Judgment
As delivered
PETITIONER:KISHAN CHAND ARORA
Vs.
RESPONDENT:COMMISSIONER OF POLICE, CALCUTTA
DATE OF JUDGMENT:09/12/1960
BENCH:WANCHOO, K.N.BENCH:WANCHOO, K.N.SINHA, BHUVNESHWAR P.(CJ)KAPUR, J.L.GAJENDRAGADKAR, P.B.SUBBARAO, K.
CITATION:1961 AIR 705 1961 SCR (3) 135CITATOR INFO :RF 1967 SC 829 (6)R 1984 SC1030 (37)
ACT:Eating House-Power to grant license-Discretion vested inPolice Commissioner -- Constitutionality Calcutta PoliceAct, 1866 (IV of 1866), s. 39-Constitution of India, Arts.19(1)(g), 19(6).
HEADNOTE:By s. 39 of the Calcutta Police Act, 1866, "The Commissionerof Police, may, at his discretion from time to time, grantlicenses to the keepers of such houses or places of publicresort and entertainment as aforesaid for which no licenceas is specified in the Bengal Excise Act, 1909 is requiredupon such conditions,(1) (1934) L.R. 61 I.A. 398.136to be inserted in every such license, as he, with thesanction of the said State Government from time to timeshall order, for securing the good behaviour of the keepersof the said houses or places of public resort orentertainment, and the prevention of drunkenness anddisorder among the persons frequenting or using the same;and the said licenses may be granted by the saidCommissioner, for any time not exceeding one year".The petitioner, whose application for a license in respectof an eating house was refused by the Commissioner ofPolice, Calcutta, under the section, challenged itsconstitutional validity on the ground that it conferredarbitrary and unguided powers on the Commissioner to grantor refuse a license without hearing the applicant and was,therefore, an unreasonable restriction on his fundamentalright to carry on his trade guaranteed by Art. 19(1)(g) ofthe Constitution.Held, (per Kapur, Gajendragadkar and Wanchoo, JJ.), that inorder to decide whether a provision in a pre-Constitutionstatute, like the one in question, satisfies. the test ofconstitutionality laid down by Art. 19(i)(g) read with Art.19(6) of the Constitution, the impugned section has to beread as a whole in a fair and reasonable manner and itshould not be declared void simply because theconsiderations relevant to those Articles are notimmediately apparent from its language. It is not correctto say that the discretion conferred on the Commissioner bythe first part of the section is absolute and that thequestion of imposing the two conditions mentioned by thesecond part can arise only after the grant of the license.The two parts, read together, can lead only to theconclusion that the discretion vested in the Commissioner isguided by the two conditions mentioned in the section,namely, the securing of good behaviour and the prevention ofdrunkenness and disorder and a third by necessary impli-cation, that the applicant must have actual and effectivecontrol and possession of the place where he keeps theeating house.Section 39 of the Calcutta Police Act, 1866, therefore, con-fers no arbitrary or uncanalised discretion on theCommissioner, unguided by any criteria, and does notconstitute an unreasonable restriction on the fundamentalright to carry on trade under Art. 19(i)(g) of theConstitution.Rustom jamshed Irani v. Harley Kennedy, (1901) I.L.R. 26Bom. 386, inapplicable.Although there can be no doubt that procedural provisions ofa statute also enter into the verdict as to itsreasonableness, it cannot be laid down as a generalproposition that if a licensing statute omits to provide fora hearing or for the giving of reasons for refusal, suchomission must necessarily constitute an unreasonablerestriction on a fundamental right. The Commissioner inpassing an order under the section acts administratively andalthough he must act reasonably, there is no duty cast onhim137to act judicially. Regard being had to the setting in whichthe impugned section appears in the Act and thecircumstances of ,.this case, it could not be said that s.39 of the Act was such a restriction.State of Madras v. V. G. Row, [1952] S.C.R. 597, NagendraNath Bora v. The Commissioner of Hills Division and Appeals,Assam, [1958] S.C.R. 1240, Nakkuda Ali v. M. F. De S.jayaratne, 1951 A.C. 66 and Express Newspapers (P.) Ltd. v.The Union of India, [1959] S.C.R. 12, relied on.If an applicant thinks that he has fulfilled the three con-ditions and the Commissioner has unreasonably rejected hisapplication, he has his remedy under Art. 226 of theConstitution.Per Subba Rao, J.-It is well settled that restrictions onfundamental rights must not be arbitrary or excessive orbeyond what is required in the interest of the generalpublic. Such restrictions have to be tested both from thesubstantive and the procedural aspects. An uncontrolled oruncanalised power constitutes an unreasonable restriction.Even though the statute may clearly express the legislativepolicy that cannot be enough unless it provides a suitablemachinery for implementation of that policy in accordancewith the principles of natural justice. Restrictions arejustifiable and in deciding whether a restriction isreasonable or not, the Court cannot attach much importanceto the fact that the impugned statute vests discretion inthe State Government or a high officer. Nor can thedistinction between an administrative authority and ajudicial one have much relevance except that the Court maybe more inclined to uphold the discretion if vested in animpartial judicial authority rather than in anadministrative one.State of Madras v. V. G. Row, [1952] S.C.R. 597, ThakurRaghubir Singh v. Court of Wards, Ajmer, [1953] S.C.R. 1049and M/s. Dwarka Prasad Laxmi Narain v. The State of UttarPradesh, [1954] S.C.R. 803, relied on.Babulal Chandra v. Chief justice and judges, High Court ofPatna, A.I.R. 1954 S.C. 524, Harishankar Bagla v. The StateOf Madhya Pradesh, [1955] 1 S.C.R. 380, Union of India v.Bhana Mal Gulzarimal Ltd., [1960] 2 S.C.R. 627 and MineralDevelopment Ltd., State of Bihar, [1960] 2 S.C.R. 609considered.Thus viewed, the plain words of the impugned section cannotbe said to lay down any policy reasonably capable ofcontrolling the discretion vested in the Commissioner.The word 'may' coupled with the words 'at his discretion' inthe first part of the section clearly emphasises theintention of the Legislature to confer absolute power on theCommissioner. The second part deals with the nature of theconditions to be inserted in the license. But the scope ofthe discretion to issue18138the license and the power to impose conditions in a licenseare two different matters.Even if the two conditions mentioned in the second partcould be read into the first, the discretion conferred bythe section would still be arbitrary since the sectionneither requires that the Commissioner should givereasonable opportunity to the applicant to prove that hesatisfies both the tests prescribed by it nor that he shouldgive reasons for refusing the license and no appeal isprovided for.Consequently , from the substantive as much as the proce-dural aspect, s. 39 of the Act infringes the fundamentalright of the petitioner guaranteed by Art. 19(i)(g) of theConstitution.
