TMI Blog1966 (12) TMI 67X X X X Extracts X X X X X X X X Extracts X X X X ..... es on in Calcutta any trade, shall take out a licence and shall pay for the same such fee as is mentioned in that behalf in Schedule IV to the Act. Admittedly for the year 1960-61, the Government of West Bengal did not take out a licence under the said section but carried on the said trade. The main contention of the Government was that the State was not bound by the provisions of the Act. The learned Magistrate, accepting the said contention, acquitted the State. On appeal, the High Court of Calcutta held that the State was carrying on the business of running a market and, therefore, it was as much bound as a private citizen to take out a licence. It distinguished the decision of this Court in Director of Rationing and Distribution v. The Corporation of Calcutta([1961] 1 S.C.R. 158) on the ground that the said decision was concerned with the sovereign activity of the State. In the result the State of West Bengal was convicted under s. 537 of the Act-s. 537 appears to be a mistake for s. 541-and sentenced to pay a fine of ₹ 250, with the direction that when realized, it should be paid to the Corporation. Hence the present appeal. Learned Advocate General of West Bengal rai ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e reasons given by this Court for applying the said rule of construction to an Indian statute. There, the Director of Rationing and Distribution was using certain premises in Calcutta for storing rice flour, etc. without taking out any licence under s. 385 (1)(a) of the Calcutta Municipal Act, 1923. The Corporation of, Calcutta filed a complaint against the said Director in the Magistrate s Court for the contravention of the said provision. This Court held that the State was not bound by the provisions of s. 386 (1)(a) of the said Act and that the appellant was not liable to prosecution for the contravention of the said section. Sinha, C. J., speaking for Imam and Shah, JJ., gave one judgment, Sarkar, J., gave a separate but concurrent judgment, and Wanchoo, J., recorded his dissent. The reasoning of Sinha, C.J., is found in the following passage : It is well-established that the common law of England is that the King s prerogative is illustrated by the rule that the Sovereign is not necessarily bound by a statutory law which binds the subject. This is further enforced by the rule that the King is not bound by a statute unless he is expressly named or unless he is bound by nece ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ogative. (At p. 185). But where the royal prerogative is merely a rule of construction of statutes based on the existence of the Crown in England and for historical reasons, I fail to see why in a democratic republic, the courts should not follow the ordinary principle of construction that no one is exempt from the operation of a statute unless the statute expressly grants the exemption or the exemption arises by necessary implication. (At pp. 188-189). The conflict between the two views expressed by the learned Judges in the earlier decision mainly rests on the meaning of the expression law in force in Art. 372 of the Constitution. While Sinha, C.J., took the view that the common law of England, including the rule of construction, was accepted as the law of this country and was, therefore, the law in force within the meaning of the said Article, Wanchoo, J., took the view that whatever might be said of the substantive laws, a rule of construction adopted by the common law of England and accepted by the Privy Council at a time when the Crown was functioning in India, was not the law in force within the meaning of the said Article. We shall now consider the validity o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nd and overrides any pre-existing rules with which it is inconsistent. A rule or canon of construction, whether of will, deed or statute, is not inflexible, but is merely a presumption in favour of a particular meaning in case of ambiguity. This was well expressed by Bowen, L.J. in L. N. W. Ry. v. Evans:([1893] I Ch. 16, 27) These canons do not override the language of a statute where the language is clear : they are only guides to enable us to understand what is inferential. In each case the Act of Parliament is all powerful, and when its meaning is unequivocally expressed the necessity for rules of construction disappears and reaches its vanishing point. The same principle was stated by Bhashyam Ayyangar, J., in Bell v. The Municipal Commissioners for the City of Madras(I.L.R. [1902] 25 Mad. 457, 484) thus : These compendious canons of interpretation which are in the nature of maxims can only be regarded as mere guides to the interpretation of Statutes and ought not to be applied as if they were statutory clauses, enacted with all the precision and provisos of an Interpretation Act. Franfurter, J., said to the same effect in United States v. United Mine Workers of Am ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on law of England relating to prerogatives of the King or even the rule of construction as forming part of that law was accepted as law in every part of the country. It has to be established whenever a question arises as to what part of the common law was accepted as the law in a particular part of the country. Learned