PETITIONER: SUPERINTENDENT & LEGAL REMEMBRANCER,STATE OF WEST BENGAL Vs. RESPONDENT: CORPORATION OF CALCUTTA DATE OF JUDGMENT: 07/12/1966 BENCH: RAO, K. SUBBA (CJ) BENCH: RAO, K. SUBBA (CJ) WANCHOO, K.N. SHAH, J.C. SIKRI, S.M. BACHAWAT, R.S. RAMASWAMI, V. SHELAT, J.M. BHARGAVA, VISHISHTHA VAIDYIALINGAM, C.A. CITATION: 1967 AIR 997 1967 SCR (2) 170 CITATOR INFO : R 1967 SC1643 (57) D 1967 SC1831 (7) F 1968 SC 360 (4,12) R 1969 SC 843 (11) R 1973 SC1425 (28) ACT: Calcutta Municipal Act (W.B. 33 of 1951), ss. 218 and 541- Taking out licence to run market-State if bound by statute; if exempted by implication. State Immunity-Rule that Crown is not bound by statute unless expressly named or clearly intended, if applies to India. Interpretation of Statutes-State immunity from statutes- Common law rule of construction if proper rule. Constitution of India, Art. 372-Rule of construction, if "law in force." HEADNOTE: The appellant-State of West Bengal was carrying on trade as owner and occupier of a market at Calcutta without obtaining a licence as required under s. 218 of the Calcutta Municipal Act, 1951. The respondent-Corporation of Calcutta filed a complaint against the State for contravention thereof. The trial Magistrate, accepting the State's contention that the State was not bound by the provisions of the Act acquitted the State. on appeal, theHigh Court convicted the State and sentenced it to a fine, holding thatthe State was as much bound as a private citizen to take out a licence. In appeal to this Court the appellant, relying on this Court's decision inDirector of Rationing v. Corporation of Calcutta, [1961] 1 S.C.R. 158,contended that the State was not bound by the provisions of a statute unless it was expressly named or brought in by necessary implication and this common law rule of construction, accepted as the law in India was "law in force" within the meaning of Art. 372 of the Constitution and that in any event by necessary implication the State was excluded from the operation of s. 218 of the Act. Held:Per Subba Rao C.J., Wanchoo, Sikri, Bachawat, Ramaswami, Shelat, Bhargava and Vaidialingam, JJ. (Shah, J. dissenting) : The State was not exempt from the operation of s. 218 of the Calcutta Municipal Act, 1951 and was rightly convicted. Per Subba Rao C. J. Wanchoo, Sikri, Ramaswami. Shelat, Bhargava and Vaidialingam, JJ. (i) The Common Law rule of construction that the Crown is not, unless expressly named or clearly intended, bound by a statute,, was not accepted as a rule of construction throughout India and even in the Presidency Towns, it was not regarded as an inflexible rule of construction. It was not statutorily recognized either by incorporating it in different Acts or in any General Clauses Act; at the most, it was relied upon as a rule of general guidance in some parts of the country. The legislative practice establishes that the various legislatures of country provided specifically, exemptions in favour of the Crown 171 whenever they intended to do so indicating thereby that they did not rely upon any presumption but only on express exemptions. Even those courts that accepted it considered it only as a simple canon of construction and not as a rule of substantive law. In the City of Calcutta there was no universal recognition of the rule of construction in favour of the Crown. The Privy Council, in Province of Bombay v. Corporation of the City of Bombay, (1946) L.R. 73 I.A. 27 gave its approval to the rule mainly on concession made by counsel. [180 D-G; 183 H; 184 E-F; 186 D-G] The archaic rule based on the prerogative and perfection of the Crown has no 'relevance to a democratic republic it is inconsistent with the rule of law based on the, doctrine of equality and introduces conflicts and anomalies. The normal construction, namely, that an enactment applies to citizens as well as to State unless it expressly or by necessary implication exempts the State from its operation, steers clear of all the anomalies and is consistent with the philosophy of equality enshrined in the Constitution. [187 F; 188 B] If a rule of construction accepted by this Court is inconsistent with the legal philosophy of the Constitution it is the duty of this Court to correct its self and lay down the right rule. This Court must more readily do so in constitutional matters than in other branches of law. [176 B-C] Director of Rationing v. Corporation of Calcutta, [1961] 1 S.C.R. 158,, reversed. Province of Bombay v. Corporation of the City of Bombay, (1946) L.R. 73 I.A. 271, held inapplicable. Bengal Immunity Co. v. State of Bihar, [1955] 2 S.C.R. 603, referred to. Case law discussed. (ii)Even assuming that the common law rule of construction was accepted as a canon of interpretation throughout India the rule is not "law in force" within the meaning of Article 372 of the Constitution. There is an essential distinction between a law and a rule of construction. A rule of construction adopted to ascertain the intention of the legislature is not -a rule of law. [187 D] (iii)The State is not excluded from the operation of s. 218 of the Act by necessary implication. The State is not the payer as well as the receiver of the fine, or the fine, when levied goes to the municipal fund. Though the expression fine' is used, in effect and substance, section 541 is a mode of realization of the, fee payable in respect of the licence. The provision for imprisonment in default of fine is only an enabling provision and the court is not bound to direct the imprisonment of the defaulter. [189 D-H; 190 A-B] Per Bachawat, J : (i) This Court should have in Director of Rationing and Distribution v. Corporation of Calcutta, [1964] 1 S.C.R. 158, refused to recognise the rule that the Crown is not bound by a statute save by express words or by necessary implication. In India the Crown never enjoyed the general prerogative of overriding a statute and 'standing outside it. The doctrine of the general immunity of the Crown from the operation of statutes so far as it is based upon the 'royal prerogative was never imported into India. Nor is there any compelling reason why the courts in India should not give full effect to the general words of a statute on the basis of some artificial rule of construction prevailing in England. The bulk of the Indian legislation proceeds upon the assumption that the Government will be bound unless the contrary is stated. The 172 rule,as rule of construction, never gained a firm foothold in untilthe Privy Council decision in Province of Bombay v. Municipal Corporation for the City of Bombay, (1946) L.R. 73 I.A. 271, in 1946, till which time there was no settled course of decisions of the Indian courts necessitating or justifying the application of this rule to the construction of Indian statutes; and even in this decision the propriety of applying the rule to Indian legislation was not considered. The imposition of this strict rule of construction by the Privy Council was received very unfavourably in India till this Court's decision in the Director of Rationing case wherein Province of Bombay was held to have laid down the correct law. But subsequent decisions of this Court disclosed a tendency to relax and soften the rigour of the rule. Further, in a country having a federal system of government it is difficult to apply the rule of Crown exemption from statutes. This rule was not in force in India and therefore was not "law in force" within the meaning of Art. 372 of the Constitution. [201 D-E; 202 C; 210 A-B, C-D; 205 F; 208 C, H; 210 H; 211 F] This Court has power to reconsider its previous decisions and this is a fit case where this power should be exercised. [211 E] Director of Rationing v. Corporation of Calcutta, [1961] 1 S.C.R. 158, reversed. Province of Bombay v. Municipal Corporation for the City of Bombay, (1946) L.R. 73 I.A. 271, held inapplicable. Shivenkata Seetararnanjaneya Rice & Oil Mills v. State of Andhra Pradesh, [1964] 7 S.C.R. 456 and Bengal Immunity Co. v. State of Bihar, [1955] 2 S.C.R. 603, referred to. Case law discussed. (ii)On a question of construction of a statute no rational distinction can be made between the trading and non-trading activities of the State. [210 G] (iii)There is nothing in the Act to indicate that the State should be excluded from the purview of s. 218(1) 'requiring the taking out of a licence on payment of the prescribed fee and s. 5441(1) providing the remedy for the recovery of fee in face of default. If the State is to be exempt from the application of s. 541(1)(b) it would lead to the anomaly that the State is liable to pay the licence fee but the Municipality will have no remedy for the recovery of the fee. Also, the fact that under s. 547(A) the court is competent to direct imprisonment in default of fine is no reason why s. 5411 1) (b) should not be applied to the State. The special provisions of s. 541(2) indicate that- the fine realizable under s. 541 is -receivable by the Municipality. It follows that the State Government is the payer but is not the receiver of the fine. The fine, when levied, is taken by the Municipality in full satisfaction of the demand on account of the licence fee. [212 H; 213B] State of Bihar v. Rani Sonavati Kumari [1961] 1 S.C.R. 728, relied on. Shah, J. (Dissenting); (i) The English Common Law rule that the Crown is not, unless expressly named or clearly intended, bound by a statute, is a rule of construction and was settled law in India before the -Constitution. [197 F; 198 D] The Common Law of England was adopted in this country subject to local variations and the personal law of the parties and the courts which functioned in the former British India territory were enjoined to cases not governed by any specific statutory rules according to equity and good conscience,, which meant rules of English Common Law 173 in so far as they were applicable to Indian society. Them was practically a consistent course of decisions of the High Courts in India, prior to the Constitution, in support of the view, affirmed by the Judicial Committee in Province of Bombay v. Municipal Corporation of the City of Bombay, (1946) L.R. 73 I.A. 271, that the rule that the Crown is not unless expressly named or clearly intended bound by a statute applied to India. It was accepted as a rule of interpretation ofstatutes applicable to all statutes governing state action, authority or property. A difference may have prevailed in Parts of the territories now comprising theIndian Union. But this is not peculiar to this rule of interpretation adoptedby the Courts in British India. Where uniform statutes do not apply differences do arise and must be determined according to the law and jurisdiction inherited by the courts administering justice. The present case concerns the administration of law in the town of Calcutta which has for more than two centuries been governed by the English Common Law as adopted by the various Acts, Regulations and finally by the Letters Patent. [191 A-D; 192 D-E; 194 F, 195 D-F] Director of Rationing and Distribution v. The Corporation of Calcutta, [1961] 1 S.C.R. 158, followed. Province of Bombay v. Municipal Corporation of the City of Bom. bay, L.R. 73 I.A. 271, applied. State of West Bengal v. Union, [1964] 1 S.C.R. 371 Srivenkata Seetaramanjaneya Rice & Oil Mills v. State of Andhra Pradesh, [1964] 7 S.C.R. 456, Builders Supply Corporation v. Union of India, A.I.R. 1965 S.C. 1061, referred to. Case law referred to. There is no reason to hold that the rule which previously applied to the interpretation of a statute ceased to apply. on the date on which the Constitution came into force. The Constitution has not so fundamentally altered our concept of 'State' as to abandon the traditional view about State privileges, immunities -and rights because they had a foreign origin and on the supposed theory of equality between the State and its citizens. The guarantee of equal protection clause of the Constitution does not extend to any differential treatment which may result in the application of a special rule of interpretation between the State and the citizens nor has the Constitution predicated in all respects equality in matters of interpretation between the State and its citizens. A State can, in the interest of public good, select itself for special treatment. This being so, there is no reason to suppose that a Statute which was framed on the basis of a well settled rule of pre- Constitution days which accorded the State a special treatment in the matter of interpretation. of statutes must be deemed to have a different meaning on the supposition that the Constitution has sought to impose equality between the State and the citizens. [198 H-199 F] The fact that in the Indian federal set up sovereignty is divided between the Union and the States, and in the application of the rule that the State is not bound by a Statute, unless expressly named or clearly implied, conflict between-the State enacting a law and the Union,, or another State, may arise, does not give rise to any insuperable difficulty which renders the rule inapplicable to the changed circumstances, for, it is the State which enacts a legislation in terms general which alone may claim benefit of the rule of interpretation and not any other State. [199 G] (ii)The rule of interpretation being a settled rule is "law in force" within Me meaning of Art. 372 of the Constitution. A rule is not any 174 the less a rule of law because it is a rule for determination of the intention of the legislature and for its application requires determination of facts and circumstances outside the statute. Acceptance of the proposition that a decision of the highest judicial tribunal before the Constitution, is law, does not involve the view that it is immutable. A statue may be repealed,' and even retrospectively, it would then cease to be in ,operation; a decision which in the view of this Court is erroneous may be overruled and may cease to be regarded as law, but till then it was law in force. [198 D-G] (iii)The application of the rule cannot be restricted to cases where an action of the State in its sovereign capacity is in issue. In the context of modem notions of the functions of a welfare State, it is difficult to regard any particular activity of the State as exclusively trading. [200 A-B] (iv)The State of West Bengal was not bound by the provisions relating to the issue of licences for occupation or conduct of a market. [200 F] There is no, express reference to the State, nor is there anything peculiar in the nature purpose and object or in the language used in the enactment relating to the issue of licences, which may suggest that the State must by necessary implication be bound by its provision. [200 E] JUDGMENT:
CRIMINAL APPELLATE JURISDICTION: Criminal Appeal No. 193 of
1964.