JUDGMENT:
ORIGINAL JURISDICTION: Petition No. 22 of 1960.Petition under Art. 32 of the Constitution of India forenforcement of Fundamental Rights.
H.J. Umrigar and B. P. Maheshwari, for the petitioner.A.C. Mitra, B. Das and P. K. Bose, for the respondentsNos. 1 and 2.
P. K. Mukherjee, for respondent No. 3.
1960, December 9. The Judgment of Kapur, Gajendragadkar andWanchoo, JJ., was delivered by Wanchoo, J., and that ofSinha, C.J., and Subba Rao, J., was delivered by Subba Rao,J.WANCHOO, J.-This petition under Art. 32 of the Constitutionchallenges the constitutionality of s. 39 of the CalcuttaPolice Act, No. IV of 1866, (hereinafter called the Act).The facts necessary for our purpose are these. On August11, 1954, the petitioner entered into an agreement with oneHaripada Bhowmick, who is respondent No. 3 with respect toan eating house named 'Kalpatoru Cafeteria', situate in No.2 Chowranghee Road, Calcutta. The petitioner was appointeda contractor by this agreement and was given the exclusiveuse and occupation of the said eating house upon certainterms and conditions. A licence has to be taken out withrespect to an eating house under s. 39 of the Act. Itappears that originally the licence was in the name ofBhowmick, and one of the conditions of the licence was thatthe eating house should not be sublet139without permission of the Commissioner of Police(hereinafter referred to as the Commissioner). On the dateof the agreement, Bhowmick held a licence for the eatinghouse, which was to expire on March 31, 1955. It is saidthat under the agreement the licence was to remain in thename of Bhowmick while the petitioner was to carry on thebusiness as a contractor. The petitioner carried on thebusiness from after the date of the agreement and noapplication for a fresh licence was made by him before March31, 1955, when the licence in the name of Bhowmick was toexpire. It was only on August 8, 1955, that an applicationfor licence was made by the petitioner on behalf and in thename of Bhowmick, though the business was continued to berun by him all the time after March 31, 1955. It appearsthat the application made in the name of Bhowmick wasrejected on December 27, 1956; but in the meantime Bhowmickwas prosecuted on September 10, 1955, for running the eatinghouse without a licence and was fined on December 12, 1955.Thereafter a notice was issued to Bhowmick on September 7,1956, to show cause why his application for licence shouldnot be refused inasmuch as he had not applied in time andviolated the condition of the licence by sub-letting theeating house to the petitioner. Thereafter the petitionerapplied on September 21, 1956, for the issue of a licence inhis own name. It may be mentioned that in the meantimethere had been disputes between Bhowmick and the petitionerand a suit had been filed by Bhowmick against the petitionerin October 1956 in that connection. It may also bementioned that though the petitioner applied for the firsttime on September 21, 1956, for licence he had already beenprosecuted in October, 1955, for keeping an eating housewithout a licence and convicted in November 1955. Theapplication made by the petitioner on September 21, 1956,was eventually rejected on March 30, 1958, though in themeantime the petitioner was all along continuing thebusiness of the eating house without having obtained alicence. After the rejection of his application thepetitioner applied to the High140Court under Art. 226 of the Constitution challenging theconstitutionality of s. 39 and also challenging the order ofthe Commissioner rejecting his licence on various grounds.This application was dismissed on August 7, 1958. Thereuponthe petitioner went up in appeal to a Division Bench of theHigh Court which was disposed of on March 4, 1959. TheDivision Bench held s. 39 to be constitutional. It furtherheld that as extraneous matters had been taken into accountin rejecting the application of the petitioner for a licencethe rejection was not in accordance with law. However, asthe period of one year for which a licence is valid under s.39 had expired in September 1957, and the judgment was beingdelivered in March 1959, the appeal was dismissed on theground that application could not be considered in 1959.Thereupon the petitioner made another application to theCommissioner on March 30, 1959, for the period from April 1,1959 to March 31, 1960. During all this time the petitionerwas carrying on his business as a keeper of the eating housewithout a licence. This application was found defective andanother application was made on May 14, 1959. In themeantime, the petitioner again applied to the High Court onor about May 8, 1959, under Art. 226 of the Constitution inorder to compel the Commissioner to issue him a licence orin the alternative to compel him not to prosecute him forkeeping an eating house without a licence and for such otherorders as the High Court might deem fit to pass. It may bementioned that day to day prosecution of the petitioner hadbegun from February 1956 under s. 40 of the Act forcontinuing to keep an eating house without a licence. Thiswrit application filed in the High Court was withdrawn bythe petitioner on May 13, 1959, as his application to theCommissioner of March 30, was defective. On May 30, 1959,the Commissioner rejected the application of the petitionerfor a licence on the ground that his antecedents and hispresent conduct showed that he would not keep good behaviorand further that he would not be able to prevent drunkennessor disorder among the persons frequenting or using theeating141house' The petitioner's complaint is that he was not heardbefore the order rejecting his application was passed. Thenon June 15, 1959, the petitioner again applied under Art.226 of the Constitution to the High Court against therejection of his application on May 30. On February 11,1960, the High Court allowed the petitioner to withdraw theapplication with liberty to move