# '959 Associated Hotels of ltidia Ltd v. R. N. Kapoor Subba Rao]. l959 May z9

- **Citation:** [1960] 1 S.C.R. 388
- **Court:** Supreme Court of India
- **Decided:** 1958-07-16
- **Case number:** Civil Appeal No. 173of1959
- **Bench:** B. P. Sinha, Jafer Imam, J. L. K.Apur, P. B. G.Ajendragadkar, K. N. W ANCHOo
- **Source:** https://unisonlegal.in/judgment/supreme-court-of-india/959-associated-hotels-of-ltidia-ltd-v-r-n-kapoor-subba-rao-l959-may-z9-1765
- **Pages:** 14

## Headnote

Municipality-Regulation of discharge of ejjl.uent-Issue of
notice-Objection to such notice and requisition specified thereinScope of enquiry by Special Officer-Existence of nuisance, if can be
gone into-Bombay District Municipal Act, I9DI, as adapted and
applied to the State of Saurashtra and as amended by Act XI of I955·
s. Ij3A(3).
The respondent Municipality issued a notice under sub-s. (1)
of s. l53A of the Bombay District Municipal Act, 1901, as adapted
and applied to the State of Saurashtra and as amended by Act
XI of 1955, calling upon the appellant to show cause why it
should not be directed to discharge the effluent of it's chemical
works in the manner specified in the notice. On the :ippellant
objecting to the notice and the requisition contained therein, a
Special Officer was appointed by the Government under sub-s. (3)
of that section to hold an enquiry in the matter. The Special
Officer treated some of the issues raised, as preliminary issues of
law and held .that the question whether the discharge of the
effluent polluted the water and adversely affected the fertility of
the soil was a matter for the subjective satisfaction of the
Municipality and binding on him and was as such beyond the
scope of his enquiry. The question for determinatiOn in this
appeal was whether the Special Officer was right in the view he
took of s. l53A(3) of the Act and in restricting ·the scope of the
enquiry in the way he did.
..
I
S.C.R.
SUPREME COURT REPORTS
389
'
Held, that Special Officer took a wrong view of his jurisdicr959
tion under s. 153A(3) of the Act and was in error in restricting
the scope of the enquiry.
Dhrangadhra
There could be no doubt on a proper appreciation of the
Chemical
scheme laid down by the provision of s. 153A.of the Act, correctly
Works Ltd.
construed, that while the subjective satisfaction of the Municipav.
Iity as to the existence of the nuisance could not be questioned at The Dhrangadhra
the initial stage when it sought to put the machinery provided by
Municipality
sub-s. (1) in motion or under sub-s. (2) where such existence was
admitted, the situation contemplated by sub-s. (3) where the
notice and the requisition were wholly disputed, and no mere
modification of the requisition sought, was entirely different.
The language of sub-s. (3) and particularly the words " to
hold an enquiry into the matter" used by it clearly indicated
that where there was such a contest, it was the duty of the
Special Officer to enquire into the existence of the alleged
nuisance and come to a finding of his own. The status of the
Special Official and powers conferred on him by the relevant
provisions of the Act, clearly indicated that sub-s. (3) was
intended by the Legislature to be a protection against any
arbitrary exercise of its power by the Municipality.
It was of the utmost importance that such proceedings should
in the interest of the community, be disposed of with all possible
expedition.
CIVIL APPELLATE
JURISDICTION : Civil
Appeal
No. 173of1959.
Appeal by special leave from the judgment and order
dated July 16, 1958, of the Special Officer appointed
under section 153(3) of the Bombay District Municipal
Act, 1901 (Bombay Act No. 111 of 1901), as applied to
Saurashtra, Zalawad Di'vision, Surendarnagar.
AND
ORIGINAL JURISDICTION: Petition No. 174 of 1958.
Petition under Article · 32 of the Constitution of
India for the enforcement of Fundamental Rights.
Purshottam Tricumdas, P. N. Bhagwati, Tanibhai
D. Desai and I. N. Shroff, for the appellant and
petitioner.