Appeal from the judgment and order dated April 29, 1964 ,of
the Calcutta High Court in Criminal Appeal No. 369 of 1962.
S. D. Banerjee, Advocate-General for the State of West
Bengal,
B. Sen, P. K. Chatterjee, M. K. Banerjee and P. K. Bose,
for the appellant.
M.C. Setalvad, A. N. Sinha and Sukumar Ghose, for the
respondent,
N.S. Bindra, R. H. Dhebar and R. N. Sachthey, for inter-
vener No. 1.
A. V. Rangam, for intervener No. 2.
V. A. Seyid Muhamad, Advocate-General for the State of
Kerala and A. G. Puddisery, for intervener No. 3.
O. P. Rana, for intervener No. 4.
I. N. Shroff, for intervener No. 5.
K. B. Mehta, for intervener No. 6.
The Judgment of SUBBA RAO, C.J., WANCHOO, SIKRI, RAMASWAMI,
SHELAT, BHARGAVA and VAIDIALINGAM, JJ. was delivered by
SBBBA RAO, C. J. BACHAWAT J., delivered a separate
concurring Judgment. SHAH, J. delivered a dissenting
Opinion.
Subbarao, C.J. This Full Bench of 9 Judges has been cons-
tituted to consider the correctness of the decision of this
Court
175
in Director of Rationing and Distribution v. The Corporation
of Calcutta(1).
The relevant facts are simple and are not in dispute. The
State of West Bengal was carrying on the trade of a daily
market at 1, Orphanganj Road, Calcutta, without obtaining a
licence as required under s. 218 of the Calcutta Municipal
Act, 1951 (West Bengal Act 33 of 1951) hereinafter called
the Act. The Corporation of Calcutta filed a complaint
against the State of West Bengal in the Court of the
Presidency and Municipal Magistrate, Calcutta, under s. 541
of the Act for contravening the provisions of s. 218
thereof. Under s. 218 of the Act, every person who
exercises or carries on in Calcutta any trade, shall take
out a licence and shall pay for the same such fee as is
mentioned in that behalf in Schedule IV to the Act.
Admittedly for the year 1960-61, the Government of West
Bengal did not take out a licence under the said section but
carried on the said trade. The main contention of the
Government was that the State was not bound by the pro-
visions of the Act. The learned Magistrate, accepting the
said contention, acquitted the State. On appeal, the High
Court of Calcutta held that the State was carrying on the
business of running a market and, therefore, it was as much
bound as a private citizen to take out a licence. It
distinguished the decision of this Court in Director of
Rationing and Distribution v. The Corporation of Calcutta(1)
on the ground that the said decision was concerned with the
sovereign activity of the State. In the result the State of
West Bengal was convicted under s. 537 of the Act-s. 537
appears to be a mistake for s. 541-and sentenced to pay a
fine of Rs. 250, with the direction that when realized, it
should be paid to the Corporation. Hence the present
appeal.
Learned Advocate General of West Bengal raised before us the
following points: (1) The State is not bound by the
provisions of a statute unless it is expressly named or
brought in by necessary implication; (2) the said principle
equally applies to sovereign and non-sovereign activities of
a State; and Mr. N. S. Bindra, learned counsel appearing for
the Attorney General raised before us the third point,
namely, this Court has no power under the Constitution to
review its earlier judgment.
While the learned Advocate General contended that the rule
of construction in favour of the State was part of the
common law of England accepted as the law of this country
and, therefore, was law in force within the meaning of Art.
372 of the Constitution, Mr. N. S. Bindra argued that the
said rule of construction was law of the land in that it was
declared to be so by the Judicial Committee in Province of
Bombay v. Municipal Corporation of
(1) [1961] 1 S.C.R. 158.
176
the City of Bombay(1) and, therefore, it was law in force
within the meaning of Art. 372 of the Constitution.
The third contention need not detain us, for it has been
rejected by this Court in The Bengal Immunity Company
Limited v. The State of Bihar(2). There a Bench of 7 Judges
unanimously held that there was nothing in the Constitution
which prevented the Supreme Court from departing from a
previous decision of its own if it was satisfied of its
error and of its baneful effect on the general interests of
the public. If the aforesaid rule of construction accepted
by this Court is inconsistent with the legal philosophy of
our Constitution, it is our duty to correct ourselves and
lay down the right rule. In constitutional matters which
affect the evolution of our polity, we must more readily do
so than in other branches of law, as perpetuation of a
mistake will be harmful to public interests. While
continuity and consistency are conducive to the smooth
evolution of the rule of law, hesitancy to set right
deviations will retard its growth. In this case, as we are
satisfied that the said rule of construction is inconsistent
with our republican polity and, if accepted, bristles with
anomalies, we -have no hesitation to reconsider our earlier
decision.
At the outset it will be convenient to notice the facts of
the decision of this Court in Director of Rationing and’
Distribution v. The Corporation of Calcutta(3) and the
reasons given by this Court for applying the said rule of
construction to an Indian statute. There, the Director of
Rationing and Distribution was using certain premises in
Calcutta for storing rice flour, etc. without taking out any
licence under s. 385 (1)(a) of the Calcutta Municipal Act,
1923. The Corporation of, Calcutta filed a complaint
against the said Director in the Magistrate’s Court for the
contravention of the said provision. This Court held that
the State was not bound by the provisions of s. 386 (1)(a)
of the said Act and that the appellant was not liable to
prosecution for the contravention of the said section.
Sinha, C. J., speaking for Imam and Shah, JJ., gave one
judgment, Sarkar, J., gave a separate but concurrent
judgment, and Wanchoo, J., recorded his dissent. The
reasoning of Sinha, C.J., is found in the following passage
:
“It is well-established that the common law of
England is that the King’s prerogative is
illustrated by the rule that the Sovereign is
not necessarily bound by a statutory law which
binds the subject. This is further enforced
by the rule that the King is not bound by a
statute unless he is expressly named or unless
he is bound by necessary implication or
unless, the statute being for the public good,
it would be absurd to exclude the King from
it.” (at page 170).
(1) [1946] L.H. 73 I.R. 271. (2) [1955]
2 S.C.R. 603.
(3 [1961] 1 S.C.R. 158
177
“That was law applicable to India also, as
authoritatively laid down by the Privy Council
in the case referred to above [(1946) L. R. 73
I.A. 271)]…… it (law in force under Art.
372 of the Constitution) must be interpreted
as including the common law of England which
was adopted as the law of this country before
the Constitution came into force.” (At p.
173).
Sinha, C.J., therefore, held that the said rule of
construction was, part of the common law of England, that it
was adopted by this, country and that Art’ 372 of the
Constitution continued it. Sarkar, J., on the other hand,
agreed with the conclusion arrived at by Sinha, C.J., but on
a different ground. He based his conclusion not on any
common law doctrine, but simply on the ground that the said
rule of construction of statutory provisions was accepted
and followed in England, America and India. Wanchoo, J., in
his dissent, put the case in a different perspective. The
following, passage brings out his line of thought :
“Two things are clear from this modern
conception of royal prerogative, namely (1)
that there must be a Crown or King to whom the
royal prerogative attaches, and (2) that the
prerogative must be part of the common law of
England. Both these conditions existed when
the Privy Council decision in Province1 of
Bombay v. Municipal Corporation of the City of
Bombay(1) was given in October 1946; the King
was still there and the Privy Council held
that the English common law rule of construc-
tion applied to Indian legislation as much as
to English ,statutes.” (At p. 184).
“In our country the Rule of Law prevails and
our Constitution has guaranteed it by the
provisions contained in Part III thereof as
well as by other provisions in other
Parts…… It is to my mind inherent in the
conception of the Rule of Law that the State,
no less than its citizens and others, is bound
by the laws of the land. When the King as the
embodiment of all power-executive, legislative
and judicial-has disappeared and in our
republican Constitution, sovereign power has
been distributed among various organs created
‘thereby, it seems, to me that there is
neither justification nor necessity for
continuing the rule of construction based on
the royal, prerogative.” (At p. 185).
“But where the royal prerogative is merely a
rule of construction of statutes based on the
existence of the Crown in England and for
historical reasons, I fail to see why in a
democratic republic, the courts should not
follow the ordinary principle of construction
that no one
(1) [1946] L.R. 73 I.A. 271.
178
is exempt from the operation of a statute
unless the statute expressly grants the
exemption or the exemption arises by necessary
implication.” (At pp. 188-189).
The conflict between the two views expressed by the learned
Judges in the earlier decision mainly rests on the meaning
of the expression “law in force” in Art. 372 of the
Constitution. While Sinha, C.J., took the view that the
common law of England, including the rule of construction,
was accepted as the law of this country and was, therefore,
the law in force within the meaning of the said Article,
Wanchoo, J., took the view that whatever might be said of
the substantive laws, ‘a rule of construction adopted by the
common law of England and accepted by the Privy Council at a
time when the Crown was functioning in India, was not the
law in force within the meaning of the said Article.
We shall now consider the validity of the conflicting views
The common law of England is clear on the subject. In
Halsbury’s Laws of England, 3rd Edn., Vol. 7, in Part 5 of
the Chapter on “Constitutional Law” under the heading “The
Royal Prerogative”, the Royal prerogatives are enumerated
and their limitations are given. In para 464 it is stated :
“The general rule is that prerogatives cannot
be affected or parted with by the Crown,
except by express statutory authority.”
The prerogative right can be taken away by law because the
law is made by the Crown with the assent of the Lords and
the Commons. It can be taken away only by law to which the
Crown is a party. Whether a particular statute has taken
away such right pertains to the domain of the rule of
construction. The relevant rule of construction evolved by
judicial decisions in England may be stated thus :
“At all events, the Crown is not reached
except by express words or by necessary
implication in any case where it would be
ousted of an existing prerogative or
interest.” (See Perry v. Eames) (1).
It is said much to the same effect in Maxwell’s
Interpretation of Statutes, 11th Edn., at page 129, thus :
“It is presumed that the legislature does not
intend to deprive the Crown of any
prerogative, right or property, unless it
expresses its intention to do so in explicit
terms, or makes the inference irresistible.”
The same rule is given in Bacon’s Abridgment
7th Edn., 9.462. The legal position in England
may be summarised thus :
(1) [1891] 1
179
“The substantive rule of law is that the
prerogative of the Crown can only be taken
away by law. The rule of construction evolved
by the courts to ascertain the legislative
intention is, that it is presumed that a
statute has not taken away the prescriptive
right unless it has expressly or by necessary
implication done so.”
There is an essential distinction between a substantive law
and a rule of construction and that is well expressed by
Craies in his book “On Statute Law”, 6th Edn., at p. 10,
thus :
“A rule of law, e.g., the Rule against
Perpetuities or the Rule in Shelley’s case
(abolished in 1925), exists independently of
the circumstances of the parties to a deed,
and is inflexible and paramount to the
intention expressed in the deed. A rule of
law cannot be said to control the construction
of a statute, inasmuch as a British statute is
itself part of the supreme law of the land and
overrides any pre-existing rules with which it
is inconsistent. A rule or canon of
construction, whether of will, deed or
statute, is not inflexible, but is merely a
presumption in favour of a particular meaning
in case of ambiguity. This was well expressed
by Bowen, L.J. in L. N. W. Ry. v. Evans:(1)
‘These canons do not override the language of
a statute where the language is clear : they
are only guides to enable us to understand
what is inferential. In each case the Act of
Parliament is all powerful, and when its
meaning is unequivocally expressed the
necessity for rules of construction disappears
and reaches its vanishing point.”
