Chairman Of The Municipal... vs Shalimar Wood Products and Another

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

Court: Supreme Court of India

Case Number: Criminal Appeal No. 240 of 1959

Decision Date: 26 March 1962

Coram: J.L. Kapur, K.C. Das Gupta, Raghubar Dayal

In the matter titled Chairman of the Municipal Commissioners of Howrah versus Shalimar Wood Products and Another, the Supreme Court of India delivered its judgment on 26 March 1962. The opinion was authored by Justice J. L. Kapur, with Justices K. C. Das Gupta and Raghubar Dayal forming the bench. The petitioner was the Chairman of the Municipal Commissioners of Howrah, and the respondents were Shalimar Wood Products and an unidentified second party. The case is reported in the 1962 volume of the All India Reporter at page 1691 and also appears in the 1963 Supreme Court Reporter, first series, at page 47.

The statutory framework involved several statutes. The matter concerned premises situated within municipal limits that were being used as a business premise. The whole of the premises had been licensed as a warehouse under the West Bengal Fire Services Act, 1950 (West Bengal Act 18 of 1950). The relevant municipal statutes included the Bengal Municipal Act, 1932 (Bengal Act 15 of 1932) with particular reference to section 370, and the Calcutta Municipal Act, 1923 (Bengal Act III of 1923) with reference to sections 330(1)(b), 386, 488, 540, 541 and 542.

The factual background recorded that the respondents were prosecuted for operating the premises in the Municipality of Howrah without obtaining a licence required under section 386 of the Calcutta Municipal Act, 1923. That requirement had been extended to the Municipality of Howrah by Notification No 260 M dated 18 January 1932, acting under sections 540 and 541 of the Calcutta Municipal Act. At the same time, the Bengal Municipal Act, 1932 was deemed repealed as to the Municipality of Howrah by virtue of section 542 of the same Act, effective from the date of the extension.

The defence advanced by the respondents asserted that the premises already possessed a warehouse licence issued under the West Bengal Fire Services Act, 1950. Consequently, they argued that section 38 of the Fire Services Act repealed the requirement of section 386, rendering any further licence unnecessary. Despite this contention, the respondents were convicted under section 488 of the Calcutta Municipal Act.

During the first appeal, the Sessions Judge reduced both the term of imprisonment and the monetary fine imposed on the respondents. The petitioner then sought a revision before the High Court. The High Court, in its judgment, held that section 38 of the West Bengal Fire Services Act was applicable to the Municipality of Howrah. It observed that while a licence under section 386(1) might still be required in principle, no portion of the premises could be charged a fee for the grant of such a licence.

By special leave, the petitioner appealed to the Supreme Court. The Supreme Court held that the effect of extending section 386 of the Calcutta Municipal Act, 1923 by Notification No 260 M, dated 18 January 1932, under sections 540 and 541, was to create an amended version of section 386 that applied specifically to the Municipality of Howrah. This amended provision was distinct from the original section 386 of the Calcutta Municipal Act, which applied only to the Corporation of Calcutta. Although section 38 of the West Bengal Fire Services Act has a blanket territorial reach over the whole of Bengal and, insofar as it is capable, repeals section 386 of the Calcutta Municipal Act, it does not affect the modified section 386 as it stands applied to the Municipality of Howrah.

The Court observed that section 386 of the earlier municipal legislation was not applied in its original form to the Municipality of Howrah. By virtue of a specific notification, the provision was altered so that its wording would suit the circumstances of Howrah. In particular, the term “corporation” that appeared in the original text was replaced by the term “commissioners.” Because of this substitution, the provision that now operated in Howrah was a distinct section and could not be described as the unmodified section 386 of the Calcutta Municipal Act, 1923. Consequently, the repeal effected by section 38 of the West Bengal Fire Services Act applied only to the original section 386 of the Calcutta Municipal Act and did not affect the newly‑modified version that had been extended to Howrah. The Court referred to the precedent set in Secretary of State for India v. Hindusthan Co‑operative Insurance Society, (1931) L. R. 59 1. A. 259, to support the principle that a statutory amendment creates a separate operative provision rather than merely altering the old one.

The matter before the Court arose from Criminal Appeal No. 240 of 1959, a petition for special leave against the judgment and order dated 15 July 1959 of the Calcutta High Court in Criminal Revision No. 135 of 1959. The appeal was heard by Justice Kapur, who noted that it challenged a revision order made by the Additional Sessions Judge of Howrah. The Additional Sessions Judge had modified the conviction of the respondents under section 488 read with section 386(1)(b) of the Calcutta Municipal Act (Act III of 1923) as it had been extended to Howrah, the statute thereafter being referred to as “the Act.” The complainant in the appeal was the Chairman of the Municipal Committee of Howrah, while the respondent was a company occupying premises at No. 1 Swarnamoyee Road. The company engaged in the manufacture of bobbins, card pins, shuttles and similar items, and also stored wood and timber on the same site. The charge alleged that the company was using the premises without the license required by section 386 of the Act and was therefore liable under section 488. The company contended that the premises were already licensed as a warehouse under the West Bengal Fire Services Act, 1950 (Act 18 of 1950); it argued that, because section 38 of that Act repealed section 386, no further licence under section 386 was necessary. The Magistrate hearing the case held that section 38 removed the municipal power to require a licence for warehouse use, but that the requirement of section 386 continued to apply to the portions of the premises used as a factory or for other purposes. He found that the premises indeed housed a factory equipped with electric machinery and therefore concluded that the licence requirement remained in force for that portion of the operation.