N. G. Chatterjee, S. K. Kapur and A. G. Ratnaparkhi,
for the respondent in appeal and respondent No. 2 in
the petition.
B. Sen and R. H. Dhebnr, for respondent No. 3 in
petition.
1959
Dhrangadhra
390
SUPREME COURT REPORTS [1960(1))
1959. May 19. The Judgment of the Court was
delivered by
Chemical
IMAM J.-The case of the respondent Municipality
Works Ltd.
was that the appellant's chemical works discharged
The m:;ngadhra effl~ent in very large quantities containing

## Text

'959
Associated Hotels
of ltidia Ltd.
v.
R. N. Kapoor
Subba Rao].
l959
May z9.
388
SUPREME COURT REPORTS [1960(1)]
out as part of a hotel or for hotel purposes, I must
hold that they are not rooms in a hotel within the
meaning of s. 2 of the Act.
In this view, the appellants are not exempted from
the operation of the Act.
The judgment of the High
Court is correct. The appeal fails and is dismissed.
ORDER
In accordance with the opinion of the majority, the
appeal is allowed. No order as to costs.
DHRANGADHRA CHEMICAL WORKS LTD.
v.
THE DHRANGADHRA MUNICIPALITY
(and connected petition)
(B. P. SINHA, JAFER IMAM, J. L. K.APUR,
P. B. G.AJENDRAGADKAR and K. N. W ANCHOo, JJ.)
Municipality-Regulation of discharge of ejjl.uent-Issue of
notice-Objection to such notice and requisition specified thereinScope of enquiry by Special Officer-Existence of nuisance, if can be
gone into-Bombay District Municipal Act, I9DI, as adapted and
applied to the State of Saurashtra and as amended by Act XI of I955·
s. Ij3A(3).
The respondent Municipality issued a notice under sub-s. (1)
of s. l53A of the Bombay District Municipal Act, 1901, as adapted
and applied to the State of Saurashtra and as amended by Act
XI of 1955, calling upon the appellant to show cause why it
should not be directed to discharge the effluent of it's chemical
works in the manner specified in the notice. On the :ippellant
objecting to the notice and the requisition contained therein, a
Special Officer was appointed by the Government under sub-s. (3)
of that section to hold an enquiry in the matter. The Special
Officer treated some of the issues raised, as preliminary issues of
law and held .that the question whether the discharge of the
effluent polluted the water and adversely affected the fertility of
the soil was a matter for the subjective satisfaction of the
Municipality and binding on him and was as such beyond the
scope of his enquiry. The question for determinatiOn in this
appeal was whether the Special Officer was right in the view he
took of s. l53A(3) of the Act and in restricting ·the scope of the
enquiry in the way he did.
..
I
S.C.R.
SUPREME COURT REPORTS
389
'
Held, that Special Officer took a wrong view of his jurisdicr959
tion under s. 153A(3) of the Act and was in error in restricting
the scope of the enquiry.
Dhrangadhra
There could be no doubt on a proper appreciation of the
Chemical
scheme laid down by the provision of s. 153A.of the Act, correctly
Works Ltd.
construed, that while the subjective satisfaction of the Municipav.
Iity as to the existence of the nuisance could not be questioned at The Dhrangadhra
the initial stage when it sought to put the machinery provided by
Municipality
sub-s. (1) in motion or under sub-s. (2) where such existence was
admitted, the situation contemplated by sub-s. (3) where the
notice and the requisition were wholly disputed, and no mere
modification of the requisition sought, was entirely different.
The language of sub-s. (3) and particularly the words " to
hold an enquiry into the matter" used by it clearly indicated
that where there was such a contest, it was the duty of the
Special Officer to enquire into the existence of the alleged
nuisance and come to a finding of his own. The status of the
Special Official and powers conferred on him by the relevant
provisions of the Act, clearly indicated that sub-s. (3) was
intended by the Legislature to be a protection against any
arbitrary exercise of its power by the Municipality.
It was of the utmost importance that such proceedings should
in the interest of the community, be disposed of with all possible
expedition.
CIVIL APPELLATE
JURISDICTION : Civil
Appeal
No. 173of1959.