Advocate General of West Bengal referred us to the decision of the Privy Council in Province of Bombay v. Municipal Corporation of the City of Bomhay([1946] L.R. 73 I.A. 271) in support of his contention that the common law of England was accepted as the law of our country in that regard. In that case the question was whether the Crown was not bound by s. 222(1) and s. 265 of the City of Bombay Municipal Act, 1888 which gave the Municipality power to carry water-mains for the purposes of water supply through across or under any street and into, through or under any land whatsoever within the city. When the Municipal Corporation wanted to lay watermains through the land belonging to the Government of Bombay, the Government did not agree except on some conditions. Thereafter, the dispute between the parties was referred to the High Court. Ultimately, setting aside ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... regard to the debts due to it, in England, in Ganpat Putava v. Collector of Kanara( [1875] I.L.R. 1. Dom. 7.) that the Crown was entitled to the same precedence in regard to fees payable to it by a pauper plaintiff, in The Secretary of State for India v. Mathura Bhai([1889] I.L.R. 14 Bom. 213.) that section 26 of the Limitation Act, 1877 being a branch of substantive law did not affect the Crown s right, in Motilal Virchand v. The Collector of Ahmedabad([1906] I.L.R. 31 Bom. 86.) that the Mamlatdars Courts could not entertain and decide a suit to which the collector was a party in The Government of Bombay v. Esufali Salebhai([1909] I.L.R. 34 Bom. 618) that the Crown had a prerogative right to intervene and claim compensation in Land Acquisition proceedings, in Hiranand Khushiram v. Secretary of State( A.I.R. 1934 Bom. 379.), that the Crown was not bound by the provision of the Bombay Municipality Act, in The Secretary of State for India v. The Municipal Corporation of Bombay (No. 1)([1935] 37 Bom. L.R. 499, 509) that the Crown was subject to a charge under s. 212 of the Bombay City Municipal Act. A careful study of these decisions discloses that all of them related to particular ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... held that the Crown was bound by s. 421 of the Calcutta Municipal Act, 1923 and that the unwholesome barley found in the Government stores was liable to be destroyed. No doubt, the Court re-stated the said rule of construction and came to the conclusion that by necessary implication the State was bound by the said provision. A Division Bench of the same High Court in Corporation of Calcutta v. Director of Rationing and Distribution(A.I.R. 1955 Cal.282) held that the State Government which was carrying on a trade at premises No. 259, Upper Chitpur Road, Calcutta, and was using or permitting the use of the said premises for the purpose of storing rice etc. without licence was liable to be convicted under s. 386(1)(a) of the Calcutta Municipal Act, 1923, read with s. 488 thereof When the said rule of construction was pressed upon the learned Judges, they held that the law, even after coming into force of the Government of India Act, 1935, was that the Crown or the Government was bound by the statute unless it was exempted from its operation either expressly or by necessary implication. They did not, therefore, accept the rule of construction laid down by the Privy Council. It c ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ct; at the most, it was relied upon as a rule of general guidance in some parts of the country. Some of the American decisions may usefully be referred to at this stage. It was said that in America where the Crown did not exist, the same rule of construction was adopted in that country as law of the land and therefore by analogy the same legal position must be accepted in India. The decision in H. Snowden Marshall v. People of the State of New York((1920) 65 L.cd. 315) only lays down that the State of New York has the common law prerogative right of priority over unsecured creditors. This case has nothing to do with the rule of construction but was based upon the common law prerogative of the Crown expressly embodied in the State s Constitution. The decision in Guarantee Trust Company of New York v. United States of America((1938) 82 L. ed. 1224) accepted the immunity of the sovereign from he operation of statutes of limitation. That decision was based upon the doctrine of public policy evolved by courts, though in evolving the said policy the courts had been influenced, to some extent, by the doctrine of the pregrogative of the Crown. This decision also does not express a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tives influenced some of the decisions of the Supreme Court ,of the United States cannot help us in coming to a conclusion whether the said rule had become part of the Law in India. Mr. Bindra, the learned counsel appearing for the Attorney- General sought to reach at the same result by a different process. He argued that the decision of the Privy Council in Province of Bombay v. Municipal Corporation of the city of Bombay and another(73 I.A. 271) is a law of the country. We have already noticed the decision in another context. It accepted the rule of construction on a concession made by the counsel. Even if it was a considered decision on the point, it was nothing more than an