The same principle was stated by Bhashyam Ayyangar, J., in
Bell v. The Municipal Commissioners for the City of
Madras(2) thus :
“These compendious canons of interpretation
which are in the nature of maxims can only be
regarded as mere guides to the interpretation
of Statutes and ought not to be applied as if
they were statutory clauses, enacted with all
the precision and provisos of an
Interpretation Act.”
Franfurter, J., said to the same effect in
United States v. United Mine Workers of
America thus : (3)
“At best, this canon, like other generalities
about statutory construction, is not a rule of
law. Whatever persuasiveness it may have in
construing a particular
(1) [1893] I Ch. 16, 27. (2) I.L.R. [1902] 25 Mad.
457, 484.
(3) [1947] 91 L. ed. 923.
180
statute derives from the subject-matter and the terms of the
enactment in its total environment.”
Even in England this rule of interpretation has not been
treated as inflexible. It is gradually losing ground in
many branches of law. The incongruity of the rule of
discrimination in favour of the Crown was pointed out by
Glanville L. Williams in his treatise on “Crown
Proceedings”, at p. 53 :
“The rule originated in the Middle Ages, when
it perhaps had some justification. Its
survival, however, is due to little but the
vis inertiae.”
The author continues at p. 54 :
“With the great extension in the activities of
the State -and the number of servants employed
by it, and with the modern idea, expressed in
the Crown Proceedings Act, [compare in this
connection Art. 300 of our Constitution],
“that the State should be accountable in wide
measure to the law, the presumption should be
that a statute binds the Crown rather than it
does not.”
The next question is, how far and to what extent the common
law of England relating to the prerogatives of the Crown has
been accepted as the law of our country? Nothing has been
placed before us to show that the entire body of the common
law pertaining to prerogatives was accepted as the law
throughout India. India at the relevant time comprised
Provinces and Native States. As Bhashyam Ayyangar, J.,
pointed out in Bell v. The Municipal Commissioners for the
City of Madras() “the prerogatives of the Crown in India-a
country in which the title of the British Crown is of a very
mixed character-may vary in different provinces, as also in
the Presidency towns as distinguished from the mofussil.
‘The determination, with anything like legal precision, of
all the prerogatives of the British Crown in India is by no
means an easy task.” It is well-known that the Common law of
England was applied as such in the original sides of the
High Courts of Calcutta, Bombay and Madras, and that in the
mofussil courts the principles embodied in the common law
were invoked in appropriate cases on the ground of justice,
equity and good conscience. It cannot, therefore, be
posited that either the entire body of common law of England
relating to prerogatives of the King or even the rule of
construction as forming part of that law was accepted as law
in every part of the country. It has to be established
whenever a question arises as to what part of the common law
was accepted as the law in a particular part of the country.
Learned Advocate General of West Bengal referred us to the
decision of the Privy Council in Province of Bombay v.
Municipal
(1) I.L.R. (1902) 25 Mad. 457,484.
181
Corporation of the City of Bomhay(1) in support of his
contention that the common law of England was accepted as
the law of our country in that regard. In that case the
question was whether the Crown was not bound by s. 222(1)
and s. 265 of the City of Bombay Municipal Act, 1888 which
gave the Municipality power to carry water-mains for the
purposes of water supply through across or under any street
and into, through or under any land “whatsoever within the
city.” When the Municipal Corporation wanted to lay water-
mains through the land belonging to the Government of
Bombay, the Government did not agree except on some condi-
tions. Thereafter, the dispute between the parties was
referred to the High Court. Ultimately, setting aside the
order of the High Court, the Privy Council held that the
rule that no statute bound the Crown unless the Crown was
expressly or by necessary implication made bound thereunder
applied to the Crown in India and that there was no such
express intention or necessary implication in the said
section. Indeed, the High Court also accepted that
principle, but on the construction of the relevant
provisions it came to the conclusion that there was such a
necessary implication thereunder. On the application of the
principle there was no contest before the Privy Council.
The Privy Council expressly stated so at p. 274, when it
observed :
“The High Court held, following previous
decisions of its own, that the principle to be
applied for the decision of the question
whether or not the Crown is bound by a statute
is no different in the case of Indian
Legislation from that which has long been
applied in England. The parties concurred in
accepting this view, and their Lordships
regard it as correct.”
The decision made on a concession made by the parties even
though the principle conceded was accepted by the Privy
Council without discussion, cannot be given the same value
as one given upon a careful consideration of the pros and
cons of the question raised. Further, no argument was
raised before the Privy Council that the Common law of
England had legal force only in the said three Presidency
towns and not in the rest of the country, for that case
happened to be one that arose in the City of Bombay. The
observations of the Privy Council that the principles
obtaining in England also governed the Crown in India are,
rather wide. Nor any argument was raised before the Privy
Counsel making a distinction between substantive branches of
common law and mere rules of construction. It is not
possible to predicate what the Privy Council would have said
if that distinction had been placed before it. Be that as
it may, this decision cannot be taken as finally deciding
the question that is raised before us.
(1) [1946] L.R. 73 I.A. 271.
182
Learned counsel relied upon a series of Indian decisions in.
support of his contention that this rule of construction had
become the law of the land.
It was held in The Secretary of State in Council of India v.
The Bombay Landing and Shipping Company (Limited)(1) that in
a winding up proceedings the Crown was entitled to the same
precedence in regard to the debts due to it, in England, in
Ganpat Putava v. Collector of Kanara(2) that the Crown was
entitled to the same precedence in regard to fees payable to
it by a pauper plaintiff, in The Secretary of State for
India v. Mathura Bhai() that section 26 of the Limitation
Act, 1877 being a branch of substantive law did not affect
the Crown’s right, in Motilal Virchand v. The Collector of
Ahmedabad(4) that the Mamlatdars’ Courts could not entertain
and decide a suit to which the collector was a party in The
Government of Bombay v. Esufali Salebhai(5) that the Crown
had a prerogative right to intervene and claim compensation
in Land Acquisition proceedings, in Hiranand Khushiram v.
Secretary of State(6), that the Crown was not bound by the
provision of the Bombay Municipality Act, in The Secretary
of State for India v. The Municipal Corporation of Bombay
(No. 1)(7) that the Crown was subject to a charge under s.
212 of the Bombay City Municipal Act. A careful study of
these decisions discloses that all of them related to
particular prerogatives of the Crown and that the Court held
either that the prerogative of the Crown Was taken away by
the statute or not, having regard to the construction placed
by it on the relevant statute. It is true that in some of
the decisions the said rule of construction was noticed, but
as the decisions turned upon the construction of the
relevant provisions, it could not be said that the said rule
had been accepted as an inflexible rule of construction by
the Bombay High Court. In one of the judgments even the
applicability of the rule of construction was doubted.
A learned thesis on the subject is found in the judgment of
Bhashyam Ayyangar, J., in Bell v. The Municipal
Commissioners for the City of Madras(8). The Superintendent
of the Government Gun-carriage Factory, Madras, having
brought timber belonging to the Government into the City of
Madras without taking out a licence and paying the licence
fees prescribed by s. 341 of the City of Madras Municipal
Act, was prosecuted. There was no mention of Government in
the said section. A Division Bench of the Madras High Court
(1) [1868] 5 Ho H. C. Rep. 23,27.
(3) [1889] I.L.R. 14 Bom. 213.
(5) [1909] I.L.R. 34 Bom. 618.
(7) [1935] 37 Bom. L.R. 499, 509.
(2) [1875] I.L.R. 1. Dom. 7.
(4) [1906] I.L.R. 31 Bom. 86.
(6) A.I.R. 1934 Bom. 379.
(8) I.L.R. (I 902) 25 Mad. 457, 484.
183
Indian legislation, statutes imposing duties or taxes bound
the Government unless the very nature of the duty or tax was
such is to be inapplicable to it. Bhashyam Ayyangar, J., in
his judgment, after considering all the relevant material on
the subject statutes and English and Indian decisions-came
to the conclusion that exemption from the payment of tolls,
rates and taxes was not in reality a prerogative of the
Crown, but depended solely upon the right construction to be
put on the Crown grant or the statute in question. Though
the learned Judge noticed the rule of construction and
affirmed its application both to English and Indian statutes
vis-a-vis the Crown, he pointed out that the said rule, like
every cognate rule of construction was not really a pre-
rogative of the Crown but only a canon of interpretation and
a mere guide to the interpretation of statutes. That case
arose in the Madras City. In Madras the_ position was that
non-liability of the Crown to taxes was not treated as its
prerogative and the aforesaid rule of construction was only
treated as a guide in interpreting the provisions of a
statute.
Now coming to Calcutta, a Division Bench of the Calcutta
High Court in Corporation of Calcutta v. Bhupal Chandra
Sinha(1) held that the Crown was bound by s. 421 of the
Calcutta Municipal Act, 1923 and that the unwholesome barley
found in the Government stores was liable to be destroyed.
No doubt, the Court re-stated the said rule of construction
and came to the conclusion that by necessary implication the
State was bound by the said provision.
A Division Bench of the same High Court in Corporation of
Calcutta v. Director of Rationing and Distribution(2) held
that the State Government which was carrying on a trade at
premises No. 259, Upper Chitpur Road, Calcutta, and was
using or permitting the use of the said premises for the
purpose of storing rice etc. without licence was liable to
be convicted under s. 386(1)(a) of the Calcutta Municipal
Act, 1923, read with s. 488 thereof When the said rule of
construction was pressed upon the learned Judges, they held
that the law, even after coming into force of the Government
of India Act, 1935, was that the Crown or the Government was
bound by the statute unless it was exempted from its
operation either expressly or by necessary implication.
They did not, therefore, accept the rule of construction
laid down by the Privy Council. It cannot, therefore, be
said that in the City of Calcutta there was a universal
recognition of the rule of construction in favour of the
Crown.
The legislative practice in India establishes that the
various Legislatures of the country provided specifically
exemptions in
(1 ) A.I.R 1950 Cal. 421. (2)A.I.R. 1955 Cal.282.
184
favour of the Crown whenever they intended to do so
indicating thereby that they did not rely upon any
presumption but only on express exemptions, see, for
instance, s. 74 of the Contract Act, s. 9 of the Specific
Relief Act, s. 90 of the Indian Registration Act, s. 2(a)
and (b) of the Indian Easements Act, The Crown Grants Act XV
of 1895, ss. 295 (proviso), 356(b) and 411 and 616 (a) of
the Code of Civil Procedure (old), s. 212 (proviso) of the
Indian Companies Act, s. 20 (proviso) of the Sea Customs
Act, 1878, s. 1(4)(i) of the Indian Ports Act, s. 3, proviso
(1) of the Indian Stamps Act, 1899, and s. 3 of the India
Act XI of 1881 etc. What is more, Act XI of 1881 empowered
the Governor-General in Council by order to prohibit the
levy by a Municipal Corporation of any specified tax payable
by the Secretary of State for India and to direct the
Secretary of State for India to pay to the Municipal
Corporation in lieu of such tax some definite amounts. This
Act was a pointer against the contention that there was a
presumption in favour of the Crown that a statute was not
binding on it. It is true that there are other Acts where
there are specific provisions to the effect that the
provisions of the Acts shall be binding on the Government:
see s. 10 of the Arbitration Act (Act X of 1940), s. 116 of
the Oil Field Regulation and Development Act (Act LIII of
1948). Subsequent to the making of the Constitution also
there were Acts where such a provision was found. There is
no firm legislative practice based upon the said presumptive
rule of construction. Different statutes adopted different
devices to achieve their desired results. The legislative
practice, therefore, does not support the contention that in
India the said rule of construction was accepted. It only
shows that wherever an exemption was intended to be given to
the Government it was expressly mentioned and wherever there
might have been any doubt of the liability of the
Government, it was expressly made liable. The rule of
construction was not statutorily recognised either by
incorporating it in different Acts or in any General Clauses
Act; at the most, it was relied upon as a rule of general
guidance in some parts of the country.
