the petitioner''s mill was particularly objectionable.

On the 6th April, 1938, the special officer who had been appointed by the Government to fulfil the duties of the Panchayat Board for the time

being, wrote to the millowners informing them that they, would be granted temporary licences upto the 18th May, 1938, the intention being, that

after that date no licence would be issued to them unless they removed their mills to the industrial area. On receipt of this letter the mill owners

moved the Government to cancel the notification of the 19th February, 1938. Pending inquiry into the matter, the Government suspended the

operation of the notification and allowed the mill owners to run their mills in the premises they then occupied. On the I6th January, 1939, the

Government passed an order which in effect rejected the application of the mill owners. The order was in these terms:

The President, Panchayat Board, Karimagalam, (Salem District) is informed that the rice mill owners who have.not yet moved to.the industrial area

should be directed to do so at an early date. They may be given time for the purpose, as may be fixed by the Panchayat Board The time limit

should not however exceed one year. Meanwhile the prosecutions pending against them may be withdrawn.

On the 12th February., 1939, the Board gave the mill owners six months time from the 1st February, 1939, to remive their mills to the industrial

area. With the exception of the petitioner all the mill owners have complied with this direction. On the 15th February, 1939, the petitioner applied

for a license in respect of his mill in the residential area for the year commencing the 1st April, 1938, and the licence was issued to him. On the

23rd February, 1939, he applied for a licence for the year commencing the 1st April, 1939. This was refused, but he was informed that he could

apply for a temporary licence until the 31st July, 1939, subject to the condition that he should then remove his mill to the industrial area. This

permission was in accordance with the notice issued to the mill owners on the 12th January, 1939. In spite of this decision the petitioner wrote to

the president of the board on the 30th March, 1939, requesting that licence be issued to him ''according to mamoo'', which means according to the

usual practice. This letter resulted in an order granting a temporary licence from the 1st April, 1939, to the 31st July, 1939, subject to the condition

that he should then remove his mill to the industrial area. The board refused to alter this decision and consequently refused to issue a licence to the

petitioner after, the 1st August, 1939. The petitioner has now moved this Court to quash the orders of the 24th February, and of the 30th March,

1939.

The petitioner says that the Board had no power to notify an industrial area and, as it has not got this power, it is not entitled to refuse him a

licence in respect of the premises in which he has carried on a milling business for so many years. For the purposes of the present application the

Court may assume that the board had no power to notify an industrial area. It is not necessary for the Court to examine Section 215-A and the

relevant sections which precede it, because it is clear that the petition must be dismissed on another ground. Section 193(3) empowers the

president of the Board to grant or refuse a licende; and as pointed out by this Bertch in Khan Bahadur Abdul Kareem Sahib v. The Commissioner,

Corporation of Madras Application No.1900 of 1939 on the file of the High Court, Madras, when considering the corresponding section in the

City Municipal Act, 1919, the section must be construed according to the words used therein and when it is so construed there is no room for

reasonable doubt that the president has in a proper case the power to refuse to renew a licence. Of course, if the refusal were arbitrary or

prompted by some ulterior motive the position would be different. In Ibis case it cannot be said that the Board has acted arbitrarily or in any way

improperly. There was material before the Board on which it could come to the conclusion that it was in the interest of the residents of

Karimangalam that the mills in the residential quarters should be removed to another area, gave ample opportunity to the mill owners to removed

their mills from the residential area and when refusing licenses for their old premises the board made it quite clear that licenses would be issued in

respect of premises within the industrial area. It is not disputed that the board acted entirely bona fide. Its action is only challenged on the ground

that it had no power to notify an industrial area. That is not sufficient to entitle the petitioner to succeed, even assuming that his contention in this

respect is correct. The president had power to refuse to renew and his order can only be set aside if he has exercised that power in an arbitrary or

illegal manner, which is not the case. The petition will be dismissed with costs.