application of a rule of construction with which it was familiar for ascertaining the intention of statutory provisions applicable to the Bombay city. To sum up : some of the doctrines of common law of England were administered as the law in the Presidency Towns of Calcutta, Bombay and Madras. The Common Law of England was not adopted in the rest of India. Doubtless some of its principles were embodied in the statute law of our country. That apart, in the mofussil, some principles of Common Law were in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... and V. S. Rice and Oil Mills others v. State of Andhra Pradesh([1965] 3 S.C.R. 289). But it is not possible to hold. that a mere rule of construction adopted by English Courts, and also by some of the Indian Courts to ascertain the intention of the Legislature was a law in force within the meaning of this term. There is an essential distinction between a law and a canon of construction. This distinction between law and the canon of construction has been noticed by us earlier and we have held that a canon of construction is not a rule of law. We are not concerned here. with the statutory rules of interpretation. We are,- therefore, of the opinion that a rule of construction is not a law in force within the meaning of Article 372. The next question is whether this Court should adopt the rule of construction accepted by the Privy Council in interpreting statute vis-a-vis the Crown. There are many reasons why the said rule of construction is inconsistent with and incongruous in the present set-up we have no Crown, the archaic rule based on the prerogative and perfection of the Crown has no relevance to a democratic republic; it is inconsistent with the rule of law based on the d ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... o, it was contended that by necessary implication the State was excluded from the operation of s. 218 of the Act. It was contended that, as the infringement of the said provision entailed a prosecution and, on conviction, imposition of fine and imprisonment, and that as the State could not obviously be put in prison and as the fine imposed on the State would merge in the consolidated fund of the State, it should necessarily be implied that the State was outside the scope of the section. This argument was based upon the reasoning of Wanchoo, J., in his dissenting judgment in Director of Rationing and Distribution v. Corporation of Calcutta([1961] 1 S.C.R. 158). To appreciate the argument it is necessary to notice the relevant provisions of the Act. Under s. 218(1) every person who exercises or carries on in Calcutta any of the trades indicated in Schedule IV shall annually take out a licence before the prescribed date and pay the prescribed fee. Section 218 is in Ch. XIII. Under s. 541(1)(b) if any person exercises on or after the first day of July in any year any profession, trade or calling referred to in Chapter XIII without having the licence prescribed by that chapter, he shall ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 541(2) in terms directs that the fine shall be credited to the demand. All amounts credited towards demands, it cannot be denied, necessarily have to be credited in the Municipal Fund. Nor s. 547A detracts from our conclusion. Under that section in every case of an offence where the offender is sentenced to pay a fine, it shall be competent to the court to direct that in default of payment of the fine the offender shall suffer imprisonment. It was said that this section necessarily implied that the State could not be, hit by s. 218, as it could not obviously be imprisoned for default of payment of fine. But it will be noticed that this section only confers a discretionary power on the court and the court is not bound to direct the imprisonment of the defaulter. It is only an enabling provision. There are other ways of collecting the money from ]persons against whom an order under s. 547A is not made. This enabling provision does not necessarily imply an exemption in favour of the State. For all the aforesaid reasons we hold that the State is not exempt from the operation of s. 218 of the Act. In the result we hold that the conclusion arrived at by the High Court is correct. The ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n the Presidency towns by the establishment of Mayors Courts in the, 18th century with the express, injunction to apply that law. In the mufassal of the three Presidencies the common law was adopted by the Regulations constituting tribunals for administration of justice enjoining them to decide disputes according to justice, equity and good conscience , and elsewhere by the diverse Civil Courts Acts imposing similar injunctions. In the three Presidency towns of Calcutta, Madras and Bombay the charters of 1726 which established the Mayors Courts introduced within their jurisdiction the English common and statute law in force at the time so far as it was applicable to Indian circumstances. By the statute of 1781 (21 Geo. III c. 70, s. 17) the Supreme Court at Calcutta was enjoined to apply in the determination of actions against the Indian inhabitants of the town in matters of succession and inheritance to lands, rents, goods, and in all matters of contract and dealing between party and party, their personal law if both parties belonged to