Appeal by special leave from the judgment and order
dated July 16, 1958, of the Special Officer appointed
under section 153(3) of the Bombay District Municipal
Act, 1901 (Bombay Act No. 111 of 1901), as applied to
Saurashtra, Zalawad Di'vision, Surendarnagar.
AND
ORIGINAL JURISDICTION: Petition No. 174 of 1958.
Petition under Article · 32 of the Constitution of
India for the enforcement of Fundamental Rights.
Purshottam Tricumdas, P. N. Bhagwati, Tanibhai
D. Desai and I. N. Shroff, for the appellant and
petitioner.
N. G. Chatterjee, S. K. Kapur and A. G. Ratnaparkhi,
for the respondent in appeal and respondent No. 2 in
the petition.
B. Sen and R. H. Dhebnr, for respondent No. 3 in
petition.
1959
Dhrangadhra
390
SUPREME COURT REPORTS [1960(1))
1959. May 19. The Judgment of the Court was
delivered by
Chemical
IMAM J.-The case of the respondent Municipality
Works Ltd.
was that the appellant's chemical works discharged
The m:;ngadhra effl~ent in very large quantities containing calcium,
Municipality
sodmm and other salts through Katcha Channels
Imam].
thereby corrupting potable water of the wells in the
surrounding area so as to render it unfit for use and
also prejudicially affecting the fertility of the soil in
the surrounding area by percolation. The respondent
Municipality accordingly, after having obtained the
approval of the Government, issued a notice dated
the 14th June, 1956, to the appellant under s. 153 A(l)
of the Bombay District Municipal Act, 1901, as adapted and applied to the State of Saurashtra and as
amended by Act XI of 1955 (hereinafter referred to as
the Act), to show cause in writing within a period of
one month from the date of the receipt of the notice
why it should not be directed to arrange within a
period of nine months from the date of such direction
for the discharge of the effluent through a covered
pucca drainage and for pumping it over a distance of
about 8 miles in the ' Ran ' area of Cutch near Kuda,
as shown in the plan annexed to the notice.
The appellant rep1ied to this notice by a letter dated
the 10th of July, 1956.
According to the appellant,
the effluent -was being discharged until 1943 through a
Katcha Channel .running parallel to the railway line in
the direction of Halvad.
In 1944 it was felt that as
the water of some of the wells in the areas known as
Harijanvas and Kolivas close to the vicinity of the
channel might be affected another channel was constructed for discharging the effluent, which was at a considerable distance away from Kolivas and Harijanvas
and still further away from the city which lies on the
western side of the railway lines whereas the factory
is at a considerable distance away on the eastern side
of the railway lines.
It was pointed out that during
the last 3 or 4 years, periodical surveys of the water
of various wells in the city had been taken by the
appellant and these tests had shown that the water
was not in any way polluted by reason of the effluent
S.C.R.
SUPREME COURT REPORTS
391
being discharged through the existing channels, that
all the papers and reports relating to the tests carried
out periodically by the appellant were available for
inspection by the respondent Municipality and that
they could be inspected by appointment. The appellant
further enquired whether before issuing the notice the
respondent Municipality had carried out similar tests
for analysing the water of the various wells and that
if such analysis had been made it might be allowed to
inspect and survey the reports and other relevant
papers connected therewith.
Regarding the fertility
of the soil the appellant emphatically denied that the
same had been in any way adversely affected by the
discharge of the effiuent through the existing channels.
The appellant further pointed out that the respondent
Municipality's direction that the appellant should
arrange the discharge of the effiuent through a covered
pucta drain for pumping it over a distance of about 8
miles as shown in the plan would involve an expenditure of nearly 8 to 9 lakhs of rupees which, having
regard to the prevailing conditions, would involve a
capital outlay of such an enormous amount as to cripple
the appellant's activities. The appellant further pointed
out that the scheme &uggested by the respondent
Municipality was impracticable and difficult to implement for technical reasons and that the appellant's
engineer had been consulted in that respect. Finally,
the appellant informed the respondent Municipality
that in these circumstances it objected to the requisitions and expressed its inability to carry out the same.
