# [1950] 1 S.C.R. 566

- **Citation:** [1950] 1 S.C.R. 566
- **Court:** Supreme Court of India
- **Decided:** 1950-01-01
- **Bench:** SHRt HARILAL KANIA C. J, SAtYm FAzL Au, PATA>iJALI SASTRI MEHR CHAND MAHAJAN MuKHERJEA, DAs J J
- **Source:** https://unisonlegal.in/judgment/supreme-court-of-india/1950-1-s-c-r-566-140
- **Pages:** 7

## Headnote

Constitution of India, Arts. 19 (1), 19 (6), 32-Fundamental
right to carry on trade-Reasonableness
of restrictions imposedU. P. Municipalities
Act, 1916, s. 241
(2) (a)-Municipal bye/aw
prohibiting carrying on u1holesale trade without permission-Absence
of provisions for issuing license to old traders-Provisfons permitting
grant of monopoly-Lt:gality of bye/aw.
Byelaw No. 2 of the byclaws of a municipal board, which
came into force
on the 1st January, 1950, provided that
0 no
person
shall establish any new
n1arket or
place for wholesale
transactions
without
obtaining the
previous
permission
of the
board, and no person shall sell or expose for sale any vegetable,
fruit, etc. at any Place other than -that fixed by the board for. the
purpose"; and byelaw No. 4 permitted the grant of a monopoly
to a contractor to deal
in
wholesale
transactions
at
the place
fixed
as a market.
In anticipation of these byclaws
the
monopoly right to do wholesale
business in vegetable for three years
was
auctioned
by
the
municipal
board
and granted to
the
highest bidder and a place was also fixed as
the market where
such business could be carried on. The petitioner who had been
carrying on wholesale
business in vegetables at a rented shop
with:.o the mtμticipality for two years before the byelaws came
into force applO!:d for a license to carry on his business at his
shop but this
was rejected on the ground that there was no
provision
in the byelaws
authorising
the
grant of
any . such
license, and he was prosecuted for contravention of th'c byelaws.
He applied under Art. 32 of the Constitution for the enforcement
of
his
fundamental
right as a citizen to carry on his busincsa
which was gaaranteed by Art. 19 (1) of the Constitution.
Held
(i) . that the
prohibition
in byelaw
No.
2 became
absolute in the
absence of
provision authorising the issue of a
license, and inasmuch as the municipal board had, further, put
it out· of its power to grant a license to the petitioner by granting
a monopoly, the restrictions imposed
\Vere not reasonable within
S.C.R.
SUPREME COURT REPORTS
567
the meaning of Art. 19 ( 6) of the Constitution, and the byelaws
were
accordingly
void and
the prosecution
of
the
petitioner
illegal, (ii) that the fact that the Constitution came into force only
after the byelaws had come into force did not affect the petitioner's right to carry on his business.
Held also, that an appeal under section 318 of the U. P.
Municipalities Act was not _in the circumstances an adequate legal
remedy the_ existence of which would disentitlc the petitioner from
maintaining this application.
ORIGINAL JuRISDICTION: Petition No. X of 1950
This was an application under article 32 (1) of the
Constitution for
the
enforcement
of the applicant's
fundamental right to carry on his
busin~ss which was
guaranteed by article 19 ( 1) of the Constitution.
The
facts of the case appear in the judgment.
Nur-ud-din, for the petitioner.
Radhelal Agaruiala, for the opposite p~rty.
M. C. Setalvad,
Attorney-General for India, ( S. M.
Sikri, with him), for the Union of India.
Pearylal Banerji,
Advocate-General of U. P. ( Shri
Ram, with him), for the State of Uttar Pradesh.
1950.
May 19. The Judgment of the Court was
delivered by
DAs J.~I am reading the judgment of the Court.
This i§ an application under article 32 of the Constitution of India made by Rashid Ahmed for enforcement of his fundamental
right
to carry on his business which
is said to have _been completely stopped
by the respondent,
the Municipal--
Board of K.airana.
The facts shortly are as follows:
The petitioner is an Aratia
(commission agent)
carrying on wholesale business
in vegetables and fruits
at Kairana in the District of Muzaffarnagar in the
1950
Rashid Ahnid
v.
Municipal Board,
Kair1111a
Dos].
11150
Das].
SUPREME COL?RT REPORT~
f 1950 J
State of Uttar Pradesh.
He
has been carrying on
this business for the last two years at a rented shop
in Bazar Jama
Masjid in the town of Kairana.
Until
recently
there were no bye

## Text

1950
May 19
566
SUPREME COURT REPORTS
(1950 l
RASHID AHMED
fl.
