MEHROTRA, J. : This petition under Article 226 of the Consti­tution has been filed by one Manmoth Nath Ghosh, proprietor of Messrs. Rasiklal Ghose and Sons. The petitioner is a dealer in medicines in the town of Mangaldai. After the introduction of the Drugs Act of 1940, the petitioner applied for a licence for sale, stocking and exhibiting for sale of patent medicines in 1951 which was ;duly granted. In the year 1955 it was renewed for a period of two years from 8th September, 1955 by the Civil Sur­geon, Darrang. Before the expiry of two. years, on the 19th August, 1957 the petitioner applied to the Civil Surgeon, Darrang for renewal of the licence for a period of two years on depositing a renewal fees of Rs. 5/-. The application was returned by the Civil Sur­geon, Darrang on the ground that the power of granting licences has now been entrusted to the Inspector of Drug, Assam, Shillong, opposite party No. 1 to this petition. The petitioner then applied to respondent No. 1 for renewal of the licence. By a letter dated 9th November, 1957 the petitioner was informed by the respondent No. 1 that the fee for renewal had been enhanced and he was directed to deposit a further sum of Rs. 15/-. The balance of Rs. 15/- was deposited on the 11th of November, 1957 and the application form No. 19A duly filled in was sent to respondent No. 1 on 21st November, 1957. By a letter dated 19th June, 1958 the applica­tion of the petitioner was rejected on the ground that there were sufficient number of pharmacies to meet the medicinal needs of the public of the locality and as such issue of licences to unqualified persons was not necessary. An appeal was pre­ferred by the petitioner against that order in the Court of the District Judge, Lower Assam Districts at Gauhati. The appeal was however rejected by the District Judge on the 9th of March, 1959 on the ground that the Inspector of Drugs had power to cancel the licence and that no appeal lay against an order of refusal to renew the licence. The pre­sent petition has been filed challenging the vali­dity of these orders. (2) Two main points have been urged by the counsel for the petitioner. The pre­sent petition has been filed challenging the vali­dity of these orders. (2) Two main points have been urged by the counsel for the petitioner. Firstly it is contended that the appointment of the Inspector of Drugs as the licensing authority was illegal. Respondent No. 1 therefore had no jurisdiction to refuse to grant licence. Secondly it was contended that the rule, giving power to the licensing authority to refuse, to renew or cancel the licence is ultra vires of Arti­cle 19(1) (g) of the Constitution inasmuch as it gives a naked and arbitrary power to the authority to grant or refuse to grant a licence. It is also urged that the said rule violates Article 14 as it is discriminatory. In this connection, it was further contended, that if Rule 66 which provides for appeal against the order of the licensing authority is interpreted to confine to the case of cancellation, then the power to refuse to grant a licence is unregulated. In case however, it is held that the order of refusal is appealable under Rule 66 the decision of the District Judge rejecting the appeal on that ground, will be without jurisdiction and the petitioner will be entitled to a mandamus directing the District Judge to dispose of tile appeal in accordance with, law. (3) After the passing of the Drugs Act 1940; different States framed rules under the Act provid­ing for granting of licences. The Assam Drugs Rules 1945 were framed under- the authority of the Drugs. Act and under those Rules power was given to the State to appoint a licensing authority. The Civil Surgeon, Darrang was appointed as the li­censing authority. The Drugs Act was amended by amending Act II of 1955. Section 33 of the Drugs Act was substituted by a new Section. Under the new Section 33 the power to frame rules was ex­clusively entrusted to the Central Government. The Drug Rules of 1945 were amended and by rule 128 of the amended rules, the Assam Drug Rules, of 1945 were repealed except the acts already done under the repealed rules. The contention of Mr. Ghose is that after the Drugs Amending Act in the year 1955 the power was taken away from the State Government to frame rules. The Drug Rules of 1945 were amended and by rule 128 of the amended rules, the Assam Drug Rules, of 1945 were repealed except the acts already done under the repealed rules. The contention of Mr. Ghose is that after the Drugs Amending Act in the year 1955 the power was taken away from the State Government to frame rules. The State Rules therefore, provid­ing for appointment of the licensing authorities be­came non-existent and any order passed by the State Government appointing respondent No. 1 in place of the Civil Surgeon, Darrang, as the licens­ing authority was illegal. The acts done under the Assam Rules were only validated after the amend­ing rules were passed. Further it was only under rule 59 of the amended rules that the State Government was authorised to appoint licensing au­thority. If any