such application as he maybe advised before, this Court, in case such liberty wasnecessary. Thereafter the petitioner moved this Court byhis present application on February 15, 1960.His main contention before us is that s. 39 of the Actconfers naked and uncanalised powers on the Commissioner togrant or refuse a licence and that no criteria have beenlaid down anywhere in the Act to guide the discretion of theCommissioner. Further, no opportunity is provided to anapplicant for a licence to be heard either orally or inwriting before passing orders on an application for licence;in consequence, the Commissioner has been given completelyarbitrary powers either to grant or to refuse a licence andthis amounts to an unreasonable restriction on thefundamental right of the petitioner to carry on the trade ofeating house keeper. Besides this attack on theconstitutionality of s. 39 the petitioner also contends thatthe order is mala fide and should be struck down on thisground. There are some other grounds in the petition butthey have not been pressed before us and it will not benecessary to consider them.
The first question therefore that falls for consideration iswhether s. 39 of the Act is a reasonable restriction withinthe meaning of Art. 19(6) on the fundamental right topractise any profession or to carry on any occupation, tradeor business contained in Art. 19 (1)(g). Sec. 39 is inthese terms:-
"The Commissioner of Police, may, at hisdiscretion, from time to time, grant licencesto the keepers of such houses or places ofpublic resort and entertainment as aforesaidfor which no licence as is specified in theBengal Excise Act, 1909, is required upon suchconditions, to be inserted in every such142licence, as he, with the sanction of the saidState Government from time to time shallorder, for securing the good behaviour of thekeepers of the said houses or places of publicresort or entertainment, and the prevention ofdrunkenness and disorder among the personsfrequenting or using the same; and the saidlicences may be granted by the saidCommissioner, for any time not exceeding oneyear."
Learned counsel for the petitioner contends that thelanguage of s. 39 shows that an absolute discretion;untrammelled by any considerations, is conferred on theCommissioner by this section and there is nothing either inthe section or anywhere in the Act to guide the discretionof the Commissioner in the matter of granting such licences.Therefore, according to learned counsel, the power conferredon the Commissioner is arbitrary and unguided and such poweris necessarily to be struck down on the ground that itcannot be a reasonable restriction on the fundamental rightto carry on trade. There is no doubt that if the sectionempowers the Commissioner to grant or refuse a licencewithout any criteria to guide him, it would be anunreasonable restriction on the right to carry on trade. Wehave therefore to see whether there is any guidance eitherin the section or in the Act to regulate the exercise ofdiscretion of the Commissioner in the matter of grantingsuch licences. In this connection it must be rememberedthat the Act was passed in 1866 when there were nofundamental rights and we cannot expect that meticulousnessof language which should be found in statutes passed afterJanuary 26, 1950. It may also be mentioned that the Actreplaced two earlier Acts, namely, Act XIII of 1856 andXLVIII of 1860. The Act of 1860 also contained provisionsfor licences for eating houses in ss. II and 12 thereof,though the language of those sections was somewhatdifferent. Sec. 11 laid down that in the towns of Calcutta,Madras and Bombay no eating house shall be kept withoutlicence and provided for a penalty for the same. See. 12then laid down that the Commissioner shall from time to timegrant licences to143keepers of such houses upon conditions for securing the goodbehaviour of the keepers of the said houses and for theprevention of drunkenness and disorder among the personsfrequenting or using the same. The language of s. 39,however, is different inasmuch as it provides that theCommissioner may at his discretion from time to time grantlicences. The Act of 1860 was interpreted by the BombayHigh Court in Rustom J. Irani v. H. Kennedy (1) as giving nodiscretion to the Commissioner to refuse a licence if theperson applying for the licence was willing to fulfil theconditions imposed thereunder. In the case of Calcutta,however, s. 39 made a change in the language contained inthe earlier Act giving discretion to the Commissioner in thematter of grant of licences. The question therefore iswhether the word "discretion" introduced by s. 39 means anabsolute and unguided discretion and would therefore nowbecome an unreasonable restriction on the fundamental rightof a citizen to carry on the trade of keeping an eatinghouse. There is no doubt, as we have already indicated,that the section does not say as many of the provisions oflaws passed after January 26, 1950, do that the Commissionerwould grant licence on certain specified considerations.The contention on behalf of the petitioner is that the firstpart of s. 39 confers an absolute discretion on theCommissioner to grant or to refuse a licence just as hepleases and that the second part of the section merelyprovides for certain conditions to be imposed in case theCommissioner pleases to grant a licence. We are however ofopinion that when we are judging a law passed in 1866 todecide whether it satisfies the test of constitutionalitybased on Art. 19(1)(g) and Art. 19(6), we should take thesection as a whole and see whether on a fair reading of thesection it can be said that there is no guidance for theCommissioner in the matter of granting or refusing licencesand his power is arbitrary. If such guidance can be foundon a fair reading of the section, there would be no reasonfor striking it down simply because it has not been wordedin a manner which(1) (1901) I.L.R. 26 Bom. 396.