The respondent then requested the Government to
appoint a Special Officer under the provisions of
s. 153 A (3) of the Act. The Government by its order
dated the 17th of May, 1958, appointed Mr. T.U. Mehta,
District and Sessions Judge, Jhalawad District, as a
Special Officer to hold an enquiry into the matter and
to complete it within three months from the date of
the Notification.
When the matter came before the Special Officer he
recorded the order which is the subject matter of the
present appeal by special leave.
The Special Officer
had framed 7 Issues of which Issues Nos. 1 to 4 were
r959
Dhrangadhra
Chemical
Works Ltd,
v.
The Dhrangadhra
Municipality
Imam].
z959
Dhrangadhra
Chemical
Works Ltd.
v.
The Dhrangadhra
Municipality
Imam].
392
SUPREME COURT REPORTS [1960(1)]
treated by him as preliminary Issues of law. Of
the 7 Issues framed Issue No. 4 was one of the most
important ones for consideration and it was to the
following effect:-·
"Is it shown that the question whether the discharge of the effluent from the factory of the
respondent company is polluting water and adversely
affects the fertility of the soil, is a question of the
subjective satisfaction of the Municipality and that
this question is beyond the scope of the present
enquiry?"
Along with this Issue, Issue No. 6 had to be considered
which was as follows :-
" If the Point No. 4 is decided in the negative, is
it proved that the effluents discharged by the factory
of the respondent corrupt potable waters of the wells
in the surrounding area so as to render them unfit
for any use, and also affect prejudicially the fertility
of the soil in the surrounding area by percolation ?"
The Special Officer decided Issue No. 4 in the affirmative and held that the question whether the discharge
of the effluent polluted the water and adversely affected
the fertility of the soil was one for the subjective satisfaction of the respondent Municipality and was beyond
the scope of the enquiry before him. Having found
this he held that Issue No. 6 did not arise for consideration. In dealing with Issue No. 5 whether the notice
issued by the respondent Municipality was mal,a fide,
arbitrary, capricious and that the same had been
issued without the respondent Municipality sufficiently
applying its mind, the Special Officer was of the opinion
that it was, " out of the purview. of the present
enquiry." Issues 2 and 3 were decided by the Special
Officer in favour of the appellant and need not be
referred to for the purpose of the present appeal.
Issue No. 1 dealt with the question whether ss. 153A
to 153G of the Act violated the fundamental rights of
the appellant guaranteed under Articles 14, 19 and 31
of the Constitution. It was pointed out by the Special
Officer that during the course of the argument on
behalf of the appellant it was not pressed that the
S.C.R.
SUPREME COURT REPORTS
393
I959
fundamental rights covered by Articles 14 and 31 were
infringed. The submission was confined to the infringement of Art. 19 of the Constitution. This conD~=:~a:z•a
tention was rejected by the Special Officer. The Special
works Ltd.
Officer in his order stated that "The result of the
v.
above findings is that this Tribunal shall now proceed The Dh~~ng~hr11
to decide the only remaining Issue which is Issue
Municipality
No. 7. I therefore order that the case should proceed
with the determination of this Issue."
This Issue was in these words :-
" If it is found that the effluents of the factory
of the respondents corrupt the potable waters and
fertility of the soil, what final recommendation
should be made about the method and manner of
the discharge of these effluents?"
It was urged on behalf of the appellant that the
Special Officer had unduly restricted the scope of the
enquiry by taking an erroneous view as to the scope of
the enquiry before him and thus had refused to
exercise jurisdiction which was vested in him under
the Act. It was further submitted that s. 153A of the
Act offends Art. 19 of the Constitution.
On behalf of the respondent it was contended that
the Special Officer has not erred in holding that the
existence of a nuisance of the kind mentioned in
s. 153A(l) of the Act was a matter for the subjective
satisfaction of the respondent Municipality and beyond
the scope of his enquiry. S. 153A of the Act did not
offend Art. 19 of the Constitution because it would be
a. reasonable restriction to the exercise of the fundamental right under Art. 19(l)(C) to prevent a. nuisance
which would affect t.he public health and fertility of
the soil. Having regard to the submissions made on
on behalf of the appellant and the respondent it is
necessary to quote the provisions of ss. 153A and
153B of the Act.