appointment had been made under the Assam Rules of 1945 after the amending rules were framed, such an appointment would have been valid, but any appointment made between the' period of coming in force of the amending Act and the passing of the amending rules was illegal I do not think that there is any force in this con­tention. If after the passing of the amending Act, 1955, the Rules framed by the State of Assam, in 1945 became invalid, there was no question of repealing those rules subsequently. The rules framed by the State of Assam in the year 1945 were valid rules therefore so long not repealed by the amending rules., and any action taken by the Stale Government under those rules will be valid. The appointment of the respondent No. 1 as the licensing authority was made in the year 1956. Even accepting the argument of the petitioner that the appointment when made in the year 1956 was without any authority, admittedly on the date when the orders were passed by respondent No. 1, the State Government had power to appoint a licensing authority and as such, it cannot be said that the respondent No. 1 had no jurisdiction to deal with the application of the petitioner. On the date of passing the order the respondent No. 1 will be deem­ed to have been validly appointed. On the date of passing the order the respondent No. 1 will be deem­ed to have been validly appointed. (4) As the constitutionality of rule 59 of the Rules framed under the Drugs Act - hereinafter called the Rules has been challenged, it is conveni­ent to set out the material provisions of the Act and Rules. Section 18 of the Act provides that from the date as may be fixed by the State Government by notification in the official Gazette, no person shall himself or by any other person on his behalf manu­facture for sale or sell, or stock or exhibit for sale, or distribute any drug except under and in accor­dance with the conditions of a licence issued for such purpose under this Chapter. The necessity to obtain a licence therefore arises under this section. It is not contended that S. 18 is violativc of Article 19. Having regard to the Act, the restriction placed on a person's carry­ing on business in drugs to obtain a licence before carrying on such a business cannot be said to be an unreasonable restriction. Under S. 33(l)(e) of the Act, the Central Government can frame rules pres­cribing the forms of licences for the manufacture for sale, for the sale and for the distribution of 'drugs; the form of such licence, the condition sub­ject to which such licence may be issued, the au­thority empowered to issue the same and the fees payable therefor. In the exercise of the aforesaid power, rule 59 has been framed by the Central Government which reads as follows: "59, (1) The State Government shall appoint licensing authorities for the purpose of this Part for such areas as may be specified. (2) Applications for the grant of renewal of a licence to sell, stock or exhibit for sale, or distribute drugs shall be made in Form 19 or Form 19-A, as the case may be, to the licensing authority and shall be accompanied by a fee of Rupees twenty". Rule 60 then provides that a licensing authority may with the approval of the. State Government by an order in writing delegate the power to sign licence to any other person. Rule 61 provides for the forms of licences to sell drugs. The petitioner in this case has asked for restricted licence to be issued in form 20A. Rule 60 then provides that a licensing authority may with the approval of the. State Government by an order in writing delegate the power to sign licence to any other person. Rule 61 provides for the forms of licences to sell drugs. The petitioner in this case has asked for restricted licence to be issued in form 20A. Rule 62-A provides that restricted licen­ces in forms 20-A and 21-A shall be issued subject to the discretion of the licensing authority to dealers or persons in respect of drugs whose sale does not require the supervision of a qualified person. Rule 64 lays down the conditions to be satisfied before a licence in form 20, 20-B, 21 or 21-B is granted. This rule does not apply to the grant of a licence in form 20-A. There is no other rule lay­ing down the condition to be satisfied before a licence in form 20-A is to be granted. Rule 66(1) provides that licensing authority may, after giving the licensee an opportunity to show cause why such an order should not be passed, by an order in writ­ing stating the reasons therefor, cancel a licence issued under this part or suspend it. Under clause (2) of Rule 66 an appeal has been provided against an order or cancellation or suspen­sion to the District Judge, when this rule 66 is con­trasted with rule. 62-A, it is clear that there is no check provided against an order granting or refus­ing to grant a licence while there is an ample check against an order of cancellation or suspension of the licence by providing for an appeal against such an order. The argument is that Rule 62-A leaves to the uncontrolled discretion of the licensing au­thority a right to grant or to refuse to grant a licence to