144would show immediately that considerations arising from theprovisions of Art. 19(1)(g) and Art. 19(6) were in mind-naturally those considerations could not be in the mind ofthe legislature in 1866. We have therefore to see whetheran Act passed before the Constitution came into force can bereasonably and fairly read as containing guidance in thematter of licensing, as in this case. If it can be fairlyand reasonably read to contain guidance it should not bestruck down. If, on the other hand, on a fair andreasonable construction of the section as a whole, we cometo the conclusion that there is no guidance in it and thediscretion vested in the Commissioner is absolute andarbitrary it will have be struck down.
What then does the section provide? It certainly givespowers to the Commissioner to grant licences at hisdiscretion. Those words, however, by themselves do notnecessarily mean that the Commissioner has the power to actarbitrarily and grant licences where he pleases and refusewhere he does not please to do so. The section providesfurther that the licence has to be granted upon certainconditions and those conditions have to satisfy two objects,namely, (i) securing of the good behaviour of the keepers ofthe said houses or places of public resort and entertainmentand (ii) the prevention of drunkenness and disorder amongthe persons frequenting or using the same. Of course, it isimplicit in the section that a licence will only be grantedto a person who is the keeper of an eating house. We cannotread the section as laying down that the discretion isabsolute and that the im. posing of conditions for theaforesaid two objects only arises after that absolutediscretion has been exercised in favour of the grant oflicences. We see no unfairness or unreasonableness inreading the section to mean that the Commissioner shallsatisfy himself (i) that the person applying for a licenceis the keeper of an eating house, meaning thereby that hehas a place where he can carry on the business or trade andthat he actually and effectively has control and possessionof that place, (ii) that the keeper is a person of goodbehaviour so that the eating house may not become145a resort of criminals and persons of ill-repute, and (iii)that the keeper is in a position to prevent drunkenness anddisorder among those who come to the eating house. Thissection appears in the Police Act, the purpose of which isto maintain law and order and that is why we find that thetwo objects to be secured when granting licences are thegood behaviour of the keeper himself and the prevention ofdrunkenness and disorder among those who frequent the eatinghouse. It seems therefore to us that s. 39 clearly providesthat the Commissioner will use his discretion in decidingwhether the person applying for a licence is in actual andeffective control and possession of the place where theeating house is to be kept and is thus the keeper thereof.He will also satisfy himself that the keeper is a person ofgood behaviour and further that he is able to preventdrunkenness and disorder in the eating house. If he issatisfied on these three matters, it seems to us that thesection contemplates that the discretion will be exercisedin favour of the grant of a licence. We cannot accept thateven though the Commissioner may be satisfied that theperson applying for a licence has actual and effectivecontrol of the place where he is going to keep the eatinghouse, is a person of good behaviour and can preventdrunkenness and disorder among the clientele, he will stillgo on to refuse the licence. The discretion that is givento him is to satisfy himself on these three points and if heis satisfied about them he has to grant the licence. On theother hand if he is not satisfied on any one or more ofthese points he will exercise the discretion by refusing thelicence. As for the conditions which will be inserted inthe licence, they are only for the purpose of carrying onthe two objects specified in the section. They willnaturally be more detailed in order to carry out the twoobjects aforesaid. But these two objects in our opinionalong with the obvious implication in the section that theperson applying must have actual and effective control ofthe place where he is going to keep the eating house are thecriteria which will govern the exercise146of discretion by the Commissioner in the matter of grantingor refusing a licence. We cannot agree with the learnedcounsel for the petitioner that the two parts of s. 39should be read separately, as if one has no effect on theother. Reading them together, it is in our opinion fair andreasonable to come to the conclusion that the discretion ofthe Commissioner in this matter is guided by the two objectsmentioned in the section and by the necessary implicationcontained in it that the person applying must be in actualand effective control and possession of the place where heis going to keep the eating house. The argument thereforethat s. 39 confers an arbitrary and uncanalised powerWithout any criteria for guiding the discretion of thelicensing authority must fail and the section cannot be heldto be an unreasonable restriction on the right to carry ontrade on this ground.
