# THE SUPREME COURT REPORTS THE CALCUTTA GAS COMPANY (PROPRIETARY) LTD v. THE STATE OF WEST BENGAL AND OTHERS

- **Citation:** [1962] Supp. 3 S.C.R. 1
- **Court:** Supreme Court of India
- **Decided:** 1960-10-03
- **Bench:** B. P. Sinha, c. J. ' K. SUBBA RAO, N. Rajagqpala Ayyangar, J. R~ Mudholkar, T. L. . Venkatarama Ayyar
- **Source:** https://unisonlegal.in/judgment/supreme-court-of-india/the-supreme-court-reports-the-calcutta-gas-company-proprietary-ltd-v-the-state-2370
- **Pages:** 20

## Headnote

· GaB and gas-works-Enactment by State LegislatureOonBtitutional validity-Writ Petition -Locus standi-Oriental
Gas Company Act, 1960 (W.B. 15 of 1960), s. 4-0onstitution of
India Arts. 226, 246, Sch. VI~, List II, Entries 24,25.
By an agreement entered into by the appellant company
and the Oriental Gas Company, the appellant was appointed
as Manager of the later company which owned an industrial
undertaki'ng for the manufacture and sale of fuel gas in Calcutta
with the right to receive n~rr1uneration as specified in the agreement. The West Bengal Legislature passed the Oriental Gas
Company Act, 1960, and s.4 of that Act provided that the said
undertaking shall stand transferred to the St>te Government
for five years for management and control.
On October 3,
1960, the State Government issued three no:ifications One of
which appointed October 7, 1960, as the date on and from
which the management and control of the said undertaking
would be taken over by it. The appellant by a petition under
Art. 226 of the Comtitution impugned the constitutional
validity of the said Act and sou~ht for appropriate writs restraining the State Government for giving effect to it and for
quashing the said
notifications. The High Court found
again~t the petitioner and rejected the petition.
·Held, th1t the State L~gislature had the competence
to enact the impugned Act and its constitutional -validity . was
beyond question.
Article 226 of the Constitution confers a very wide
power on the High Court to issue directions and '\-\Tits not only
for the enforcement of fundamental rights but other legal
rights as well.
Since the appellant's lawful rights under t\le
agreement had been abrid~ed, if not wholly destroyed, by the
impugned Act, it had the locus • .,tandii'.
to apply under
Art. 226 of the Constitution.
The State of Orissa v. Madan Go,,,al Rungta, [1952] S.C.R.
28 and Ohiranjit Lnl Ohoudhuri v. The Union of India, [1950]
S. C.R. 869, referred to.
·
1
. 1962
FebmaryS.
1962
Tiu C:11lc'u1ta Ga11
Com/iauy
P1cprietorJ) lt1l.
v
?'ht Stau of
U·' est Btrigal
S11bha I ao J.
2 SUPRE:\IE OOURT REPORTS [1962] SUPP.
1'hc entries in the three Legislative Lists arr. only lcgisa
lativc hcadS or fields of legislation that den1arcatc the area
over which the appropriate legislature operates and it is \\'Cll
settled that tl1e .language of the entries should be widely construed.
If any entries overlap or are in direct conflict \Vith
each other, C\'cry attempt should he 1nadc to harmonise thc1n,
\Vhether the fntrics belong to the same List or different "List-;,
so that no entry may be robbed of its entire content and made
nugatory.
In re tl;c Central l'ro1~inceR and Berar .1ct, h"o. XI\,. of
1933, [1939] F. C.R. 18 and Stale of Bonzl,ay ,._ .\"orothamdas
Jethabhai, [1951] S. C.R. 51, rcfcrrecl to.
So construed Entry 24 of List II which is in apparent
conflict \Vith Entry 25 of the !'a.me list, must be he'.d to cover
all industries in a State except Ga" and (;as•\\·orks \\'hich arc
specifically dealt "·ith by F.n°try 2'i anrl exclusively a!lotted
to it.
It is clear that the express intention of the Constitution
\Va'\ to carve out Ga~ and Gas-\vorks industry from F.ntrv 24
an<l ·hring them under Fntry '.!:i a11d treat them in nOrma\
tin1es as State indtJslri<'s.
It \rould he rrroncous to sav that
such an intc-rpretation \\'1)tild prevent thC Parliarncnf from
making lan·s in respect of Gas and (;as-\vurks during \\'ar or
other national c1nergenrics.
C!YIL
APPEI,LA'n~ l·h::RISDICTIOX: Civil Appe<d
No. 138 of l!JGI.
App1·al by fipecial leave frnm thP jmlgmrnt
and order dated November I :i. 1960, of the Calcutta
High Court in }fatter No. 235 of l!lGO.
Jlf. C. Setalrad. Atlorney-Genr-ralfor India, R.R.
L. lyengnr and IJ. P. Mnheshn·ari, for the a.ppellant.
S. Jlf.
Rn.<e,
Adrocale-Urnu-al, W e.~t
Bengal,
B. Sen, P. ](. Ch11ttei:jec, 8. C. Rose, Milon Banne1:j1'.
and P. K. Bnsr., for the respollrlcnts '.\'os. I to 4. ·
1962. February 5.
The ,Judgment of the
Court was ddivered by

## Text

_Characters 0–39,986 of 40,683. This is a partial read: ask again with offset=39986 for what follows._

i
THE SUPREME COURT REPORTS
THE CALCUTTA GAS COMPANY
(PROPRIETARY) LTD.
v.