Some of the American decisions may usefully be referred to
at this stage. It was said that in America where the Crown
did not exist, the same rule of construction was adopted in
that country as law of the land and therefore by analogy the
same legal position must be accepted in India.
The decision in H. Snowden Marshall v. People of the State
of New York(1) only lays down that the State of New York has
the common law prerogative right of priority over unsecured
creditors. This case has nothing to do with the rule of
construction but was based upon the common law prerogative
of the
(1) (1920) 65 L.cd. 315.
185
Crown expressly embodied in the State’s Constitution. The
decision in Guarantee Trust Company of New York v. United
States of America(1) accepted the immunity of the sovereign
from he operation of statutes of limitation. That decision
was based upon the doctrine of public policy evolved by
courts, though in evolving the said policy the courts had
been influenced, to some extent, by the doctrine of the
pregrogative of the Crown. This decision also does not
express any opinion on the rule of construction.
The decision in United States of America v. United Mine
Workers of America(2) ruled that statutes which in general
terms, divested pre-existing rights and privileges would not
be applied to the sovereign without express words to that
effect. But Frankfurter, J., after citing the said rule,
pointed out that
“At best, this canon, like other generalities about
statutory construction, is not a rule of law.”
The same rule was again re-stated in United States of
America v. Reginald P. Wittek.(3) The question there was
whether the District of Columbia Emergency Rent Act did not
apply to Government-owned defence houses in the District
such as Bellevue Houses. The Court relied not only upon the
said rule of construction but also on other circumstances in
support of the conclusion that the United States was exempt
from the operation of that Act by necessary implication. In
Jess Larson, as War Assets Administrator and Surplus
Property Administrator v. Domestic and Foreign,, Commerce
Corporation,(4) the purchaser of surplus coal from the War
Assets Administration filed a suit against the said
Administration for an injunction prohibiting the latter from
selling or delivering the coal to any other person. The
suit was dismissed on the ground that the sovereign immunity
in suits for injunction or for specific performance was
based upon public policy. But it was argued that the
principle of sovereign immunity was an archaic hangover not
consonant with modern morality; the majority conceded that
there was substance in such a viewpoint as applied to suits
for damages. Mr. Justice Frankfurter in his dissent went
further and pointed out that the doctrine of sovereign
immunity was in disfavour. The American decisions,
therefore, were mainly based either on the provisions of the
constitution of the State or on. the ground of public policy
evolved by Courts. The founding fathers carried with them
the English doctrine of the Crown Prerogative and it
continued to influence some of the principles of public
policy evolved in that country. Even so, the decisions made
it clear that the rule of construction was relied upon only
as one of the guides to arrive at the intention of a
particular statute. That apart, the fact that the common
law of England pertaining to
2,1.4
(1)(1938) 82 L. ed. 1224.
(3)(1949) 93 L. ed. 1406.
M19Sup.C.I./66-13
(2) (1947) 91 L. ed. 884,923.
(4) (1949) 93 L. ed. 1628.
186
prerogatives influenced some of the decisions of the Supreme
Court ,of the United States cannot help us in coming to a
conclusion whether the said rule had become part of the Law
in India.
Mr. Bindra, the learned counsel appearing for the Attorney-
General sought to reach at the same result by a different
process. He argued that the decision of the Privy Council
in Province of Bombay v. Municipal Corporation of the city
of Bombay and another(1) is a law of the country. We have
already noticed the decision in another context. It
accepted the rule of construction on a concession made by
the counsel. Even if it was a considered decision on the
point, it was nothing more than an application of a rule of
construction with which it was familiar for ascertaining the
intention of statutory provisions applicable to the Bombay
city.
To sum up : some of the doctrines of common law of England
were administered as the law in the Presidency Towns of
Calcutta, Bombay and Madras. The Common Law of England was
not adopted in the rest of India. Doubtless some of its
principles were embodied in the statute law of our country.
That apart, in the mofussil, some principles of Common Law
were invoked ‘by courts on the ground of justice, equity and
good conscience. It is, therefore, a question of fact in
each case whether any particular branch of the Common Law
became a part of the law of India or in any particular part
thereof. The aforesaid rule of construction is only a canon
of interpretation, it is not a rule of substantive law.
Though it was noticed in some of the judgments of the Bombay
High Court, the decisions therein mainly turned upon the
relevant statutory provisions. One decision even questioned
its correctness. There is nothing to show that it was
applied in other parts of the country on the ground of
justice, good con.science and equity. In Madras, it was not
considered to be a binding rule of law, but only as a simple
canon of construction. In Calcutta there was a conflict :
one Bench accepted the construction and the other rejected
it. The Privy Council gave its approval to the rule mainly
on the concession of Advocates and that decision related to
Bombay City. It is, therefore, clear that the said rule of
construction was not accepted as a rule of construction
throughout India and even in the Presidency towns it was not
regarded as inflexible rule of construction. In short it
has not become a law* of the land.
Let us now proceed on the assumption that it has been
accepted as a rule of construction throughout India. This
leads us to the question whether the said rule of
construction is the law of the land after the Constitution
came into force. Under Article 372,
(1)73 I.A. 271.
187
all the laws in force in the territory of India immediately
before the commencement of this Constitution shall continue
in force, therein until altered or repealed or amended by a
competent Legislature or other competent authority. Can it
be said that the said canon of construction was a ‘law in
force’ which can only be amended by a Legislature? Under
Explanation (1) to the said Article, the expression ‘law in
force’ shall include a law passed or,. made by a Legislature
or other competent authority in the territory of India
before the commencement of the Constitution. it has been
held by this court that the said expression includes not
only enactments of the Indian Legislatures but also the
Common Law of the land which was being administered by the
Courts in India. (See Director of Rationing and Distribution
v. The Corporation of Calcutta and others() and V. S. Rice
and Oil Mills & others v. State of Andhra Pradesh(2). But
it is not possible to hold. that a mere rule of construction
adopted by English Courts, and also by some of the Indian
Courts to ascertain the intention of the Legislature was a
law in force within the meaning of this term. There is an
essential distinction between a law and a canon of
construction. This distinction between law and the canon of
construction has been noticed by us earlier and we have held
that a canon of construction is not a rule of law. We are
not concerned here. with the statutory rules of
interpretation. We are,- therefore, of the opinion that a
rule of construction is not a ‘law in force’ within the
meaning of Article 372.
The next question is whether this Court should adopt the
rule of construction accepted by the Privy Council in
interpreting statute vis-a-vis the Crown. There are many
reasons why the said rule of construction is inconsistent
with and incongruous in the present set-up we have no Crown,
the archaic rule based on the prerogative and perfection of
the Crown has no relevance to a democratic republic; it is
inconsistent with the rule of law based on the dictrine of
equality. It introduces conflicts and discrimination. To
illustrates: (1) State “A” made a general Act without
expressly making the Act binding on the said State. In the
same State States “B”, “C” and “D” and the Union have
properties. Would the rule of construction apply only to
the properties of State “A?’ or to the properties of all the
States and the Union ? (2) The Central Act operated in
different States; the rule of construction was accepted in
some States- and rejected in other States. Is the Central
Act to be construed in different States in different ways ?
(3) Acts in general terms might be made in different States-
States where the said rule of construction was accepted and
the States where it was not so accepted.. ‘Should different
States construe
(1) [1961] 1.S.C.R. 158. (2) [1965] 3
S.C.R. 289
188
the General Acts in different ways, some applying the
presumption and some ignoring it ?
There is, therefore, no justification for this Court to
accept the English canon of construction, for it brings
about diverse results and conflicting decisions. On the
other hand, the normal construction, namely, that the
general Act applies to citizens as well as to State unless
it expressly or by necessary implication exempts the State
from its operation, steers clear of all the said anomalies.
‘It prima facie applies to all States and subjects alike, a
construction consistent with the philosophy of equality en-
shrined in our Constitution. This natural approach avoids
the archaic rule and moves with the modern trends. This win
not cause any hardship to the State. The State can make an
Act, if it chooses, providing for its exemption from its
operation. Though the State is not expressly exempted from
the operation of an Act, under certain circumstances such an
exemption may necessarily be implied. Such an Act, provided
it does not infringe fundamental rights, will give the
necessary relief to the State. We, therefore, hold that the
said canon of construction was not ‘the law in force’ within
the meaning of Art. 372 of the Constitution and that in any
event having regard to the foregoing reasons the said canon
of construction should not be applied for construing
statutes in India. In this view it is not necessary to
express our opinion on the question whether the aforesaid
rule of construction would not apply to the trade activities
of the State, even if it applied to its sovereign
activities.
Even so, it was contended that by necessary implication the
State was excluded from the operation of s. 218 of the Act.
It was contended that, as the infringement of the said
provision entailed a prosecution and, on conviction,
imposition of fine and imprisonment, and that as the State
could not obviously be put in prison and as the fine imposed
on the State would merge in the consolidated fund of the
State, it should necessarily be implied that the State was
outside the scope of the section. This argument was based
upon the reasoning of Wanchoo, J., in his dissenting
judgment in Director of Rationing and Distribution v.
Corporation of Calcutta(1). To appreciate the argument it
is necessary to notice the relevant provisions of the Act.
Under s. 218(1) every person who exercises or carries on in
Calcutta any of the trades indicated in Schedule IV shall
annually take out a licence before the prescribed date and
pay the prescribed fee. Section 218 is in Ch. XIII. Under
s. 541(1)(b) if any person exercises on or after the first
day of July in any year any profession, trade or calling
referred to in Chapter XIII without having the licence
prescribed by that chapter, he shall be punished with fine;
and under s. 541(2)
(1) [1961] 1 S.C.R. 158.
189
such fine, when levied, shall be taken in full satisfaction
of the demand on account of the said licence. Under s.
547A, which was inserted in the Act by s. 96 of the Calcutta
Municipal (Amendment) Act, 1953 (West Bengal Act XIX of
1953), in every case of an offence punishable with
imprisonment or fine, or with fine only, in which the
offender is sentenced to pay an fine, it shall be competent to
the Court to direct that in default of payment of the fine
the offender shall suffer imprisonment for such term or
further term not exceeding six months as may be fixed by
the Court. Under the Act there is a distinction between
fines imposed under s. 537 and under s. 541 of the Act. The
fines under s. 537 are in respect of offences enumerated
therein and they certainly go to the coffers of the States.
In respect of such offences it may be contended that, as the
fines paid reach the State itself, there is an implication’
that the State is not bound by the sections mentioned
therein, for a person who receives the fine cannot be the
same person who pays it. This incongruity may lead to the
said necessary implication. But the same cannot be said in
respect of the provisions covered by s. 541. Under the said
section the -fine recovered for the infringement of the said
provisions, when levied, shall be taken in full satisfaction
of the demand on account of the licence not taken
thereunder. Though the expression “fine” is -used, in
effect and substance, s. 541 is a mode of realization of the
fee payable in respect of the licence: it goes to the
municipal fund and forms part of it. In this context, s.
115 of the Act is relevant. Under that section, there shall
be one Municipal Fund held by the Corporation in trust for
the purposes of the Act to which the moneys realised or
realisable under the Act (other than fine levied by
Magistrates) and all moneys otherwise received by the
corporation shall be credited. Reliance is placed upon the
words within the brackets, viz., “other than fine levied by
Magistrates” and an argument is raised that the fine levied
under s. 541 will not be credited to the Municipal Fund.