THE MUNICIPAL BOARD,
KAIRANA.
THE UNION OF INDIA and THE STATE OF
UTT AR PRADESH :
lNTERVENERS.
[SHRt HARILAL KANIA C. J., SAtYm FAzL Au,
PATA>iJALI SASTRI MEHR CHAND MAHAJAN
MuKHERJEA and DAs J J. J
Constitution of India, Arts. 19 (1), 19 (6), 32-Fundamental
right to carry on trade-Reasonableness
of restrictions imposedU. P. Municipalities
Act, 1916, s. 241
(2) (a)-Municipal bye/aw
prohibiting carrying on u1holesale trade without permission-Absence
of provisions for issuing license to old traders-Provisfons permitting
grant of monopoly-Lt:gality of bye/aw.
Byelaw No. 2 of the byclaws of a municipal board, which
came into force
on the 1st January, 1950, provided that
0 no
person
shall establish any new
n1arket or
place for wholesale
transactions
without
obtaining the
previous
permission
of the
board, and no person shall sell or expose for sale any vegetable,
fruit, etc. at any Place other than -that fixed by the board for. the
purpose"; and byelaw No. 4 permitted the grant of a monopoly
to a contractor to deal
in
wholesale
transactions
at
the place
fixed
as a market.
In anticipation of these byclaws
the
monopoly right to do wholesale
business in vegetable for three years
was
auctioned
by
the
municipal
board
and granted to
the
highest bidder and a place was also fixed as
the market where
such business could be carried on. The petitioner who had been
carrying on wholesale
business in vegetables at a rented shop
with:.o the mtμticipality for two years before the byelaws came
into force applO!:d for a license to carry on his business at his
shop but this
was rejected on the ground that there was no
provision
in the byelaws
authorising
the
grant of
any . such
license, and he was prosecuted for contravention of th'c byelaws.
He applied under Art. 32 of the Constitution for the enforcement
of
his
fundamental
right as a citizen to carry on his busincsa
which was gaaranteed by Art. 19 (1) of the Constitution.
Held
(i) . that the
prohibition
in byelaw
No.
2 became
absolute in the
absence of
provision authorising the issue of a
license, and inasmuch as the municipal board had, further, put
it out· of its power to grant a license to the petitioner by granting
a monopoly, the restrictions imposed
\Vere not reasonable within
S.C.R.
SUPREME COURT REPORTS
567
the meaning of Art. 19 ( 6) of the Constitution, and the byelaws
were
accordingly
void and
the prosecution
of
the
petitioner
illegal, (ii) that the fact that the Constitution came into force only
after the byelaws had come into force did not affect the petitioner's right to carry on his business.
Held also, that an appeal under section 318 of the U. P.
Municipalities Act was not _in the circumstances an adequate legal
remedy the_ existence of which would disentitlc the petitioner from
maintaining this application.
ORIGINAL JuRISDICTION: Petition No. X of 1950
This was an application under article 32 (1) of the
Constitution for
the
enforcement
of the applicant's
fundamental right to carry on his
busin~ss which was
guaranteed by article 19 ( 1) of the Constitution.
The
facts of the case appear in the judgment.
Nur-ud-din, for the petitioner.
Radhelal Agaruiala, for the opposite p~rty.
M. C. Setalvad,
Attorney-General for India, ( S. M.
Sikri, with him), for the Union of India.
Pearylal Banerji,
Advocate-General of U. P. ( Shri
Ram, with him), for the State of Uttar Pradesh.
1950.
May 19. The Judgment of the Court was
delivered by
DAs J.~I am reading the judgment of the Court.
This i§ an application under article 32 of the Constitution of India made by Rashid Ahmed for enforcement of his fundamental
right
to carry on his business which
is said to have _been completely stopped
by the respondent,
the Municipal--
Board of K.airana.
The facts shortly are as follows:
The petitioner is an Aratia
(commission agent)
carrying on wholesale business
in vegetables and fruits
at Kairana in the District of Muzaffarnagar in the
1950
Rashid Ahnid
v.
Municipal Board,
Kair1111a
Dos].
11150
Das].
SUPREME COL?RT REPORT~
f 1950 J
State of Uttar Pradesh.
He
has been carrying on
this business for the last two years at a rented shop
in Bazar Jama
Masjid in the town of Kairana.
Until
recently
there were no bye-laws
of
the
respondent
Board
regulating the sale
of
vegetables
and
fruit
within the limits of the municipality.
In March, 1949,
the respondent Board published certain proposed bye-
.laws made under section
298 of the U.P. Municipalities Act,
1916.
These bye-laws were passeJ
by
the
respondent
Board on the 19th April, 1949.