THE STATE OF WEST BENGAL AND
OTHERS
(B. P. SINHA, c. J. ' K. SUBBA RAO, N. RAJAGQPALA
AYYANGAR, J. R~ MUDHOLKAR, and T. L. .
VENKATARAMA AYYAR, JJ.)
· GaB and gas-works-Enactment by State LegislatureOonBtitutional validity-Writ Petition -Locus standi-Oriental
Gas Company Act, 1960 (W.B. 15 of 1960), s. 4-0onstitution of
India Arts. 226, 246, Sch. VI~, List II, Entries 24,25.
By an agreement entered into by the appellant company
and the Oriental Gas Company, the appellant was appointed
as Manager of the later company which owned an industrial
undertaki'ng for the manufacture and sale of fuel gas in Calcutta
with the right to receive n~rr1uneration as specified in the agreement. The West Bengal Legislature passed the Oriental Gas
Company Act, 1960, and s.4 of that Act provided that the said
undertaking shall stand transferred to the St>te Government
for five years for management and control.
On October 3,
1960, the State Government issued three no:ifications One of
which appointed October 7, 1960, as the date on and from
which the management and control of the said undertaking
would be taken over by it. The appellant by a petition under
Art. 226 of the Comtitution impugned the constitutional
validity of the said Act and sou~ht for appropriate writs restraining the State Government for giving effect to it and for
quashing the said
notifications. The High Court found
again~t the petitioner and rejected the petition.
·Held, th1t the State L~gislature had the competence
to enact the impugned Act and its constitutional -validity . was
beyond question.
Article 226 of the Constitution confers a very wide
power on the High Court to issue directions and '\-\Tits not only
for the enforcement of fundamental rights but other legal
rights as well.
Since the appellant's lawful rights under t\le
agreement had been abrid~ed, if not wholly destroyed, by the
impugned Act, it had the locus • .,tandii'.
to apply under
Art. 226 of the Constitution.
The State of Orissa v. Madan Go,,,al Rungta, [1952] S.C.R.
28 and Ohiranjit Lnl Ohoudhuri v. The Union of India, [1950]
S. C.R. 869, referred to.
·
1
. 1962
FebmaryS.
1962
Tiu C:11lc'u1ta Ga11
Com/iauy
P1cprietorJ) lt1l.
v
?'ht Stau of
U·' est Btrigal
S11bha I ao J.
2 SUPRE:\IE OOURT REPORTS [1962] SUPP.
1'hc entries in the three Legislative Lists arr. only lcgisa
lativc hcadS or fields of legislation that den1arcatc the area
over which the appropriate legislature operates and it is \\'Cll
settled that tl1e .language of the entries should be widely construed.
If any entries overlap or are in direct conflict \Vith
each other, C\'cry attempt should he 1nadc to harmonise thc1n,
\Vhether the fntrics belong to the same List or different "List-;,
so that no entry may be robbed of its entire content and made
nugatory.
In re tl;c Central l'ro1~inceR and Berar .1ct, h"o. XI\,. of
1933, [1939] F. C.R. 18 and Stale of Bonzl,ay ,._ .\"orothamdas
Jethabhai, [1951] S. C.R. 51, rcfcrrecl to.
So construed Entry 24 of List II which is in apparent
conflict \Vith Entry 25 of the !'a.me list, must be he'.d to cover
all industries in a State except Ga" and (;as•\\·orks \\'hich arc
specifically dealt "·ith by F.n°try 2'i anrl exclusively a!lotted
to it.
It is clear that the express intention of the Constitution
\Va'\ to carve out Ga~ and Gas-\vorks industry from F.ntrv 24
an<l ·hring them under Fntry '.!:i a11d treat them in nOrma\
tin1es as State indtJslri<'s.
It \rould he rrroncous to sav that
such an intc-rpretation \\'1)tild prevent thC Parliarncnf from
making lan·s in respect of Gas and (;as-\vurks during \\'ar or
other national c1nergenrics.
C!YIL
APPEI,LA'n~ l·h::RISDICTIOX: Civil Appe<d
No. 138 of l!JGI.
App1·al by fipecial leave frnm thP jmlgmrnt
and order dated November I :i. 1960, of the Calcutta
High Court in }fatter No. 235 of l!lGO.
Jlf. C. Setalrad. Atlorney-Genr-ralfor India, R.R.
L. lyengnr and IJ. P. Mnheshn·ari, for the a.ppellant.
S. Jlf.
Rn.<e,
Adrocale-Urnu-al, W e.~t
Bengal,
B. Sen, P. ](. Ch11ttei:jec, 8. C. Rose, Milon Banne1:j1'.
and P. K. Bnsr., for the respollrlcnts '.\'os. I to 4. ·
1962. February 5.
The ,Judgment of the
Court was ddivered by
SuBBA RAO •• l,-This appeal by special kavc is
against the ,Judgment ancl Ordt·r dated ~ovember
Hi, 1960, of the High Court of .Judi cat.Ure at Caleu lta
diomissing the petition filed hy the appellant under
)
\
3 S.C.R.
SUPREME COURT REPORTS
3
Art. 226 of the Constitution, and it raises the constitutional validity of the Oriental Gas Company
Act, 1960, (W.B. Act XV of 1960), hereinafter
called the "impugned Act".
The facts that have given rise to this appeal
may be briefly stated. The Oriental Gas Company
was originally constituted by a deed of settlement
dated April 25, 1853, by the name of the Oriental
Gas Company, and it was subsequently registered in
England under the provisions of the English Joint
Stock Companies Act, 1862. By Act V of 1857
passed by the Legislative Council of India, it was
empowered to lay pipes in CaJcutta and its suburbs
and to e:x:cavate the streets for the said purpose: By
Acts of the Legislative Council of India passed from
time to time special powers were .conferred on the
said Qompany.
