The District Board, Ghazipur vs Lakshmi Narain Sharma

Rewritten Version Notice: This is a rewritten version of the original judgment.

Court: supreme-court

Case Number: Civil Appeal No. 372 of 1956

Decision Date: 26 October, 1960

Coram: K.N. Wanchoo, P.B. Gajendragadkar, A.K. Sarkar, J.R. Mudholkar

The case was titled The District Board, Ghazipur versus Lakshmi Narain Sharma and was decided on 26 October 1960 by the Supreme Court of India. The judgment was authored by Justice K.N. Wanchoo, who sat on a bench together with Justices P.B. Gajendragadkar, A.K. Sarkar and J.R. Mudholkar. The petitioner in the proceeding was the District Board of Ghazipur and the respondent was Lakshmi Narain Sharma. The official citation of the decision is 1961 AIR 356 and 1961 SCR (2) 81. The matters that came before the Court involved the interpretation of provisions relating to the regulation and control of trade, the powers of the District Board, the possible implied repeal of those powers, and the meaning of the term “sanitation” in the context of the United Provinces District Boards Act, 1922 (U.P. X of 1922), sections 91(q) and 174, as well as the United Provinces Panchayat Raj Act, 1947 (U.P. XXVI of 1947), sections 15 and III.

The appellant had framed bye‑laws under section 174 of the United Provinces District Boards Act, 1922 to regulate the operation of flour, rice and oil mills, requiring that any person who wished to run such a mill obtain a licence and pay a licence fee. The respondent argued that these bye‑laws were ultra vires and void because, in his view, the District Boards had been stripped of their power to regulate and control trade by section III of the Panchayat Raj Act, 1947, which operated in the same field. The Court held that the bye‑laws were validly made and that the District Boards had not been divested of their power to regulate trade by the later Panchayat Raj Act. The Court pointed out that section 91(q) of the District Boards Act imposed on the District Boards a duty to make provisions for the regulation of offensive, dangerous or obnoxious trades, callings or practices, and that section 174(2)(k) expressly empowered the Boards to make bye‑laws for that purpose. The Court observed that the Panchayat Raj Act did not confer a comparable duty or power on Village Panchayats, and therefore the issue of the later enactment prevailing over the earlier one did not arise.

The Court further examined the reference to “sanitation” in section 15(c) of the Panchayat Raj Act. Although the word “sanitation” in its broadest sense could encompass regulation of trade, the Court found that the legislature used the term in its ordinary sense, limited to matters of conservancy, drainage and similar concerns, and not to the regulation and control of trade. Section III of the Panchayat Raj Act, being framed in general terms, allowed bye‑laws to be made only with respect to the functions and duties that the act specifically imposed on a Gram Panchayat under sections 15 and 16. Finally, the Court ruled that the licence fee imposed by the District Board could not be struck down on the ground that the respondent was already paying fees for his mills under the United Provinces Rice and Dal Mills Control Order, 1948 and the United Provinces Pure Food Act. The licence fee collected by the District Board was intended for the regulation of obnoxious trades, and the purpose of that regulation was distinct from the purpose for which fees were collected under the Essential Supplies Act and the Pure Food Act.

The Court observed that the fee was not imposed for the purpose for which it had been charged from the respondent under the Essential Supplies Act and the Pure Food Act. The matter came before this Civil Appellate jurisdiction as Civil Appeal No 372 of 1956, an appeal from the judgment and order dated 18 January 1956 of the Allahabad High Court in Special Appeal No 43 of 1955. The appellant was represented by counsel, while the respondent was appeared for by separate counsel. Interveners No 1, No 2 and No 3 were each represented by their respective counsel. The judgment was pronounced on 26 October 1960 by Justice Wanchoo. This appeal arose on a certificate that had been granted by the Allahabad High Court.