Section 153A states :
" Regul~tion of discharge of effluent containing
salt or other chemicals by factories.
(1) If it be shown to the satisfaction of the Municipality that the owner or mana~r of ·a factory,
50
Imam].
r959
Dhrangadhra
Chemical'.
Works Ltd.
v.
T ,,,, Dhrangadhra
Municipality
Imam].
394
SUPREME COURT REPORTS [1960(1)]
situated or located within the limits of the Municipal District, is discharging from such factory
effluent containing salt or other chemicals in such
manner as renders, or is likely to render, saline the
potable waters of wells, tanks, ponds or other water
receptacles, or corrupts, or is likely to corrupt, such
water in such a way as to render it unfit for any use
by the public or is prejudicially affecting, or is
likely to so affect1 the fertility of the soil, in the
surrounding area either by percolation or otherwise,
the Municipality may, with the previous approval of
the Government, issue a written notice to the
manager or the owner of such factory, requiring him
to show cause in writing within a fixed period why
he should not be directed to arrange within such
period as may be fixed in such notice, or as may be
extended from time to time, for the discharge of such
effluents in such manner as may have been previously
approved by the Government and as may be specified in the notice, so that the discharge of such
effluents may not have the effect of rendering
saline or corrupting the waters of wells, tanks, ponds
or other water receptacles, or of prejudicially affecting the fertility of the soil, in surrounding area.
(2) If no reply to the notice given under subsection (1) is received from the manager or the owner
of the factory within the fixed period, or if a reply
is received to the effect tha.t the manager or the
owner consents to comply with the requisition in
such notice, the Municipality may forthwith pass
such order as may be necessary for the purpose. of
regulating the discharge of effluents in the manner
specified in such notice.
(3) If a reply to the notice given under subsection (1) is received from the manager or the
owner of the fact~ry, objecting or consenting subject
to modification to the requisition specified in such
notice, the Government shall, on a request made to
it by the Municipality in this beha1.f appoint a
special judicial officer, who shall not be below the
rank of a District Judge (hereinafter referred to as
the Special Officer), to hold an inquiry into the
S.C.R.
SUPREME COURT REPORTS
395
matter. The Special Officer shall make the inquiry
r959
in such manner and perform such functions and
within such time as may be specified .in the orc}er. of
D~::!~c~~"'
appointment."
works Ltd.
Section 153B states :
v.
" Report by Special Officer and order to be. passed Th• Dli~a.ng"'!h'
11
b M
. . 1.
"th
.
f G
t
Mumcipdfity
y
ume1pa ity w1
sanction o
overnmen .
The Special Officer shall on completion of the
Imam J.
inquiry entrusted to him under sub-section (3) of
Section 153A, send his report to the Municipality &
the Municipality shall, with the previous approval
of the Government, pass an order in terms of the
recommendations of such officer."
It was contended on behalf of the appellant that
prior to the issuing of notice under s. 153A (1) the
existence of a nuisance in the terms'of•the sub-section
may be within the subjective satisfaction of the
Municipality but after issuing the notice different
considerations would arise when the provisions of
sub-s. (3) are given effect to. 'fhe scheme of s. 153A
of the Act is to permit the Municipality, if it is satisfied that a nuisance in the terms of sub-s. (1) exists,
to issue a notice requiring the person to whom the
notice is issued to show cause why he should not be
directed to arrange for the discharge of the effiuent
in such manner as may have been previously approved by the Government and as mentioned in the
notice so that rendering saline or corrupting the water
of the wells, tanks, ponds or other wa.t.er receptacles,
or prejudicially affecting the fertility of the soil in the
surrounding areas may be stopped. In showing cause
the person to whom the notice has been issued may
under sub-s. (2) consent to comply with the requisition
in such notice upon which the Municipality may forthwith pass such orders as may be necessary for the
purpose of regulating the discharge of the effiuent in
the manner specified in such notice. Upto fihis stage
there is no contest between the Municipality and the
person to whom the notice has been issued. The
question whether a nuisance in the terms of sub-s. (I)
exists or not did not arise as the person to whom the
notice has been issued by his consent and willingness
396
SUPREME COURT REPORTS [1960(1)]
to comply with the requisition admits the existence
of such a nuisance. Different considerations, howDhrangadhra
ever, arise where the circumstances attract the proviChenzical
Works Ltd.