In the proceedings before the trial court, the respondent was found to be carrying on the manufacture of bobbins, card pins, shuttles and other similar articles. On the basis of those facts, the trial magistrate convicted the respondent under section 488 of the relevant Act and imposed a monetary penalty of two hundred and fifty rupees. The respondent appealed the conviction and the fine to the Additional Sessions Judge. The learned Additional Sessions Judge examined the effect of section 38 of the West Bengal Fire Services Act upon section 386 of the municipal legislation. He concluded that section 38 did not repeal the entire provision of section 386, which contains three distinct clauses, but that it effected only a partial repeal of clause 386(3), the clause that authorised the levying of fees. Consequently, the judge held that a licence under clause 386(1) remained mandatory. However, because the premises in question had already been authorised as a warehouse under the Fire Services Act, the respondent could not be required to pay any fee under clause 386(3). The judge explained that the purpose of the statutory scheme was to prevent the imposition of duplicate fees on the same premises, not to abolish the requirement of obtaining a licence. In light of this reasoning, the judge reduced the fine imposed by the trial court from two hundred and fifty rupees to ten rupees.

The respondent then sought a revision of the Additional Sessions Judge’s order before the High Court. The High Court examined the situation where a premises is licensed as a warehouse under the Fire Services Act but a portion of the same premises is used as a workshop. The Court held that, although the municipal authority may still be obliged to grant a licence under section 386(1), it no longer possessed the power to levy any fee for granting that licence because the premises had already been licensed as a warehouse. Accordingly, the Court ruled that no part of the premises could be subjected to a fee for the issuance of a licence. In addition, the appellant advanced a further contention before the High Court, arguing that section 38 of the West Bengal Fire Services Act should not apply to the Howrah Municipality. The appellant contended that Howrah was not governed by the Calcutta Municipal Act or the Bengal Municipal Act, but rather by the Calcutta Municipal Act as extended to Howrah in accordance with the authority conferred on the Government by section 541(2) of that Act. The High Court rejected this submission, holding that section 38 of the Fire Services Act did indeed apply to the Howrah Municipality, and therefore dismissed the appellant’s argument. As a result, the revision petition was dismissed and the rule was discharged.

Subsequently, the appellant filed a special leave appeal against the High Court’s order. The principal ground raised in that appeal was that section 38 of the West Bengal Fire Services Act could not affect the operation of section 386 of the Calcutta Municipal Act as it applied to the Howrah Municipality. The appellant quoted the text of section 38 of the Fire Services Act, which provides that, upon application of that Act to Calcutta or any other municipality, the relevant provisions of the Calcutta Municipal Act, 1923, or the Bengal Municipal Act, 1932, relating to the levy of fees for premises licensed as warehouses, shall be deemed repealed to the extent that they empower the municipal corporation or commissioner to charge such fees.

In the disputed provision, the Bengal Municipal Act of 1932, as applicable, is stated to be deemed repealed to the extent that it authorises the Corporation of Calcutta or the Commissioners of a Municipality to levy fees for any premises or part thereof that is licensed as a warehouse under the Act. The appellant argued that section thirty‑eight of that Act does not, in fact, repeal section three hundred eighty‑six of the Calcutta Municipal Act because the proper reading of section thirty‑eight is that it only repeals section three hundred eighty‑six of the Calcutta Municipal Act of 1923, which allows the Corporation of Calcutta to charge such fees, and also repeals section three hundred seventy of the Bengal Municipal Act of 1932, which permits the Commissioners of other municipalities to levy similar fees. Accordingly, the appellant contended that for the Corporation of Calcutta, section three hundred eighty‑six is repealed only to the extent specified in section thirty‑eight, and for other municipalities, section three hundred seventy is repealed only to the extent that section thirty‑eight applies. Since the Municipality of Howrah is neither the Corporation of Calcutta nor is it governed by section three hundred seventy of the Bengal Municipal Act, the appellant maintained that section thirty‑eight is inoperative with respect to Howrah. To examine whether that argument is correct, reference must be made to the statutory mechanism by which the Calcutta Municipal Act was extended to the Municipality of Howrah. Sub‑sections five‑four zero and five‑four one of the Calcutta Municipal Act authorised the Provincial Government to extend all or any part of that Act to Howrah. Under section five‑four two, the effect of such an extension was that the Bengal Municipal Act of 1932 was deemed repealed as far as the Municipality of Howrah was concerned from the date of the extension. Sub‑clause (b) of section five‑four two expressly provides that, unless the Provincial Government otherwise directs by a notification in the Official Gazette, all rules, by‑laws, orders, directions and powers made, issued or conferred under those portions of the Calcutta Municipal Act that have been extended and are in force at the date of extension shall apply to the municipality, superseding any corresponding rules, by‑laws, orders, directions or powers made under the Bengal Municipal Act of 1932. An explanatory note to that section clarified that the extension did not place the Municipality of Howrah under the authority of the Corporation of Calcutta. By Gazette Notification number 260M dated 18 January 1932, the Government of Bengal, through the Ministry of Local Self‑Government, extended practically the entire Calcutta Municipal Act, except for provisions that were unnecessary, to the Municipality of Howrah. The notification used language indicating that the power conferred by sub‑section two of section five‑four one of the Calcutta Municipal Act, 1923 (Bengal Act III of 19‑3) was being exercised to extend the specified provisions to Howrah.