Then it is urged that even if there is guidance in thesection it provides for no hearing either oral or written ofthe person applying for a licence. Further it provides forno grounds to be given for refusing a licence. Therefore,though there may be some guiding principle in the matter ofgranting licences, the absence of a provision for hearingand for giving reasons for refusal would also make theprovision unconstitutional as an unreasonable restriction ona fundamental right. Reference in this connection was madeto State of Madras v. V. G. Row (1) where it was observedthat-
"In considering the reasonableness of lawsimposing restrictions on fundamental right,both the substantive and procedural aspects ofthe impugned law should be examined from thepoint of view of reasonableness and the testof reasonableness, wherever prescribed, shouldbe applied to each individual statute impugnedand no abstract standard or general patternof reasonableness can be laid down asapplicable to all cases."
There is no doubt that procedural provisions of a statutealso enter into the verdict as to its reasonableness; but atthe same time there can be no abstract or147general principles which would govern the matter and eachstatute has to be examined in its own setting. It isundoubtedly correct that no provision has been made forgiving a hearing to a person applying for a licence and theCommissioner has not to give reasons when refusing thelicence; but it cannot be laid down as a general propositionthat where in the case of licensing statute no provision ismade for hearing and there is no provision for givingreasons for refusal the statute must be struck down asnecessarily an unreasonable restriction on a fundamentalright. No case has been cited before us which lays downsuch a general proposition. We have therefore to examinethe section in its setting to decide whether the absence ofa provision for hearing and for requiring the Commissionerto give reasons for refusal would make this sectionunconstitutional. The section appears in the Police Act,which deals generally with matters of law and order and thetwo objects specified in the section are also for the samepurpose. The discretion is vested in a high police officerwho, one would expect, would use it reasonably. There is noprovision for appeal and there is no lis as between theperson applying for a licence and the Commissioner; theexercise of the discretion depends upon the subjectivesatisfaction of the Commissioner as to whether the personapplying for a licence satisfies the three conditionsmentioned above. It is true that the order when made oneway or the other affects the fundamental right of carryingon trade, but in the circumstances it cannot but be anadministrative order (see, Nagendra Nath Bora v. TheCommissioner of Hills Division and Appeals, Assam (1)), andthough the Commissioner is expected to act reasonably thereis no duty cast on him to act judicially. In Nakkuda Ali v.M. F. De S. Jayaratne (2), the Privy Council pointed outthat it was Quite possible to act reasonably withoutnecessarily actinG judicially and that it was a long step inthe argument to say that because a man is expected to actreasonably he cannot do so without a course of conductanalogous to the judicial process. The compulsion ofhearing before(1) [1958] S.C.R. 1240,1253.
(2) [1951] A.C. 66.
148passing the order implied in the maxim 'audi alteram partem'applies only to judicial or quasi-judicial proceedings:
(see, Express Newspapers (P.) Ltd. v. The, Union of India(1)). Therefore, the fact that no hearing is required to begiven by the Commissioner before he decides to grant orrefuse a licence would not make the provisions as tolicensing in the circumstances of this case unreasonablerestrictions on the fundamental right of carrying on atrade. For- the same reasons it cannot be said that becausethe reasons for refusal are not communicated to the personapplying that would make the licensing provisionunconstitutional. The person applying knows that under thelaw there are three conditions (already set out above) whichthe Commissioner has to consider in granting or refusing thelicence. If he thinks that he fulfills the three conditionsand the Commissioner has acted unreasonably in rejecting hisapplication he is not without a remedy; he can apply to theHigh Court under Art. 226 and compel the Commissioner todisclose the reasons for refusal before the Court and ifthose reasons are extraneous or are not germane to the threematters arising under s. 39, the High Court will compel theCommissioner to act within the scope of s. 39. We aretherefore of opinion that in the circumstances of this caseand in the setting in which s. 39 appears the mere absenceof a provision for a hearing or a provision forcommunicating the reasons for refusal to the personapplying, does not make s. 39 unconstitutional as anunreasonable restriction on a fundamental right. The attacktherefore on the constitutionality of s. 39 must fail.
Then we turn to the question of mala fides. It is not thecase of the petitioner that the Commissioner has anypersonal animus against him or that he is favouringBhowmick. What he says in ground 41 of his petition in thisconnection is that the reasons given by the Commissioner inhis order dated May 30, 1959, for refusing the licence arenot correct and that the Commissioner is annoyed with himbecause he went to the High Court by means of a writapplication.
(1) [1959] S.C.R. 12. 106.
149These in our opinion are no grounds for holding that theorder of the Commissioner passed in this case on May 30,1959, is malafide.
The petition therefore fails and is hereby dismissed withcosts.