sions of sub-s. (3) and a Special Officer has to be
I959
v.
appointed. Under this sub-section if the reply to the
The Dhra11gadhra notice given under sub-s. (1) objects to the requisition
Municipality
specified in the notice or consents to it subject to modiImam].
fication, the Government shall on the request of the
Municipality appoint a special judicial officer "to hold
an inquiry into the matter." It is urged on behalf of
the appellant that if the requisition in the notice is
objected to, the objection includes not only to the
allegation of the existence of the nuisance in terms of
sub-s. (1) but also to the direction as to the manner in
which the discharge of the effluent shall be made.
The objection beiffg in regard to both the matters, it
was the bounden duty of the Special Officer to hold
an enquiry with respect to the entire matter in dispute.
At this stage, the satisfaction of the Municipality as
to the existence of the nuisance alleged inevitably
becomes justiciable. The Special Officer was bound
to enquire into the dispute and make its report both
as to the existence of the nuisance and the direction
as to the manner in which the effluent shall be discharged.
On behalf of the respondent Municipality it was
submitted that under sub-s. (1) the satisfaction is the
subjective satisfaction of the Municipality and of no
other authority. The requisition under this subsection is to the person on whom the notice is issued
to show cause why he should not be directed to arrange
for the discharge of the effluent in the manner
specified in the notice and not to show cause against
the existence of the nuisance. Sub-s. (3) deals with
this requisition which is the subject of the enquiry
before the Special Officer' and not the existence of a
nuisance which was purely a matter for the subjective
satisfaction of the Municipality. It is contended
that where the Legislature has conferred on the
Municipality jurisdiction to determine whether a
particular state of fact exists and on finding that it
does exist to proceed further and to do something
S.C.R.
SUPREME COURT REPORTS
397
more, then the fact in question is not collateral but
is a part of the very issue which the Municipality has
to enquire into and that ceases to be justiciable. ·
Having regard to the submissions made on behalf
of the appellant and the respondent it is necessary to
construe the provisions of s. 153A of the Act and to
understand the scheme set out in its provisions fdr dealing with a nuisance of the kind mentioned in subs. (1). In our opinion, to justify the issuing of a notice
by the Municipality, with the previous approval of
the Government, there 'must be in existence such a
nuisance to the satisfaction of the Municipality. The
satisfaction here is the subjective satisfaction of the
Municipality and no other authority could question the
action of the Municipality in issuing the notice on the
ground that it should not have been so satisfied.
Once the notice has issued ordering the person to
whom the notice is issued to show cause why he
should not be directed to arrange for the discharge of the
efll.uent in the manner _specified in the notice, i.t is
open to the person to whom the notice is issued to
accept the assertion of the Municipality that the
nuisance·in question exists and to agree to comply
with the direction to arrange the discharge of the
eflluent in the manner specified by the notice. In
such a case, th~ Municipality may forthwith pass such
orders as may be necessary for the purpose of regu·
lating the discharge of the eflluent in the manner
specified in the notice. In our opinion, this authority is given to the Municipality because the person
to whom the notice has been issued does not deny the
existence of the nuisance in question and is prepared
to comply with requisition in the notice without any
objection. If the person to whom the notice has been
issued does not· reply to the notice the Municipality
may forthwith pass a similar order.
In both these
cases there is no dispute about the existence of the
nuisance in question and what was the subjective
satisfaction of the Municipality is admitted to be in
accordance with the existing facts.
Sub-s, (2) of s.
153 A covers such a situation.
I9'59
Dkrangadhra
Chemical
Works Ltd.
v.
The Dhrangadhra
Municipality
Imam].