In the Gazette Notification the modifications and restrictions were shown in antique type, and as a result of that extension section 386 was extended to the Municipality of Howrah with the specific alteration that the phrase “Corporation of Calcutta” was replaced by the word “Commissioners.” In 1951 the Calcutta Municipal Act 1951, which is West Bengal Act 33 of 1951, was enacted and it replaced the earlier Act III of 1923, that earlier Act being repealed. The new Act contains corresponding provisions to the former sections 540, 541 and 542, which are now sections 589, 590 and 591 respectively. Section 614 of the 1951 Act stipulates that the provisions of Act III of 1923, as they had been extended to the Municipality of Howrah, shall remain in force until the new Act itself is extended to that municipality. Consequently, the effect of the original notification made under sections 540 and 541 of the Calcutta Municipal Act is that an amended Act, containing an amended section 386, applies to the Municipality of Howrah, and not the unamended section 386 of Act III of 1923. With this background the Court examined the extent to which section 38 of the West Bengal Fire Services Act 1950 (Act 18 of 1950) affects the operation of section 386 as it applies to Howrah. Section 38 provides that it repeals section 386 of the Act III of 1925 to the extent mentioned, and it also repeals section 370 of the Bengal Municipal Act as that section applies to the Commissioners of Municipalities in Bengal. However, that repeal does not apply to the modified version of section 386, because in the version applicable to the Corporation of Calcutta the word “Corporation” is used, whereas in the version applicable to Howrah the word “Corporation” has been substituted everywhere by “Commissioners.” Therefore, section 38 does not repeal section 386 of Act III of 1923 as it applies to the Municipality of Howrah. The Court noted a similar approach adopted by the Privy Council in Secretary of State for India v. Hindusthan Co‑operative Insurance Society. In that case certain provisions of the Land Acquisition Act had been incorporated by reference into the Calcutta Improvement Act 1911, and an amendment of 1921 introduced a right of appeal to the Privy Council from High Court decisions arising under the Land Acquisition Act. The Privy Council held that the right of appeal did not extend to awards made by a tribunal under the Calcutta Improvement Act for compensation on land acquired under the Land Acquisition Act. In commenting on that decision, Sir George Lowndes, quoting Lord Westbury, observed that it is logical to hold that when provisions of an earlier Act are incorporated into a later Act, additions to the earlier Act that are not expressly made applicable to the later Act cannot be deemed to be incorporated, especially when the later Act can function effectively without those additions.

In this case the Court explained that when specific provisions from an earlier Act are incorporated into a later Act, any subsequent amendment to the earlier Act that is not expressly made applicable to the later Act cannot be deemed to have been incorporated into the later Act, even where the later Act is capable of functioning effectively without that amendment. The Court then turned to Section 38 of the West Bengal Fire Services Act, noting that this provision extends to the entire territory of Bengal and, insofar as it is expressed, it repeals Section 386 of the Calcutta Municipal Act as it applies to the Corporation of Calcutta, as well as Section 370 which applies to the other municipalities of Bengal. However, the Court observed that Section 38 does not affect the operation of Section 386 of the former Act insofar as that section has been modified and extended to the Municipality of Howrah by the notification previously described. The reason for this distinction, the Court said, is that the language of Section 386 was altered to make it suitable for application to the Municipality of Howrah; specifically, the word “corporation” was replaced by the word “Commissioners.” Because of this substitution, the modified provision is no longer the original Section 386 of the Calcutta Municipal Act but constitutes a different, distinct section. Consequently, the repeal effected by Section 38 of the West Bengal Fire Services Act applies only to the original Section 386 of the Calcutta Municipal Act and not to the version of Section 386 that has been altered and applied to the Municipality of Howrah. The Court acknowledged that this result may appear anomalous, but it held that the effect of the linguistic modification is precisely that outcome. In the Court’s view, therefore, the appellant’s contention is well founded, and Section 38 of the West Bengal Fire Services Act does not repeal the modified Section 386 as applicable to the Municipality of Howrah. Although the respondent may consider the result unfortunate, as noted in the precedent (1) (1869) 33 L 372, 376, this is the correct interpretation of the language of the relevant sections. Accordingly, the Court allowed the appeal, set aside the order of the High Court, and convicted the respondent of the offences charged. Because the appellant succeeded on a question of statutory interpretation, the Court did not deem it necessary to increase the fine imposed by the learned Sessions Judge. The appeal was therefore allowed to that extent, and the appeal was allowed.