# The Bengal Immunity Company Limited v. The State of Bihar

- **Citation:** [1957] 1 S.C.R. 930
- **Court:** Supreme Court of India
- **Decided:** 1956-03-31
- **Case number:** Writ Petitions Nos. 78-80, 93 and 152 of 1956
- **Bench:** S. R. Das C.J, Venkatarama Ayyar, B. P. Sinha, S. K. DAs, P. B. Gajendragadkar
- **Source:** https://unisonlegal.in/judgment/supreme-court-of-india/the-bengal-immunity-company-limited-v-the-state-of-bihar-1381
- **Pages:** 23

## Headnote

Prize
Competition-Definition-Construction-If
includes
competition other than of a gamOling nalure-Validity of enactment
-Principle of setJerability-Application-Prize Competitions Act,
( 42 Of J955), SS. 2(J), 4, 5, TT. Jl, J2.
The petitioners, who were promoting and conducting prize
compet1tJ.ons
in the different
States of India, challenged
the
constitutionality of ss. 4 and 5 of the Prize Competitions Act ( 42
of 1955) and rr. II and 12 framed under s. 20 of the Act. Their
contention was that 'prize competition' as defined in s. 2( d) of the
Act included not merely competitions that were of a gambling
nature but also those in which succ.css depended to a substantial
degree on skill ·and the sections
a~d the
rules
violated
their
fundamental right to carry on business, and were unsupportable
under Art. 19(6) of the Constitution, that they constituted a single
inseverable enactment and, consequently, must fail entirely.
On
behalf of the Union of India this was controverted and it was
contended that the
definition,
properly
construed,
meant and
included only such competitions as were of a gambling nature, and
even if that was not so, the impugned provisions, being severable
in their application, were valid as regards gambling competitions.
Held, that the validity of the restrictions imposed by ss. 4
and 5 and rr. 11 and 12 of the Act as regards gambling competitions was no longer open to challenge under Art. 19( 6) of the
Constitution in view of the decision of this Court that gambling
did not fall within the purview of Art. 19(1)(g) of the Constitution.
The S!Ote of Bombay v. R. M. D. Chamarbaugwala, (1957)
S.C.R. 87 4, followed.
On a proper construction there could be no doubt that the
Prize Competitions Act ( 42 of 1955), in defining the word 'prize
competition' as it did in s. 2(d), had in view only such competitions as were of a gambling nature and no others.
In interpreting an enactment the Court should ascertain the
intention of the legislature not merely from a literal meaning of
the words used but also from such matters as the history of the
legislation, its purpose and the mischief it seeks to suppress.
The Bengal Immunity Company Limited v. The State of Bihar
and others. (1955) 2 S.C.R. 603, referred to.
S.C.R.
SUPREME COURT REPORTS
931
Even assuming that. prize competition as defined by s. 2( d)
1937
of the Act included not merely gambling competitions but also R.M. D. CharM•
others in which success depended to a considerable degree on skill,
baugwal/a
the restrictions imposed by ss. 4 and 5 and rr. 11 and 12 of the
v.
Act were clearly severable in their application to the two distinct The Union 1if fndi.l
and separate categories of competitions and, consequently, could
not be void as regards gambling competitions.
The principle of severability is applicable to laws enacted by
legislatures with limited powers of legislation, such as those in a
Federal Union, which fall partly within and partly outside their
legislative competence, where
the question arises as to whether
the valid can be separated from the invalid parts and that is a
question which has to be decided by the Court on a consideration
of
the entire
provisions of the Act.
There is, however, no
basis for the contention that the principle applies only when the
legislature
exceeds its powers as regards the
subject-matter of
legislation
and
not
when
it
contravenes
any
constitutional
prohibitions.
Jn re Hindu Women's Rights to Property Act, (1941) F.C.R. 12,
The State of Bombay and another v. F. N. Balsara, (1951) S.C.R. 682,
and The State of Bombay and another v. The' United Motors (India)
Ltd. and others, (1953) S.C.R. 1069, relied on.
Punjab Province v. Daulat Singh and others, (1946) F.C.R. 1,
Ramesh Thappar v. State of Madras, (1950) S.C.R. 594 and Chintaman
Rao v. State of Madhya Pradesh, (1950) S.C.R. 759, distinguished.
ORIGINAL
JuRISDICTION :
Writ Petitions Nos. 78-80,
93 and 152 of 1956.
Petitions under Article 32 of the Constitution of
India for the

## Text

_Characters 0–39,783 of 52,946. This is a partial read: ask again with offset=39783 for what follows._

1957
April !I
930
SUFREME COURT REPORTS
R.M.D.CHAMARBAUGWALLA
"·
THE UNION OF INDIA
(with connected petitions)
[1957]
(S. R.
DAS C.J., VENKATARAMA AYYAR, B. P. SINHA,
S. K. DAs and P. B. GAJENDRAGADKAR JJ.)
Prize
Competition-Definition-Construction-If
includes
competition other than of a gamOling nalure-Validity of enactment
-Principle of setJerability-Application-Prize Competitions Act,
( 42 Of J955), SS. 2(J), 4, 5, TT. Jl, J2.