the same community, and by the law and usages of the defendant if they belonged to different communities. The English common law in its applicat ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... iction of the Assam and Orissa High Courts was derived from their respective parent High Courts-the Calcutta High Court and the Patna High Court. In the Courts in the mufassal, the Civil Courts Acts e.g. Bengal, Agra and Assam Civil Courts Act, 1887 s. 37; the Punjab Laws Act, 1872, s. 5; the Central Provinces Laws Act, 1875, ss. 5, 6; the Oudh Laws Act, 1876, S. 3. require the Courts to decide cases according to justice, equity and good conscience. There can therefore be no doubt that the Courts which functioned in the former British India territory were enjoined to decide cases not governed by any specific statutory rules according to justice, equity and good conscience, which meant rules of English common law in so far as they were applicable to Indian society and circumstances. By a long course of decisions of the High Courts in India the rule of the English common law that the Crown is not, unless expressly named or clearly intended, bound by a statute was applied in India. In The Secretary of State in Council of India v. Bombay Landing and Shipping Co. Ltd.(5 Bom. H.C.R O.CJ. 23) the Secretary of State for India claimed priority in the payment of a debt in the course of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... g, metalling or paving, sewering, draining, channelling and lighting of private streets and with execution of that work to the satisfaction of the Commissioner, if the work be not done in accordance with the requisition and for recovery of the expenses incurred in that behalf. In the second case, the Court held that the Crown was bound by necessary implication in respect of the charge which arises under s. 212 of the Bombay City Municipal Act 3 of 1888, that section being an integral part of the general scheme of the Act imposing tax on land in Bombay including Government land. In the third case the Bombay High Court observed that the general principle is that the Crown is not bound by legislation in which it is not named expressly or by necessary implication. But reading the relevant sections in the Act relating to the water supply it appeared that it would be impossible to carry them out with reasonable efficiency, unless Government was bound by them. The view of the High Court in the last judgment that the Province was bound by the statute by implication was overruled by the Judicial Committee in Province of Bombay v. Municipal Corporation of the City of Bombay and Another(I.L.R ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Bombay Municipal Act, 1888, which invested the Municipality with power to carry water-mains through, across or under any street and into,, through or under any land whatsoever within the city bound the Crown in whom the lands were vested either expressly or by necessary implication. The Judicial Committee observed that the general principle applicable in England in deciding whether the Crown is bound by a statute-that it must be expressly named or be bound by necessary implication-applies to Indian legislation. The Board observed at p. 274 : The maxim of the law in early times was that no statute bound the Crown unless the Crown was expressly named therein, Roy n est lie per ascun statute si il ne soit expressment nosme. But the rule so laid down is subject to at least one exception. The Crown may be bound, as has often been said, by necessary implication . If, that is to say, it is manifest from the very terms of the statute, that it was the intention of the legislature that the Crown should be bound, then the result is the same as if the Crown had been expressly named. It must then be inferred that the Crown, by assenting to the law, agreed to be bound by its provisions ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e to it : The Secretary of State for India in Council v. The Bombay Landing A Shipping Co. Ltd.([1961] 1 S.C.R. 158) and M/s. Builders Supply Corporation v. The Union of India(2). As I have already stated the adoption of the English law was not in its entirety, but as nearly as the circumstances of the case and of the inhabitants of the place admit. It would be confusing the issue to hold that because some prerogatives have not been adopted, no prerogative of the State may have any place in our system of law. Again in considering the limited question as to the application of the rule of interpretation under discussion, it would be an idle exercise to enter upon a detailed discussion of the prerogatives which have and which have not been assimilated in our system of law. In Director of Rationing Distribution v. The Corporation of Calcutta Ors.(3) this Court regarded the rule as one of interpretation, and it is so expressly stated in State of West Bengal v. Union of India([1964] 1 S.C.R. 371); Sri Vankata Seetaramanjaneva Rice and Oil Mills v. State of Andhra Pradesh( [1964]7 S.C.R. 456. ) and M/s. Builders Supply Corporation v. Union of India(A.I.R. [1965] S.C. 1061). ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ary if the Crown were already immune. This is not an unfamiliar argument, but, as has been said many times, such provisions may often be inserted in one part of an Act, or in a later general Act, ex abundanti cautela, and, so far as the Act of 1899 is concerned, it is fallacious to argue that the legislature which passed it must have had in mind the particular sections of the Act of 1888 which are not under review, or that it was impliedly interpreting those sections. The argument that the rule had not received recognition in the High Courts in India, before the judgment of the Judicial Committee reported in Province of Bombay v. Municipal Corporation of the City of Bombay and Anr.(1) was pronounced, is belied by the course of authorities summarised earlier. There was practically a consistent course of authorities prior to the Constitution in support of the principle which was affirmed by the Judicial Committee in Province of Bombay v. Municipal Corporation of the City of Bombay and Another(L.R. 73 I.A. 271). The origin of the rule undoubtedly was in the prerogative of the Crown, but there is even in the country of its origin authority for the view that the rule is regarded ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... aled, and even retrospectively, it would- then cease to be in operation : a decision which in the view of this Court is erroneous may be overruled and may cease -to be regarded as law, but till then it is law in force. It may be pertinent to bear in mind that it was never seriously argued before us that the judgment of the Judicial Committee which affirmed the view expressed in a long course of decisions was erroneous in the circumstances then prevailing. It was said by counsel for the Corporation that it is one of the fundamental principles of our Constitution that there is equality between the State and the citizens and discrimination is not permissible in the application of a law generally expressed. it was claimed that if other occupiers of markets take out licenses, and comply with the regulatory provisions of the Act, and the State is not obliged to abide by the rules, there would be unequal treatment between owners similarly situate and that the State may ignore the rules regulating the markets, and on that account the public interest would suffer. There is no reason however to assume that the State under a democratic Constitution would be impervious to public opinion, an ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the changed circumstances, for it is the State which enacts a legislation in terms general which alone may claim benefit of the rule of interpretation, and not any other State. It was urged that even if the rule that the State is not, unless expressly named or by necessary implication intended, to be bound, applies, its application must be restricted to cases where an action of the State in its sovereign capacity is in issue. Where, however, the State is following a commercial or trading activity, the rule can have no application. But in the context of modem notions of the functions of a welfare State, it is difficult to regard any particular activity of the State as exclusively trading. The State was originally regarded as merely concerned with the maintenance of law and order, and was not concerned with any trading activity. But that is now an exploded doctrine. For the welfare of the people the State does and is required in modern times to enter into many trading activities, e.g. to effectuate control of prices, prevent hoarding and distribute commodities in short supply, besides maintenance of departments like Posts, Telegraphs, Railways, Telephones etc., activities which m ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he general rule clearly is, that though the King may avail himself of the provisions of any Acts of Parliament, he is not bound by such as do not particularly and expressly mention him . It has been said that the reason of the rule is that it is inferred prima facie, that the law made by the Crown, with the assent of the Lords and the Commons, is made for the subjects, and not for the Crown per Alderson, B. in A.G. v. Bonaldson (10 M. W. 117,124). Two rules follow from the proposition that the law is prima facie made for subjects and not for the Crown: (i) the Crown is not bound by a statute save by express words or by necessary implication, (ii) that the Crown may take advantage of a statute, though not bound by it, unless expressly or impliedly prohibited from doing so. This Court categorically rejected the second rule in V. S. Rice and Oil Mills v. State of Andhra Pradesh([1964] 7 S.C.R. 456, 463, 463-4) and held that the State cannot be permitted to rely upon the artificial rule that the State can take advantage of a statute though not bound by it. I think that this Court should have refused to recognise the first rule also. The exception of the Crown from the operation ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... aid at pp. 280, 281, 282 and 286 of the Report: But it seems to be contended both here and below, that there is something in the law incapacitating aliens, which makes it, so to speak, of necessary application wheresoever the sovereignty of the Crown is established, as if it were inherent in the nature of sovereign power. To this a sufficient answer has been already afforded, if the acts of the sovereign power to which we have referred, show that no such application to Bengal ever was contemplated, unless direct authority can be produced to