TMI Blog1960 (12) TMI 90X X X X Extracts X X X X X X X X Extracts X X X X ..... name of Bhowmick, and one of the conditions of the licence was that the eating house should not be sublet without permission of the Commissioner of Police (hereinafter referred to as the Commissioner). On the date of the agreement, Bhowmick held a licence for the eating house, which was to expire on March 31, 1955. It is said that under the agreement the licence was to remain in the name of Bhowmick while the petitioner was to carry on the business as a contractor. The petitioner carried on the business from after the date of the agreement and no application for a fresh licence was made by him before March 31, 1955, when the licence in the name of Bhowmick was to expire. It was only on August 8, 1955, that an application for licence was made by the petitioner on behalf and in the name of Bhowmick, though the business was continued to be run by him all the time after March 31, 1955. It appears that the application made in the name of Bhowmick was rejected on December 27, 1956; but in the meantime Bhowmick was prosecuted on September 10, 1955, for running the eating house without a licence and was fined on December 12, 1955. Thereafter a notice was issued to Bhowmick on September 7, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... a licence or in the alternative to compel him not to prosecute him for keeping an eating house without a licence and for such other orders as the High Court might deem fit to pass. It may be mentioned that day to day prosecution of the petitioner had begun from February 1956 under s. 40 of the Act for continuing to keep an eating house without a licence. This writ application filed in the High Court was withdrawn by the petitioner on May 13, 1959, as his application to the Commissioner of March 30, was defective. On May 30, 1959, the Commissioner rejected the application of the petitioner for a licence on the ground that his antecedents and his present conduct showed that he would not keep good behavior and further that he would not be able to prevent drunkenness or disorder among the persons frequenting or using the eating house' The petitioner's complaint is that he was not heard before the order rejecting his application was passed. Then on June 15, 1959, the petitioner again applied under Art. 226 of the Constitution to the High Court against the rejection of his application on May 30. On February 11, 1960, the High Court allowed the petitioner to withdraw the applicat ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the section or anywhere in the Act to guide the discretion of the Commissioner in the matter of granting such licences. Therefore, according to learned counsel, the power conferred on the Commissioner is arbitrary and unguided and such power is necessarily to be struck down on the ground that it cannot be a reasonable restriction on the fundamental right to carry on trade. There is no doubt that if the section empowers the Commissioner to grant or refuse a licence without any criteria to guide him, it would be an unreasonable restriction on the right to carry on trade. We have therefore to see whether there is any guidance either in the section or in the Act to regulate the exercise of discretion of the Commissioner in the matter of granting such licences. In this connection it must be remembered that the Act was passed in 1866 when there were no fundamental rights and we cannot expect that meticulousness of language which should be found in statutes passed after January 26, 1950. It may also be mentioned that the Act replaced two earlier Acts, namely, Act XIII of 1856 and XLVIII of 1860. The Act of 1860 also contained provisions for licences for eating houses in ss. II and 12 ther ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... o reason for striking it down simply because it has not been worded in a manner which would show immediately that considerations arising from the provisions of Art. 19(1)(g) and Art. 19(6) were in mind- naturally those considerations could not be in the mind of the legislature in 1866. We have therefore to see whether an Act passed before the Constitution came into force can be reasonably and fairly read as containing guidance in the matter of licensing, as in this case. If it can be fairly and reasonably read to contain guidance it should not be struck down. If, on the other hand, on a fair and reasonable construction of the section as a whole, we come to the conclusion that there is no guidance in it and the discretion vested in the Commissioner is absolute and arbitrary it will have be struck down. What then does the section provide? It certainly gives powers to the Commissioner to grant licences at his discretion. Those words, however, by themselves do not necessarily mean that the Commissioner has the power to act arbitrarily and grant licences where he pleases and refuse where he does not please to do so. The section provides further that the licence has to be granted upon ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... good behaviour and can prevent drunkenness and disorder among the clientele, he will still go on to refuse the licence. The discretion that is given to him is to satisfy himself on these three points and if he is satisfied about them he has to grant the licence. On the other hand if he is not satisfied on any one or more of these points he will exercise the discretion