The petitioners, who were promoting and conducting prize
compet1tJ.ons
in the different
States of India, challenged
the
constitutionality of ss. 4 and 5 of the Prize Competitions Act ( 42
of 1955) and rr. II and 12 framed under s. 20 of the Act. Their
contention was that 'prize competition' as defined in s. 2( d) of the
Act included not merely competitions that were of a gambling
nature but also those in which succ.css depended to a substantial
degree on skill ·and the sections
a~d the
rules
violated
their
fundamental right to carry on business, and were unsupportable
under Art. 19(6) of the Constitution, that they constituted a single
inseverable enactment and, consequently, must fail entirely.
On
behalf of the Union of India this was controverted and it was
contended that the
definition,
properly
construed,
meant and
included only such competitions as were of a gambling nature, and
even if that was not so, the impugned provisions, being severable
in their application, were valid as regards gambling competitions.
Held, that the validity of the restrictions imposed by ss. 4
and 5 and rr. 11 and 12 of the Act as regards gambling competitions was no longer open to challenge under Art. 19( 6) of the
Constitution in view of the decision of this Court that gambling
did not fall within the purview of Art. 19(1)(g) of the Constitution.
The S!Ote of Bombay v. R. M. D. Chamarbaugwala, (1957)
S.C.R. 87 4, followed.
On a proper construction there could be no doubt that the
Prize Competitions Act ( 42 of 1955), in defining the word 'prize
competition' as it did in s. 2(d), had in view only such competitions as were of a gambling nature and no others.
In interpreting an enactment the Court should ascertain the
intention of the legislature not merely from a literal meaning of
the words used but also from such matters as the history of the
legislation, its purpose and the mischief it seeks to suppress.
The Bengal Immunity Company Limited v. The State of Bihar
and others. (1955) 2 S.C.R. 603, referred to.
S.C.R.
SUPREME COURT REPORTS
931
Even assuming that. prize competition as defined by s. 2( d)
1937
of the Act included not merely gambling competitions but also R.M. D. CharM•
others in which success depended to a considerable degree on skill,
baugwal/a
the restrictions imposed by ss. 4 and 5 and rr. 11 and 12 of the
v.
Act were clearly severable in their application to the two distinct The Union 1if fndi.l
and separate categories of competitions and, consequently, could
not be void as regards gambling competitions.
The principle of severability is applicable to laws enacted by
legislatures with limited powers of legislation, such as those in a
Federal Union, which fall partly within and partly outside their
legislative competence, where
the question arises as to whether
the valid can be separated from the invalid parts and that is a
question which has to be decided by the Court on a consideration
of
the entire
provisions of the Act.
There is, however, no
basis for the contention that the principle applies only when the
legislature
exceeds its powers as regards the
subject-matter of
legislation
and
not
when
it
contravenes
any
constitutional
prohibitions.
Jn re Hindu Women's Rights to Property Act, (1941) F.C.R. 12,
The State of Bombay and another v. F. N. Balsara, (1951) S.C.R. 682,
and The State of Bombay and another v. The' United Motors (India)
Ltd. and others, (1953) S.C.R. 1069, relied on.
Punjab Province v. Daulat Singh and others, (1946) F.C.R. 1,
Ramesh Thappar v. State of Madras, (1950) S.C.R. 594 and Chintaman
Rao v. State of Madhya Pradesh, (1950) S.C.R. 759, distinguished.
ORIGINAL
JuRISDICTION :
Writ Petitions Nos. 78-80,
93 and 152 of 1956.
Petitions under Article 32 of the Constitution of
India for the enforcement of Fundamental Rights.
Sir N. P. Engineer, N. A. Palkhivala, R. A. Gagrat
and G. Gopalakrishnan, for the petitioners in Petitions
Nos. 78, 79 and 80 of 1956.
Ganpat Rai, for the petitioner in petition No. 93 of
1956.
K. C. /ain and B. P. Maheshwari, for the petitioner
in Petition No. 152 of 1956.
C. K. Daphtary, Solicitor-General of India, Porus
A. Mehta and R. H. Dhebar, for the respondent No. 1
in Petitions Nos. 78/56 and 152/56 and Respondents
in Petitions Nos. 79, 80 and 93 of 1956.
G. R. Ethirajulu Naidu, Advocate-General, Mysore,
Porus A. Mehta and T. M. Sen, for respondent No. 2
in Petition No. 78 of 1956.
7-80 S. C. lndia/59
1957
R.M.D.C/Jamm'.
baugwalla
v.
T1" Union of India
V enkatarama
.A!J>ar J.
932
SUPREME COURT REPORTS
[1957)
April 9.
1957. The Judgment of the - Court was
delivered by
VENKATARAMA
AIYAR J.-Pursuant
to
resolutions
passed by the legislatures of
several
States under
Art. 252, cl. ( 1) of the Constitution, Parliament enacted
Prize Competitions Act,
( 42
of
1955),
hereinafter
referred to as the Act, and by a notification issued on
March 31, 1956, the Central Government brought it
into force on April 1, 1956. The petitioners before us
are
engaged
in
promoting
and
conducting
prize
competitions in different States of India, and they have
filed the present petitions under Art. 32 questioning
the validity of some of the provisions of the Act and
the rules framed thereunder.
