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1975 DIGILAW 184 (KER)

SADANANDSHENOY v. STATE OF KERALA

1975-07-15

CHANDRASEKHARA MENON, P.SUBRAMONIAN POTI

body1975
Judgment :- 1. The question that arises for decision in these cases being identical they have been heard together and are being disposed of by a common judgment. It is sufficient to refer to the facts of one of these cases as those are typical of other cases too. We propose to refer to the facts in O. P. No. 3943 of 1972 since an independent counter-affidavit has been filed in that case. The State has prayed that the said counter-affidavit may be adopted in other cases. 2. S.68 (2) (ww) of the Motor Vehicles Act, 1939 (hereinafter referred -to as the Act) enables Rules being made for the licensing of agents engaged in the business of collecting, forwarding and distributing of goods carried by public carriers. The rule prior to its amendment by Act 56 of 1969 was a little different and the rule enabled the "licensing of agents engaged in the business of collecting goods carried by public carriers". Apparently in exercise of such powers R.225 of the Motor Vehicles Rules was framed by the State Government and that rule reads: "225. Licensing of agents engaged in goods transport. - (1) (a) Necessity of licence. - No person shall conduct the business of collecting, forwarding and distributing goods carried by public carriers, unless he holds an effective licence authorising him to do so issued by the Regional Transport Authority within whose jurisdiction his place of agency-business is. (b) Separate licence should be necessary for each place of agency business within the jurisdiction of a Regional Transport Authority. (2) Issue of licence: Upon receipt of an application in writing for a licence referred to in sub-rule (1) the Transport Authority may, after such enquiries as it thinks necessary, and after satisfying itself about the adequacy of the facilities proposed to be made for the proper storage and delivery of goods by the applicant, issue the licence in writing to be valid for a period of twelve months from the date of issue. (3) Renewal or revocation of licence: (a) A licence issued under sub-rule (2) above may, on application in writing, be renewed for further periods of twelve months at a time: Provided that the Transport Authority which issued the licence may, at any time revoke or refuse to renew the licence if the Authority thinks that the licensee does not carry on the business satisfactorily. (b) Every application for renewal shall be made before the date of its expiry. 4. Fee: The fee for the issue or renewal of a licence under this rule shall be rupees fifty". The Rule extracted above is the rule which had undergone certain amendments and it may not be necessary to refer to the amendments themselves. The complaint of the petitioners is that they are unable to carry on the business of collecting, forwarding and distributing goods carried by public carriers freely and without obstruction from the Regional Transport Authority. The petitioner in O.P. 3943 of 1972 complains that he applied for licence in terms of R.225, but by Ext. P1 order the application has been rejected and licence had been denied to him on the ground that there is no sufficient parking place available for carrying on his business. The order Ext. P1 is challenged in this petition. But there is a further challenge to the insistence on taking out a licence from the Regional Transport Authority to conduct his business. This challenge is based upon an attack to the rule as well as to the provision in the Act under which the rule is purported to be made. It is said that the Act does not provide in terms for any rule to be made insisting upon taking out licence for the profession carried on by the petitioner. It is further said that if S.68(2)(ww) is considered as enabling the framing of a rule intended for the purpose, then, the section itself is bad as it delegates power to the rule making authority without necessary guidance. The rule is attacked on the ground that it does not provide for proper safeguards. The order is also under attack as not properly passed. 3. S.66A is a provision in the Motor Vehicles Act 1939 providing for the issue of a licence to a person engaged in the business of agency for collecting, forwarding or distributing goods carried by public carriers. That section reads: "66A. Agent or canvasser to obtain licence. The order is also under attack as not properly passed. 3. S.66A is a provision in the Motor Vehicles Act 1939 providing for the issue of a licence to a person engaged in the business of agency for collecting, forwarding or distributing goods carried by public carriers. That section reads: "66A. Agent or canvasser to obtain licence. (1) No person shall engage himself - (i) as an agent or canvasser, in the sale of tickets for travel by public service vehicles or in otherwise soliciting custom for such vehicles, or (ii) as an agent in the business of collecting, forwarding or distributing goods carried by public carriers, unless he has obtained a licence from such authority and subject to such conditions as may be prescribed by the State Government. (2) The conditions referred to in sub-section (1) may include all or any of the following matters, namely (a) the period for which a licence may be granted or renewed; (b) the fee payable for the issue or renewal of the licence; (c) the deposit of security (i) of a sum not exceeding rupees five thousand in the case of an agent in the business of collecting, forwarding or distributing goods carried by public carriers; (ii) of a sum not exceeding rupees five hundred in the case of any other agent or canvasser, and the circumstances under which the security may be forfeited; (d) the provision by the agent of insurance of goods in transit; (e) the authority by which and the circumstances under which the licence may be suspended or revoked; (f) such other conditions as may be prescribed by the State Government". We have already adverted to S.68(2)(ww). These are the two provisions in the Motor Vehicles Act which are sought to be relied on by the State to support the power of the State Government to make R.225. This Rule was incorporated