That interpretation brings that section into conflict with
s. 512. On the other hand, a harmonious construction of
these two provisions makes it clear that the fine mentioned
in s. 115 is the fine imposed under s. 537, for s. 541(2) in
terms directs that the fine shall be credited to the demand.
All amounts credited towards demands, it cannot be denied,
necessarily have to be credited in the Municipal Fund. Nor
s. 547A detracts from our conclusion. Under that section in
every case of an offence where the offender is sentenced to
pay a fine, it shall be competent to the court to direct
that in default of payment of the fine the offender shall
suffer imprisonment. It was said that this section
necessarily implied that the State could not be, hit by s.
218, as it could not obviously be imprisoned for default of
payment of fine. But it will be noticed that this section
only confers a discretionary power on the court and the
court is not bound to
190
direct the imprisonment of the defaulter. It is only an
enabling provision. There are other ways of collecting the
money from ]persons against whom an order under s. 547A is
not made. This enabling provision does not necessarily
imply an exemption in favour of the State.
For all the aforesaid reasons we hold that the State is not
exempt from the operation of s. 218 of the Act.
In the result we hold that the conclusion arrived at by the
High Court is correct. The appeal fails and is dismissed.
Shah, J. The High Court of Calcutta convicted the State of
West Bengal of the offence of carrying on trade as owner and
occupier of a market at Calcutta without obtaining a license
under s. 218 of the Calcutta Municipal Act, 1951, and
imposed a sentence of fine of Rs. 250/-. In this appeal, it
is urged that the State not being by express enactment or
clear intendment bound by the provisions of the Act relating
to the obtaining of a license for carrying on trade as owner
or occupier of a market, the order of conviction is not
sustainable, and reliance is placed upon the judgment of
this Court in Director of Rationing & Distribution v. The
Corporation of Calcutta & Ors.(1) The Corporation contends
that since India became a Republic, the rule that “Crown is
not bound by statute unless specially named, or clearly
intended” has no application to the interpretation of the
Calcutta Municipal Act, 1951. The argument is urged on two
grounds : (i) since India has ceased to be governed in the
name of the British Crown, the rule in terms has no
application; and (ii) even if it be assumed that the rule
applies to the State as the sovereign authority, it must be
deemed to be superseded, for to accept it would be to
countenance unequal treatment between the State and the
citizens.
The origin of the rule in England that the Crown is not
bound by a statute unless expressly named or clearly
intended lay undoubtedly in the prerogative of the British
Crown. In Bacon’s Abridgement, 7th Edn., p. 462, the
general rule is stated thus: “where a statute is general,
and thereby any prerogative, right, title or interest is
divested or taken away from the King, in such case the King
shall not be bound, unless the statute is made by express
terms to extend to him.” But the Crown is bound where it is
expressly named or by clear implication intended to be
bound. An inference that the Crown was intended to be bound
by implication is, however, not to be raised merely because
the Crown assented to the statute, for as stated by Plowden
“when the King gives his assent he does not mean to
prejudice himself or to bar himself of his liberty and his
privilege, but he assents that it shall be a law among his
subjects.”
(1) [1961]1 S.C.R. 158.
191
The common law of England was adopted in this country
subject to local variations and the personal law of the
parties, within the Presidency towns by the establishment of
Mayors’ Courts in the, 18th century with the express,
injunction to apply that law. In the mufassal of the three
Presidencies the common law was adopted by the Regulations
constituting tribunals for administration of justice
enjoining them to decide disputes according to justice,
equity and good conscience’, and elsewhere by the diverse
Civil Courts Acts imposing similar injunctions. In the
three Presidency towns of Calcutta, Madras and Bombay the
charters of 1726 which established the Mayors’ Courts
introduced within their jurisdiction the English common and
statute law in force at the time so far as it was applicable
to Indian circumstances. By the statute of 1781 (21 Geo.
III c. 70, s. 17) the Supreme Court at Calcutta was enjoined
to apply in the determination of actions against the Indian
inhabitants of the town in matters of succession and inheri-
tance to lands, rents, goods, and in all matters of contract
and dealing between party and party, their personal law if
both parties belonged to the same community, and by the law
and usages of the defendant if they belonged to different
communities. The English common law in its application to
Hindus and Mahomedans in the matters enumerated in the
statute was to that extent superseded, but in other matters
the English common law unless it was inconsistent with
statute or Indian conditions continued to apply. Similar
statutes were passed enjoining the Courts in the Presidency
towns of Madras and Bombay in 1797 (37 Geo. III c. 142, s.
13), to apply in the enumerated matters the personal law of
the parties. it may however be observed that by the Supreme
Court charters, English law, not in its entirety but as
nearly as the circumstances of the place and of the
inhabitants admit, was applied: Advocate General of Bengal
v. Ranee Surnomove Dossee.(1) In the mufassal Courts by
Bengal Regulation III of 1793 in respect of Bengal, by
Regulation 11 of 1802 in respect of Madras, it was ordained
that where no specific rule existed the Courts were to act
according to “justice, equity and good conscience” which
expression was interpreted to mean the rules of English
common law in so far as they were applicable to Indian
society and circumstances: Waghela Rajsanji v. Shekh
Masludin(2). The Bombay Regulation IV -of 1827 provided by
s. 26 that the law to be observed in the trial of suits
shall be Acts of Parliament and Regulations of Government;
in the absence of such acts and regulations the usage of the
country in which the suit arose; if none such appears, the
law of the defendant, and in the absence of specific law and
usage equity and good conscience. By the Letters Patents of
the High Courts of the three principal Courts of Calcutta,
Madras and Bombay by cls. 19 in exercise of the original
jurisdiction law or equity to be applied
(1) (1864) 9 M. 1. A. 387.
(2) (1887) 14 1. A. 89.
192
was such law or equity which would have been applied if the
Letters Patents had not been issued. By cl. 20 in respect
of suits tried in exercise of the extraordinary original
jurisdiction, and by cl. 21 in respect of the appellate
jurisdiction, the High Courts were directed to apply law or
equity and the rule of good conscience which the Court in
which the proceeding was originally instituted would have
applied. Similar provisions were made in the Letters
Patents of the Allahabad, Patna, Lahore and Nagpur High
Courts by cls. 13 & 14 and in respect of Jammu & Kashmir
High Court by cls. 14 & 15, and in respect of Rajasthan by
cls. 33 & 34 of the Rajasthan High Court Ordinance, 1949.
The jurisdiction of the Assam and Orissa High Courts was
derived from their respective parent High Courts-the
Calcutta High Court and the Patna High Court. In the Courts
in the mufassal, the Civil Courts Acts e.g. Bengal, Agra and
Assam Civil Courts Act, 1887 s. 37; the Punjab Laws Act,
1872, s. 5; the Central Provinces Laws Act, 1875, ss. 5, 6;
the Oudh Laws Act, 1876, S. 3. require the Courts to decide
cases according to justice, equity and good conscience.
There can therefore be no doubt that the Courts which
functioned in the former British India territory were
enjoined to decide cases not governed by any specific
statutory rules according to justice, equity and good
conscience, which meant rules of English common law in so
far as they were applicable to Indian society and
circumstances.
By a long course of decisions of the High Courts in India
the rule of the English common law that the Crown is not,
unless expressly named or clearly intended, bound by a
statute was applied in India. In The Secretary of State in
Council of India v. Bombay Landing and Shipping Co. Ltd.(1)
the Secretary of State for India claimed priority in the
payment of a debt in the course of winding up of a company
and it was held by the High Court of Bombay that a judgment
debt due to the Crown is in Bombay entitled to the same
precedence in execution as a like judgment debt in England,
if there be no special legislative provision affecting that
right in -the particular case. The Court held that as the
Crown is not, either expressly or by implication, bound by
the Indian Companies’ Act (X of 1866), and as an order made
under that Act for the winding up of a Company does not work
any alteration of property against which execution is
sought, such an order does not enable the Court to stay the
execution of a judgment debt due to the Crown, or to the
Secretary of State in Council for India. Westropp, J., who
delivered the judgment of the Court after an exhaustive
review of the earlier authorities observed
“The King, by his prerogative, regularly is to
be preferred, in payment of his duty or debt,
before any subject although the King’s debt or
duty be the latter.”
(1) 5 Bom. H.C.R O.CJ. 23.
193
The learned Judge also observed that the rule was recognised
by the laws of many countries as applicable to the claims of
the Sovereign or the State, e.g. France, Spain, America and
Scotland and that principle was no novelty in India, because
at an earlier date it was promulgated by Hindu jurists
Yajnavalkya and others.
In The Secretary of State for India v. Mathurahbai and
Ors.(1) the rule was held to apply to India as a rule of
construction of statutes. In that case the inhabitants of a
village sued to establish their right of grazing their
cattle on certain Government land and for an injunction
restraining the Government from interfering with their
right. It was held by the High Court of Bombay that the
right of free pasturage which the plaintiffs enjoyed did not
necessarily confer that right on any particular piece of
land, and that s. 26 of the Limitation Act 15 of 1877 did
not bind the Secretary of State. It was also applied in
three later decisions of the Bombay High Court: Hiranand
Khushiram Kirpalani v. Secretary of State; (2) Secretary of
State v. Municipal Corporation Bombay (No. 1)(3) and
Province of Bombay v. The Municipal Corporation of
Bombay(4). In the first case the Secretary of State was
held not bound by ss. 305, 489 and 491 of the Bombay City
Municipal Act, 1888, which deal with levelling, metalling or
paving, sewering, draining, channelling and lighting of
private streets and with execution of that work to the
satisfaction of the Commissioner, if the work be not done in
accordance with the requisition and for recovery of the
expenses incurred in that behalf. In the second case, the
Court held that the Crown was bound by necessary implication
in respect of the charge which arises under s. 212 of the
Bombay City Municipal Act 3 of 1888, that section being an
integral part of the general scheme of the Act imposing tax
on land in Bombay including Government land. In the third
case the Bombay High Court observed that the general
principle is that the Crown is not bound by legislation in
which it is not named expressly or by necessary implication.
But reading the relevant sections in the Act relating to the
water supply it appeared that it would be impossible to
carry them out with reasonable efficiency, unless Government
was bound by them. The view of the High Court in the last
judgment that the Province was bound by the statute by imp-
lication was overruled by the Judicial Committee in Province
of Bombay v. Municipal Corporation of the City of Bombay and
Another(5) to which I will presently refer. The Madras High
Court in Bell v. The Municipal Commissioners for the City of
Madras(6) also upheld the rule which prevailed in the Bombay
High Court that the Crown is not bound by a statute unless
expressly named or clearly intended. In that case the
Superintendent of the Gun
2,1.5
(1) 1. L. R. 14 Bom. 213.
(3) I.L.R. 59 Bom. 681
(5) I.L.R. 73 I.A. 271.
(2) I.L.R. 58 Bom. 635.
(4) I.L.R. [1944] Bom. 45.
(6) I.L.R. 25 Mad. 457.
194
Carriage Factory in Madras brought timber belonging to
Government into Madras without taking out a licence, and
paying the license fee prescribed by s. 341 of the’ City of
, Madras Municipal Act. The Court held that the timber
brought into Madras by or on behalf of Government was liable
to the duty imposed by s. 341 of the City of Madras
Municipal Act, although Government was not named in the
section. Bhashyam Ayyangar, J., entered upon a detailed
analysis of the case law and set out certain principles at
p. 500. The learned Judge was of the view that “the canon
of interpretation of Statutes that the prerogative or rights
of the Crown cannot be taken away except by express words or
necessary implication, is As applicable to the Statutes
passed by the Indian Legislatures as to Parliamentary and
Colonial Statutes”. But he held that “the English law as to
the exemption of the Crown and Crown property from payment
of tolls, poor-rates and other taxes, local or imperial,
imposed by statutes rests partly upon historical reasons and
principally upon judicial decisions which do not proceed
upon a course of reasoning or principle which will be
binding on Indian Courts”. It is not necessary to express
any opinion on the question whether the general exception
engrafted by the learned Judge on the rule in so far as it
relates to taxing statute is wholly correct and applied to
all taxing statutes in India.