It will be convenient first to refer to the provisions
of the Act and of the . rules, so far as they are material
for the purpose
~f the present petitions. The object
of the legislation is, as stated in the short title and in
the preamble, "to provide for the control and regulation of prize competitions". Section 2(d) of the Act
defines "prize competition" as meaning "any competition (whether called a cross-word prize competition,
a missing-word
prize competition,
a picture
prize
competition or by any other name), in which prizes
are offered for the solution of any puzzle based upon
the building up, arrangement, combination or permutation of letters, words or figures". Sections 4 and 5 of
the Act are the provisions which are impugned as
unconstitutional, and they are as follows :
4. "No
person shall
promote or
conduct
any
prize competition or competitions in which the total
value of the prize or prizes (whether in cash or otherwise) to be offered in any month exceeds one thousand
rupees; and in every prize competition,
the
number
of entries shall not exceed two thousand.
5. Subject
to the provisions of
section 4,
no
person shall promote any prize competition or competitions in which the total value of the prize or prizes
(whether in cash or otherwise) to be offered in any
month does not exceed one thousand rupees
unless
he has obtained in this behalf a licence granted in
S.C.R.
SUPREME COURT REPORTS
933
accordance with the provisions of this Act and the
rules made thereunder."
Then follow provisions as to licensing, maintaining of
accounts and penalties for violation thereof. Section 20
confers power on the State Governments to frame
rules for carrying out the purpose of the Act. In
exercise of the powers conferred by this section, the
Central Government has framed rules for Part C States,
an<l they have been, in general, adopted by all the
States. Two of these rules, namely, rules 11 and 12
are impugned by the petitioners as unconstitutional,
and they are as follows :
11. "Entry fee-(l) Where an entry fee is charged
in respect of a prize competition, such fee shall be paid
in money only and not in any other manner.
(2) The maximum amount of an entry fee shall
not exceed Re. 1 where the total value of the prize or
prizes to be offered is rupees one thousand but not less
than rupees five hundred; and in all other cases the
maximum amount of an entry fee shall be at the
following rates, namely-
( a) as. 8 where the total value of the prize or
prizes to be offered is less than rupees five hundred but
not less than rupees two hundred and fifty; and
(b) as. 4 where the total value of the prize or
prizes to be offered ts less than rupees two hundred
and fifty.
12. Maintenance of Register.-Every licensee shall
maintain in respect of each prize competition for which
a licence has been granted a register in Form C and
.shall, for the purpose of ensuring that not more than
two
thousand entries are
received for
scrutinv for
each such competition, take the following steps,· that
is to say, shall-
( a) arrange to receive all the entries only at the
place of business mentioned in the license;
(b) serially number the entries according to their
order of receipt;
(c) post the relevant particulars of such entries
in the register in Form C as and when the entries arc
received and in any case not later than the close of
business on each day; an<l
1957
R. M. D. Chamar·
baugwalla
v.
T"6 Union of India
•
Venkatarama
Ai,1ar ].
1957
R. M. D. Ch.,.,,,.
baugwalla
v.
TM Union of ldian
Vmkat<lrama
A!Yar ].
•
934
SUPREME COC'RT REPORTS
(1957]
( d) accept for scrutiny only the first two thousand entries as they appear in the register in Form C
and ignore the remaining entries, if any, in cases where
no entry fee is charged and refund the entry fee
received in respect of the entries in excess of the first
two thousand to the respective senders thereof in cases
where an entry fee has been charged after deducting
the cost (if any) of refund."
Now, the contention of Mr. Palkhiwala, who addressed the main argument in support of the petitions, is
that prize competition as defined in s. 2(d) would
include not only competitions in which success depends
on chance but also those in which it would depend to a
substantial degree on skill; that the conditions
laid
down in ss. 4 and 5 and rr. 11 and 12 are wholly
unworkable and would render it impossible to run the
competition, and that they seriously encroached on the
fundamental right of the petitioners to carry on business;
that they could not be supported under Art. 19(6) of the
Constitution as they were unreasonable and amounted,
in effect, to a prohibition and not merely a regulation
of the business; that even if the provisions could be
regarded as reasonable restrictions as regards competitions which are in the nature of gambling, they could
not be
supported
as
regards
competitions
wherein
success depended to a substantial extent on skill, and
that as the impugned law constituted a single inseverabk enactment, oit must fail in its entirety in respect
of both classes
of competitions.
Mr. Secrvai
who
appeared for the respondent, disputes the correctness
of these contentions. He argues that 'prize competition' as defined in s. 2(d) of the Act, properly construed,
means and includes only competitions in which success
does not depend to any substantial degree on skill and
arc essentially gambling in their character; that gambling activities are not trade or business within the
meaning of that expression in Art. 19( 1 )(g), and that
accordingly the petitioners are not entitled to invoke
the protection of Art. 19( 6); and that even if the
definition of 'prize competition' in s. 2( d) is wide
enough
to
include competitions in which success
depends to a substantial degree on skill and ss. 4 and 5
S.C.R.