SUBBA RAO, J.-We regret our inability to agree with Wanchoo,J. Our learned brother in his judgment has stated the factsfully 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 thebusiness of an eating house known as "Kalpatoru Cafeteria".The Commissioner by his order dated May 30, 1959, rejectedthe application made by the petitioner for a licence on twogrounds, namely, that he was not satisfied that from "theantecedents and resent conduct" of the petitioner it wouldbe reasonable to think that the petitioner would keep goodbehaviour and would be able to prevent drunkenness ordisorder among the persons frequenting the eating house.The application was rejected under s. 39 of the CalcuttaPolice Act, No. IV of 1866 (hereinafter called the Act).The short question raised is whether s. 39 of the Act isconstitutionally valid. Section 39 of the Act reads:
"The COMMISSIONER of Police, may, at his.discretion, from time to time, grant licensesto the keepers of such houses or places ofpublic resort and entertainment as aforesaidfor which no license as is specified in theBengal Excise Act, 1909, is required upon suchconditions, to be inserted in every suchlicense, as he, with the sanction of the saidState Government from time to time shallorder, for securing the good behaviour of thekeepers of the said houses or places of publicresort or entertainment, and the prevention ofdrunkenness and disorder among the personsfrequenting or using the same; and the saidlicenses may be granted by the saidCommissioner, for any time not exceeding oneyear."
Learned counsel for the petitioner contends that150the petitioner has under Art. 19(1)(g) of the Constitution afundamental right to carry on the business of an eatinghouse and that the provisions of s. 39 of the Act imposeunreasonable restrictions on the exercise of his right and,therefore, the said section is void.
Before scrutinising the provisions of that section it wouldbe convenient at the outset to notice the relevant aspectsof the law vis-a-vis the concept of reasonable restrictionson a fundamental right. The concept of reasonableness hasbeen clearly defined by Patanjali Sastri, C. J., in State afMadras v. V. G. Row (1) thus:
"It is important in this context to bear inmind that the test of reasonableness, whereverprescribed, should be applied to eachindividual statute impugned, and no abstractstandard, or general pattern, of reasonablenesscan be laid down as applicable to all cases.The nature of the right alleged to have beeninfringed, the underlying purpose of therestrictions 'imposed, the extent and urgencyof the evil sought Co be remedied thereby, thedisproportion of the imposition, theprevailing conditions at the time, should allenter into the judicial verdict".
There the constitutional validity of s. 15(2)(b) of theIndian Criminal Law Amendment Act, 1908, was impugned on theground that it fell outside the scope of authorizedrestrictions in Art. 19(4) of the Constitution. The issueof a notification by the State Government declaring anassociation unlawful was made to depend upon its subjectivesatisfaction of certain objective factors. The Act alsoprovided for an enquiry before an Advisory Board and thesubsequent review of the order by the Government on thebasis of the said enquiry. It was pressed upon this Courtto hold that the said restriction passed the test laid downin Art. 19(4) of the Constitution. In rejecting the con-tention, Patanjali Sastri, C. J., observed thus:
"The formula of subjective satisfaction of theGovernment or of its officers, with anAdvisory(1)[1952] S.C.R. 597, 607, 608.
151Board thrown in to review the materials onwhich the Government seeks to override a basicfreedom guaranteed to the citizen, may beviewed as reasonable only in very exceptionalcircumstances and within the narrowest limits,and cannot receive judicial approval as ageneral pattern of reasonable restrictions onfundamental rights."
The learned Chief Justice adverting to the procedural aspectof the restriction criticised the absence of a provision inthe impugned Act for personal service on the association andthus depriving its members of the opportunity to make theirrepresentations.
Compared with s. 39 of the Act, the impugned provisions ofthe Criminal Law Amendment Act impose more stringent controlon the exercise of the discretionary power by theGovernment. Yet the Court struck down the provisions. Theattempt made to distinguish that decision on the ground thatit related to the fundamental right of freedom of speechcannot be justified as the freedom to do business is alsoone of the important fundamental rights under theConstitution,The case of Thakur Raghubir Singh v. Court of Wards, Ajmer(1) was concerned with the question of the reasonableness ofthe provisions of s. 112 of the Ajmer Tenancy and LandRecords Act (XLII of 1950) which provided that "if alandlord habitually infringes the rights of a tenant underthis Act, he shall, notwithstanding anything in s. 7 of theAjmer Government Wards Regulation, 1888 (1 of 1888), bedeemed to be a 'landlord who is disqualified to manage hisown property' within the meaning of s. 6 of the saidRegulation and his property shall be liable to be takenunder the superintendence of the Court of Wards." Thedetermination of the question whether a landlord habituallyinfringed the rights of a tenant was left to the Court ofWards. This Court held that section was void as beingunreasonable restriction on the right in property as therestriction made the enjoyment of that right to depend uponthe mere discretion of the(1)[1953] S.C.R. 1049, 1055.
152executive. Mahajan, J., as he then was, observed as under:
"When a law deprives a person of hispossession of his property for an indefiniteperiod of time merely on the subjectivedetermination of an executive officer, such alaw can, on no construction of the word"reasonable" be described as coming withinthat expression, because it completelynegatives the fundamental right by making itsenjoyment depend on the mere pleasure anddiscretion of the executive, the citizenaffected having no right to have recourse forestablishing the contrary in a, civil court."
Though s. 112 of the Ajmer Tenancy and Land Records Act laiddown an objective test, namely,"a landlord habituallyinfringing the rights of tenants under that Act", and,therefore, may be said to have laid down some policy for theexercise of the discretion by the Court of Wards, thesection was struck down as the discretion was uncanalisedand no effective procedure was prescribed to remedy thegrievance of an aggrieved party.