The Municipal Corporation of Calcutta is, it may be
recalled, seeking to collect the license fee by prosecuting
the State of West Bengal, but the primary purpose of the
prosecution is to enforce compliance with the pro-visions
relating to the conduct of a market by compelling the State
to take out a license, and paying a fee in lieu of services
rendered to the owners of the markets.
These decisions were affirmed by the Judicial Committee in
Province of Bombay v. Municipal Corporation of the City of
Bombay and Another(1). The question which fell to be
determined was whether by s. 222(1) and s. 265 of the City
of Bombay Municipal Act, 1888, which invested the
Municipality with power to carry water-mains through, across
or under any street and “into,, through or under any land
whatsoever within the city” bound the Crown in whom the
lands were vested either expressly or by necessary
implication. The Judicial Committee observed that the
general principle applicable in England in deciding whether
the Crown is bound by a statute-that it must be expressly
named or be bound by necessary implication-applies to Indian
legislation. The Board observed at p. 274 :
“The maxim of the law in early times was that
no statute bound the Crown unless the Crown
was expressly named therein, “Roy n’est lie
per ascun statute si il ne soit expressment
nosme.” But the rule so laid down is subject
(1) L.A. 73 I.A. 271.
195
to at least one exception. The Crown may be
bound, as has often been said, “by necessary
implication”. If, that is to say, it is
manifest from the very terms of the statute,
that it was the intention of the legislature
that the Crown should be bound, then the
result is the same as if the Crown had been
expressly named. It must then be inferred
that the Crown, by assenting to the law,
agreed to be bound by its provisions.”
It is true that counsel appearing before the Judicial
Committee accepted the correctness of the rule “that the
question whether or not the Crown is bound by a statute is
no different in the case of Indian legislation from that
which has long been applied in England.” But the judgment of
the Judicial Committee did not proceed upon a concession:
the Board expressly observed that they regarded the rule “as
correct”.
The Union of India now includes territory of the former
Indian States in which the law as originally existing and
which the Courts are enjoined to apply may have been
somewhat different. But that is not peculiar to the
application of the rule of interpretation which was adopted
by the Courts in British India that the State shall not be
deemed to be bound by an enactment unless it is expressly
named or by clear intendment included in the statute. Even
in respect of matters of personal law, procedure and
jurisdiction of the Courts and in other matters where
uniform statutes do not apply differences do arise and must
be determined according to the law and jurisdiction
inherited by the Courts administering justice. But the
present case concerns the administration of the law in the
town of Calcutta which has for nearly 250 years been
governed by the English common law as adopted by the various
Acts, Regulations and finally by the Letters Patents. It
may also be necessary to observe that we are not called upon
to decide whether all the prerogatives of the British Crown
have been incorporated in our system of law. Some of those
are so wholly inconsistent with the system of law-personal
and common-in India, that they have not been held
applicable, e.g. the rule of English law incapacitating
aliens from holding real property to their own use, and
transmitting it by descent or devise has never been in-
troduced in India so as to create forfeiture of lands held
in Calcutta or the mofussil by an alien and devised by will
for charitable purposes. Mayor of the City of Lyons v. The
East India Company(1): the English law of felo de se and
forfeiture of goods does not extend to a Hindu committing
suicide: Advocate General of Bengal v. Ranee Surnomoye
Dossee(2). But the rule that the Crown debt is entitled to
priority in payment of debts due to it has been adopted,.
and the State is entitled to priority in payment of debts
due to it :
(1) L.R. I Moare’s I.A. 173.
(2) (1864) 9 M.I.A.
196
The Secretary of State for India in Council v. The Bombay
Landing A Shipping Co. Ltd.(1) and M/s. Builders Supply
Corporation v. The ‘Union of India(2). As I have already
stated the adoption of the English law was not in its
entirety, but as nearly as the circumstances of the case and
of the inhabitants of the place admit. It would be
confusing the issue to hold that because some prerogatives
have not been adopted, no prerogative of the State may have
any place in our system of law. Again in considering the
limited question as to the application of the rule of
interpretation under discussion, it would be an idle
exercise to enter upon a detailed discussion of the
prerogatives which have and which have not been assimilated
in our system of law.
In Director of Rationing & Distribution v. The Corporation
of Calcutta & Ors.(3) this Court regarded the rule as one of
interpretation, and it is so expressly stated in State of
West Bengal v. Union of India(4); Sri Vankata
Seetaramanjaneva Rice and Oil Mills v. State of Andhra
Pradesh(5) and M/s. Builders Supply Corporation v. Union of
India(2).
In England and the Colonies the rule has not been restricted
to common Crown actions or the personal prerogatives of the
Crown. It excludes from the operation of statutes all
public servants acting under the authority of the Crown. It
is well-settled that in the Colonies the executive
government represents the Crown as it does in England, and
therefore the Executive Government of the Commonwealth of
Australia or of a State in Australia is not bound by a
statute unless the intention that it shall be bound is
apparent : Roberts v. Ahern(6). Again because of the origin
of the rule, its protection is not restricted to the
property and rights of the Crown alone, and applies to State
property, actions and rights.
When a statute expressly includes the State in its
operation, no difficulty arises in giving effect to the
statute. Even if there be no express provision, the State
may be bound by clear intendment of the statute, having
regard to the nature of the legislation, if the beneficent
purpose intended to be served thereby would be wholly
frustrated unless the State is bound. The rule of interpre-
tation applies only when the Court has no indication either
by express reference or by clear intendment in the statute:
a presumption arises in such a case that the words of the
statute even though general are not intended to bind the
State. The question is one of presumed intention where the
language, purpose and the -nature of the statute give no
clear indication and mere general words .ire used.
It was urged that in the Act there are certain provisions
which ,expressly refer to the liability of the State and the
binding character
5 Bom. H.C.R. O.C.J. 23. (2) A.I.R. [1965]
S.C. 1061.
(1) [1961] 1 S.C.R. 158.
(3) 4 [1964] 1
S.C.R. 371.
(5) [1964]7 S.C.R. 456. (6) [1904] 1
C.L.R. 406.
197
of those provisions against the State is not in doubt. But
that cannot be a ground for holding that the remaining
provisions apply to the State. , The Judicial Committee in
Province of Bombay v. Municipal Corporation of the City of
Bombay and Another() observed :
“They (the Judicial Committee) were pressed
with the argument that such an inference might
be drawn from certain express references to
the Crown in other parts of the Act itself,
and from the fact that by the Government
Building Act, 1899, the legislature had
provided for the exemption of Government
buildings from certain municipal laws. The
argument was that no express provisions saving
the rights of the Crown would be necessary if
the Crown were already immune. This is not an
unfamiliar argument, but, as has been said
many times, such provisions may often be
inserted in one part of an Act, or in a later
general Act, ex abundanti cautela, and, so far
as the Act of 1899 is concerned, it is
fallacious to argue that the legislature which
passed it must have had in mind the particular
sections of the Act of 1888 which are not
under review, or that it was impliedly
interpreting those sections.”
The argument that the rule had not received recognition in
the High Courts in India, before the judgment of the
Judicial Committee reported in Province of Bombay v.
Municipal Corporation of the City of Bombay and Anr.(1) was
pronounced, is belied by the course of authorities
summarised earlier. There was practically a consistent
course of authorities prior to the Constitution in support
of the principle which was affirmed by the Judicial
Committee in Province of Bombay v. Municipal Corporation of
the City of Bombay and Another(1).
The origin of the rule undoubtedly was in the prerogative
of the Crown, but there is even in the country of its origin
authority for the view that the rule is regarded primarily
as one of construction. In Madras Electric Supply
Corporation Ltd. v. Boarland(2), in dealing with the
question whether “the immunity” of the Crown “from taxation
depends on the construction of the statute or arises, from
the prerogative in some other way”, Lord MacDermott observed
:
“Whatever ideas may once have prevailed on the
subject it is, in my opinion, today impossible
to uphold the view that the Crown can find in
the prerogative an immunity from tax if the
statute in question, according to its true
construction, includes the Crown amongst those
made liable to the tax it imposes. The
appropriate rule as I under-
(1) L.R. 73 I.A. 271.
(2) [1955] A.C. 667 H.L.-
198
stand it is that, in an Act of Parliament,
general words shall not bind the Crown to its
prejudice unless by express provision or
necessary implication. That, however, is, and
has long been, regarded as a rule of
construction.
Lord Reid concurred in the view that the immunity depends
upon construction of the statute rather than on royal
prerogative. Lord Keith of Avonholm appeared to express a
different view. In India the rule has been accepted as a
rule of interpretation of statutes and applicable to all
statutes which governed State actions, authority or
property.
Is there any reason then to hold that on January 26, 1950,
the rule which previously applied to interpretation of
statutes ceased to apply thereto on the date on which the
Constitution came into force ?
The rule of interpretation was, as already stated, a settled
rule and was law in force in the territory of India within
the meaning of Art. 372 of the Constitution. I am unable to
agree with the contention that a rule of interpretation is
not “law in force” within the meaning of Art. 372. There is
no warrant for holding that a rule of interpretation which
is incorporated in a statute e.g. The Indian Succession Act,
or the General Clauses Act is law in force, and not a rule
which was enunciated by the highest Court in the realm. The
circumstance that a rule of interpretation is a rule for
determination of intention of the legislature and for its
application requires determination of facts and
circumstances outside the statute will not make it any the
less a rule of law. Acceptance of the proposition that a
decision of the highest judicial tribunal before the
Constitution is law does not involve the view that it is
immutable. A statute may be repealed, and even
retrospectively, it would- then cease to be in operation : a
decision which in the view of this Court is erroneous may be
overruled and may cease -to be regarded as law, but till
then it is law in force. It may be pertinent to bear in
mind that it was never seriously argued before us that the
judgment of the Judicial Committee which affirmed the view
expressed in a long course of decisions was erroneous in the
circumstances then prevailing.
It was said by counsel for the Corporation that it is one of
the fundamental principles of our Constitution that there is
equality between the State and the citizens and
discrimination is not permissible in the application of a
law generally expressed. it was claimed that if other
occupiers of markets take out licenses, and comply with the
regulatory provisions of the Act, and the State is not
obliged to abide by the rules, there would be unequal
treatment between owners similarly situate and that the
State may ignore
199
the rules regulating the markets, and on that account the
public interest would suffer. There is no reason however to
assume that the State under a democratic Constitution would
be impervious to public opinion, and would merely because it
is not bound by a regulatory Act perpetuate ‘a nuisance. If
it be assumed that such be the attitude of the State there
would be nothing to prevent the State from enacting express
legislation excluding itself from the operation of the
regulatory laws relating to markets. I do not think that
the guarantee of the equal protection clause of the
Constitution extends to any differential treatment which may
result in the application of a special rule of
interpretation between the State and the citizens. Nor can
it be said that under our Constitution equality in matters
of interpretation between the State and the citizens is
predicated in all respects. It must be remembered that our
Constitutional set-up is built up not anew, but on the
foundations of our old institutions. The political set up
is indisputably changed, but can it be said that our concept
of a State is so fundamentally altered that the traditional
view about State privileges, immunities and rights must be
abandoned because they had a foreign origin, an on the
supposed theory of equality between the State and the
citizens a theory which seeks to equate common good of the
people represented by the State with the rights and
obligations of the individual-the Court should decline to
give effect to the State privileges and immunities ? If it
be granted that the State in making laws is entitled to
select itself for special treatment different from the
treatment accorded to the citizen-and it is not denied that
in order to achieve public good it can do so even if there
is a differential treatment between the State and the
citizen-is there any reason to suppose that a statute which
evidently was framed on the basis of the well-settled rule
of the pre-Constitution days which accorded to the State a
special treatment in the matter of interpretation of
statutes must be deemed to have a different meaning on the
supposition that the Constitution has sought to impose
equality between the State and the citizen ? The fact that
in our federal set-up sovereignty is divided between the
Union and the States, and in the application of the rule
that the State is not bound by a statute, unless expressly
named or clearly implied, conflicts between the State
enacting a law and the Union, or another State may arise
does not give rise to any insuperable difficulty which
renders the rule in applicable to the changed circumstances,
for it is the State which enacts a legislation in terms
general which alone may claim benefit of the rule of
interpretation, and not any other State.
