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1996 DIGILAW 66 (KER)

Peter v. Perayam Panchayat

1996-02-01

K.T.THOMAS, S.SANKARASUBBAN

body1996
Judgment :- Sankarasubban J. The Perayam Panchayat, to augment its finances, decided by its resolution dt. 25.3.1995 to auction out the right to sell meat within its jurisdiction. The Panchayat area was divided into separate zones for the purpose of this auction. Petitioners, who are conducting meat stalls on the basis of the licences issued by the same Panchayat, are attacking the 'validity of the notification issued by the Secretary of the Panchayat to auction out the rights in pursuance of the resolution. The question is whether the Panchayat has got the power to auction out the right to vend meat in the teeth of the relevant statutory provisions and the constitution. 2. Petitioners, 5 in number, are conducting meat stalls within the area of Perayam Panchayat. They have been conducting the meat stalls for the last 5 to 15 years.' This is being done after getting licences from the Panchayat and after paying the licence fees. They had applied for renewal of licences for the period 1995-96. But because of Ext. P4 notification, their licences had not been renewed. The Panchayat, by resolution dt. 31.3.1995, decided to auction out the right to vend meat on the ground that it would fetch more income to the Panchayat. In pursuance of the resolution, Ext. P4 notification was issued indicating the place where meat stalls are allowed and inviting tenders for the same. Clause 10 of Ext,P4 notification is significant, in that it is stated therein that the Panchayat will issue licence only for those persons, who have bid the right in the auction to be conducted. By Ext. P6, the date of auction was postponed to 9.5.1995. 3. The original Petition is filed praying for quashing the auction notifications and for a declaration that the Panchayat is not entitled to auction out the right to conduct the meat stalls. There is yet another prayer to issue licences to the petitioners after collecting the licence fees. According to the petitioners, Panchayat has got the right to auction the stalls only if there is a public market. Since there is no public market, they have no right to auction. 4. The first respondent/ Panchayat contends that in the Kerala Panchayat Raj Act, 1994 (hereinafter referred to as 'the Act'), there is no prohibition against auctioning the rights to conduct the meat stalls. Since there is no public market, they have no right to auction. 4. The first respondent/ Panchayat contends that in the Kerala Panchayat Raj Act, 1994 (hereinafter referred to as 'the Act'), there is no prohibition against auctioning the rights to conduct the meat stalls. Reliance is placed on S.273 of the Act, which enables the Panchayat to farm out collection of licence fees, taxes or other amounts due by auction or otherwise. In any event, the object was to raise the income for the Panchayat and hence according to the counsel for the Panchayat, and justifies the means. Petitioners rely on the decision of this Court reported in Cherian Jdhnv. Mundakayam Panchayat and another-1991 (2) KLT 698. The above decision was rendered on the provision of the repealed Kerala Panchayat Act, 1960. In the above decision, Pareed Pillay, J. (as his Lordship then was), while considering the provision of the Kerala Panchayat Act, the Kerala Panchayats (Public and Private Markets) Rules and the Kerala Panchayats (Slaughter Houses and Meat Stalls) Rules, held that the Panchayat had the right to auction only the stalls in the public markets. The matter has come before us on reference, since counsel for the Panchayat raised certain points on the basis of which it was thought mat the decision rendered in 1991(2) KLT 698 requires reconsideration. 5. The question for consideration is whether Exts. P4 and P6 notifications are legally valid. A conspectus of the provisions of the Act and the relevant rules reveal the following: S.221 of the Act gives power to the Panchayat to provide places to be used as public markets. Sub S.2 of S.221 enables the Panchayat to parcel out any portion of a public market and lease such parcel or parcels by auction or otherwise (emphasis supplied). S.222 deals with licensing of private markets. Under. S.222, no person shall open a new private market or continue to keep open a private market unless he has obtained a licence from the village Panchayat. No Rules have been framed under the Act regarding public markets and private markets. As per S.284 of the Act, the rules already in force will continue till new rules are framed. Under the Kerala Panchayat Act, 1960, Kerala Panchayats (Public and Private Markets) Rules, 1964 were made. Rule 5 states that lease of parcel or parcels and stalls in public markets shall be made by auction. As per S.284 of the Act, the rules already in force will continue till new rules are framed. Under the Kerala Panchayat Act, 1960, Kerala Panchayats (Public and Private Markets) Rules, 1964 were made. Rule 5 states that lease of parcel or parcels and stalls in public markets shall be made by auction. Rule 8 deals with licensing of private markets. R.9 enables the Panchayat to levy licence fee for private markets. Thus, it is clear that so far as private markets are concerned, there is no right for the Panchayat to auction out the right to conduct the same. Under the Kerala Panchayats Act 1960, Kerala Panchayats (Slaughter Houses and Heat Stalls) Rules, 1964 were framed. In view of the repealing Section, the above Rules are in force now. R.31 of the Kerala Panchayats (Slaughter Houses and Meat Stalls) Rules enables the Panchayat to farm out collection of rent and fees in public slaughter houses. R.32 enables opening of private slaughter houses on obtaining licence from the Panchayats. 