In 1946
Messrs.
Soorajmull
Nagarmull, a firm carrying on business ·in India,
purchased 98 per cent of the shares of the iaid
Oriental Gas Company Limited. The said firm
floated a limited liability Company named the
Calcutta Gas Co. (Proprietary) Limited and it was
registered in India with its registered office at
Calcutta. On July 24, 1948, under an agreement
entered into between the Oriental Gas Company,
and the Calcutta Gas Company the latter was
appointed the manager of the former Company
in India for a period of 20 years from July 5,
1948.
The Oriental Gas Company is the owner of
the indu.strial undertaking, inter alia, for the production, manufacture, supply, distribution and sale
of fuel gas Calcutta. The Calcutta Gas Company, by
virtue of the aforesaid a.rrangement, was in charge of
its general management for a period of 20 years for
remuneration. The West Bengal Legislature passed
the impugned Act and it received the assent of the
President on October 1, 1960. On October 3, 1960,
the West Bengal Government issued three notifications~the first declaring that the said Act would
come into force on October 3, 1960, the second cont~inin~ the rqle~ fr~II\e<l 1:\Ilder t4e Act. and t4e
The C'aicutta GllS
Comparry
(Proprietary) Ltd.·
v.
The State of
West Bengal
Subba Rao J.
Tl:1 C4lculfo GaJ
Conpan.'1
( fr•prietary l /.td.
v.
Th, Stau of
n· 1st Bental
Sutba Ra1 J.
4 SUPREME COURT REPORTS [1962] SUPP.
third specifying October 7, 1960, as the date with
effect from which the ~tate Government would
take over for a period of five years the management and control of the undertaking of the Oriental
Gas Company for the
purposes of,
and in
accordance with, tho provisio11s of the said Act.
The appellant, i.e., the Calcutta Gas Company,
1
filed a petition under Art. 226 of tho Constitution
~
in the High Court for West Bonga! at Calcutta for
appropriate writs for restraining the State Goyernmont from giving effect to the said Act and for
quashing the said notifir.ations.
Respondents I to
4 to the petition wore the St.ate of West Bengal and
thti concerned officers, anrl respondent 5 was the
Oriental Gas Company Limit!'<!.
In thP p<'tit.ion,
the appellant contested the constitutiowil validity
of the Act on ,·arious grounds, an<l in the counteraffidavit, the contesting respondents i.e.. respondents 1 to 4, sought to :;uotain its validit.y and also
questioned the maintainability oft-he petition at tho
instance of the appellant. Ray,,)., gave the following findings on the contentions rnised bcforo him:
(I) Tho appellant has no legal right to mn.intain
the petition; (2) the appellant <:annot question the
vn.liditJ of th<' Act on t,hc ground that its proYisions
infringed his fundumcnt'11 rights uncler Arts. 14, I!)
and 31 in view of Art. 31A(l}(b) of the Cnnstitu'
tion; (3) the West Bengal
LegiHlat.ure had the
Legislative competence to pa~s the impugm·d Act
by virtue of 1,nt r.v 42 of List HI of the :;eventh
Schedule to tho Constitution; (4) entry 2ii of List TI
also confers sufficient authMily and power on the
State Legislature to make li>ws affecting gas and μaswork ; and (!i) even if the Act. i!leidentally trnnches
upon any produetion 1rnpect, th<: pith and substance
of the legislation is iras ancl
~:t'·work withiu tho
meaning of entry 25 of List II.
The l~arnccl ,Judge~
·rcjcotcd. all tho contentions of the appellant and
dismissed tho petition by his order <lated No,·embcr 15, 1960. Hence the appeal.
I
)
3 s.c.:R.
SUPREME dOURT REPORTS
Learned Attorney-General, appearing for the
appellant, has repeated before us all the contentions,
except that relating to fundamental rights, which.
his client had unsuccessfully raised before the High
Court. His contentions may be summarized thus :
( 1) The finding of the High Court that the appellant
has no locus sf,andi to file the petition cannot be
sustained, as under the inpugned Act the appellant's legal rights under the agreement entered in to
by it with the Oriental Gas Company on July 24,
1948 were seriously affected. (2) Under Art. 246
of the Constitution Parliament has exclusive
power to make laws with respect to any of the
matters enumerated in List I : Parliament in exercise of the said power passed the Industries
(Development and Regulation) Act, 1951, by virtue
of entry 52 of said List; the two entries in List II,
namely, entries 24:and 25, cannot sustain the Act, as
entry 24 is subject to the provisions of entry 52 of
List I; and entry 25 must be confined to matters
other than those covered by entry 24, and, therefore, the West Bengal Legislature is not Competent
to make a law regulating the gas industry.
( 3) Assuming that the State Legislature has power to
pass the Act by virtue of entry 25 of List II, under
Art. 254(1) of the Constitution the law made by
Parliament, namely, the Industries (Development
and
Regulation) Act, 1951, shall p~evail, and
the
law
made
by
the State
Legislature,
n.amely, the impugned Act be
void to the
extent ofrepugnancy. And (4) the view of the High
Court that the validity of the Act could be sustained under entry 42 of List III is wrong, as under
the impugned Act the State only takes over the
management of the Company and manages it for
and on behalf of the Company, whereas the concept
of requisition under the said entry requires that the
State shall take legal possession of property of the
person from whom it is requisitioned, on its own behalf or on behalf of a petitioner other than the owner
thereof.