SUPREME COURT REPORTS
935
of the Act and rr. 11 and 12 are to be struck down in
respect of such competition
as
unreasonable
restrictions not protected by Art. 19( 6), that would not affect
the . validity of the enactment as regards the competitions which are in the nature of gambling, the Act
being severable in its application to such competitions.
These petitions were heard along with Civil Appeal
No. 134 of 1956, wherein the validity of the Bombay
Lotteries and Prize Competitions Control and Tax Act,
1948 was impugned on grounds some of which are
raised in the present petitions. In our judgment in
that appeal, we have held that trade and commerce
protected by Art. 19( 1) (g) and Art. 301 are only those
activities which could be regarded as lawful trading
activities, that gambling is
not
trade but res extra
commercium, and that it does not fall within the
purview of those
Articles.
Following that decision,
we must hold that as regards gambling competitions,
the petitioners before us cannot seek the protection of
Art. 19(1)(g), and.that the question whether the restrictions enacted in ss. 4 and 5 and rr. 11 and 12 are
reasonable and in the interest of the public within
Art. 19(6) does not therefore arise for consideration.
As regards competitions which involve substantial
skill, however, different considerations arise. They are
business activities, the protection of which is guaranteed by Art. 19(1)(g), and the question would have to
be determined with reference
to
tl1ose competitions
whether ss. 4 and 5 and rr. 11 and 12 are reasonable
restnct10ns
enacted
in
public
interest.
But
Mr. Seervai has fairly conceded. before us that on the
materials on record in these proceedings, he could not
maintain that the restrictions contained in those provisions are saved by Art. 19(6) as being reasonable and
in the public interest. The ground being thus cleared,
the only questions that survive for our decision arc
(1) whether, on the definition of 'prize competition' in
s. 2( d), the Act applies to competitions which involve
substantial skill and are not in the nature of gambling;
and (2) if it does, whether the provisions of ss. 4 and 5
and rr. 11 and 12 which are, ex cQ1Jcessi void, as regards
such competitions, can. on the principle of sevcrability
1957
R. M. D. Clulinatbaugwalla
v.
Tht Union of InJia
1957
R. M. D. Cizamar.
baugwalla
v.
The Union of India
V tnkatarama
A9-ar ].
936
SUPREME COURT REPORTS
[1957]
·be enforced against competitions which are in the
nature of gambling.
!. If the question whether the Act applies also to
prize competitions in which success depends to a sul>-
stantial degree on skill is to be answered solely on a
literal construction of s. 2 ( d), it will he difficult to resist
the contention of the petitioners that it does. The
definition of 'prize competition' in s. 2(d) is wide and
unqualified in its terms. There is nothing in the wording of it, which limits it to competitions in which
success does not depend to any substantial extent on
skill but on chance. It is
argued by Mr. Palkhiwala
that the language of the enactment being clear and
unambiguous, it is not open to us to read into it a
limitation which is not there, bv reference to other and
extraneous,
considerations.
No;..,
when
a
question
arises as to the interpretation to be put on an enactment, what the ·court has to do is to ascertain "the
intent of them that make it", and that must of course
be
gathered from
the
words actually used
in
the
statute. That, however, does not mean that the decision should rest on a literal interpretation of the words
used in disregard of all
0ther materials. 'The literal
construction then", says Maxwell on Interpretation of
Statutes, 10th Edn., p. 19, "has, in general, but prima
facie preference. To arrive at the real meaning, it is
always necessary to get an exact conception of the aim,
scope am! object of the whole Act; to consider, according to Lord Coke: !. What was the law before the Act
was passed; (2) What was the mischief or defect for
which the law had not provided; (3) What remedy
Parliament has appointed; and ( 4). The reason of the
remedy".
The reference here is to Heydon's case( 1 ),
These are principles well settled, and were applied by
this Court in The Bengal Immunity Company Limited
v. The State of Bihar and others('). To decide the true
scope of the present Act, therefore,
we must
have
regard to all such factors as can legitimately be taken
into account in ascertaining . the intention of the legi,_
lature, such as the history of the legislation and the
purposes thereof, the mischief which it intended
to
(r) (1584) 3 W. Rep. 16; 76 E.R. 637.
(2) (1955) 2 S.C.R. 603, 633
S.C.R.
SUPREME COURT REPORTS
937
suppress and the other provisions of the statute,
construe the language of s. 2 ( d) in the light of
indications furnished by them.