6. In this context, it is also relevant to note S.232(1) of the Kerala Panchayat Raj Act. That Section states as follows: "232. Purpose for which places may not be used without a licence:- (1) The Village Panchayat may notify that no place in the Panchayat area shall be used for any of the purposes specified in the rules made in this behalf being purposes which in the opinion of Government are likely to be offensive or dangerous to human life or health or property, without a licence issued by the village Panchayat and except in accordance with the conditions specified in such licence". S.232(1) of the Act is akin to S.95 of the Kerala Panchayats Act, 1960. Kerala Panchayats (Licensing of Dangerous and Offensive Trades and Factories) Rules deal with the conditions for the purpose of starting dangerous and offensive trades. Schedule I enumerates different trades, which are offensive or dangerous to human life or health or property. Item 86 deals with meat - selling or exhibiting or offering for sale, or, storing, packing etc. thus, selling of meat comes within the aforementioned Rules. A perusal of the Rules shows that licence has to be obtained for the purpose of trade and the Panchayat can issue only licence. Item 86 deals with meat - selling or exhibiting or offering for sale, or, storing, packing etc. thus, selling of meat comes within the aforementioned Rules. A perusal of the Rules shows that licence has to be obtained for the purpose of trade and the Panchayat can issue only licence. Thus, any person, who is able to satisfy the conditions mentioned in the Kerala Panchayats (Licensing of Dangerous and Offensive Trades and Factories) Rules, is entitled to get a licence for vending meat. 7. Learned counsel for the Panchayat relied on S.273 of the Kerala Panchayat Raj Act. The said Section enables the Panchayat to farm out collection of any fees due to it on such conditions as it thinks fit. Obviously, it deals only with collection of fees. There is no dispute regarding the fact that Panchayat can auction out the right to collect fees. But that is not what is done under Exts. P4 & P6 notifications. Learned counsel for the first respondent then highlighted the fact that the Panchayat needs money. There are no public markets or cinema theatres, through which this Panchayat can collect money. It is in such circumstances, mat the Panchayat decided to auction out the right to vend meat, so as to enrich its coffers. It cannot be denied that the Panchayat is well within its right to find sources to raise income. But it can be only according to law and not against the provisions of the Act and the Rules. 8. It was further contended based on the legal position that there is no fundamental right for a careen to carry on trade or business in liquor and that the State, under its regulatory power, can impose conditions regarding the trade in liquor. It is true that so far as trade in liquor is concerned, it has been held that there is no fundamental right, in view of the fact that trade or business in liquor is so inherently dangerous mat no-one can claim any right in respect of it. As already stated, it is only with regard to the public market that the Panchayat has been given the right to auction. As already stated, it is only with regard to the public market that the Panchayat has been given the right to auction. So far as the private markets and the various trades mentioned in the Kerala Panchayats (Licensing of Dangerous and Offensive Trades and Factories) Rules are concerned, no right is given to the Panchayat to auction out the right to start a business. If . the argument of learned counsel for the Panchayat is accepted, then the Panchayat can even auction out the right to start the business in biscuits, chilies and coffee and tea shops (which are included in the schedule). We are in respectful agreement with the view adopted by Pareed Pillay, J. (as his Lordship then was) in Cherian John v. Mundakayam Panchayat and another -1991(2) KLT 698. 9. Art.19(1)(g) of the Constitution gives the fundamental right to the citizen to practice any profession or to carry on any occupation, trade or business. The right guaranteed under Art.19(1)(g) is a natural right to enter into or carry on any trade, profession or calling which every person has, as the member of a civilised society, anterior to and independent of any legislation or grant by the State - vide Saghir Ahmed v. State of U. P. (AIR 1954 SC 728). The right to conduct a trade is the fundamental right of a citizen. It can be controlled by the State in the interest of the public. There are certain trades which are inherency dangerous, eg, the business relating to intoxicating liquor - where the creation pf monopoly right in favour of an individual or individuals for the purpose of effective State control might be reasonable. An almost similar question came up for consideration before the Supreme Court in -Rashid Ahmed v. Municipal Board, Kairana (1950(1) SCR 566). There, the action of the Municipal Board in auctioning the 'contract for wholesale business in vegetables' was challenged under Art.32 of the Constitution/ It Was-held that "'this certainly is much more than reasonable restriction on the petitioner-as are contemplated by clause (6) of Art.19" 10. Thus in any view of the matter, the auction, of the first respondent is illegal. The notifications, Exts. P4 and P6„ are hence quashed. Original Petition is disposed of accordingly.