The Calcutt11 Gas
Company
(Proprietary) Ltd.
v.
The State of
l'Vest Bengal
Subba Bot J.
1962
The Cclcutla Gas
Compan,;·
(Prop1itlary} /Jd.
Tiit Stal~ of
H1,..rt Btngal
Subba Rao .!.
6 SUPREME COURT REPORTS [1962] SUPP.
The
learned
Advocate-General of 'Vest
Bengal, and Mr. Sen, who followed him, seek to
sustain the validity of the impugned Act not onl.v
nnd('r entry 25 of List II but also under entries 33
and 4~ uf List TH of the Sev(•nth Schedule to
the Constitution. ·They further cc ntend that the·
ap1wllant was constituted as agent under the said
agrcl'ment i>nd thi>t, as its rights were preserved by
s. 4 of the impugned Act, it has no locus stand; to
file the petition under Art. 226.
The first question that falls to be considered
is whether the appellant has lows standi to file tho
petition under Art. 226 of the Constitution. The
argument of le&rnod counsel for the rPspondenl~~ is
that the appellant
was only
managing
the
induHtry and
it had
no
proprietary
right
therein and, therefore, it could not
maintain,
the application. Article 226 confers a very wide
powor on the High Court to issue directionH and
writs of the nature mentioned therein for the enforcement of any of the rights conferred by Part III
or for any other purpose. It is, thPrefore, clear 1 hat
persons other than those claiming fundamental right
can also approach the eourt seeking a reliefth'"rcunder. The Article in terms docs not describe the
classes of persons entitled to apply thereunder ; but
it is implicit in tho exercise of the extraordinary
jurisdiction that the relief asked for must be one to
enforce a legal right. In The Swte of Ori-~8a v. illadan
Gop"l Runyta( ')this Court has ruled that the existence
of the right is the foundation of the exercisn of
jurisdiction of the court under Art. 226 of the Consti.
tution. In Chiranjit La/, Chowrlhuri v. The l.:nion
of {wlu1 ('), it has been held by this Court. that the
legal right that can be enforced under Art. :l2 must
orc!inarily be tho right of the petitioner himself who
complains of infraction of such right and approaches
the court for relief. We do not see any reason why
a different principle should apply in the case of a
(I) (1952] s C.R. 28.
(2)
(195-0J s.c.R. 869.
I
)
>
•
. )
3 S.C.R.
SUPREME COURT REPORTS
petitioner under Art. 226 of the Constitution .. The
right that can be enforced under Art. 226 also shall
ordinarily be the personal or individual right of the
peti tioll.er himself, though in the case of some of the
writs like habeas corpus or quo warranto thi'J rule may
have to be relaxed or modified.
The question,
therefore, is whether in the present case the petitioner has a legal right, and whether it has been in·
fringed by the contesting respondent.s. The petitioner
entered into an agreement dated July 24, 1948, with
respondent No. 5 in regard to the management of
the Oriental Gas Company. Under the agreement,
the appellant was appointed as Manager and the
general management of the affairs of the Company
was entrusted to it for a period ofJ!O years. The
appellant would receive thereundf'_ by way of
remuneration for its services, (a) an office .allowance
of Rs. 3,000/- per mensem, (b) a commissron of IO
per cent, on the net yearly profit of the Company,
subject to a minimum of Rs. 60,000/· per year in the
case
of absence
of
or inadequacy of profits
and (c) a commission of Re. I/- per ton of all coal
purchased and negotiated by the Manager. In its
capacity as Manager, the appellant-Company was
put in charge of the entire business and its assets in
India and it was given all the incidental powers
necessary for the said management. Under the
agreement, therefore, the appellant had the right to
manage the Oriental Gas C0mpany for a period of
20 years and to receive the aforesaid amounts toward
its· remuneration for its services.
Section 4 of the
impugned Act reads:
"With effect from the appointed day and
for a period of five years thereafter,-
(a) the undertaking of the Company shall
stand transferred to the State Governmfclnt for the purpose of management
and control ;
·
1962
The 0 arcutea Gas
company.
(Proprietary) Ltrl.
v.
The State ·of
West.Bangal
Suhba Rao J.
1962
Tht Caladla Gas
Companl
(l'rofJritlarJ) l.Jd.
v.
Tit Stal< of
W11t Bengal
Sub6a Raa J.
8 SUPREME COUHT REPORTS [1962] StJl>l'.
'b) the C Jmpany and its agents, includin01
managing agents, if any, and servant shail
cease to exercise management or control
in relation to the undertaking of thl'
Company;
I c) all contracts, excluding any contract or
contracts in respect of agency or managing agency, subsisting immediately before
the appointed day and affecting the undertaking of the Company shall cease to have
l'ffoct or to be enforeeable against the
Company, its agents or :lny person who
was a surety thereto or had guaranteed
the performance thereof and shall be of
ai; full forre and effect against or in
favo~· of the State of West Bonga! and
shall be enforceable as fully and effectively as if instead of the Company the
State of West Bengal had been named
therein or had boon a party thereto:"
Under tho said section, with effect from the appointed day and for a period of five years th<!reafter, the
management of the Company shall stand transferred
to the State Government, and the Company, its
agents and 8ervants shall cease to exercise management or control of the same.
l'.nder d. (c) of the
section, the contracts of agency or managing agency
aro not touched, but all the other contracts cease to
have effect against the Company and are enforceable by or against the State. It is not necessary in
thiA case to decide whether under the said pgreement the appellant was constituted as agent or
managing agent or a servant of the Oriental
Gas Company. Whatever may be its character,
by reason of s. 4 of the impugned Act, it was
deprived of certain
legal rights it posse8Sed
undei: the agreement. Under the agreement, the
appellant had the right to manage the Orit•ntal
Gas Company for a period of 20 years and to
receive remuneration for. the Bame. llut under
~
y
)
)
.J
3 S.d.R.
SUl>REMlll COUR1' RlllFORTS
9
s. 4 of the impugned Act, it was deprived of that
right for a period of five years. There was cert'.linly
a · legal right accruing to the appellant under the
agreement and that was abridged, if not destroyed,
by the impugned Act. It is, therefore, impossible
to say that the legal right of the appellant was not
infringed by the provisions of the impugned Act.