It was urged that even if the rule that the State is not,
unless expressly named or by necessary implication intended,
to be bound, applies, its application must be restricted to
cases where an action of the State in its sovereign capacity
is in issue. Where, however,
200
the State is following a commercial or trading activity, the
rule can have no application. But in the context of modem
notions of the functions of a welfare State, it is difficult
to regard any particular activity of the State as
exclusively trading. The State was originally regarded as
merely concerned with the maintenance of law and order, and
was not concerned with any trading activity. But that is
now an exploded doctrine. For the welfare of the people the
State does and is required in modern times to enter into
many trading activities, e.g. to effectuate control of
prices, prevent hoarding and distribute commodities in short
supply, besides maintenance of departments like Posts,
Telegraphs, Railways, Telephones etc., activities which may
have been regarded as -trading activities in the past. But
if initiation and completion of schemes for social welfare
of the people be regarded as an attribute of the exercise of
sovereign authority, it is difficult to regard activities
undertaken by the State for setting up markets for effective
distribution of goods as merely trading. Assuming that
conducting a market in a metropolitan town may be regarded
in a sense as a trading activity there is, in my judgment,
no sufficient reason to justify any distinction in the
application of the rule of interpretation to statutes
concerning sovereign authority and trading activity.
Under the provisions of the Calcutta Municipal Act the owner
or occupier of a market is required to take out a license.
But there is no express reference to the State: nor is there
anything peculiar in the nature, purpose and object or in
the language used in the enactment relating to the issue of
licenses which may suggest that the State must by necessary
implication be bound by its provisions. I am, therefore, of
the view that the High Court was in error in holding that
the State of West Bengal was bound by the provisions
relating to the issue of licenses for occupation or conduct
of a market.
I do not deem it necessary to consider the argument that
since the State cannot be imprisoned in enforcement of the
general provisions, and imposing a fine upon the State would
be futile because the hand which pays and the hand which
receives the fine is the same, an implication arises that it
was not intended that the State should be bound by s. 218 of
the Calcutta Municipal Act. in my view the penal provision
of s.541 is, though in form a provision creating an offence,
intended to enable the Corporation to collect the license
fee. The offender and the recipient of fine are therefore
not the same bodies.
Bachawat, J. By the common law of England, the Crown is not
bound by a statute save by express provision or necessary
implication. This rule was applied to Indian legislation in
201
Province of Bombay v. Municipal Corporation of the City of
Bombay(1). In The Director of Rationing and Distribution v.
Corporation of Calcutta(2), this Court followed the Privy
Council decision.
On the subject of the royal prerogative regarding
statutes Chitty in his book on “Prerogatives of the Crown at
P. 382 said “The general rule clearly is, that though the
King may avail himself of the provisions of any Acts of
Parliament, he is not bound by such as do not particularly
and expressly mention him’. It has been said that the
reason of the rule is that “it is inferred prima facie, that
the law made by the Crown, with the assent of the Lords and
the Commons, is made for the subjects, and not for the
Crown” per Alderson, B. in A.G. v. Bonaldson (3). Two rules
follow from the proposition that the law is prima facie made
for subjects and not for the Crown: (i) the Crown is not
bound by a statute save by express words or by necessary
implication, (ii) that the Crown may take advantage of a
statute, though not bound by it, unless expressly or
impliedly prohibited from doing so. This Court
categorically rejected the second rule in V. S. Rice and Oil
Mills v. State of Andhra Pradesh(4) and held that the State
cannot be permitted to rely upon the artificial rule that
the State can take advantage of a statute though not bound
by it. I think that this Court should have refused to
recognise the first rule also.
The exception of the Crown from the operation of statutes
is based sometimes on the royal prerogative, and sometimes
on a rule of construction. Originally, the exemption was
claimed and allowed on the ground of the prerogative. The
King by virtue of his prerogative could claim that a statute
was made for subjects only and he stood outside it. He
waived this prerogative right by assenting to a statute
which bound him expressly or by necessary implication. The
immunity of the Crown is now couched in the form of a rule
of construction. In spite of this modem disguise, there is
high authority for the view that this immunity is still
based upon the prerogative. In Madras Electric Supply
Corporation Ltd v. Boarland(5) Lord Keith said:
“The true explanation, easily understandable
on his torical and legal grounds, is that
words in a statute capable of applying to the
Crown may be overridden in the exercise of the
prerogative. That is necessarily involved in
the oft-repeated phrase that the King is not
bound by a statute
(1) [1946] L.R. 73 I.A. 271. (2) [1961] 1 S.C.R. 158.
(3) 10 M. & W. 117,124. (4) [1964] 7 S.C.R. 456,
463, 463-4.
(5) [1955] A.C. 667, 694.
sup. CI/66-14
202
unless by express words or by clear
implication. If the statute does not apply to
him there can be no question of his being
bound by it. It is only because it can apply
to him that appeal to the prerogative is
necessary. The conception of the prerogative,
in my view, is of something that stands
outside the statute, on which the Crown can
rely, to control the operation of the statute
so far as it prejudices the Crown”.
But the prerogative right of overriding statutes did not
extend to India. When the Crown of England became sovereign
in India, it acquired such prerogative rights as were
enjoyed by the former Indian sovereigns and such other
prerogative rights as may be said to inhere in every
sovereign power. But the common law was never bodily
imported into India and the Crown never possessed in India
all the prerogatives allowed to the Crown by the law of
England. In The Mayor of the City of Lyons v. Hon. East
India Company(1), the Privy Council held that the common law
as to alienage and the royal prerogative of forfeiture of
the lands held by a deceased alien on the ground of the
incapacity of the alien to hold real property and transmit
it by devise or descent was never’ introduced in the
Presidency town of Calcutta or the mofussil. Such a right
was not enjoyed by the Indian sovereign, nor was it a
necessary incident of sovereignty. Lord Brougham said at
pp. 280, 281, 282 and 286 of the Report:
“But it seems to be contended both here and
below, that there is something in the law
incapacitating aliens, which makes it, so to
speak, of necessary application wheresoever
the sovereignty of the Crown is established,
as if it were inherent in the nature of
sovereign power. To this a sufficient answer
has been already afforded, if the acts of the
sovereign power to which we have referred,
show that no such application to Bengal ever
was contemplated, unless direct authority can
be produced to show that the right is
inseparable from the sovereignty, and, as it
were, an essential part of it.
It certainly is not an incident to
sovereignty; in several countries the
sovereign has no such right………..
Besides, if reference be made to the
prerogative of the English Crown, that
prerogative in other particulars is of as high
a nature, being given for the same purpose of
protecting the State; and it is not contended
that these branches are extended to Bengal.
Mines of precious metals, treasuretrove, royal
fish, are all vested in the Crown, for the
purpose of maintaining its power, and enabling
it to defend the State. They are not enjoyed
by the sovereign in all or even in most
(1) [1837] 1 M.I.A. 173.
203
countries, and no one has said that they
extend to the East Indian possessions of the
British Crown………..
Upon the whole, their Lordships are of
opinion that the law, incapacitating aliens
from holding real property to their own use,
and transmitting it by descent or devise, has
never been introduced into Calcutta.”
The common law of attainder or corruption of blood and the
prerogative right of forfeiture or escheat on conviction of
treason or felony now abolished by the Forfeiture Act, 1870
(33 & 34 Vict. c. 23) did not prevail in India, see Papamma
v. Appa Rau(1)’ Nor did the English law as felo de se and
the forfeiture of goods and chattels consequent upon suicide
apply to a Hindu, though a British subject, committing
suicide at Calcutta, see Advocate-General of Calcutta v.
Ranee Surnomoye Dossee(2).
At Common law, no proceedings, civil or criminal, were
maintainable against the Sovereign in person for, it was
said, that as the Courts were her own they could have no
jurisdiction over her, see Halsbury’s Law of England, Vol.
7, Art. 544, p. 249. In India, the government did not enjoy
a general immunity from suits and legal proceedings, see The
Peninsular and Oriental Steam Navigation Company v. The
Secretary of State for India.(1) The subjection of the
Government to suits where it was liable to be sued before
the Constitution is preserved by Art. 300 of the Consti-
tution. Though orders of mandamus and injunction cannot
issue to the Crown in England, see Halsbury’s Laws of
England, 3rd Edn. Vol. II, Art. 25 and 184 pages 16 and 98,
such orders can issue to Government under Arts. 32 and 226
of the Constitution. See also State of Bihar v. Sonavati
Kumari(4). Province of Bombay v. Khusaldas Advani(5). In
England the King by his prerogative may sue in what Court he
pleases, see Craies on Statute law, 6th Edn., p. 435. The
prerogative of choice of Courts by the Crown never applied
in India. The State can sue only in a Court competent to
entertain the suit under the general law. In England it was
the prerogative of the Crown not to pay costs in any
judicial proceeding, see Craies on Statute Law, 6th edn, p.
432. But this prerogative was never recognised in India.
The State pays and receives costs like a private individual.
The Indian law did not deny that the Crown had certain pre-
rogatives. The Crown inherited the prerogatives enjoyed by
the former Indian Sovereigns and had other prerogatives
inherent in the nature of sovereignty. It was the
prerogative of the King in Council to hear appeals and
petitions from his Indian subjects,
(1) 1. L. R. 16 Mad. 384,396. (2) 9 M.I.A. 387.
(3) 5 Bom. H.C.R. Appendix 1. (4) [1961] 1 S.C.R. 728.
(5) [1950] S.C.R. 621,697.
204
see Modee Kai Khocscroo Hormusjee v. Cooverbhaee(1).
prerogative was taken away by the Abolition of Privy Council
Jurisdiction Act 1949. When there is a failure of heirs on
a person dying intestate, the Crown had the prerogative
right to take his property by escheat, and this right was
said to rest on grounds of general or universal law, see the
Collector of Masulipatam v. Cavaly Vencata Narrainapa(2),
Sonet Koor v. Himmut Bahadoor(3) Mussammat Khursaidi Begun
v. Secretary of State for India(4). The right of the
Government to take the property by escheat or lapse on the
failure of heirs or as bona vacantia for want of a rightful
owner is recognised by Art. 300 of the Constitution. The
prerogative right of the Crown to priority in payment of its
claims was recognised on the ground that this right did not
arise out of any peculiar quality in the writ of extent and
the Hindu, Muhammadan and Poituguese Sovereigns had enjoyed
a similar right, see Secretary of State for India v. Bombay
Landing and Shipping company(5). The extent of this
prerogative right may be limited by a statutory scheme of
administration, see GrovernorGeneral in Council v. Shiromani
Sugar Mills Ltd. (in liquidation)(6). It has been held that
the Government continues to enjoy this prerogative right of
precedence after the Constitution came into force, see
Builders Supply Corporation v. Union of India (7), Bank of
India v. J. Boman(8). The Crown as parens partriae had
other prerogative rights. The Crown may have also enjoyed
in India certain prerogative rights which were not allowed
to the Crown of England by the common law and those
prerogatives might vary in different parts of India, see
Bell v.Municipal Commissioners for the City of
Madras(9).Gopalan v. State of Madras (10). But in India the
Crown never enjoyed the general prerogative of overriding a
statute and standing outside it. Such a right is not
indigenous to India, nor is it a necessary incident of
sovereignty.