After
confirmation
by
the Commissioner
these
bye-laws
came into operation on anJ from 1st January 1950.
In anticipation of these
new
bye-laws
coming into
effect the respondent Board on the 21st May,
1949,
auctioned
"the contract
for wholesale
of vegetables",
presumably meaning 'thereby
the
monopoly
right
to
do
wholesale
business
in
vegetables.
The contract
was given to one Habib Ahmad,
who was the highest
bjdder for three years at and
for Rs.
72,750
payable
in equal quarterly instalments in advance.
On the
31st December,
1949, respondent BoarJ notified a place
near Police Post Imam
as the market
for
wholesale
pur.chase and sale of vegetables
and fruits.
The petitioner applied for a license to carry on his wholesale
Aratia business at his shop.
On or
about the 22nd
December,
1949, the respondent Board
by resolution
No. 188 rejected the petitioner~s application. This decision was. communicated to the petitioner on the 9th February 1950. The order of the Chairman of the respond-
. ent Board was in these terms : "According to resolution
No. 188 ·dated 22-12-49 the application of Mr. Rashid
Ahmed is rejected and he be informed accordingly".
No reason was. assigned by the respondent
Board's
resolution for the rejection of the petitioner's
application.
We are now informed by the learned
Advocate
tor the respondent Board
that the application
was
rejected
as there was no bye-law for entertaining
such
application or granting such license as was prayed for.
The fact that the respondent Board
had already auctioned the conHact to Habib Ahmad might conceivably
have had some bearing on this refusal to grant a license
to the petitioner.
In
the meantime on the 28th
S.C.R.
SUPREME COURT REPORTS
569
January,
1950.
a notice was served on the petitioner in
the following terms :
"You are liereby
informed that the Municipal
Board,
Kairana,
have given the contract of wholesale
.purchase and sale of the vegetables,
which is in force
from the 1st day of January,
1950.
It has been
repeatedly promulgated, in the city by the beat of
drum,
through a Khakrob (sweeper) that excepting the
contractor of v~etables
the Municipal Board, Kairana,
nobody shall deal in wholesale purchase and sale of
vegetables at a place other than
the one approved
by
the Municipal Board aforesaid (i.e. the place near Police
rost Imam).
As against this,
you in the first place
kept selling vegetables by wholesale, at the house near
Jama Masjid otherwise known as Qaziwala,
despite
occasional verbal warnings requiring
you to desist
therefrom,
which were conveyed through an employee
of the Board. On your failure tG comply, you were
warned by a notice in writing, dated the 3rd January,
1950.
That notice was duly served on you.
But still
you paid no heed.
Accordingly a complaint was lodged
against you,
under the bye-laws, quoted above,
in the
Court of Pargana Officer,
Tahsil Kairana.
The com-
.Plaint is still pending.
Now you are selling wholesale
by auction,
vegetable at another place in Jama Masjid
Bazar, which is a thoroughfare.
Your above conduct is unlawful
and
in contravention of the Municipal Board's Bye-law 2 pertaining
to vegetable contract.
Moreover, highly prejudicial as
it is to the interests of both the contractor
and the
Board,
you are warned that after this notice has been
served on you, you should cease to sell any more
ffgetable in breach of the bye-laws
above mentioned.
Herein fail not."
This notice is rather disingenous in that while it
• suggests that everybody
can
deal
in wholesale
purchase and sale of vegetables at the place
approved by
the Board,
i.e., at the place near Police Post
Imam,
the ,fact,
as we are now told by the learned Advocate
for the i:espondent BOard,
is entirdy contrary for it is
Rashid Ahmed
"·
Municipal Board,
Eairana
Das}.
1950
Rashid Ahmed
v.
Municipal Board,
KaiTtma
Das).
570
SUPREME COURT REPORTS
(1950]
only the contractor Habib Ahmad
who can carry on
wholesale business at that place.
The position,
therefore, is that the petitioner cannot do any wholesale
business either at
the appointed marktit or at his own
shop where
he had admittedly been doing wholesale
business for
two years prior
to the bye-laws coming
into force.
In short,
the petitioner's business has been
wholly stopped and he is being prosecuted for alleged
breach of the bye-laws.
The above notice
was headed
as
"Notice under bye-law 2 of the bye-laws pertaining
to contract of vegetables."
Bye-law 2 runs thus :
"No person
shall establish
any new
market or
pl~cc for
wholesale
transaction
without
obtaining
the previous permission of the Board and no person
shall sell or expose for sale any vegetable,
fruit, etc.,
at any place other than that fixed by the Board for
the purpose."
