P. Venkatachallam, a business concern, by its Receiver Mr. Gompertz vs The Commissioner, Corporation of Madras

Stone, J.—This motion is for the issue of a writ of certiorari to the Commissioner, Corporation of Madras, commanding him to send

forthwith to and before this Court all and singular the orders of the Commissioner, Corporation of Madras, dated 1st May, 1933, in the matter of

issuing a license to the P. Venkatachallam Condiment Factory with all things touching the same etc. The matter has been very fully and fairly argued

before me partly on affidavit evidence and partly on oral evidence, and it is agreed quite properly by Mr. Rajamanikkam on behalf of the

Corporation that the point in issue shall be finally disposed of to-day rather than limiting my orders to-day to the issue of a writ which would be

returnable for argument.

The question that the proceedings raise is one of very considerable importance, in my opinion, to the business community of Madras. It relates

to the powers of the Corporation (conferred by the Madras City Municipal Act) to refuse or cancel the license required before certain scheduled

trades can be carried on. It was observed by Reilly, J., in Corporation of Madras v. The Madras Electric Tramways, Ltd. (1930) 60 M.L.J. 551

as follows:

Can it be supposed that it was intended that the Commissioner of the Corporation under the City Municipal Act should have power arbitrarily to

prohibit any of these operations from being conducted in any part of the City of Madras? Such a suggestion on the face of it would be absurd. It is

possible that, if the Commissioner found that a very large number of persons were applying for licenses to carry on one of the more objectionable

trades or occupations included in that schedule, he might reasonably say : ''there are quite enough people in Madras doing that business already,

and, if I allow any more to do so, there will be serious nuisance to the public''. In such a case he might perhaps use his powers of refusing licenses

to prohibit any more people from starting those particular operations. But, apart from that, I think it is quite clear that the Commissioner''s powers

are intended for regulation, not for prohibition.

That power is conferred by Section 287 of the Madras City Municipal Act and runs as follows:

(1) The owner or occupier of every place used for any purpose specified in Schedule VI shall, in the first month of every year, or, in the case of a

place to be newly opened, within one month before it is opened, apply to the Commissioner for a license for the use of such purpose.

(2) The Commissioner may, by an order and under such restrictions and regulations as he thinks fit, grant or refuse to grant such license.

(3) No person shall, without or otherwise than in conformity with such a license, use any place for such purpose

and Schedule V I, among other things, mentions the manufacturing of condiments. Section 365(3) provides:

Every order of the Commissioner refusing to grant a license or permission shall state the grounds on which it proceeds.

Sub-section (10) of that section provides:

The acceptance by the Corporation of the pre-payment of the fee for license or permission or for registration shall not entitle the person making

such pre-payment to the license or permission or registration as the case may be, but, only to refund of the fee in case of the refusal of the license

or permission or of registration; but an applicant for the renewal of a license or permission or registration shall, until communication of orders on his

application, be entitled to act as if the license or permission or registration had been renewed; and, save as otherwise specially provided in this Act,

if orders on an application for a license or permission or for registration are not communicated to the applicant within forty-five days after the

receipt of the application by the Commissioner, the application shall be deemed to have been allowed for the year or for such less period as is

mentioned in the application and subject to the law, rules, by-laws, regulations and all conditions ordinarily imposed.

Provision is made in Section 366 for an appeal from a refusal by the Commissioner to grant a license u/s 287. Therefore one has the following

steps : application for a license, consideration of the matter by the Commissioner : he either decides to grant or to refuse or to refuse save under

conditions : in the case of refusal or refusal save under conditions, he communicates his reasons : the applicant then has an opportunity to be heard :

he places his case before the Standing Committee to persuade them, if he can, to reverse the order of refusal. In this case the relevent steps are as

follows : On the 14th March, that is before the beginning of the official year, the receiver and manager of this condiment business, which receiver

and manager I may observe is an officer of Court, wrote the following letter:

SIR,

Factory license.

I have the honour to enclose a cheque for Rs. 15 being the license fee for the condiment factory, situated at 1 and 2, Poonamallee High Road, for

the year 1933-1934. Kindly acknowledge receipt.

The money was received and the challan for payment of money was given and under ""Particulars of payment"" was given ""License fee for

manufacturing condiment at Nos. 1 and 2, Poonamallee High Road"". Now it is said - and I must say, to my surprise - that this is not an application

for a license : as it is not an application for a license, there is no application for a license, and therefore there can be no grant of a license, and

therefore this business must close down. The matter is put in a somewhat different way in a letter from the Commissioner, dated 1st of May, 1933,

in which he says:

I have the honour to inform you that the Standing Committee before whom I placed the matter of granting a license to the P. Venkatachallam''s

Condiment Factory at No. 1, Poonamallee High Road, have, at a meeting held on the 26th April, 1933 refused to reconsider their order of refusal.