in the Motor Vehicles Rules in 1961. S.66A was incorporated in the Act only by Act 56 of 1969 and therefore that provision was not in operation at the time when the rule was made. Naturally therefore reliance cannot be placed upon S.66A of the Act to sustain a rule made very much earlier as the rule could not have been made in exercise of the power under S.66A of the Act. Naturally therefore reliance cannot be placed upon S.66A of the Act to sustain a rule made very much earlier as the rule could not have been made in exercise of the power under S.66A of the Act. But possibly S.68(2)(ww) might be sufficient to find a base for the rule making power That provision was incorporated in the Act by Act 100 of 1956 and R.225 was framed later. S.68 (1) gave the State Government the power to make rules for the purpose of carrying into effect the provisions of Chapter IV of the Act and without prejudice to the generality of that power it was provided that rules made under this section may be with respect to the various matters enumerated. One of the matters so enumerated is that found in S.68 (2) (ww). That categorically provided for the licensing of agents in the business in which the petitioner was engaged. 4. The contention of Sri. V. K. K. Menon, learned counsel appearing for the petitioners in these cases is that S.68 (2) (ww) does not confer on the State Government authority for rule making power, for, according to him S.68 (2) (ww) is not a substantive provision which confers power for rule making. It is said that such power must be derived from one or other provisions of the Act and possibly S.66A was intended to achieve that object. But S.66A having come into existence only later, there was no authority in the State Government to make rules notwithstanding S.68 (2) (ww). S.68 (2) (ww) according to learned counsel, enables rules to be mads for the purposes enumerated therein provided such power was conferred by the other provisions of the Act. It is not necessary to consider this plea in detail, for, a similar plea raised in regard to this section has been noticed by the Supreme Court in the decision in Chief Commr. Delhi v. C. M. Transport Co. (AIR. 1968 SC. 1199) and that has been negatived. It was held in that case - "This law may be open to attack on the ground that it is not on a matter on which the legislature is competent to legislate or on the ground that there is excessive delegation of legislative power. But it cannot be struck down on the ground that the legislature has made no other provision for licensing in the body of the Act. But it cannot be struck down on the ground that the legislature has made no other provision for licensing in the body of the Act. There is no constitutional prohibition against the making of a law authorising the making of rules on any topic without the support of another substantive provision of law in the body of the Act". We have only to notice this and follow the decision of the Supreme Court. 5. There is also a plea that S.68 (2) (ww), if that is the sole source for rule making power in the State Government, is bad for excessive delegation of legislative power. It is well settled that any provision which enables the delegation of legislative power must indicate the guidelines for the exercise of such power by the delegate in order to obviate arbitrary and unguided exercise by the delegated authority. When such guidance is not provided provisions delegating the legislative power have been struck down by courts. The petitioner's case is that the same has to be said in the case of S.68 (2) (ww) which does not indicate the circumstances under which licence could be granted, the procedure to be followed in the matter of grant of licence, the quantum of licence fee, the circumstances warranting grant or refusal of the licence and similar other matters which should guide the rule making authority in making appropriate rules. Having noticed this plea, before considering it we will proceed to consider whether the attack against the rules could succeed on other grounds, for, if we are of the view that such attack could succeed there may no necessity to consider the validity of S.68 (2) (ww). If, for any reason, new rules have to be framed as the existing rules are bad the question whether S.68 (2) (ww) is valid or not will be only of academic interest, for, any rule now made will be supportable by the authority under S.66A of the Act which came into the statute in 1969. 6. If, for any reason, new rules have to be framed as the existing rules are bad the question whether S.68 (2) (ww) is valid or not will be only of academic interest, for, any rule now made will be supportable by the authority under S.66A of the Act which came into the statute in 1969. 6. R.225 is attacked by the petitioners in these cases as affording no guidance to the Regional Transport Authority in the matter of the procedure to be adopted by such authority for the grant or refusal of a licence and it is equally bad for the reason that the authority is given no guidance as to what are the matters that should govern in the consideration of an application for licence. The result is, as pointed out by learned counsel for the petitioners, that different authorities dealing with similar applications may take different views and may adopt different criteria for refusal or grant of the licence. This would be to vest in them, notwithstanding the rules, arbitrary power capable of arbitrary exercise. If that be so, the rule would be certainly be bad and liable to be struck down. The question here is whether the objection raised against the rule are sustainable on the merits. 