In the circumstances, as the appellant's personal
right to manage the Company and to receive remuneration therefor had been infringed by tho provisions of the statute, it had wcus standi to file the
petition under Art. 226 of the Constitution.
To appreciate the rival contentions in regard
to the other points, it would be convenient and
necessary to notice briefly the provisions of the
Industries (Development and Regulation) Act, 1951,
hereinafter called the "Central Act.", and the impugned Act. The Central Act was passed, as its long
. title shows, to provide for the development and
regulation of certain industries. Under s. 2 of the
Central Act, it is declared that it is expedient in
the publio interest that the Union should take under
its control the industries specified in the First
Schedule.
Under beading 2 of the First Schedule,
item (3) is "fuel gases-( coal gas, natural gas and
the like)". "Industrial undertaking" is defined to
mean any undertaking pertaining to a scheduled
industry carried on in one or more factories .by any
person or authority including Government ; and /
"factory" is defined to mean any premises, including the precincts thereof, in any part of which a
manufacturing process is. being carried on or is
ordinarily so carried on.
Section 9 authorizes the
Government to levy and collect a cess from the
industries : Chapter III provides for the regulation
of scheduled industries : section 15 empowers the
Government to make or cause to be made a full and
complete investigation of the affairs of any scheduled industry, if it is of opinion that there is a
likelihood of substantial fall in the
volume of
1962
The Calcutta & as
Company
( ProprietaTy) Ltd.
v.
The Siate of
West Bengal
Subba Rao J,
/962
Tlia Calcutta (}as
Comparrp
(Propritl·iry) Ltd.
v.
Tht Statt of
JV est Rtn.,al
Subb11 Rao J.
iO
SUPR~~IE COURT REPORTS [1962] SUPP.
production or a marked deterioration in the quality
of any article produced, or there is likely to bo a
ri~e in the price of any article produced, therein, or
that an undertaking is being managed in a manner
highly detrimental to the scheduled industry concerned; and s. HJ authorizes the Central Government,
after making the said investigation to issue such
directions to the industrial undertaking or undertakings concerned as may he appropriate in the circumstances in order to regulate the production of any
article or articles and fi:ic the standards of production, to require it to take such steps to stimulate
the development of the industry, to prohibit from
resorting to any act or practice which might reduce
its production capacity or economic value, or to
control the prices or regulate the distribution of
articles produced therein· Chapter IIIA confers
power on the Central
Government to
assume
management or control of an industrial undertaking
in cortain cases: section J8A enables it to htke control of an industrial undertaking, ands. 18H(l), in~r
al·ia, provides that on the issue of the notified order
nuder s. 18A, all persons in charge of management,
including persons holdin" oJfice as managers or directors of the industrial und~rtaking immediately before
the issue of the notified order shall he deemed to have
vacated their offices as such, aud that any contr~ct
of managem•rnt between the industrial undertakmg
and any managing agf,nt or any director th~rcof
holding ofEce as such immediately before the issue
of the notified order shaJI be deemed to have been ·
terminated and the person or persons appointed
under th~ Act shall be empowered to take over the
management and condu'.•t the affairs of the Company
in the place of the previous management. · qiapter
IIIB enables tho Central Government for securmg the
equitable distribution and availability a.t fair prices
of any article or class of articles relatahlf_' to any
hanrecetd · industry,
and
for controllmg and
.
ugsdlciuJg the supply, distribution, and price, of the
1
"" ..
•
:I s.C.R.
SUPR)!jM:i): COURT REPORTS
11
said articles. Section 20 of the A ct declares that
aft.er the commencement of·the Act, it shall not lie
competent for any State Government or. a local
authority to take over the management or control
of any industrial undertaking under any law for the
time being in force which authorizes any such
Government or local authority so to do. Briefly
stated, the Central Act declares that it is expedient
in the public interest to take under its control the
scheduled industries; its provisions are designed to
provide for the development and regulation of the
said industries; it enables the Central Government,
for the purpose of promoting and rcgulatini2' the
said industries, to investigate into the affairs of an
undertaking, to regulate its production, supply and
distribution, and, if necess<irv, to take over the
management of the unctertaki;;g.
Coming to the impugned Act, its provisions are
confined only to the affairs of the Oriental Gas
Cnmpany Limiled. Its long title shows that it was
passed to provide th·, taking over for a limited
period of the mnnagement, and control, and the
subsequent acquisition of the undertaking of the
Oriental Gas Compa,ny Limited. Its preamble says
that i.t was thought expedient to provide for
the
increase of the production of
gas and
improving
the quality thereof, for supply to
industrial undertakings, hospitals and other welfare institutions, to local authorities for street
lighting and to the public in general for domestic
consumption and for that purpose to provide
for the taking over for a limited period of
the management and control, and the subsequent
acquisition, of the undertaking. Under s. 4, with effect
from the appointed day and for a period of five
years tP,ereafter the undertaking of the Company
shall stand transferred to the State Government
for the purpose of management and control. Under
s. 6, the undertaking of the Company shall be run
by the State Government and shall lte used and
The Calcutta Gas
Company
(Proprietary) Ltd.
v.