1959
Dhrangadhra
Chemical
Works Ltd.
v.
1"/ie Dhrungadlira
111 ur1icipalit;1
ln1am ],
398
'SUPREME COURT REPORTS [1960(1)]
Sub-s. (3) of s. 153A deals with a situation entirely
different from that which arises under sub-s. (2). Under
sub-s. (3) two situations arise (1) where the person to
whom the notice has been issued objects to it and the
requisition contained therein and (2) where he consents
to it subject to modification. ln both cases the Government shall on the request made by the Municipality,
appoint a
judical officer not below the rank of a
District J ndge to hold an enquiry into the matter. It
will be noticed that while under sub-s. (2) the consent
and willingness to comply with the requisition in the
notice is .absolute under sub-s.(3) even if the person to
whom the notice has been issued consents to the requisition subject to modification the consent is not absolute.
That is to say, some dispute between the person concerned and the l\Iunicipalit.y remains outstanding as to
the manner of carrying it out and that dispute would
be the subject of an enquiry by the Special Officer. In
this situation also, the existence of the nuisance is
implicitly admitted and need not be enquired into.
Where, however, the person concerned objects to the
notice and the requisition contained therein absolutely
the objection is in substance to the issue of the notice
itself, which means he objects to the declaration of the
Municipality that a nuisance exists as well as to the
direction of the .Municipality as to the manner in which
the effluent shall be discharged. lf sub-s. (3) was in tented to mean that the person to whom the notice has
been issued could not object to the assertion of the
l\Iunicipality that a nuisance existed then the words
"objecting or consenting subject to modification to
the requisition " would not find a place in the subsection because in that case it would have been quite
sufficient to have used in the sub-section the words
"consenting subject to the modification to the requisition."
The words " to hold an enquiry into the
matter " clearly suggest that the Special Officer must
enquire into the entire matter where a party objects
absolutely to the notice and the requisit.ion contained
therein.
There would have been no need for the
appointment of a special judical officer not below the
rank of a District Judge as a Special Officer if such
S.C.R.
SUPREME COURT REPORTS
399
I959
Dhrangadhra
Chemical
Works Ltd.
v.
Officer was not required to enquire into the existence
of the nuisance. If the existence of a nuisance was
assumed because that was a matter for the subjectiye
satisfaction of the Municipality, then it would not
require a judical officer of the rank of a District Judge
to enquire and report only as to the manner in which Tiie Dhrangadhra
the effluent should be discharged. That task could be
Municipality
performed by engineers and experts in such matters.
In our opinion, the scheme under s. 153A is to
loo.ve it to the subjl'ictivc satisfaction of the Municipality as to the exis1Pnce of a nuisance before a notice
is issued to the party concerned.
Sub-s. (1) does not
deal with any enquiry into the matter.
It merely
provides a machinery by which the scheme of s. 153 A
is set in motion. No difficultv arises once a notice has
been issued and the party concerned consents to it
absolutely or does not choose to reply to it. Under
sub-s.(3), however, the appointment of a Special Officer
was considered necessary because the dispute between
the Munfoipality and the party concerned required
investigation and a report from the Officer.
Under
s. 1538 the Special Officer shall have the same powers
as a Civil Court has while trying a suit under the Code
of Civil Procedure in the following matters:-
"(a) summoning and enforcing the attendance of
any person and examining him on oath;
(b) requiring the discovery and production of any
documents;
(c) receiving evidence on affidavits;
(d) requisitioning any public record or copy thereof from any court or office ;
(e) issuing commissions for the examination of
witnesses or documents ;
(f) any other matters which may be prescribed."
Under s. 153F there is a provision for the appointment
of assessors to advise the Special Officer on any technical matter. Under s. 153G the proceedings before
the Special Officer shall be deemed to be judicial proceedings within the meaning of sections 193 and 228
of the Indian Penal Code.
These provisions make it
clear that the Legislature intended, where there was
Imam].
400
SUPREME COURT REPORTS [1960(1)]
a.n absolute objection to the notice and the requisition
contained therein as in the present case, that the
Dhrangadhra
dispute between the Municipality and the party conChemical
works Ltd.
cerned would be enquired into by a judicial officer of
I959
v.
the rank of a District Judge.
