P.J. George vs Municipal Commissioner Trichur and Another

M.S. Menon, J.—The Petitioner is running the Government distillery at Trichur in accordance with the provisions of Ex. A, an agreement dated the 2nd Kumbhom 1128. The Trichur Municipality has demanded from him a licence fee of Rs. 1000/- per year In- pursuance of a notification published by the Municipal Council u/s 255 (1), Cochin Municipal Act, XVIII of 1113, and the Petitioner''s contention is that the demand cannot be supported.

Exhibit B is the order of the Municipal Commissioner (first Respondent) negativing the Petitioner''s contention and Ex. C is the order of the Municipal Council (second Respondent) affirming the decision of the Municipal Commissioner. The prayer In the petition is that Exs. B and C "be quashed by a writ of certiorari or other appropriate writ or direction and also that the first and second Respondents be restrained by an appropriate order from realising from the Petitioner the license fee for the year 1953 to 1954 for carrying on the business -of the Distillery."

Sub-section (1) of Section 255 omitting the proviso thereto reads as follows:

The Council may publish by notification in the Cochin Government Gazette and by beat of drum that no place within Municipal limits or at a distance within one mile of such limits shall be used for any one or more of the purposes specified in Schedule v. without the license of the executive authority and except in accordance with the condition specified therein," Purposes (r) and (s) of Schedule v. are "manufacturing or storing anything from which offensive or unwholesome smells arise,

and using for any industrial purpose any fuel or machinery"

and there can be no doubt that the Petitioner is using the premises for those purposes as part of his Activities in the manufacture and supply of arrack under Ex. A.

The main contention of the Petitioner before us, however, is not that there is no user of the premises for any of the purposes specified in Sch. v. but that he is not liable to take out a licence as Sub-section (3) of Section 256, Cochin Municipal Act is ultra vires of the Constitution in that it endows the executive authority with a naked and arbitrary power and thus constitutes a violation of the fundamental right guaranteed by Article 19 (1) (g) "to practise any profession, or to carry on any occupation, trade or business."

Sub-section (3) of Section 255 is in the following terms: "The executive authority may, by an order and under such restrictions and regulations as he thinks .fit, grant or refuse to grant such licence." The Sub-section taken by itself does afford some basis for the contention ; and in Mohamed Kasim & Bros. v. Municipal Council Ootacamund, 68 Mad L W 823: (S) AIR 1956 Mad 181) (A), Rajagopala Ayyangar J., dealt with Sub-section (3) of Section 249, Madras District Municipalities Act, 1920, which is identical in weeding, as follows:

"Iu-47''ill be seen that under Sub-section (3) the executive authority is given an absolute power of refusing to grant the licence as also''the power of imposing such restrictions and conditions as he might think fit. As the Petitioners have under the Constitution a fundamental right to carry on their ibuslness subject to such reasonable restrictions as might be imposed, the question is whether the vesting of such an absolute power as would be involved in Sub-section (3) in an executive authority without any guidance by the Legislature as to the relevant conditions and restrictions would be. a reasonable restriction within Article 19 (6) of the Constitution. In my opinion, the Sub-section in its present form is in contravention of Article 19 (6) and has to be struck down as violating the fundamental right guaranteed by Article 19 (g)."

We are unable to agree with this conclusion as other provisions of the Madras District Municipalities Act like Section 321(4):

"Every order of a municipal authority refusing, suspending, cancelling or modifying a licence or permission shall be in writing and shall state the grounds on which it proceeds"and Section 322(1)(c):

An appeal shall lie to the council from any order of the executive authority granting or refusing a licence or permission" which we consider material have apparently not been noticed by the Court.

In Dwarka Prasad Laxmi Narain Vs. The State of Uttar Pradesh and Others, , the Supreme Court said that the power of granting or withholding licence "would necessarily have to be vested in certain public officers or bodies and they would certainly have to be left with some amount of discretion in these matters" and pointed out that the mischief arises only "when the power conferred on such officers t is an arbitrary power unregulated by any rule or 4 principle and it is left entirely, to the discretion ot particular persons to do anything they like without", any check or control by any higher authority.", In this case adequate checks and controls, as we shall show presently, are available and in view of that we must hold that the provision impugned does no more than strike (to use the words of the Supreme Court in the case above mentioned) "a proper balance between the freedom guaranteed under Article 19 (1) (g) and the social control permitted by Clause (6) of Article 19".

Section 255 (3) occurs in Part IV of the Cochin Municipal Act, a Part which is entitled "Public Health, Safety and Convenience" and section 296 (4) provides:

"Every order of a municipal authority refusing, suspending, cancelling or modifying a licence or permission shall be in writing and shall state the grounds on which it proceeds.;1 In other words a "speaking" order, that is, an order which sets out the grounds of the decision,! is postulated and it goes without saying that the; grounds will have to be (to adopt the words of Lord Halsbury in Sharp v. Wakefield, (1891) 60 L J M C 73 (C) "according to the rules of reason and justice, not to private opinion", "according to law, and not humour", "not arbitrary, vague, and fanciful, but legal and regular".

That a power of judicial review in appropriate cases is available as regards "speaking" orders can also be considered as well settled since the decision in R. v. Northumberland Tribunal, 1954 1 All E R 268 (D). Commenting on that decision the Modern Law Review (Vol. XIV, p. 207)-said that: "Pew judgments in recent years have aroused more widespread interest" and:

"In ordering certiorari to issue to quash the decision of the tribunal because of error of law apparent on the face of it, i the Court revived an almost forgotten doctrine of judicial review which enables the Courts to exercise what is in effect an appellate jurisdiction in relation to the reasoned decisions of inferior tribunals."

It is true that in Boulter v. Kent Justices 1897 A C C 556 (E) the House of Lords described licensing as an "administrative act" but subsequent decisions have taken "a different view. In- R. v. Woodhouse, (1906) 75 L J K B 745 (P), Vaughan Williams L. J., said:

I ask myself, therefore, the question whether the licensing Justices in granting or refusing a licence do a judicial act. In my opinion the grant or refusal of such a licence is a judicial act" and R. v. London County Council, 1931 2 K B 215(G) Bcrutton L. J., considered the position as settled since the decision in R. v. Woodhouse (F). Reading S. 255 (3) of the Cochin Municipal Act in the context in which it appears and in the light of the trammels under which the power conferred by that Sub-section is to be exercised, we think we can take the view that the function of the executive authority under that Sub-section is a judicial or quasi judicial function and not an act:which can be considered as merely administrative in character.

Apart from the direction for a "speaking" order and the liability to''.judicial review which such an order affords, Sub-sections (1) and (2) of S. 329 of the Cochin Municipal Act also provides for appeals to the Council and the Government:

329 (1). An appeal from any notice or order issued or other action taken or proposed to be taken by the Chairman of the executive authority under the provisions of this Act shall in the first instance lie to the Municipal Council, and the Council may pass such orders as it deems fit.329 (2). Any person aggrieved by any notice or order issued or passed by, or by any other act of a Municipal Council or its Chairman or executive authority under this Act may appeal to the Diwan or such other officer as may be appointed by Government in that behalf. The Diwan or other appellate officer may pass such orders on the appeal as he thinks fit and pending decision may direct the council, Chairman, or executive authority to keep the proceedings in abeyance.

In the light of what is stated above we must hold that Sub-section (3) of Section 255 does not confer on the executive authority:i power that is naked and arbitrary, that the said Sub-section is not ultra vires of the Constitution and that, this petition should be dismissed.

The petition is hereby dismissed, but In the circumstances of the case without any order as to costs.