any person. The discretion is unregulated. No direc­tions are laid down for the guidance of the licensing authorities in granting or refusing a licence. The power thus granted to a licensing authority is naked and arbitrary, the exercise of which will affect the right of the petitioner to carry on busi­ness. A law giving such a wide discretion is an unreasonable restriction On the right of the petitioner to carry on business and such a legislation *has in itself the germs of discrimination. The power thus granted to a licensing authority is naked and arbitrary, the exercise of which will affect the right of the petitioner to carry on busi­ness. A law giving such a wide discretion is an unreasonable restriction On the right of the petitioner to carry on business and such a legislation *has in itself the germs of discrimination. (5) Reliance has been placed on the case of Dwarka Prasad Laxmi Narain v. State of Uttar Pradesh, AIR 1954 SC 224 . Before the Supreme Court, the validity of Rule 4(3) of the. U. P. Coal Control Order 1953 was involved. Rule 4(3) was in the following terms: "The licensing authority may grant, refuse to grant, renew or refuse to renew a licence and may suspend, cancel, revoke or modify any licence or any terms thereof granted by him under the Order for reasons to be recorded". It was held that this provision was hit by Article 19 of the Constitution and not saved by clause (6) of the said. Article. The following observation is apposite to the present case : "The more formidable objection has been taken on behalf of the petitioners against Cl. 4(3) of the Control Order which relates to the granting and refusing licences. The licensing authority has been given absolute power to grant or refuse to grant, renew or refuse to renew, suspend, revoke, cancel or modify any licence under this order and the only thing he has to do is to record reasons for the action he .takes. Not only so, the power could be exercised by any person to whom the State Coal Controller may choose to delegate the same, and the choice can be made in favour of any and every person. It seems to us that such provision cannot be held to be reasonable. No rules have been framed and no directions given on these mat­ters to regulate or guide the discretion of the licensing Officer. It seems to us that such provision cannot be held to be reasonable. No rules have been framed and no directions given on these mat­ters to regulate or guide the discretion of the licensing Officer. Practically the Order commits to the unrestrained will of a single individual the power to grant, withhold or cancel licences in any way he chooses and there is nothing in the Order which could ensure a proper execution of the power or operate as a check upon injustice that might result from improper execution of the same." ,It was held in this case that the phrase "reasonable restriction'' in Article 19(2)(6) connotes that the limitation imposed upon a person in enjoyment of a right should not be arbitrary or of an excessive nature beyond what is required in the interest of the public. Legislation which arbitrarily or exc­essively invades the right, cannot be said to contain the quality of reasonableness, and unless it strikes a proper balance between the freedom guaranteed under Article 19(1) (g) and the social control per­mitted by clause (6) of Article 19, it must be held to be wanting in reasonableness. (6) In the case of Pannalal Binjraj v. Union of India, (S) AIR 1957 S.C. 397 , a question as to the constitutionality of Section 5(7A) of the Income-tax Act arose for consideration. The argument advanced in that case was that the section gave arbitrary power to the Commissioner of Income-tax to dis­criminate between assessees placed in similar circumstances and to transfer the case of some only to a place outside the place where he ordinarily carries on business. Such discretion was violative of Article 14 of the Constitution. It was observed that there is a broad distinction between discretion which has to be exercised with regard to a funda­mental right guaranteed by the Constitution and some other right which is given by the statute. Where, for example, a discretion is given in the matter of issuing licences for carrying on trade, profession or business or where restrictions are imposed on freedom of speech etc., the discretion must be controlled by clear rules so as to come within the category of reasonable restrictions. Where, for example, a discretion is given in the matter of issuing licences for carrying on trade, profession or business or where restrictions are imposed on freedom of speech etc., the discretion must be controlled by clear rules so as to come within the category of reasonable restrictions. In other words the discretion vested has to be looked at from two points of view, namely (1) does it admit of the possibility of any real and substantial dis­crimination and (2) does it infringe on a fundamental right guaranteed by the Constitution. Article 14 can be invoked only when both these conditions are satisfied. (7) Applying the two tests laid down in this case the