It cannot be said that the Commissioner of Police has ahigher status than the Court of Wards or that the takingover of the management of an estate affects a larger rightthan preventing a person from doing his business.The decision in Messrs. Dwarka Prasad Laxmi Narain v. TheState of Uttar Pradesh (1) dealt with cl. 4(3) of the UttarPradesh Coal Control Order, 1953, whereunder the licensingauthority was given absolute power to grant or refuse togrant, renew or refuse to renew, suspend, revoke, cancel ormodify any licence under the said Order and the only thinghe had to do was to record reasons for the action he took.Under the clause the State Coal Controller could delegatepower to any other officer. This Court held that the saidOrder was void as it imposed unreasonable restrictions onthe freedom of trade and business guaranteed under Art.19(1)(g) of the Constitution and not coming within theprotection afforded(1)[1954] S.C.R. 803, 811.
153by cl. (6) of the Article. Mukherjea, J., as he then was,observed to the following effect:
"The power of granting or withholding licencesor of fixing the prices of the goods wouldnecessarily have to be vested in certainpublic officers or bodies and they wouldcertainly have to be left with some amount ofdiscretion in these matters. So far noexception can be taken; but the mischiefarises when the power conferred on suchofficers is an arbitrary power unregulated byany rule or principle and it is left entirelyto the discretion of particular persons to doanything they like without any check orcontrol by any higher authority."
We shall now notice some of the decisions cited at the Bar on behalf of the Commissioner in support of the validity of the impugned provisions. In Babul Chandra v. Chief Justice and Judges, High Court of Patna (1) it was held that the proviso to s ub-s. (1) of s. 9 of the Indian Bar Councils Act was not void as being an unreasonable restriction upon the freedom to practise a profession, or to carry on an occupation, trade or calling. The proviso to s. 9(1) states expressly that the rules "shall not limit or in any way affect the power of the High Court to refuse admission to any person at its discretion". Under s. 8 of the Indian Bar Councils Act, no person is entitled as of right to practise in any High Court, unless his name is entered in the roll of the Advocates of that Court maintained under the Act. Under s. 9 of that Act, the Bar Council can frame rules with the sanction of the High Court to regulate the admission of persons as Advocates. The proviso saves the overriding power of the High Court to refuse admission in its discretion. It was contendedthat an unfettered and uncontrolled discretion wasgiven to the High Court and that was unreasonable. This Court pointed out that there could not be a better authority than the High Court in that State to which the discretion could be entrusted. This decision turned upon three considerations, namely, (1) no person was entitled as of right to practise; (2) the discretion to refuse was vested in the (1)A.I.R. 1954 S.C R. 524.
20 154 highest judicial body in the State; and (3) it was implicit in the power of discretion that the High Court would give notice before rejecting an application. On that basis this Court held that the restrictions imposed by the proviso to s. 9(1) were reasonable.
Nor does the decision in Harishankar Bagla v. The State of Madhya Pradesh (1) lay down any different principle. There this Court was concerned with cl. 3 of the Cotton Textile (Control of Movement) Order, 1948, promulgated by the Central Government 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 commodities to the public; and (4) the policy underlying the Order was clearly enunciated by the provisions therein and that policy governed the exercise of the discretion by the Textile Commissioner. On these considerations this Court maintained the validity of that Order. The said decision has no analogy to the provisions of s. 39 of the Act in question.
The decision in Union of India v. Bhana Mal Gulzarimal Ltd. (2) related to the question of validity of (1) [1955] 1 S.C.R. 380.
(2) [1960] 2 S.C.R. 627, 641.
155 cl. 11B of the Iron and Steel (Control of Production and Distribution) Order, 1941. This Court held, having regard to the provisions of that Order and those of the Essential Supplies (Temporary Powers) Act, 1946, that the Legislature had clearly enunciated its legislative policy and that cl. 11B of the Order laid down the object which was intended to be achieved. Gajendragadkar, J., delivering the judgment of the Court, observed thus:
"Therefore reading cl. 11B by itself we do not see how it would be possible to hold that the said clause is violative of Art. 19. In fact, if ss. 3 and 4 are valid and cl. 11B does nothing more than prescribe conditions for the exercise of the delegate's authority which are consistent with s. 3 it is only the actual price structure fixed by the Controller which in a given case can be successfully challenged as violative of Art. 19."
The learned Judge considered the price structure fixed by the notification and observed that the respondents therein did not seriously challenge the validity of the notification in respect of price structure and, that apart, it was not proved that the notification adversely affected a large class of dealers taken as a whole. The judgment, therefore, does not help the respondents.
Nor is the decision of this Court in Mineral Development Ltd. v. State of Bihar (1) of any help to the respondents. There the constitutional validity of s. 25(1) of the Bihar Mica Act (10 of 1948) was impugned as violating the petitioners' fundamental right under Art. 19(1)(f) and (g), of the Constitution. Under s. 25(1)(c) of that Act discretion was given to cancel a licence to the State Government, but cl. (c) was hedged in by two important restrictions, namely, (i) the failure to comply with the provisions of that Act or the rules made thereunder should be a repeated failure and not a mere sporadic one, i.e., the defaulter must 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.