Sub.s. (3) was a protecTlu Dhrangadhr• tion to the party objecting to the requisition. In these
Municipality
circumstances, the enquiry must necessarily relate to
lmani ].
the entire dispute and the words " to hold an enquiry
into the matter" are wide enough to suggest this. The
Legislature intended that the party to whom the notice
had been issued should not be the victim of exercise of
any power vested in the Municipality in a capricious
manner.
The Special Officer apparently made no attempt to
construe the provisions of sub-s. (3) of s. 153A of the
Act. In our opinion, he erred in holding that it was
beyond the scope of his enquiry to enquire into the
question whether, in fact, the nuisance alleged by the
Municipality existed. He had thus denied himself the
jurisdiction which he did possess and which he ought
to have exercised. It is plain that before the appellant
could be called upon to comply with the requisition of
the respondent Municipality involving several lakhs
of rupees as expenditure the Special Officer ought to
decide and report whether a nuisance cf the kind
alleged by the respondent Municipality existed. The
appellant rightly contends that the order of the Special
Officer declining to go into the question whether the
nuisance in question existed was one which ought to
be set aside.
As, in our opinion, the Special Officer had wrongly
decided that he could not go into the question whether
the nuisance existed his order must be set aside.
Having regard to the view which we take, the contention on behalf of the appellant that the provisions of
s. 153A of the Act offend Art. 19 of the Constitution
does not require to be decided ; this position is conceded by the appellant.
We must point out, however, that the enquiry should
be completed without undue delay. The notice was
issued in June, 1956, nearly 3 years ago. Proceedings
of this kind ought to be handled with the utmost
S.C.R.
SUPREME COURT REPORTS
401
expedition because if a nuisance exists it should be
removed without delay in order to preserve the health
of the community and the fertility of the soil.
The appeal is accordingly allowed with costs.
A petition (No. 174 of 1958) under Art. 32 of the
Constitution was also filed by the appellant. It is
unnecessary to pass any formal order on this petition
as, the appellant has i:mcceeded in the Civil Appeal
No. 173 of 1959, and it is dif-!posed of accordingly
except that there will be no order for costs in this
petition.
Appeal allowed.
COMMISSIONER OF INCOME-TAX, DELHI
v.
MESSRS. P. M. RATHOD & CO.
(B. P. SINHA, J. L. KAPUR and
M. HIDAYATULLAR, ,JJ.)
Income-tax-Place of accrual or receipt of profits-Goods sold
by a trader in a Part B State to customers in Part A or C StatesGoods sent by Value Payahle Post or by rail-Post office, whethe1
agent of seller or bailee of goods-Railway receipt sent to bankers to
be delivered to customers against payment--Concessional rate of
taxation applicable to Part B States-Indian Sale of Goods Act, I9JO
(3 of I9JO), s. 25(I)-lndian Contract Act, I872 (9 of I872), s. I48.
The respondents were manufactur<'rs of perfumery and hair
oils at Ratlam in Madhya Bharat which at the relevant time
was a Part B State. They sent out agents who canvassed orders.
The goods ordered were sent to the customers from Ratlam
either through the post office by Value Payable Post or they were
sent from there by rail and the railway receipts in favour of self
were sent through a bank with the direction that they (railway
receipts) were to be handed over against ' payment of the enclosed demand draft.' The price when received by the bank was
sent by means of a demand draft to the respondents at Ratlam
who had it cashed and credited to their account at Bombay. The
respondents were assessed to income-tax. in respect of profits
from such sales of goods to customers in Part A and C States, for
the assessment year 1950-51, at the rate or rates applicable to
income, profits or gains arising or accruing in Part A States on
the footing that the sales were effected in Part A and C States
and the payments were also received there. The respondents
claimed that the prices realised constituted receipts in Ratlam
51
r959
Dh,.angadhra
Chemical
Worl<s Ltd.
v.
The Dhrangadhra
Municipality
Imam].
I959
Mayzo.