and
1957
the . R. M. D. Chamarbaug<sa/la
Turning first to the history of the legislation, its
genesis is to be found in the Bombay Lotteries and
Prize Competitions Control and Tax Act (Born. LIV of
1948). That Act was passed with the object of controlling and
taxing lotteries and
prize
competitions
within the Province
of Bombay, and
as
originally
enacted, it applied
only
to
compettttons
conducted
within the Province of Bombay. Section 7 of the Act
provided that "a prize competition shall be deemed to
be an unlawful prize competition unless a li.:ence in
respect of such competition has been obtained by the
promoter' thereof." Section 12 imposed a tax on the
amounts received In respect of competitions which had
been licensed under the Act. With a view to avoid the
operation of the taxing provisions of this enactment,
persons who had theretobefore been conducting prize
competitions within the Province of Bombay shifted
the
venue of their activities
to neighbouring States
like Mysore, and from there continued to receive entries
and remittances of money therefor from the residents
of Bombay State. In order to prevent evasion of the
Act and for effectually carrying out its objrct, the
legislature of Bombay passed Act XXX of 1952 extending the provisions of the Act of 1948 to competitions
conducted outside the State of Bombay but operating
inside it, the tax however being limited to the amounts
remitted or due on the entries sent from the State of
Bombay. The validity of this enactment was impugned
by a number of promoters of prize competitions in
proceedings by way of writ in the High Court of
Bombay, and dealing with the contentions raised by
them, Chagla C.J. and Dixit J. who heard the appeals
arising from those proceedings, held that the competi- ·
tions in question were gambling in character, and that
the licensing provisions were accordingly valid, but
that the taxes imposed by ss. 12 and 12-A bf the Act
were really taxes on the carrying on of the business of
running prize competitions, and were hit by Art .. 301
of the Constitution, and were therefore bad. It is
v.
Thl Union of India
V enkatarama.
Al)lar ].
1957
R.M.D. Clumwrbaugwalla
v.
The Union of India
V tnkatl11'm1UJ
A(Yar J.
938
SUPREME COURT REPORTS
(1957)
against this decision that Civil Appeal No. 134 of
1956, already referred to, was directed.
The position created by this judgment was that
though the States could regulate the business of running competitions within their respective borders, to
the extent that it had ramifications in other States they
could deal with it effectively only by joint and concerted action among themselves. That precisely is the
situation for which Art. 252(1) provides.
Accordingly,
following on the judgment of the Bombay High Court,
the States of Andhra, Bombay, Madras, Orissa, Uttar
Pradesh,
Hyderabad, Madhya
Bharat,
Patiala
and
East
Punjab
States Union
and
Saurashtra
passed
resolutions under Art.
252 ( l)
of
the
Constitution
authorising Parliament to enact the requisite legislation
for the control and regulation of prize competitions.
Typical of such resolutions · is the one passed by the
legislature of Bombay, which is in these terms :
"Th.is Assembly do resolve that it is desirable that
control and regulation of prize puzzle competitions and
all other matters consequential and incidental thereto
in so far as these matters are concerned with respect
to which Parliament has no power to make laws for
the States, should be regulated by Parliament by law."
It was to give effect to these resolutions that Parliament passed the Act now under consideration, and that
fact is- recited in the preamble to the Act.
Having regard to the circumstances under which the
resolutions came to be passed, there cannot be any
reasonable doubt that the law wh.ich the State legislatures moved Parliament to enact under Art. 252(1) was
one to control and regulate prize competitions of a
gambling character.
Competitions in which
success
depended substantially on skill could not have been in
the minds of the legislatures which passed those resolutions. Those competitions had not been the subject of
any controver!!V in court. They had done no harm to
the public . and had presented no problems to the States,
and at no time had there been any legislation directed
to regulating them. And if the State legislatures felt
that there was any need to regulate even those competitions, they could have · themselves effectively done
S.C.R.
SUPREME COURT REPORTS
939
so withut resort to the special jurisdiction under Art.
252(1). It should further be observed that the language
of the resolutions is that it is desirable to control competitions. If it was intended that Parliament should
legislate also on competitions involving skill, the word
'control' would seem to be
not appropriate.
While
control and regulation would be requi~ite in the case of
gambling, mere regulation would have been sufficient
as regards competitions involving skill. The use of the
word 'control' which is to be found not only in the
resolution but also in the short title and the preamble
to the Act appears to us to clearly indicate that it was
only competitions of the character dealt with in the
Bombay judgment, that were within the contemplation
of the legislature.
Our attention was invited by Mr. Seervai to the
statement of objects and reasons in the Bill introducing
the enactment. It is therein stated that the proposed
legislation falls under Entry 34 of the State List, viz.,
"Betting and gambling". If we could legitimately rely .
on this, that would be conclusive against the petitioners.
But Mr. Palkhiwala contends, and rightly, that the
Parliamentary history of the enactment is not admissible to construe its meaning, and Mr. Seervai also disclaims any intention on his part to use the statement
of objects and reasons to explain s. 2(d). We ·must
accordingly
exclude it from our
consideration. But
even apart from it, having regard to the history of the
legislation, the declared object thereof and the wording
of the statute, we are of opinion that the competitions
which are sought to be controlled and regulated by the
Act are only those competitions in which success does
not depend to any substantial degree on skill.
(2) Assuming, however, that prize competitions as
defined in s. 2( d) include those in which success depends
to a substantial degree on skill as ' well as those in
which it does not so depend, the question then ai:ises
for determination whether ss. 4 and 5 of the Act and
rr. 11 and 12 are void not merely in their application
to the former-as to which there is no dispute- but
also the latter. Mr. Palkhiwala contends that they' are,
because, he .argues, the rules as to sev:erability of
1957
R.M.D.C,._
baugwallo
v.
Tlr4 Union ef I..tio
VenkOIOtatM
Avor J.