The respondent was engaged in the business of hulling rice, milling grains and extracting oil at the village of Nandganj, which fell within the jurisdiction of Gaon Sabha Barapur. He had obtained licences for each of these three trades under the United Provinces Rice and Dal Control Order, 1948, and also under the Uttar Pradesh Pure Food Act, 1950. In addition, the Gaon Sabha levied a fee of eight rupees on each mill within its area, and the respondent had been paying that amount regularly. In 1953 the District Board of Ghazipur, the district in which the village is located, promulgated bye‑laws for the regulation and control of flour, rice and oil mills operating in the rural parts of the district. These bye‑laws required each mill to obtain a licence on payment of a fee of twenty rupees per annum for each mill. When the respondent received a notice directing him to obtain a licence for each of his mills and to pay the stipulated licence fee, he challenged the legality and validity of the levy. He subsequently filed a writ petition before the High Court under Article 226 of the Constitution. His contentions were threefold: first, that after the constitution of Gaon Sabha Barapur under the Uttar Pradesh Panchayat Raj Act, No XXVI of 1947, the District Board had been divested of any power or jurisdiction to regulate trade under the relevant provisions of the Uttar Pradesh District Boards Act, No X of 1922; second, that he had already paid the requisite licence fees under the Uttar Pradesh Rice and Dal Control Order, 1948 and the Uttar Pradesh Pure Food Act, 1950, and therefore could not be required to pay the same fees again under the District Boards Act; and third, that the levy was excessive, not proportionate to the actual or probable expenses that the District Board would incur in regulating trade, and that it was intended merely to augment the general revenue of the District Board. The High Court, through a learned single judge, dismissed the writ petition in limine, delivering a reasoned judgment that rejected each of the three contentions advanced by the respondent. The respondent then appealed, and the appellate court allowed the appeal, holding that, in view of

Section 111 of the Panchayat Raj Act was held to have removed the District Board’s authority to issue bye‑laws for the regulation and control of trade under Section 174 of the District Boards Act. The Appeal Court further expressed the view that the licence levy imposed by the Board was not disproportionate to the expenses that the Board would incur in regulating trade and that the levy could not be characterised as a tax. The Appeal Court, however, did not address the third contention raised by the respondent. After the decision of the Appeal Court, the District Board applied for a certificate authorising an appeal to this Court; the certificate was granted and consequently the present matter was placed before this Court. The principal issue for determination on appeal is whether the Appeal Court’s conclusion that the District Board has lost the power to make bye‑laws under Section 174 of the District Boards Act for the regulation and control of trade, on the ground of Section 111 of the Panchayat Raj Act, is legally correct. Counsel for the appellant advanced his argument on this point in two alternative limbs. Firstly, he contended that the Panchayat Raj Act contains no provision conferring upon the Gaon Sabha or the Gaon Panchayat any authority to regulate or control trade; consequently, even if the later Panchayat Raj Act were to prevail over the earlier District Boards Act where both statutes address the same subject, that specific power would nevertheless remain with the District Board because it is not among the powers enumerated for Panchayats under the Panchayat Raj Act. In the alternative, he argued that the legislature did not intend to repeal by necessary implication the provisions of the District Boards Act that are common to the two statutes; therefore the District Board’s power to control and regulate trade would continue to exist irrespective of any provision in the Panchayat Raj Act. The Court indicated that it would first examine the initial contention advanced on behalf of the appellant, since if the Panchayat Raj Act does not provide for the control and regulation of trade by either the Gaon Sabha or the Gaon Panchayat, there can be no inconsistency between the District Boards Act and the Panchayat Raj Act and, consequently, no basis for stating that the later Act (the Panchayat Raj Act) should override the earlier Act (the District Boards Act). Section 91 of the District Boards Act imposes certain compulsory duties upon District Boards; clause (q) of that section mandates that every Board shall make reasonable provision within its district for regulating offensive, dangerous or obnoxious trades, callings or practices. Section 106 of the District Boards Act authorises the Board to levy a fee, fixed by bye‑law, for any licence, sanction or permission that it is empowered or required to grant under the Act. Section 174 confers power on the District Board to …

In this case, the Court observed that Section 174 of the District Boards Act authorises the Board to make bye‑laws that are consistent with the Act and with any rules made by the State Government for the purpose of promoting or maintaining the health, safety and convenience of the inhabitants of the area and for the furtherance of the administration of the district. Sub‑section (2)(k) specifically empowers the District Board to frame bye‑laws for the regulation of slaughter‑houses and of offensive, dangerous or obnoxious trades, callings or practices, and to prescribe fees that will cover the expenses incurred in carrying out that regulation. The Court noted that there is no dispute that the District Board possesses the authority under these provisions to frame bye‑laws concerning the regulation of trades such as hulling rice, milling grains and extracting oil. Consequently, unless the Panchayat Raj Act expressly removes or necessarily implies the removal of this authority, the District Board remained entitled to enact the bye‑laws it did in 1953 and to levy licence fees in accordance with them. Turning to the Panchayat Raj Act, the Court examined Section 15, which enumerates the compulsory duties of a Gaon Panchayat, and Section 16, which sets out its optional duties. Section 3 confers on the prescribed authority the power to make bye‑laws for a Gaon Panchayat within its jurisdiction that are consistent with the Act and the rules made thereunder, for the purpose of promoting or maintaining health, safety and convenience of persons residing in that jurisdiction and for the furtherance of the administration of Gaon Panchayats. The prescribed authority in the present context is the Executive Committee of the District Board, as indicated by Section 56 of the District Boards Act, and it may be distinguished from the District Board itself. The appellant argued that a combined reading of Sections 15, 16 and 111 makes it clear that regulation or control of trades, callings and practices does not fall within the scope of the Panchayat Raj Act. The appellant pointed out that neither Section 15 nor Section 16 contains any provision analogous to Section 91(q) of the District Boards Act, and therefore, on its face, the Panchayat Raj Act does not deal with the regulation of offensive, dangerous or obnoxious trades, callings or practices, leaving the District Board’s power untouched. Counsel for the respondent, however, contended that although Sections 15 and 16 lack a specific provision on such regulation, the matter is implicitly covered by clause (c) of Section 15, which obliges a Panchayat to make reasonable provision for sanitation and to take curative and preventive measures to eliminate and stop the spread of an epidemic. The respondent argued that the term “sanitation” should be given a very wide meaning, which would encompass the regulation of offensive, dangerous or obnoxious trades.