Tht State of
West Ben~a!
Subba Rao J.
1962
Tiu Calcutta Gas
Company
(Propri11a1y) Ltd.
••
TM Stal< aj
Wt!I lhngal
Subba Rao J.
12 SUPREME COURT REPORTs [1962] stJt>i>.
utilised by the State Government for purposes of
production of gas and supply thereof to public
institutions mentioned therein and for other
purposes. Sections 8 l}nd 9 provide for payment of
compensation for taking over the said management.
It would be seen that the impugned Act intends to
serve the same purpose as the Central Act, though
its operation is. confined to the Oriental Gas
Company. Both tho Acts are conceived to increase
tho production, quality and supply pertaining to an
industry, and for that purpose to enable the
appropriate Government, if necessary, to take over
the management for
regulating tho industry
concerned to achieve the said purposes.
.The
impugned Act occupies a part of the field already
covered by the Central Act. The question is whether
the State Legislature has constitutional competency
to encroach upon the said field.
At this stage it would be convenient to read
the relevant Articles of the Constitution.
Aricle 246. · (1) Notwithstanding anything
in clauses (2) and (3) Parliament has exclusive
power to make laws with respect to any of
the matters enumerated in List I in the
Seventh Schedule (in this Constitution referred
to as the "Union List").
(3) Subject to clauses (I) and (2), the
Legislature of any State has exclusive power
to make laws for such State or any part
thereof with respect to any of the mattem
enumerated in
List II in the Seventh
Schedule (in this Constitution referred to as
the "State List").
List I-Union List
·Entry 7.
Industries declared by Parliament by law to be necessary for the purpose
of defence or for the prosecution of war.
,.
•
3 S.C.R. SUPREME COURT REPORTS
13
· Entry 52. Industries, the control of which
by the Union is declared by Parliament by
law to be expedient in the public interest.
List I I -&ate List
Entry 24.
Industries subject
to
the
provisions of entries 7 and 52 of List I.
Enti·y 25.
Gas and gas-works.
Entry 26.
Trade and commerce within
the State subject to the provisions. of entry
33 of List III.
Entry 27.
Production,
supply
and
distribution of goods subject to the provisions
of entry 33 of List III.
Before construing the sa.id entries it would be useful
to notice some of the well settled rules of
interpretation laid down by the Federal Court and
this Court in the matter of construing the entrie~.
The power to legislate is given to the appropriate
Legislatures by Att. 246 of the Constitution. The
entries in the three' Lists are only legislative heads or
fields of legislation : 'they demarcate the area over
which the appropriate Legislatures can· operate.
It is also well settled that widest amplitude should
be given to the language of the entries. But some
of the entries in the different List or· in the same
List may overlap and sometimes may also appear
to be in direct conflict with each other. It is then the
dnty of this Court to reconcile the entries and bring
about harmony between them. When the question
arose about reconciling entry 45 of List I, duties
of excise, and entry 18 of List II, taxes on the sale
of gonds, of Government of India Act, 1935, Gwyer,
C. J., in ln re The Central Provinces and Berar Act
No. X fV of 1938 (1), observed; '
"A grant of the power in general terms,
standing by itself, would no doubt be construed
in the wider· sense; bnt it may be qualified
(!) (!939) F. C.R. IB, 42, 44.
1962
The Calcutla Gas
Oompan)
(Proprietary) Ltd.
v.
The State of
West Bengal
Subba Rao J.
1962
T ht C:oir11fl.1 GaJ
(,'nn,pany
(P1ot,1ino•;) l.:d 1
v.
·r1,, ._<..'taze of
JYcir B~Tl'.fcJ.l
Si.bba Uao J.
14 SUPREME COURT REPORTS [1962] SUPP.
by other express pro,·isions in the same
enactment, by the implication of the context,
and even by considerations arising out of
what appears to be the general scheme
of the. Act.,.
The learned Chief J usticc procr eded to state :
" ......... an endra n>ur must be made to
sohc it, as the ,Judicial Committee have said
by having recourse to the context and scheme
of the Act, and a rceonciliation attempted
betwmm two apparently conflicting jurisdictions
hy reading the two entries together and hy
interpreting, and, whrre ncne~sary, mod(fying
the language of the un" by that of the oth<>r.
If indeed i;ueh a rc'bonciliation should prov"
impossible, then, and only then. will the
nm1·obstantc clau~e operate and the federal
power prevail."
The Federal Court in that ease held th:it the entry
'"taxes on the Hale of good"" was not covered by
the entry "duties of cxcisi" :rn<l in coming to tl1~t
conclusion, the learned Chid' .Ju~ticc observed:
"Here are two scpJ.rate enactments, "ad1
in one aApect conferring the pown to impose
a tax upon goods; and it woultl nccord with
sound principle8 of
conetru<:t ion to ta kc
the
more
gen<' ml
pow Pr,
th ·1(.
which extends to tlH' whole of India,
a8
Rubject to an oxcc1•t ion
created
by the_
particular power, that which extends t;o t.he
province<!
only. It is not rerhaps strictly
accnratc to speak of the provincial pow!'r as
being excepted· out of the federal power, for
thn two are independr,nt. of one another aucl
exist sirle
by side.