show that the right is inseparable from the sovereignty, and, as it were, an essential part of it. It certainly is not an incident to sovereignty; in several countries the sovereign has no such right........... Besides, if reference be made to the prerogative of the English Crown, that prerogative in other particulars is of as high a nature, being given for the same purpose of protecting the State; and it is not contended that these branches are extended to Bengal. Mines of precious metals, treasuretrove, royal fish, are all vested in the Crown, for the purpose of maintaining its power, and enabling it to defend the State. They are not en ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... law did not deny that the Crown had certain prerogatives. The Crown inherited the prerogatives enjoyed by the former Indian Sovereigns and had other prerogatives inherent in the nature of sovereignty. It was the prerogative of the King in Council to hear appeals and petitions from his Indian subjects, (3) 5 Bom. H.C.R. Appendix 1. see Modee Kai Khocscroo Hormusjee v. Cooverbhaee(6 M.I.A. 448,455). prerogative was taken away by the Abolition of Privy Council Jurisdiction Act 1949. When there is a failure of heirs on a person dying intestate, the Crown had the prerogative right to take his property by escheat, and this right was said to rest on grounds of general or universal law, see the Collector of Masulipatam v. Cavaly Vencata Narrainapa([1859-61] 8 M.I.A. 500), Sonet Koor v. Himmut Bahadoor([1876] I.L.R. I Cal.391) Mussammat Khursaidi Begun v. Secretary of State for India( [1925] I.L.R. 5 Patna 538). The right of the Government to take the property by escheat or lapse on the failure of heirs or as bona vacantia for want of a rightful owner is recognised by Art. 300 of the Constitution. The prerogative right of the Crown to priority in payment of its claims was recognised ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ssary implication, it should be presumed that general words of an Indian Act were not intended to affect the prerogative. In Bells case( I.L.R. 25 Mad. 457) Sir Bhashyam Ayyangar J.therefore pointed out that the doctrine that the prerogative could not be taken away save by express words or by necessary implication could be based on the maxim generalia specialibus non derogant. This maxim does not exempt the Crown from the operation of statutes generally whenever a statute prejudicially affects it. In order to invoke this doctrine, the Crown must, establish that it has some prerogative right which it claims to be outside the purview of the statute. As pointed out already under the Indian law the Crown could not claim a general exemption from statutes on the ground of the prerogative. But there is high authority for the view that such an exemption is allowed to the Crown in England on the basis of a rule of construction. In Madras Electric Supply Corporation v. Boarland([1955] A.C. 667,685.) at p. 685 Lord Macdermott said that the rule that in an Act of Parliament general words shall not bind the Crown to its prejudice unless by express words or by necessary implication has long b ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... for India v. Mathurabhai([1889] I.L.R. 14 Bom. 213) Sargent, C. J. was inclined to apply the English rule that the Crown is not included in an Act unless there are words to that effect and to hold that the Government was not bound by S. 26 of the Indian Limitation Act, 1877. But he observed that it was not necessary to express a decided opinion on the question. In Bells, case(I.L.R. 25 Mad. 457), the Madras High Court held that the Government was bound by the taxing provisions of s. 341 of the City of Madras Municipal Act, 1884, though not named in that section. Sir Bhashyam Ayyangar, J. reviewed the earlier cases and decisively rejected the general claim of immunity of the Crown from a statute imposing a tax on the basis of any prerogative right or supposed rule of construction. In Motilal v. The Collector of Ahmedabad([1906] I.L.R. 31 Bom. 86, 89.). Russel, Acting C. J. and Beaman, J. doubted the application of the English rule of construction in this country. They said: It is contended that the maxim of English law that the Crown cannot be bound by any statute unless expressly named therein applies, and reference is made to the cases of Ganpat Putaya v. The Collector of Kana ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ivy Council concurred in accepting this view. The attention of the Privy Council was not drawn to Bell s case(I. L. R. 25 Mad. 457) and the propriety of applying the English rule to Indian legislation was not considered. Lord Du Parcq said: If it can be affirmed that, at the time when the statute was passed and received the royal sanction, it was apparent from its terms that its beneficient purpose must be wholly frustrated unless the Crown were bound, then it may be inferred that the Crown has agreed to be bound. They held that the Crown was not bound by ss. 222(1) and 265 of the City of Bombay Municipal Act, 1888 and an inference of necessary implication binding the Crown could not be drawn from certain express references to the Crown in other parts of the same Act and from the exemption of the Crown in a later general Act since such provisions are often inserted ex abundanti cautela. It is to be noticed