In this case the Court observed that even if the term “sanitation” were given its broadest possible meaning, it would not be appropriate to interpret clause (c) of section 15 of the Panchayat Raj Act as encompassing the regulation of offensive, dangerous or obnoxious trades. The Court examined the structure of both the District Boards Act and the Panchayat Raj Act and concluded that the word “sanitation” should not be given the widest possible connotation in clause (c) of section 15. Section 91(m) of the District Boards Act mentions “public vaccination, sanitation and the prevention of disease”, but the Act also contains other provisions that would fall within a broad reading of sanitation, such as clause (e) dealing with construction and repair of public wells and drainage works, clause (n) concerning the supply of pure and wholesome water and protection of water from pollution, and clause (r) relating to the dissemination of knowledge about disease, hygiene and sanitation. The presence of these separate clauses demonstrates that the term “sanitation” in clause (m) of section 91 is not intended to be interpreted in its widest sense. Similarly, section 92, which enumerates optional duties of District Boards, includes clause (c) on reclaiming unhealthy localities and clause (i) on preventing injury, contamination or pollution of rivers and other water sources—matters that would also be covered by a broad definition of sanitation. This indicates that, within the District Boards Act, “sanitation” is employed in a limited, rather than expansive, sense. The Court then turned to the Panchayat Raj Act and noted that clause (c) of section 15 refers to “sanitation”, while clause (g) deals expressly with the regulation of places for the disposal of carcasses and other offensive matters, which would already be covered if “sanitation” were given its broadest meaning, making the separate provision unnecessary. Clause (k) provides for regulation of sources of water supply for drinking purposes, another issue that would be subsumed under a wide definition of sanitation. Clause (r) deals with the allotment of places for storing manure, which again would fall within a broad interpretation of sanitation, rendering the specific clause redundant. Moreover, section 16, which outlines discretionary functions of a Gaon Panchayat, contains clause (c) concerning the filling of insanitary depressions and land levelling—activities that would not require a distinct provision if “sanitation” were understood in its most expansive sense. The Court therefore concluded that both statutes employ the term “sanitation” in its ordinary meaning, limited to the improvement of sanitary conditions, particularly with respect to dirt, infection, conservancy and drainage, and not to the regulation of offensive or dangerous trades.

Section 16 of the Panchayat Raj Act authorises the regulation of the collection, removal and disposal of manure and sweepings and requires making arrangements for the disposal of animal carcasses; this activity would also fall within clause (c) if the term “sanitation” were interpreted in its broadest sense. Clause (m) of the same Act prohibits or regulates the curing, tanning and dyeing of skins within two hundred twenty yards of the settlement, an activity that likewise would be covered by the word “sanitation” when given the expansive meaning advocated by the respondent. Consequently, it becomes apparent that both the District Boards Act and the Panchayat Raj Act employ the term “sanitation” not in its widest possible sense but rather in its ordinary sense, meaning the improvement of sanitary conditions with particular reference to dirt and infection, and therefore limited to matters of conservancy, drainage and similar concerns. In the context of both statutes, the term “sanitation” as used in section ninety‑one of the District Boards Act and clause (c) of section fifteen of the Panchayat Raj Act is confined to its ordinary meaning relating to conservancy and drainage, aimed at preventing dirt and disease, and cannot be extended to include the control or regulation of trades, occupations or practices. Section eighteen of the Panchayat Raj Act further confirms that the ordinary meaning is intended; it authorises a Gaon Panchayat, by notice, to direct owners or occupiers to close, remove, alter, repair, cleanse, disinfect or put into good order any latrine, urinal, water‑closet, drain, cesspool or other receptacle for filth, sewage, rubbish or refuse, and also to cleanse, repair, cover, fill, drain or remove water from private wells, tanks, reservoirs, pools, pits, depressions or excavations that may be injurious to health or offensive to the neighbourhood, as well as to clear vegetation, undergrowth or scrub‑jungle and to remove any dirt, dung, nightsoil, manure or any noxious or offensive matter and to cleanse the land or building. Therefore, the Panchayat Raj Act does not provide for the control or regulation of trades, occupations or practices as contemplated by section ninety‑one (q) of the District Boards Act. Nevertheless, although sections fifteen and sixteen do not specifically address the regulation of trades, occupations or practices, section three, in very general terms, empowers the prescribed authority to frame bye‑laws concerning the promotion or maintenance of health, safety and convenience of persons residing within the jurisdiction of a Gaon Panchayat.