7. We find from a perusal of R.225 that while sub-rule (1) provides that a person in order to conduct a business of the nature mentioned in the rule must take a licence from the Regional Transport Authority and separate licence is necessary for each place of agency business, sub-rule (2) deals with issue of licence. The only provision in that rule is that upon receipt of an application in writing for a licence the Transport Authority may, after such enquiries as it thinks necessary, and after satisfying itself about the adequacy of the facilities proposed to be made for the proper storage and delivery of goods by the applicant, issue the licence valid for 12 months. Sub-rule (3) provides that licence may be renewed for further periods of twelve months at a time. Sub-rule (4) imposes a licence fee of Rs. 50/- for the issue of each licence. This being the scheme of the rule, there is considerable scope for objection that no proper procedure has been prescribed in the matter of consideration of the application. Sub-rule (3) provides that licence may be renewed for further periods of twelve months at a time. Sub-rule (4) imposes a licence fee of Rs. 50/- for the issue of each licence. This being the scheme of the rule, there is considerable scope for objection that no proper procedure has been prescribed in the matter of consideration of the application. It is no doubt true that the rule refers to an enquiry and that enquiry is an enquiry "as it thinks necessary". If a person is obliged to take a licence in order to run a business, it is necessarily a restriction on his fundamental right to carry on such business or avocation. It is true that such right can be restricted reasonably by provisions of law. The reasonableness of a restriction depends not only on the degree of severity but on the safeguards provided in the matter in assuring to the citizen that the benefit of the right is not lost. If a person could carry on the business of the nature envisaged in R.225 only by obtaining a licence, grant or refusal must be governed by proper, valid and relevant considerations. If the licence could be refused on irrelevant grounds that would be unreasonable. What may be the relevant grounds must be indicated in the rule lest the Transport Authority be left without guidance in the matter. May be that a Transport Authority may take a view that licence cannot be issued because the applicant is not solvent to the extent he considers such solvency is called for and another Transport Authority may take a different view on this. It is possible that an authority may feel that sufficient number of people in the locality are carrying on the same business so much so no licence is to be granted, but another transport authority may consider that this may not be a relevant circumstance. This is possible only because there is no guidance in the rule. Further, when making such a rule care must be taken to see that a proper opportunity or occasion is afforded to an applicant to urge his claim for issue of licence and this opportunity will include not only an opportunity to urge the case before the licensing authority but in normal circumstances also a right of appeal against the order of the licensing authority. We are mentioning this only to show that there must be minimum safeguards against unreasonable exercise. R.225, apart from the fact that it does not provide for a proper procedure or right of appeal, does not also state the matters which are relevant in the matter of considering an application for grant. 8. We notice a plea by the State that R.225 is proposed to be amended drastically and copy of the draft amendment also has been filed by the State along with the counter-affidavit. This itself would indicate, in a way, the necessity for a rule different from that which appears now in the Motor Vehicles Rules. Though the proposal for amendment now mentioned in the counter-affidavit filed in these cases was a fairly long time back, it is said that this has not become law yet. Whatever that be, it is sufficient to state that the rule as it appears is objectionable and cannot be sustained. 9. Now that we are relying on Art.19 of the Constitution to indicate that the rule enables an unreasonable exercise of power in a realm which affects the rights of the citizen, it may not be out of place to refer to Art.358 of the Constitution because at the moment the proclamation of emergency is in force. When such a proclamation is in operation nothing in Art.19 shall restrict the power of the State to make any law or to take any executive action which the State would, but for the provisions contained in Part III, be competent to make or to take. Art.358 of the Constitution enables the State to exercise the power (1) to make any law (2) to take any executive action which cannot be challenged as infringing Art.19 of the Constitution. The rule with which we are concerned is not any law made when the Proclamation of Emergency was in operation and therefore we are not precluded from considering the question whether the law is unconstitutional for the reasons urged by the petitioners in these cases. 10. There is a further plea that the levy of licence fee of Rs. 50/- is also unwarranted. 10. There is a further plea that the levy of licence fee of Rs. 50/- is also unwarranted. It is said that so long as the levy is not sought to be sustained as a tax or fee authorised by the Motor Vehicles Act-it is not so sought to be sustained either in the counter-affidavit or at the hearing - it can be sustained only as a fee in return for the services rendered. Though the petitioners have categorically averred that no services are rendered, the counter-affidavit does not in any way attempt to support the levy by indicating the return to the licencees for the fee received from them. We do not propose to go into this question since we are striking down R.225 of the Motor Vehicles Rules. We may in passing refer to S.132 A which enables the Central Government or the State Government to provide for the levy of fees. We are adverting to the Section only because of the mention of it made by the State. Whether the fees levied under R.225 could be supported with reference to S.132A is a matter which the Government will do well to examine before finalising the new rule which is said to be under consideration. We do not think that we should observe further on this question in these cases. 11. In the view that we have taken of the validity of R.225, it does not appear to be necessary to go into any other question Accordingly we allow these petitions holding that R.225 of the Kerala Motor Vehicles Rules is invalid and is unenforceable. The orders passed in these cases rejecting the applications for licences are also quashed. Parties are directed to suffer costs in the circumstances. Allowed.