by refusing the licence. As for the conditions which will be inserted in the licence, they are only for the purpose of carrying on the two objects specified in the section. They will naturally be more detailed in order to carry out the two objects aforesaid. But these two objects in our opinion along with the obvious implication in the section that the person applying must have actual and effective control of the place where he is going to keep the eating house are the criteria which will govern the exercise of discretion by the Commissioner in the matter of granting or refusing a licence. We cannot agree with the learned counsel for the petitioner that the two parts of s. 39 should be read separately, as if one has no effect on the other. Reading them together, it is in our opinion fair and reasonable to come to the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... neral proposition. We have therefore to examine the section in its setting to decide whether the absence of a provision for hearing and for requiring the Commissioner to give reasons for refusal would make this section unconstitutional. The section appears in the Police Act, which deals generally with matters of law and order and the two objects specified in the section are also for the same purpose. The discretion is vested in a high police officer who, one would expect, would use it reasonably. There is no provision for appeal and there is no lis as between the person applying for a licence and the Commissioner; the exercise of the discretion depends upon the subjective satisfaction of the Commissioner as to whether the person applying for a licence satisfies the three conditions mentioned above. It is true that the order when made one way or the other affects the fundamental right of carrying on trade, but in the circumstances it cannot but be an administrative order (see, Nagendra Nath Bora v. The Commissioner of Hills Division and Appeals, Assam ([1958] S.C.R. 1240,1253), and though the Commissioner is expected to act reasonably there is no duty cast on him to act judicially. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e licence are not correct and that the Commissioner is annoyed with him because he went to the High Court by means of a writ application. . These in our opinion are no grounds for holding that the order of the Commissioner passed in this case on May 30, 1959, is malafide. The petition therefore fails and is hereby dismissed with costs. SUBBA RAO, J.- We regret our inability to agree with Wanchoo, J. Our learned brother in his judgment has stated the facts fully and it is not necessary to restate them here. The petitioner applied to the Commissioner of Police, Calcutta, for a licence to enable him to carry on the business of an eating house known as Kalpatoru Cafeteria . The Commissioner by his order dated May 30, 1959, rejected the application made by the petitioner for a licence on two grounds, namely, that he was not satisfied that from the antecedents and resent conduct of the petitioner it would be reasonable to think that the petitioner would keep good behaviour and would be able to prevent drunkenness or disorder among the persons frequenting the eating house. The application was rejected under s. 39 of the Calcutta Police Act, No. IV of 1866 (hereinafter calle ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... to depend upon its subjective satisfaction of certain objective factors. The Act also provided for an enquiry before an Advisory Board and the subsequent review of the order by the Government on the basis of the said enquiry. It was pressed upon this Court to hold that the said restriction passed the test laid down in Art. 19(4) of the Constitution. In rejecting the con- tention, Patanjali Sastri, C. J., observed thus: The formula of subjective satisfaction of the Government or of its officers, with an Advisory Board thrown in to review the materials on which the Government seeks to override a basic freedom guaranteed to the citizen, may be viewed as reasonable only in very exceptional circumstances and within the narrowest limits, and cannot receive judicial approval as a general pattern of reasonable restrictions on fundamental rights. The learned Chief Justice adverting to the procedural aspect of the restriction criticised the absence of a provision in the impugned Act for personal service on the association and thus depriving its members of the opportunity to make their representations. Compared with s. 39 of the Act, the impugned provisions of the Criminal Law Ame ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ommissioner of Police has a higher status than the Court of Wards or that the taking over of the management of an estate affects a larger right than preventing a person from doing his business. The decision in Messrs. Dwarka Prasad Laxmi Narain v. The State of Uttar Pradesh ([1954] S.C.R. 803, 811.) dealt with cl. 4(3) of the Uttar Pradesh Coal Control Order, 1953, whereunder the licensing authority was given absolute power to grant or refuse to grant, renew or refuse to renew, suspend, revoke, cancel or modify any licence under the said Order and the only thing he had to do was to record reasons for the action he took. Under the clause the State Coal Controller could delegate power to any other officer. This Court held that the said Order was void as it imposed unreasonable restrictions on the freedom of trade and business