But the underlying
principle in the two cases must Le the same,
that a general power ought not to ho> so
9onstn~ecl as to make a nullit,Y of a particular
-
,
•
1
3 s.c.R.' SUPREME COURT REPORTS
15
power !Jonferred by the same Act and operating
in the same field, when by reading the former
in a more restricted sense effect can be given
to the latter in its ordinary and natural
meaning."
The rule of constru.ction adopted by that decision
for the purpose of harmonizing the two apparently
conflicting entries in the two Lists would equally
apply to an apparent conflict between two entries
in the same List. Patanjali Sastri, J., as he then
was, held in·State of Bombay v.Narothamdas J ethabai(')
that the words "administration of justice" and
"constitution and organization of all courts'' in
item one of List II of the Seventh Schedule to the
Government of India Act, 1935, must be understood
in a restricted sense excluding from their scope
"jurisdiction and powers of courts" specifically dealt
with in item 2 of List II. In the words of the learned
Judge, if such a construction was not given "the
wider construction of entry I would deprive entry
· 2 of ail its content and reduce it to useless lumber."
This rule of construction has not been dissented
· from in any of th0 subsequent decisions of this
CDlirt. It may, therefore, be taken as a well settled
rule of construction tJiat every attempt should be
made to harmonize the apparently conflicting
entries not only of different Lists but also of the
same List and to reject that construction which will
rob onu of the imtries of its entire content and
make it nugatory.
With this background let us construe the
aforesaid entries. There are three possible constri:ctions, namely, (1) entry 24 of List II, which
pJ,"ovidcs for industries generally, covers the indqstrial aspect of gas and gas works leaving entry 25
to p:·ovide for other aspects of gas and gas-works;
(2) «ntiy
24 provides generally for industries,
and «ntry 25 carves out of it the specific industry
(!) [1951] S. C.R. ,,1,
1982
The r:alcutta Gas
Comp'.my
(Proprietary) Ltd.
v.
The State "of
West Bengal
Sttbha Rao J.
The Caltutta Gas
Com>any
( /l, oprUtat_)) I.Id.
v.
The Stak of
II est IJ,nga/
Sul)ba Rao J.
16
SUPREME COURT REPORTS [1962] SUPP.
of gns and gas-work•, with the result that the industry of gas and gas-works is excluded from entry
24 ; and(::!) the industry of gas and gas-works falls
umfor both the entries, that is, there is a real overlapin!! of the said entries. Having regard to the
aforesaid principle, while giving tho widest scope
to both the entries, we shall adopt tho interpretation which reconciles and harmonizes them.
The first question that oecurs to one's mind
is, what is the meaning of tho cxprt>ssion "industry" in entry 24 0f List JI ? IR it 1lifferent from
tho meaning of that
ilXpresRion
in
entry 52
of List I ? Whatnver may be its eonnotation,
it must, hear t.hn ~amo meaning in both the entries
for thr two entries are so interconnected that
conflicting or different meanings given
to them
would snap the connection. Entry !?4 is subject
t.o the proviRions of entrv 7 and entrv 52 of .List I.
Entry 7 of List I provides for
indu~tries declared
by Parliament by law to be nr1•cssary for thr purpose of defence or for the prosrcution of war;
and entry .~2 for industries t hP control of which
by the Union is declared bv Parliam11nt by law
to be expedient in tho pn hlfr intcrPst. Therefore
ordinarilv indn•tr:v is in the field of State legis.
lation ; but, if Parliament by law makes a reluvant
declaration or declarations, "the industrv or industries so declared would bo tR ken off "its field and
passed on to Parliament.
Tn the premises. the
cxpres~ion "industry" in all the ent.ries must bP.
given tho same mea.ninp-.
Now, "hat is tho mean·
ing of word "induRtrv"? In Ch. Tika Ramji v.
State nf ntm· Pradesh (1), the •·xprcssion "industries"
. is defined to mean the pn,cess of manufacture
or production and <loo•
not include the
raw
matcrialR used in the industr\' or the distributior,
of the products of the industry.
Tt was contl•nded
·that tho word "industry" was a word of wide 4
,
(I) [1956) S.C.R. 393,
t
I
.. -
• -
•
3s.c.:R .
SUPREME COURT REPORTS
import and should be construed as inchtding not
only the process of manufacture or production
but also activities antecedent tliereto such as
acquisition of raw materials and subsequent there·
to such as disposal of the finished products of that
industry. But that contention was not accepted.
It is not necessary in this case to attempt to define
the expression "industry" precisely or to state
exhaustively all its ingredients. Assuming that
the expression means only
production or manufacture,
would it
take
in
its sweep production or manufacture, of gas?
Entry 24 in List
II in its widest amplitude takes in all industries,
including that •of gas and gas-works.
So too,
entry 25 of the said List comprehends gas industry.
There ie, therefore, an apparent conflict between
the two entries and they overlap each other. In
such a contingency the doctrine of harmonious
construction must be invoked. Both the learned
counsel accept this principle. While the learned
Attorney-General seeks to harmonize both the
entries by giving the widest meaning to the word
"industry" so as to include the industrial aspect
of gas and gas-works and leaving the other aspects
to be covered by entry 25, learned
counsel for
the contesting respondents seeks to reconcile
them by carving out gas and gas-works in all its
a.spects from entry 24. If industry in entry 24 is
interpreted to include gas and gas-works, entry
25 may become redundant, and in the context of
the succeeding entries, namely, entry 26, dealing
with trade and commerce, and entry 27, dealing
with production, supply and distribution of goods,
it will be deprived of all its contents and reduced
to "useless lumber''. If industrial, trade, production and supply aspects are taken out of entry 25,
the substratum of the said entry would disappear :
in that event we would be attributing to the
authors of the Constitution ineptitude, want of
precision and !autology. On the other hand, •the
1962
The Calcutta Gas
·eompa,,,
( Proprieta1j) 'Ltd.
v.