restriction placed in the present case is one relating to a matter affecting the fundamental right guaranteed to the petitioner under Article 19(l)(g) and the discretion being unregulated, it is open to the licensing authority to grant licences to some individuals who may be placed in exactly similar circumstances and refuse to the other. The discretion, thus admits of the possibility of real and substantial discrimination. (8) Reliance was placed on behalf of the State on the case of Harisnaukar Bagla v. State of Mauhya Pradesh, AIR 1954 SC 465 . In that case, the validity of the provisions of the Cotton Textile (Control of Movement) Order (1948) was challenged. This Order was issued under the provisions of the Essential Supplies (Temporary) Powers Act 1946. The provision of the Control Order impugned was as follows: "No person shall transport or cause to be transported by rail, road, air, sea or inland naviga­tion any cloth, yarn or apparel except under and in accordance with-(i) a general permit notified in the Gazette of India by the Textile Commissioner, or (ii) a special transport permit issued by the Textile Commissioner." It was argued that the Textile Commissioner had been given unregulated and arbitrary discretion to refuse or to grant a permit and thus clause 3 of the Order was ultra vires in view of the decision of the Supreme Court in the case of AIR 1954 SC 224 , referred to above. This argument was repelled on two grounds. Firstly on the ground that in that case no application had been made for the grant of the permit which was refused. This argument was repelled on two grounds. Firstly on the ground that in that case no application had been made for the grant of the permit which was refused. The petitioned was transporting essential goods by rail without a valid permit and thus they can be granted a. relief only by attacking the Section which placed an obliga­tion on them to take a permit before they could transport by rail essential commodities. That pro­vision on the face of it was held to be unregulated. It was observed in that case that it the permit had been applied for and refused arbitrarily, they might then have had a right to attack the law on the ground that it vested arbitrary and unregulated power in the Textile Commissioner. The second ground on which Dwarka Prasad's case was disting­uished was that the language of the two Orders was entirely different. In the Coal Control Order, power was given to grant or refuse licence without any control. ' In the Cotton Textile Control Order, the order only laid down that no one could carry on a particular business without obtaining a licence. The provision impugned did not deal with the question of granting or refusing licences and it was (therefore held in the aforesaid case that the power could not be said to be uncontrolled. The policy was laid down in the Act and the discretion had to be exercised in a way as to effectuate that policy. Further it was observed in that case that as it appeared from the different forms published in the manual, there were directions or rules laid down by the Central Government for the grant or refusal of permits. In the present case, the petitioner is not challenging the validity of Section 18 of the Act which enjoins that a person carrying on business in drugs has to obtain a licence; but the provisions of the rule which give arbitrary powers to the licensing authority to grant or refuse a licence are being challenged as violative of Articles 19 and 14 of the Constitution. No provision in the Act or Rules has been poin­ted out by the counsel for the State which gives any directions to the licensing authority in the matter of granting or refusing licence. No provision in the Act or Rules has been poin­ted out by the counsel for the State which gives any directions to the licensing authority in the matter of granting or refusing licence. The power is not only conferred upon the State Government; but the State Government has been empowered to appoint a licensing authority. The State Govern­ment could therefore appoint any and every person as the licensing authority and there is no check provided against the arbitrary action of such an authority. We are therefore of opinion that rule, 62-A which gives a discretion to an authority to grant or refuse a licence is hit by Articles 19 and 14 of the Constitution. As the respondent in refusing a licence to the petitioner acted under the said Rule, the Order refusing licence to the petitioner is thus illegal and cannot be enforced. It is therefore not necessary to examine die reasoning of the authority in rejecting the application for grant of the licence. (9) In the result therefore, we allow this petition in so far as we issue a writ of mandamus to the Opposite Parties directing them not to give effect to the. order dated 19th June, 1958 refusing the petitioner's application for grant of licence. The application filed by the petitioner will thus would be deemed to be pending. In the circumstances of the case however, we make no order as to costs. (10) C. P. SINHA, C. j. : I agree. IC/H.G.P. Petition allowed.