The second
part
of
this
bye-law
clearly
contemplates
that everybody
will
be
entitled
to
do business at the place fixed
by the respondent
· Board,
but as a result of a monopoly
in favour
of
the contractor Habib
Ahmad having been
created,
nobody else can do business at that place as conceded
by the learned
Advocate
for
the respondent
Board.
Under the first part of this bye-law no person can
establish a new market or place for
wholesale transaction wit.hout
obtaining
the
permission
of
the
respondent Board.
This ·part of the
bye-law clearly
contemplates that the Board may permit the establishment of
a new
market for wholesale dealings in
vegetables.
The petitioner applied for this permission
but it was refused.
Bye-law 2 is still in force.
If it
requires a license then under
section 241 (2) (a) the
respondent Board cannot
refuse·
such
license except
on the ground that the
place where the market or
shop is established fails to comply with any condition
prescribed by,
or under,
the
Act.
It is conceded
that the
rejection of
the
petitioner's
application.
was not based on any such ground but that it was because there was no bye-law authorising the issue of any
license.
The Constitution by article
19 ( 1) guarantees
S.C.R.
SUPREME COURT REPORTS
571
to the Indian · citizen the right to ca.rry on trade or
business subject to such reasonable
restrictions
as are
mentioned in clause ( 6) of that article.
The position,
however,
under bye-law 2 is that while it provided
that no person shall establish a market for wholesale
transactions in vegetables
except with the permission
of the Board,
there is no bye-law authorising the
respondent Board to · issue the license.
The nett result
is that the prohibition of this bye-law,
in the absence
of any provision for issuing license:,
becomes
absolute.
Further, bye-law 4 contemplates the grant of a monopoly to a contractor to deal in wholesale transactions
at the place fixed as a market.
Acting up,on that provision, the respondent Board has granted monopoly to
Habib Ahmad and has put it out of its power to grant
a license to the petitioner to carry dn wholesale business in vegetables either at the fixed market place or
at any other place within the municipal limits of
Kairana.
This certainly is much more than reasonable
restrictions on the
petitioner as are
contemplated
by
clause (6) of article 19.
This being the position, the
bye-laws would
be void under article 13 (1) of the
Constitution.
On the other hand, if there is no bye-law
requiring . the petitioner to take out license,
then there
can' be no justification for the respondent Board
to
stop the petitioner's business or to prosecute him.
r"
Learned counsel tor the respondent Board faintly
contended that the bye-laws having come into force on
1st January,
1950,
i.e., before the Constitution came
into force,
the petitioner no longer had any right to
continue the business and,
therefore,
his case is not
governed by article 19(1) (g).
There is no substance
in this argument for,
if it were sound, article 19 (1) (g)
would
only protect
persons who
were
carrying
on
business before the Constitution came into force.
Learned
Advocate-General
of
Uttar
Pradesh
appearing for the intervener
drew
our attention
to
section 318 of the U.P. Municipalities Act, 1916, and
submitted that the petitioner haviJ:ig
adequate
remedy
by way of appeal,
this Court should not
grant any
writ in the nature of the prerogative writ of
mandamus
1950
v.
Muniripal Botmf
Kairana
Das].
1950
v.
Municipal Board,
Kairana
Das].
572
SUPREME COURT REPORTS
[1950j
or certiorari.
There can be
no question th.at the
aistence of an adequate legal remedy is ;i thing to be
taken into consideration
in
the
matter of granting
writs,
but the powers given to this Court under
article 32 are
much wider and are not confined to
issuing prerogative writs only.
The respondent
Board
having admittedly put it out of its power to grant a
license and having regard to the fact that there is no
specific bye-law authorising the issue of a license,
we
do not consider that the appeal under section 318 to
the local Government which
sanctioned
the bye-laws
is,
in the circumstances of this case,
an adequate legal
remedy.
We are satisfied that in this case the petitioner's
fundamental rights have been infringed and he is
entitled
to have his grievance
redressed.
The proper
order in such circumstances would
be
to direct the
respondent
Board not to prohibit
the petitioner from
carrying on the trade of wholesale dealer and commission agent of vegetables and fruits
within the
limits
of the Municipal Board of Kairana,
except in accordance with the bye-laws as and when framed in future
according to law and further
to direct
the respondent
Municipal Board to withdraw the pending
prosecution
of the petitioner and we order accordingly.
The respondents to pahthe costs of the petitioner ..
' ,.
Petition allowed.
Agent for the petitioner : Narmitlal.
Agent for the opposite party : Tarachand Bri;mohanlal.
Agent for the Union of India : P. A. Mehta.
Agent for Uttar Pradesh : Tarachand Bri;mohan/al.