'The.:BMtepf
West B~ngal
Subba Rao J.-
196!
TIN CokuUa Gos
camp...,
(P,optietary) Ltd.
v.
Tiu Stal, of
West Bengal
Subba R<UJ J.
18
SUPREME OOURT REPORTS [1962] 8ttl>P.
alternative contention enables entries 24 a.nd 25 to
operato fully in their rc8pectivc fields : while entry
24 covers a ve'rv wide field, that iR, the field of the
entire industry ·in the State, entry 2ii. dealing with
gas and gas-works, ca.n be confined to a Hpccifi"
industry, that is, the gas industry. There may be
many good reasons for the authors of the Constitution giving separate treatment to gas and gas-works.
If one can surmis(., it may be that, as the industry
of gas and gas· works was confined to one or two
States and was not of all-India importance, it was
carved out of entry 24 and given a separate entry,
as otherwise if a declaration by law was made by
Parliament. within tho mrn~ning of ;•ntry 7 or entry
ii2 of List I, it would be taken out of the legi~lativo
power of States.
Be it as it may, the express
intention of the Constitution is to treat it, in nUJmal
times, as a state subject and it is not in the province
of this Court to ascertain and scrutinize the reasuns
for doing so. It is suggested that this interpreta·
tion would prevent Parliament to make law in
respect of gas and gas-works during war or other
national emergency. Apart from the relevancy of
such a consideration, the apprehension has no
justification, for under Art. 249 Parliament
is
enabled to take up for legislation any matter which
is specifically enumrrated in List II whenever the
Council of States resolves by two.thirds majority
that such a legislation is necessary or expedient in
the national interest.
So too, under Art.
~50
Parliament can make laws with respect to any of
the matters enumerated in the State List, if a.
Proclamation of Emergency is in operation. Article
2ii2 authorizes the Parliament to legislate for two
or more States, if tho House8 of the Legislatures
of those ::itatcs give their eonRcnt to the said course.
Subject to s~ich Pmcrgency or extra-ordinary powers,
the entire industry of gas and gas-works is within
exclusive legislative competence of a State. It iH,
therefore, dear that the scheme of harmoniou" con·
struction suggested on behalf of the State gives full
...
•
•
\~
3 S.C.R.
SUPREME COURT REPORTS
19
and effective scope of operation for both the
entries in their respective fields,
while that
suggested by learned counsel for the appellant
deprives entry 25 of a 11 its content and even .
makes it redundant.
The former interpretation
must, therefore, be accepted in preference to·
the latter. In this view, gas and-gas works are
within the exclusive field allotted to the States, On
this interpretation the argument of the learned
Attorney-Genera]. that, under Art. 24.6 of the Constitution, the legislative power of State is subject to
that of Parliament ceases to have a,ny force, for the
gas industry is outside the legislative field of Parliament and is within the exclusive field of the Legislature of the State. We, therefore, hold that the
impugned Act was within the legislative competence
of the West Bengal Legislature and was, therefore,
validly made.
In this view the alternative argument advanced
on beh<tlf <A' the State, namely, that the impugned
Act was made by virtue of entry 33 and entry 42 of
List III need not be considered. We should not be
understood to have exproosed our view one way or
other on this aspect of the case.
Nor is the contention of learned AttorneyGeneral that s. 20 of the. Central Act would still be
valid vis-a-vis gas industry has any force.
Under
s. 20 of the Central Act,
"After the commencement of this Act, it
shall not be competent for any State Government or a local authority to take over the
management or control of any industrial
undertaking under any law for the time being
in force which authorizes any such Government or local authority so to do."
We have expressed the view that the Legislature of a State has the exclusive. power to make law
in respect of gas industry by virtue of entry 25 of
List II, and that entry 24 does not comprehend gas
industry. As we have indicated earlier, the expression "industry" in entry 52 of List I bears the
19t,S
The Calcutta GOs
Company
(Proprietor}) !,tr!.
v.
The State of
West Benzal
Subba Rao J.
1961
7'/k CalcuUa Gas
CompanJ
( Prop.-iiia.J) Ltd.
Y,
TM Stal1 of
Wut Bt119.J
Suhbo Rao J,
20
SUPREME COURT REPoRTS (l!J62] SUPi>.
same meaning as that iu entry 24 of List II, with
the result that the said expression in entry 5 .'. of
List I also does not take in a gas industry.
If so,
it follows that the Central Ad, in so f.ir as it
purported to deal "ith the gas industry, is beyond
the legislative competeneo of Parliament..
Section
20 is an integral part of the Central Act, and if it is
taken out of the Act, it can only operaw in v:.cuum.
The said section was introduced for the effective
implementation of the provisions of the Central .<\ct.
It was also enacted by virtue of entry i'::! of List I
of the Seventh Schedule to the Constitution. If
the Act was constitutionally void in so far as it purported to offect the gas industry, for the aforesaid
reasons, s. 20 would equally be void to tho same
extent for the same reasons. Jn this context two
decisions of this Court, namely, Raylrnbir Singh v.
Slaw of Ajmtr( 1), and State of Bihar v.