The Court observed that although the wording in section three of the Panchayat Raj Act is broad, that breadth could not be extended beyond the specific duties that are placed on a Gaon Panchayat or a Gaon Sabha by sections fifteen and sixteen, or by any other provision of the same Act. The Court explained that any bye‑laws made under section one‑eleven, which are intended to promote or maintain health, safety and convenience, must also further the administration of the Gaon Panchayats as provided by the Act. Consequently, if the Gaon Panchayats possess administrative functions under sections fifteen and sixteen, or under any other relevant provision, they may enact bye‑laws under section one‑eleven for those purposes in order to support their administrative role. However, the Court held that the Gaon Panchayats have not been given a duty to control or regulate trades, callings or practices. Because they lack such a duty, the Court found that there can be no basis for framing bye‑laws in that regard under section one‑eleven, even though the language of that section is wide. The Court further clarified that the authority to make bye‑laws under section one‑eleven is conditioned by the duties and functions assigned to a Gaon Panchayat by sections fifteen and sixteen as well as by any other provisions of the Panchayat Raj Act. The Court noted that no other provision of the Panchayat Raj Act imposes an obligation on Gaon Panchayats to control or regulate trades, callings or practices, and therefore the power under section one‑eleven does not extend to creating bye‑laws for that purpose. The Court also examined section thirty‑seven(d), which allows a Gaon Sabha to levy a tax on trades, callings and professions within a prescribed rate, and concluded that this provision relates to taxation under item sixty of List II of the Seventh Schedule, not to the regulation of trades, callings or practices or to the imposition of licence‑fees. Accordingly, the Court was of the opinion that because the Panchayat Raj Act does not provide for controlling or regulating the matters described in section ninety‑one(q) of the District Boards Act, there is no conflict with the District Board’s power under section one‑seventy‑four to frame bye‑laws and prescribe fees for those matters. The Court further observed that this issue had not been argued before the High Court, which seemed to have assumed that the Panchayat Raj Act also covered the same subject matter as section ninety‑one(q) of the District Boards Act, and on that assumption the High Court had held that section three of the Panchayat Raj Act prevailed over section one‑seventy‑four of the District Boards Act. In light of the Court’s reasoning, it was unnecessary to consider the alternative argument raised by the appellant on this point.

The Court observed that the issue raised by the appellant had not been addressed by the Appeal Court, although the learned Single Judge had examined it and ruled against the respondent. The appellant contended that the respondent was already subject to fees imposed under the Uttar Pradesh Rice and Dal Mills Control Order of 1948 and the Uttar Pradesh Pure Food Act, and therefore the District Board lacked authority to impose any additional licence fee pursuant to section 91(q) of the District Boards Act read with section 174. The Court referred to the observation of the learned Single Judge that the fees arising from the 1948 Control Order, which derives its force from the Essential Supplies Act, and the fees under the Uttar Pradesh Pure Food Act are intended for purposes distinct from those of the District Board fee. The fee imposed by the District Board is intended to regulate obnoxious trades, a regulatory purpose that differs from the objectives of the Essential Supplies Act and the Pure Food Act. Consequently, the Court found no basis for invalidating the regulatory provisions of the District Boards Act or the licence fee that follows from them. The Court further held that any overlap between the regulatory scheme of the Uttar Pradesh Pure Food Act and that of the District Boards Act does not affect the legitimacy of the bye‑laws or the licence fee derived therefrom. In view of this reasoning, the Court allowed the appeal, set aside the order of the Appeal Court, and dismissed the writ petition. Because the successful point raised before this Court had not been specifically presented before the High Court, each party was ordered to bear its own costs throughout. The appeal was therefore allowed.