156 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 on the exercise of a fundamental right shall not be arbitrary or excessive or beyond what is required in the interest of the general public; the reasonableness of a restriction shall be tested both from substantive and proce- dural aspects; an uncontrolled and uncanalised power conferred on an officer is an unreasonable restriction on such right; though a legislative policy may have been clearly expressed in a statute, it must also pro. vide a suitable machinery for implementing that policy in accordance with the principles of natural justice; whether a restriction is reasonable or not is a justiciable concept and it is for the Court to come to one conclusion or the other having regard to the considerations laid down by Patanjali Sastri, C.J., in State of Madras v. V. G. Row (1).and similar others; in taking an overall picture of the relevant circumstances, the Court may legitimately take into consideration the fact that the discretion is entrusted to a State Government or a highly placed officer, but that in it- self is of minor importance for the simple reason that the fundamental right itself is guaranteed against the (1)[1952] S.C.R. 597.
157 action of the State, which is defined to include not only the Union or the State Governments but also Parliament, Legislatures and all local or other authorities within the territory of India; the distinction between an administrative authority and a judicial authority is not of much relevance in the context of a reasonable restriction, except perhaps a Court may more readily be inclined to uphold a restriction if a matter is entrusted to an impartial judicial authority than to an executive authority. Bearing the aforesaid principles in mind, let us look at the impugned provisions of the Act. The section has been extracted supra. The first part of the section confers a free and unqualified discretion on the Commissioner to grant a licence. A discretionary power to issue a licence necessarily implies a power to refuse to issue a licence. The word "may" is an enabling one and in its ordinary sense means "Permissible". When coupled with the words "at his discretion" it emphasises the clear intention of the legis- lature to confer on the Commissioner an unrestrained freedom to act according to his own judgment and conscience. If the section stops there, it is common case that the power of the Commissioner is.uncontrolled and uncanalised. 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 158 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 exercise of the discretion, the Commissioner cannot travel beyond the said two conditions. As a result the amplitude of the discretion is drastically cut down. The Commissioner would be able to refuse a licence only if he was satisfied that the applicant could not be relied upon to comply with the said conditions; if he was so satisfied, he could not refuse a licence in spite of the fact that there were many other good and relevant reasons for doing so. Thirdly, if the conditions are not exhaustive but only illustrative, the section would continue to suffer from the same vice, as it would still be open to the Commissioner to refuse a licence for any other reason. Fourthly, discretion based upon an anticipatory breach of conditions will be as arbitrary as in the case of absolute discretion, particularly in the case of new applicants, as more often than not it will have to be exercised on the basis of surmises, gossip or information, which may be false or at any rate untested. Lastly, by this unwarranted search for an undisclosed policy in the crevices of the statute, this Court will not only be finding an excuse to resuscitate an invalid law but also be encouraging the making of laws by appropriate authorities in derogation of fundamental rights.
The provisions of ss. 47 and 48(3) of the Motor Vehicles Act, 1939 (IV of 1939), bring out in bold relief the distinction between the exercise of a discretion to issue a licence and the imposition of conditions in a licence. Section 47 enjoins on the Regional Transport Authority in considering an application for a stage carriage permit to have regard to the matters enunciated in that section. Section 48(3) enables the Regional Transport Authority to attach to the permit the conditions detailed in that sub- section. While the former section regulates the exercise 159 of the discretion of the Regional Transport Authority issuing a permit, the latter describes the nature of the conditions to be inserted in the permit. These provisions no doubt cannot be invoked to construe the provisions of s. 39 of the Act, but we are referring to them only to show the legislative practice in such matters and to emphasize the fact that the scope of the discretion to issue a licence and that of the power to impose conditions in a licence are different. Therefore, on a true construction of the plain words of the statute we cannot hold that 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. Admittedly this order is made without giving any opportunity to an applicant to prove that he would satisfy both the tests laid down by s. 39 of the Act. The Commissioner is not legally bound to give any reasons for his refusal to give a licence. Even if reasons are given, there is no machinery for getting such an order revoked or vacated. The section does not impose a duty on the Commissioner to give reasonable opportunity to an 160 applicant to clear his character or to disprove any un- warranted allegations made against him or to prove that he would satisfy both the tests laid down by s. 39 of the Act. Nor does the section provide for an appeal against the order of the Commissioner to an appropriate authority. The suggestion that the authority is a high officer in the police department and that he can be relied upon to exercise his discretion properly does not appeal to us for two reasons, namely, (1) as we have already pointed out, the Constitution gives a guarantee for the fundamental right against the State and other authorities; and (2) the status of an officer is not an absolute guarantee that the power will never be abused. Fundamental rights cannot be made to depend solely upon such presumed fairness and integrity of officers of State, though it may be a minor element in considering the question of the reasonableness of a restriction. Therefore, it is clear to our mind that the exercise of the power also suffers from a statutory defect as it is not channelled through an appropriate machinery. We have, therefore, no hesitation to hold that s. 39 of the Act infringes the fundamental right of the petitioner under Art. 19(1)(g) of the Constitution both from substantive and procedural aspects.
The next question is whether a mandamus will issue against the Commissioner. The Commissioner admittedly has launched criminal proceedings against the petitioner under the provisions of the Act for not taking out a licence under s. 39 of the Act. As we have held that s. 39 of the Act is constitutionally void, a writ of mandamus will issue against the Commissioner of Police, Calcutta, directing him not to take any further proceedings against the petitioner for not taking out a licence under the provisions of the Act. BY COURT. In accordance with the opinion of the majority, this Petition is dismissed with costs.