1957
R.M.D. Ch.,,.,,,.
baugwalla
v.
The Union of India
VenA:atatama
Atyar J.
SUPREME COURT REPORTS
[1957]
statutes can apply only when the impugned legislation
is in excess of legislative competence as regards subjectmatter and not when it is in violation of constitutional
prohibitions, and further because the impugned provisions are one and indivisible. On the other hand,
Mr. Seervai for the respondent
contends that the
principle of severability is applicable when a statute is
partially void for whatever reason that might be, and
that the impugned provisions are severable and therefore enforceable as against competitions which are of a
gambling character. It is on the correctness of these
contentions that we have to pronounce.
The question whether a statute which is void in
part is to be treated as void in toto, or whether it is
capable of enforcement as to that part which is valid
is one which can arise only with reference to laws
enacted by
bodies which do not possess unlimited
powers of legislation, as, for example, the legislatures
in a Federal Union. The limitation on their powers
may be of two kinds : It may be with reference to the
subject-matter on which they could legislate, as,
for
example, the topics enumerated in the Lists in the
Seventh Schedule in the Indian Constitution,
~s. 91
and 92 of the Canadian Constitution, and s. 51 of the
Australian Constitution; or it may be with reference
to the character of the legislation which they could
enact in respect of subjects assigned to them, as for
example,
in
relation
to
the
fundamental
rights
guaranted in Part III of the Constitution and similar
constitutionally protected rights in the American and
other Constitutions. When a legislature, whose authority is subject to limitations aforesaid enacts 'a law
which is wholly in excess of its powers, it is entirely
void and must be completely ignored.
But where the
legislation falls in part within the area allotted to it
and in part outside it, it is undoubtedly void as to the
latter; but does it on that account become necessarily
void' in its entirety? The answer to this question must
depend on whether what is valid could be separated
from What is invalid, and that is a question which has
to be decided by the court on a consideration of the
provisions of the
Act.
This
1s
a
principle
well
-
S. C.R.
SUPREME COURTS REPORTS
941
established in American Jurisprudence, Vide Cooley's
Constitutional Limitations, Vol. I, Chap. VII, Crawford
on Statutory Construction,
Chap. 16 and
Sutherland
on Statutory Construction, 3rd Edn, Vol. 2, Chap. 24.
It has also been applied
by the
Privy
Council
in
deciding on the validity of laws enacted by the legislatures of Australia and Canada, Vide Attorney-General
for the Commonwealth of Australia v. Colonial Sugar
Refining Company
Limited(1 )
and Attorney-General
for Alberta v. Attorney-General for Canada ( 2). It was
approved by the Federal Court in In re Hindu Women's
Rights to Property Act(3) and adopted by this Court in
The State of Bombay and another v. F. N. Balsara(4 )
and The State of Bombay v. The United Motors (India)
Ltd., and others( 5).
These decisions are relied on by
Mr. Seervai as being decisive in his favour. Mr. Palkhiwala disputes this position, and maintains that on the
decision of
the Privy Council in Punjab Province
v. Daulat Singh and other( 6 ) and of the decisions of
this court in Romesh Thappar v. State of Madras(7)
and Chintaman Rao v. State of Madhya Pradesh.( 8 ), the
question must be answered in his favour.
We must
now examine the precise scope of these decisions.
In In re Hindu Women's Rights to Property Act('),
the question
arose
with
reference
to
the
Hindu
Women's
Rights to Property Act XVIII of 1937
That was an Act passed by
the Central Legislautre,
and had conferred
on Hindu
widows
certain rights
over properties which devolved by intestate succession
and survivorship.
While the
subject of devolution
was within the competence of the Centre under Entry
7 in List III, that was litnited to property other than
agricultural land;
which 'w~s a
subject
within
the
exclusive competence of the Provinces· under Entry 21
in List II. Act No. XVIII of 1937 dealt generally
with property, and the
contention raised
was
that
beirtg
admittedly
incompetent
and
ultra
vires
as
regards
a~riculiura~ lantls, it was void \n its entirety.
{1) [1914] A. C. 237.
(5) [1953] S. C. R. ro69.
(2) L. R. [1947] A. C. 503•
(6) [1946) F. C. R. 1.
(3) fi941] F. c. R. 12.
(i'J [1950] '8. c. R. 954;
(4) [1951l S. C. R.· 682.
(8) [1950] .S. C,. R. 759·
1957
R.M.D. Chamarbaugwalla!
...
Tiii Unitm of lndi.ai
V,•nJ;atarama
Avar J.
1957
R.M.D. Clra1orJr.
bau87:f!alla
"·
"Tiu Union of India
Venkatarama
AV•ar J.
942
SUPREME COURT REPORTS
[1957]
It was held by the Federal Court that the Central
Legislature must, on the principle laid down in Macleod
v.
Attorney-General
for
New South
Wales('),
be
presumed to have known its own limitations and must
be held to have intended to enact only laws within its
competence, that accordingly the word
'property'
in
Act No. XVIII of 1937 must be construed as property
other than agricultural land, and that, in that view,
the legislation was wholly intra vires.