that in several earlier decisions the Bombay High Court had drawn an inference of necessary implication binding the Crown in other sections of the same Act. Moreover, except the Bombay High Court, no other High Court held that the English c of Crown exemption from statute ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... lead to the anomalous position that the statute may lose its efficacy . In other words, the Court was inclined to revive the Bombay heresy rejected by the Privy Council. With regard to this rule of exemption of the Crown from statutes, Glanville L. Williams in his book on Crown Proceedings , 1948, pp. 53 and 54 said: The rule originated in the Middle Ages, when it perhaps had some justification. Its survival, however, is due to little but the vis inertiae. The chief objection to the rule is its difficulty of application .... With the great extension in the activities of the State and the number of servants employed by it, and with the modern idea, expressed in the Crown Proceedings Act, that the State should be accountable in wide measure to the law, the presumption should be that a statute binds the Crown rather than that it does not. Thus, the artificial rule of construction has not escaped criticism even in England. This rule of construction is unsuitable to Indian conditions and should never have been applied to India. Before 1946 there was no settled course of decisions of the Indian Courts necessitating or justifying the application of this rule to the constructi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f Civil Procedure, 1908 and the Indian Contract Act 1872 make special provisions for the Government in respect of particular matters on the assumption that in respect of all other matters the Government will be bound by the general provisions of the Act. The Indian Limitation Act 1882 provided a special period of limitation for suits by the Government on the assumption that the Government like the subjects will be bound by its other general provisions. To apply the technical rule of construction exempting the Crown from the operation of Indian statutes will be to stultify the intention of the legislature in most cases. The English Courts have gone to the length of deciding that the Crown is not bound even by general regulations as to public safety, see Cooper v. Hawkins([1904] 2 K.B. 164). Such a result has not escaped criticism even in England. In India, no one has doubted that general regulations as to public safety bind the Government equally like the citizens. The Director of Rationing and Distribution s case([1961] 1 S.C.R. 158) left open the question whether the State could claim immunity from the provisions of a statute with regard to its trading or commercial activities. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ule of common law controlling the operation of a statute on the ground of the prerogative applied to India, it would be a law in force before the Constitution and would continue to be in force by virtue of Art. 372 of the Constitution. It would be the law in force because it would limit and control the operation of the existing Indian Acts. But we have ample power to say that this rule was not in force in India and the Indian law was not correctly laid down by the Privy Council in the Province of Bombay s case(4) and the decisions which followed it. There is no presumption that the provisions of an Act do not bind the State (using the expression State in a compendious sense as including the Union and the States). In each case, it is a question of fair construction of the Act whether or not any particular provision of the Act binds the State. The intention of the legislature has to be gathered on a careful scrutiny of the Act in question. Particular care should be taken in scrutinising the provisions of a taxing or a penal Act. If the application of the Act (5) [1961] 1. S.C.R. 158. leads to some absurdity, that may be a ground for holding that the State is excluded from ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the demand on account of the license Fee. Section II 5 of the Act no doubt provides that all monies realised or realisable under the Act (other than fine levied by magistrates) shall be credited to the municipal fund. Reading sections 115 and 541(2) together it appears that the excepting words other than fine levied by magistrates in s. 115 do not refer to the fine levied under s. 541. The general provisions of s. 115 must be read subject to the special provisions of s. 541(2) and the fine realisable under s. 541 is receivby the Municipality. It follows that the State Government is the payer but is not the receiver of the fine. There is nothing to indicate that the State Government should be excluded from the purview of s. 218(1) and s. 541(1)(b). Section 218 renders the State liable to pay the license fee. Section 541(1) provides the remedy for the recovery of the fee in case of default in taking out the license and payment of the fee. If we are to hold that s. 218 (1) applies to the State but s. 541(1) (b) does not, the result would be that though the State is liable to pay the license fee, the Municipality will have no remedy against the State for the recovery of the fee. The ..... X X X X Extracts X X X X X X X X Extracts X X X X
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