Please therefore make arrangements to stop the trade within a month from the date of receipt of this communication.

I think that a businessman receiving that communication would be arriving at a reasonable conclusion if he concluded that his application for a

license had been placed before the Standing Committee, that they had refused it, and again that they had reconsidered it and refused to consider

that refusal, and that order of refusal was now being communicated to him with a further order to stop work within a month. I am now informed by

Mr. Rajamanikkam on behalf of the Corporation and by the Commissioner in an affidavit he has filed that any businessman so reading that letter

would have been under a complete misapprehension for no application had been received, no application had been considered and no order had

been made on any application because there was no application. I make no comment, but I think it is right in the interests of the business

community of Madras to say this. This power of stopping businesses, not only businesses like this that has been running for 73 years but any

business upon which a man''s livelihood depends, is a power that I think should be used very carefully. This particular business is a very famous

business though a small one. It employs over a hundred people, mostly quite poor people. It occupies premises of some considerable value. It

exports from India lakhs worth of goods bringing wealth to a country that is not too wealthy. It has at the present moment considerable debts and

driving it out of business would cause many creditors to lose what otherwise they may recover. Financial loss, business loss, loss of wealth to India

of employment to people are involved if this business is compelled to close down. This business is no peculiar case. The same can be said of

hundreds of businesses in Madras. Small businesses they may be, but they are all the livelihood that their owners possess; and they are the source,

probably the only source, of employment of the people of Madras in these times of stringency, and I should think that, when that is borne in mind,

the Madras Corporation should remember that they, like all other public bodies and like all officials, do not exist so that jobs should be found but

for the benefit of the citizens they are controlling, and to stop a business like this on the ground that a letter enclosing the license fee and asking for

the license is not an application seems to me to show a lack of appreciation of the seriousness of the occasion. The Commissioner in the affidavit

that he swore to in this matter although he takes this purely technical and, I think, trivial ground, also adds to it a ground of substance, the sort of

ground that would, I think, justify the Municipality or the Commissioner in refusing a license, except upon terms. Even in such a case I do not

consider that there should be a blank refusal but only a refusal unless certain indicated safeguards are provided. This is the ground:

The pungent odour and dust of the chillies from the factory is in ray opinion a public nuisance and the continuance of the trade should be stopped in

the interests of public health.

If this business, conducted as it is, is injurious to public health, then it seems to me that this is the sort of case that falls within the scheme of the

Act, the sort of case for which this regulative power is given, to prevent one citizen injuring the health of another. When I read that affidavit I

confess to a considerable surprise. I was not aware that you ever ground chillies into dust in such quantities that you could get such clouds of

pungent vapour as to be likely to cause injury to the health of the citizens of Madras, and for that reason primarily I thought it well to go and have a

view myself of the premises. 0 I have had a view and I have also the evidence of Mr. Gompertz, who is the Receiver in this matter and who is a

witness upon whom I rely. From that view and upon that evidence I am of the opinion that there is no such nuisance, that there is no danger to

public health, that chilly dust is not escaping in large quantities and never by itself, these chillies being mixed with a great number of other things and

made into curry powder. I went to these premises. They are not situated in a residential locality in my opinion. On the one side there is a dramatic

club and on the other side a working men''s club, and abutting it there is a flour mill : next to that is an open yard and next to that a garage. They

are backed by the Electric Railway and fronted by a wide high road along which Trams pass. I had to take thirteen steps from the outside to these

premises into the factory before I could smell anything. There was no sign of dust of any kind anywhere until I had got beyond the corrugated

partition that separates the entrance from the factory proper. I stood for quarter of an hour with all the various powders working round me and

was not in the least affected by the smell. There was no dust on the floor at all. All the curry mixture was being ground in motors by steel pestles

and it was the business of a man to keep the curry powder in these motors and not let any part escape. There was no dust in the air at all. It may

well be that I went on a peculiarly favourable day : it may well be that things are worse in the hot weather. But I can only say that they would have

to be altogether different from anything I have observed before this business can be regarded as in any way a nuisance or danger to public health.

To think of the smell of chillies in curry powder endangering the health of the people who inhabit Periamet seems to me to be a little fanciful, and I

can only assume that the Commissioner has much more delicate organs for the detection of smells than most of us. That is as regards the facts.

Now, as regards the application of the facts to the provisions of the Act, it seems to me that here there was on the 14th of March of this year an

application for a license. That application has never been considered, and it has never been refused. The Corporation have retained the license fees

beyond the period provided by the Act and P. Venkatachallam & Co. have now got a statutory license for this financial year. The order dated the

1st May directing them to close their business was an order made without any statutory or proper authority and must be quashed. The Standing

Committee has nothing to do with the issue of licenses unless and until the application has been received, considered and refused with reasons

given. That situation, so far as this financial year is concerned, has never arisen. The application accordingly succeeds with taxed costs.