It is contended
by Mr. Palkhiwala that this decision does not proceed
on the basis that the Act is in part ultra vires and that
the remainder however could be separated therefrom,
but on the footing that the Act is in its entirety intra
vires, and that thus, no question of
severability
was
decided.
That is
true;
but that ·the
principle
of
severability had the approval
of that
Court
clearly
appears from the following observations of Sir Maurice
Gwyer C. J.:
"It
should
not however be
thought that the
Court has overlooked cases cited to it in which the
same words have been applied in an Act to a number
of purposes, some within and some without the power
of the Legislature, and the whole Act has been held to
be bad. If the restriction of the general words
to
purposes within the power of the Legislature would be
co leave an Act with nothing or next to nothing in it,
or an Act different in kind, and not merely in degr~e,
from an Act in which the general words were given
the wider meaning, then it is plain that the Act as a
whole must be held invalid, because in such circumstances it is impossible to assert with any confidence
that the Legislature intended the general words which
it has used to be
construed only in
the narrower
sense. If the Act is to be upheld, it must remain,
even when a narrower meaning is given to the general
words, 'an Act which
is
complete, intelligible and
valid and which can be executed by itself;' 'Wynes:
Legislative and Executive Powers in Australia, p. 51,
citing Presser v. lllinois(2)."
There is nothing . in these observations to support the
contention of the
petitioners that the
doctrine of
(1) [1891] A. C. 455.
(2) (1886) 116 U. S. 250.
S.C.R.
SUPREME COURT REPORTS
943
severability applies- only when the legislation is in
excess of the competence of the legislature quoad its
subject-matter,
and
not
when it
infringes
some
constitutional prohibitions.
In The State of Bombay and another v. F. N. Balsara( 1 )
the question was as to the validity of the Bombay
Prohibition Act. Sections 12 and 13 of the Act imposed
restrictions on the possession, consumption and sale of
liquor, which had been defined in s. 2(24) of the Act as
including "(a) spirits of wine, methylated spirits, wine,
beer, toddy and all liquids consisting of or containing
alcohol, and (b) any other intoxicating substance which
the Provincial Government may, by notification in the
Official Gazette, declare to be liquor for the purposes of
this Act". Certain medicinal and toilet preparations
had been declared liquor by notification issued by the
Government under s. 2(24) (b). The Act was attacked
in its entirety as violative of the rights protected by
Art. 19 ( 1) ( f) ; but this Court held that the impugned
provisions were unreasonable and therefore void in so
far as medicinal and toilet preparations were concerned,
but valid as to the rest. Then, the contention was
raised that "as the law purports to authorise the
imposition of a restriction on a fundamental right
in language wide enough to cover restrictions both
within
and
without 'the limits of constitutionally
permissible legislative action affecting such right, it
is not possible to uphold it even so far as it may be
applied within the constitutional limits, as it is not
severable". In rejecting this
contention, the Court
observed (at pp. 717-718) :
''These items being thus treated separately by the
legislature itself and being severable, and it not being
contended, in view of the directive principles of State
policy
regarding
prohibition,
that
the
restrictions
imposed upon the right to possess or sell or buy or
consume or use those categories of properties are
unreasonable, the impugned sections must be held
valid so far as these categories .are concerned."
This decision is clear authority that the principle of
severability
is
applicable
even
when
the
partial
(\) [.1951) S. C. R· 682.
1957
fl.M.D. Chamar•
baugwa/la
v.
The Umon of Indio
V enkataram"
Aiyar J.
J957
R.M.D. Chanallf"•
baugwa/la
v.
TM Union of India
Venkatarama
Aryar J.
944
SUPREME COURT REPORTS
[ 195'1]
invalidity of the Act arises by reason of its contravention of constitutional limitations. It is argued for the
petitioners that in that case the legislature had through
the rules framed under the statute classified medicinal
and toilet preparations as a separate category, and had
thus evinced an intention to treat them as severable,
that no similar classification had been made in the
present Act, and that therefore the decision in question
does not help the respondent. But this is to take too
narrow a view of the decision. The doctrine of severability rests, as will presently be shown, on a presumed
intention of the legislature that if a part of a statute
turns out to be void, that should not affect the validity
of the rest of it, and that that intention is to be
ascertained from the terms of the statute. It is the true
nature of the subject-matter of the legislation that is
the determining fac~r, and while a classification made
in the statute might go far to support a conclusion in
favour of severability,
the
absence
of it does
not
necessarily preclude it. It is a feature usual in latterday legislation in America to enact a clause that the
invalidity of any part of the law shall not render the
rest of it void, and it has been held that such a clause
furnishes
only
prima· facie
evidence of
severability,
which must in the last resort be decided on an examination of the provisions of the statute. In discussing the
effect of a severability clause, Brandies J. observed in
Dorchy v. State of Kansas(') that it "provides a rule of
construction, which may sometimes aid in determining
that intent. But it is an aid merely; not an inexorable command". The weight to be attached to a
classification
of subjects
made
in
the statute
itself
cannot, in our opinion, be greater than that of a
severability clause. If the decision in The State
of
Bombay and another v. F. N. Balsara( 2 ) is examined in
the light of the above discussion, it will be seen that
while there is a reference in the judgment to the fact
that
medicinal
and
toilet
preparations are
treated
separately by the legislature, . that is followed by an
independent finding that they are severable. In other
words, the decision as to severability was reached on
(1) (1924] 264 U. S. 286; 68 L. Ed. 686, 690.