guaranteed under Art. 19(1)(g) of the Constitution and not coming within the protection afforded by cl. (6) of the Article. Mukherjea, J., as he then was, observed to the following effect: The power of granting or withholding licences or of fixing the prices of the goods would necessarily have to be vested in certain public officers or bodies and they would ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ment under s. 3 of the Essential Supplies (Temporary Powers) Act, 1946, which required a citizen to take a permit from the Textile Commissioner to enable him to transport cotton textiles purchased by him. It was contended in that case that the requirement of a permit was an unreasonable restriction on the citizen's right under sub-cls. (f) and (g) of Art. 19(1) of the Constitution. This Court rejected the contention and affirmed the validity of the law. Mahajan, C. J., speaking for this Court gave four reasons in support of his conclusion and they were: (1) the Legislature passed the Essential Supplies (Temporary Powers) Act during a period of emergency when it was necessary to impose control on the production, supply and distribution of commodities essential to the life of the community; (2) cl. 3 of the Control Order did not deprive a citizen of the right to dispose of or transport cotton textiles purchased by him, but only required him to take a permit from the Textile Commissioner to enable him to transport them; (3) if transport of essential commodities by rail or other means of conveyance was left uncontrolled, it might well have seriously hampered the supply of these com ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... be a recalcitrant one; (ii) before canceling the licence the State Government should afford reasonable opportunity to the licensee to show cause why his license (1) [1960] 2 S.C.R. 609, 619. should not be cancelled. This Court in upholding the validity of the said section observed thus: The power given to the State Government is only to achieve the object of the Act, i.e., to enforce the said provisions, which have been enacted in the a interest of the public; and that power, as we have indicated, is exercisable on the basis of objective tests and in accordance with the principles of natural justice. We cannot, therefore, hold that s. 25(1)(c) of the Act imposes an unreasonable restriction on the petitioner's fundamental rights under Art. 19(1)(f) and (g) of the Constitution. This decision far from helping the respondents is, to some extent, against their contention. The result of the discussion may briefly be summarized in the form of the following propositions: A fundamental right to do business can be controlled by the State only by making a law imposing in the interest of the general public reasonable restrictions on the exercise of the said right; restrictions o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... alised. The second part of the section deals with the nature of the conditions to be inserted in the licence. The conditions to be imposed are for securing the good behaviour of keepers of public resort and for the prevention of drunkenness and disorder among the persons frequenting or using such places. No doubt the said conditions must have the sanction of the State Government. This part, therefore, ensures the peaceful and orderly conduct of business. The section is clear and unambiguous in terms and it is not disputed that the plain terms of the section will not enable the conditions of a licence to be projected into the matter of the exercise of the discretion. But what is contended is that the conditions laid down a precise policy for guiding the discretion of the Commissioner to give or not to give a licence. There are many objections to this approach to the problem. Firstly, it is to rewrite the section. If the legislature intended to guide the discretion by laying down objective criteria it would have stated so in express terms; it would not have left the matter to the absolute discretion of the Commissioner. Secondly, if the two conditions only of the licence control the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t any policy reasonably capable of controlling the discretion of the Commissioner has been laid down. Even if the two conditions can be read into the first part of s. 39, the arbitrariness is writ large in the manner of exercising the so-called guided discretion. In this context it is not necessary to come to a definite conclusion on the question whether the discretion is judicial or executive, for whatever be the nature of the discretion it must be tested from the standpoint of reasonableness of the restrictions imposed on a person's right to do business. A citizen of India, for the purpose of eking out his livelihood, seeking to do an extensive business of an eating house, applies to the Commissioner for a licence, for without that licence he cannot do business, and if he does he will be liable to prosecution. The Commissioner can reject the application on two grounds, namely, (1) from his antecedents and present conduct it would be unreasonable to think that the petitioner would keep good behaviour, and (2) the Commissioner is not satisfied that the petitioner would be able to prevent drunkenness and disorder among the persons frequenting or using the eating house. Admitt ..... X X X X Extracts X X X X X X X X Extracts X X X X
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