(2) [1951] S. C.R. 6820
S.C.R.
SUPREME COURT REPORTS
945
the separability in fact of the subjects dealt with by
the legislation and the classification made in the rules
merely furnished support to it.
Then, there are
the
observations
of
Patanjali
Sastri C.J. in The State of Bombay v. The United
Motors (India) Ltd.( 1 ). Dealing with the contention
that a law authorising the imposition of a tax on sales
must be declared to be wholly void because it was bad
in part as transgressing constitutional limits, the learned
Chief Justice observed (at p. 1099) :
·
"It is
a sound rule
to extend
severability
to
include separability in enforcement in · such cases, and
we are of opinion that the principle should be applied
in dealing with taxing statutes in this country."
The petitioners contend that the rule of severability in
enforcement laid down in the above passage, following
the decision in Bowman v. Continental Co.(2) is confined
in American law to taxing statutes, that it is really in
the nature of an exception to the rule against severability of laws. which are partially unconstitutional, and
that it has no application to the present statute. We
are unable to find anv basis for this argument in the
American authorities ... That the decision in Bowman's
case(2) related to a taxing statute is no ground for
limiting the
principle. enunciated therein· to taxing
statutes. · On the other hand,. the discussion ·of the law
as to severability. in the authoritative .text-books .shows
that no distinction is made in American Jurisprudence
between
taxing
statute~. ·and other statutes, Corpus
Juris Secundurri, Vol. 82, dealing with the · subject of
severability, · states
first
the
principles
applicable
generally . and to all statutes, and· then . proceeds to
consider those principles with reference to different
topics, and taxation laws from one of those topics.
We have now to consider the decisions in Punjab .
Province v. Daulat Singh and others( 3), Ramesh Thappar
v; State of Madras( 4 ) and Chintarnan Rao v. State. of
Madhya Pradesh( 5 )
relied on by the petitioners. In
Punjab Province.· v.
Daulat Singh and others(3), the
(1) [1953] S. C.R. 1069 at 1098-99.
(3) [1946] F. C.R. 1.
(2) (1921] 256 U.S. 642; 65 L. Ed. 1137.
(4) 1950 S. C. R.-594.
(5) (1950] S. C. R. 759.
.
1957
R.M.D. Ciuunarbaugr.aalla
v.
Tiii Union of India
Venkatararna
A!1ar ].
1957
fl.M.D. Chamarhaugwalla
v.
·r lu: Union of India
V en.(:atarama
Aryar ].
946
SUPREME COURT REPORTS
[1957)
challenge was on the validity of s. BA which had been
introduced into the Punjab Alienation of Land Act
XIII of 1900 by an Amendment Act X of 1938.
That
section enacted that an alienation of land by a member
of an agricultural tribe in Punjab in favour of another
member of the tribe made either before or after the
commencement of the amendment Act was void for all
purposes, when the real beneficiary under the transaction was not a member of the tribe. Section 4 of the
Act had empowered the local Government to determine
by notification the body or group of persons who are to
be declared to be agricultural tribes for the purpose of
the Act. A notification dated April 18, 1904 issued
under that section provided that,
"In each district of the Punjab mentioned in
column 1 of the Schedule attached to this notification,
all persons either holding land or ordinarily residing in
such district and belonging to any one of the tribes
mentioned opposite the name of
such
district, in
column 2, shall
be deemed to be an agricultural
tribe' within the district''.
The question was whether s. BA was void as contravening s. 298 ( 1) of the Government of India Act, 1935,
which provided inter alia that no subject of His
Majesty domiciled · in India shall on grounds on! y of
descent be prohibited from acquiring, holding or disposing of property. It was held by the Federal Court
that s. BA was void as infringing s. 298(1) to the extent
that it prohibited alienation on ground of descent, but
that it was valid in so far as it related to a prohibition
of the transaction in favour of a person who belonged
to the tribe but did not hold land or ordinarily reside
in the district, as a prohibition on that ground was not
within s. 298(1) and that accordingly an enquiry should
~ made as to the validity of the impugned alienation
with reference to the qualifications of the alienee. (Vide
Punjab Province v. Daul.at Singh( 1 ).
Before the Privy Council, Mr. Pritt, counsel for the
appellant, "conceded that membership of a tribe was
generally
a question of descent", and the Board
accordingly held that s. BA was repugnant to s. 298(1)
(I) [1942) F. C. R. 67.
;
S.C.R.
SUPREME COURT REPORTS
947
and was void. Dealing next with the enquiry which
was directed by the Federal Court as to the qualifications of the alienee, the Privy Council observed
as
follows (at p. 20) :
"The majority of the Federal Court appear to
have
contemplated
another
form
of
severability,
namely, by a classification of the particular cases on
which the impugned Act may
happen to operate,
involving an inquiry into the circumstances of each
individual case.