In The Secretary of State for India in Council v. Bombay
Landing and Shipping Company(5), Ganpat Putava v. The Col-
lector of Canars (11) the Bombay High Court held that a
prerogative of the Crown cannot be taken away except by
express words or by necessary implication. To appreciate
these rulings, it is necessary to remember that until 1861
there were constitutional restrictions on the power of the
Indian legislature to affect the prerogative of the Crown,
see Statutes 3 and 4 William cap. LXXV S. 43 and 16 and 17
Vict. cap XCV S. 43, which were swept away by later
statutes, see the Indian Councils Act, 1861 s. 24, the
Government of India Act 1915, s. 84 (1) (A), the Government
of
(1) 6 M.I.A. 448,455.
(3) [1876] I.L.R. I Cal.391.
(5) (1868) 5 Bom. H.C.R. 23.
(7) [1965] 2 S.C.R. 289.
(9) I.L.R. 25 Mad. 457.
(2) [1859-61] 8 M.I.A. 500.
(4) [1925] I.L.R. 5 Patna 538.
(6) [1946] F.C.R. 40.
(8) A.I.R. 1956 Bom. 305
(10) [1902] I.L.R. 1958 Mad. 798,802.
(11) [1875] I.L.R. I Bom. 1.
205
India (Amendment) Act, 1917, s. 2 as interpreted in The
Secretary of State v. Bombay Municipality(1), with one
exception introduced by the Government of India Act, 1935,
s. 1 10(b)(ii). Having regard to this historical
background, it was considered that the prerogative of the
Crown was a very special subject matter and in the absence
of express words or necessary implication, it should be
presumed that general words of an Indian Act were not
intended to affect the prerogative. In Bells case(2) Sir
Bhashyam Ayyangar J.therefore pointed out that the doctrine
that the prerogative could not be taken away save by express
words or by necessary implication could be based on the
maxim generalia specialibus non derogant. This maxim does
not exempt the Crown from the operation of statutes
generally whenever a statute prejudicially affects it. In
order to invoke this doctrine, the Crown must, establish
that it has some prerogative right which it claims to be
outside the purview of the statute.
As pointed out already under the Indian law the Crown could
not claim a general exemption from statutes on the ground of
the prerogative. But there is high authority for the view
that such an exemption is allowed to the Crown in England on
the basis of a rule of construction. In Madras Electric
Supply Corporation v. Boarland(3) at p. 685 Lord Macdermott
said that the rule that in an Act of Parliament general
words shall not bind the Crown to its prejudice unless by
express words or by necessary implication has long been
regarded as a rule of construction. This rule has a wide
sweep, and is not limited to cases where the prerogative
right or property of the Crown is in question. It protects
the Crown whenever general words in a statute may operate
to, its prejudice. See Broom’ s Legal Maxims, 10th Edn.,
pp. 39-40, Glanville L. Willams’ Crown Proceedings, p. 48
(f. n.). A review of the decided cases shows that until the
decision of the Privy Council in the Province of Bombays
case(4) this wide rule of construction had not obtained a
firm foothold in India. In Verubai v. The Collector of
Nasik(5), the Bombay High Court held that the Government was
bound by Art. 167 of Schedule 11 of the Indian Limitation
Act, 1877. Westropp, C.J. said:
“The legislature in passing the Limitation
Act of 1871, which is applicable to this case,
where it intends that Government should have a
longer period than the subject, has been
careful expressly to say so, as for instance,
in article 150 of Schedule II, where the
period assigned to suits brought by the
Secretary of State is sixty years from the
time of the accruer of the cause of action;
but the Legislature makes no difference
between Government and its subjects
(1) 37 Bom. L.R. 499. (2) I.L.R. 25 Mad. 457.
(3)[1955] A.C. 667,685. (4) [1946] L.R. 73 I.A. 271.
(5) I.L.R. 7 Bom. 552.
206
in the case of appeals or applications-see
Govind Lakshman v. Narayan Moreshvar(1)”.
In Appava v. The Collector of Vizagapatam (2), the Madras High
Court held that the Government was bound by Art. 178 of the
Indian Limitation Act, 1877. Turner, C.J. and Muttusami Ayyar,
J.said:
“If the maxim on which the counsel for the
Crown relies applies to this country-and the
Crown is not bound by the provisions of any
Act unless they are expressly declared binding
on the Crown-it may be inferred from the
circumstance that this Act contains provisions
prescribing a Limitation to the Government for
the institution of suits and presentation of
criminal appeals that the Legislature
contemplated that the Crown should be subject
to the provisions of the Act and should enjoy
a privilege to the extent expressed and no
further-expressum facit cessare tacitum”
In the last two cases, the Courts did not apply the strict
English rule that the Crown under the prerogative was not
bound by the statute of limitation, see Bank Voor Handel v.
Hungarian Administrator(3). In The Secretary of State for
India v. Mathurabhai(4) Sargent, C. J. was inclined to apply
the English rule that the Crown is not included in an Act
unless there are words to that effect and to hold that the
Government was not bound by S. 26 of the Indian Limitation
Act, 1877. But he observed that it was not necessary to
express a decided opinion on the question. In Bells,
case(5), the Madras High Court held that the Government was
bound by the taxing provisions of s. 341 of the City of
Madras Municipal Act, 1884, though not named in that
section. Sir Bhashyam Ayyangar, J. reviewed the earlier
cases and decisively rejected the general claim of immunity
of the Crown from a statute imposing a tax on the basis of
any prerogative right or supposed rule of construction. In
Motilal v. The Collector of Ahmedabad(6). Russel, Acting C.
J. and Beaman, J. doubted the application of the English
rule of construction in this country. They said:
“It is contended that the maxim of English
law that the Crown cannot be bound by any
statute unless expressly named therein
applies, and reference is made to the cases of
Ganpat Putaya v. The Collector of Kanara(7)
The Secretary of State for India v.
Mathurabhai(8). Without in any way wishing to
prejudge the question or fetter future
argument,
(1) 11 Bom H.C.R. 1 1 1.
(2) [1882] I.L.R.4 Mad. 135.
(3) [1954] 1 A.E.R. 969, 984 (H.L).
(4) [1889] I.L.R. 14 Bom. 213.
(5) I.L.R. 25 Mad. 457.
(6) [1906] I.L.R. 31 Bom. 86, 89.
(7) [1875] I.L.R. I Bom. 1
(8) [1889] I.L.R. 14 Bom. 213.
207
we may say that as at present advised we
entertain some doubt whether an exact analogy
exists between the privileges and immunities
of the Crown under the Constitutional Law of
England and those of servants of the Indian
Government.”
The full Bench left the question open. In The Secretary of
State v. Mohammed Yysuf(1), Pratt J. held that ss. 17(2)
(vii) and 90 of the Indian Registration Act, 1908 contained
an implication that the Crown was bound by the Act. In
Hiranand Khushiram v. Secretary of State for India(2),
Beaumont, C. J. and Rangnekar, J. applied the strict English
rule of construction and held that since the Crown was not
named either expressly or by necessary implication in ss.
305, 489 and 491 of the City of Bombay Municipal Act, 1888,
the Crown was not bound by those sections. Soon thereafter,
the same learned Judges held in Secretary of State for India
v. The Municipal Corporation of Bombay(3), that the Crown
was bound by s. 212 of the City of Bombay Municipal Act,
1888 by necessary implication, though not expressly named
therein. In Province of Bombay v. The Municipal Corporation
for the City of Bombay(4), Beaumont, C. J. and
Rajadhayaksha, J. held that ss. 222(1) and 265 of the City
of Bombay Municipal Act, 1888 by necessary implication bound
the Crown. They refused to follow the dictum of Day, J. in
Corton Local Board v. Prison Commissioner(5) that the test
of necessary implication binding the Crown involves that the
legislation is unmeaning unless the Crown is bound. They
said:
“………. if it can be shown that
legislation cannot operate with reasonable
efficiency, unless the Crown is bound, that
would be a sufficient reason for saying that
the Crown is bound by necessary implication.
”
This decision was reversed by the Privy Council on appeal in
Province of Bombay’s case(6). The Privy Council rejected
the test laid down by the Bombay High Court. They held that
the strict English rule of construction exempting the Crown
from the operation of statutes applied in the case of Indian
legislation. The parties appearing before the Privy Council
concurred in accepting this view. The attention of the
Privy Council was not drawn to Bell’s case(7) and the
propriety of applying the English rule to Indian legislation
was not considered. Lord Du Parcq said:
“If it can be affirmed that, at the time when
the statute was passed and received the royal
sanction, it was apparent from its terms that
its beneficient purpose must be wholly
frustrated unless the Crown were bound, then
it may be inferred that the Crown has agreed
to be bound.”
(1) [1919] 21 Bom. L.R. 1120, 1136.(2)
[1934] I.L.R. 58 Bom. 635.
(3) 37 Bom. L.R. 499. (4) I.L.R. 1944 Dom.
95.
(5) [1904] 2 K.B. 165. (6) (1946) L.R. 73
I.A. 271.
(7) I. L. R. 25 Mad. 457.
208
They held that the Crown was not bound by ss. 222(1) and 265
of the City of Bombay Municipal Act, 1888 and an inference
of necessary implication binding the Crown could not be
drawn from certain express references to the Crown in other
parts of the same Act and from the exemption of the Crown in
a later general Act since such provisions are often inserted
ex abundanti cautela. It is to be noticed that in several
earlier decisions the Bombay High Court had drawn an
inference of necessary implication binding the Crown in
other sections of the same Act. Moreover, except the Bombay
High Court, no other High Court held that the English c of
Crown exemption from statutes applied to India. Even in
Bombay, some of the Judges doubted the applicability of the
rule to Indian conditions. The imposition of the strict
rule of construction by the Privy Council decision was
received very unfavourably in India. In Corporation of
Calcutta v. Sub Postmaster, Dharamtala(1), the Calcutta High
Court felt bound to follow the Privy Council decision, and
held that the Government was not bound by the provisions of
the Calcutta Municipal Act, 1923. Mookerjee, J., however,
said:
“Had the question been res integra and had it
been open ,-to us to consider the question
untrammelled by a decision of the Judicial
Committee we might have considered the
reasonableness and propriety of applying the
principles as enunciated by the English Courts
and also how far they should be applied to
Indian conditions. For some years past the
position of the Crown with regard to liability
and procedure has been considered by the
lawyers in England as being antiquated and
absurd as contrasted with that of ordinary
individuals and reform in this respect has
been considered to be long overdue.”
In The Corporation of Calcutta v. Director of Rationing and
Distribution(2), the Calcutta High Court refused to follow
the Privy Council decision and held that the State was bound
by s. 386(1) (a) of the Calcutta Municipal Act, 1923. This
decision was reversed in The Director of Rationing and
Distribution’s case (3) and a majority of a Bench of this
Court held that the law was correctly laid down in the
Province of Bombay’s case(4) and continued to apply in this
country even after the Constitution came into force, and the
State was not bound by s. 386(1) (a) of the Calcutta
Municipal Act, 1923. Wanchoo, J. dissented and held that
the rule laid down by the Privy Council did not apply to the
construction of Indian statutes after the Constitution-came
into force. Later decisions of this Court disclose a
tendency to relax and soften the rigour of
(1) [1948]54 C. W. N. 429. (3) [1961] 1 S.C.R. 158.
(2) A.I.R. 1955 Cal. 282.
(4) (1964) L.R. 73 I.A. 271.
209
this rule. In Sri Venkata Seetaramanjaneya Rice and Oil
Mills and others v. State of Andhra Pradesh(1) this Court
held that an inference of necessary implication binding the
State may be drawn if “the conclusion that the State is not
bound by the specific provision of a given statute would
hamper the working of the statute, or would lead to the
anomalous position that the statute may lose its efficacy”.
In other words, the Court was inclined to revive the Bombay
heresy rejected by the Privy Council.
With regard to this rule of exemption of the Crown from
statutes, Glanville L. Williams in his book on “Crown
Proceedings”, 1948, pp. 53 and 54 said:
“The rule originated in the Middle Ages, when
it perhaps had some justification. Its
survival, however, is due to little but the
vis inertiae. The chief objection to the rule
is its difficulty of application …. With the
great extension in the activities of the State
and the number of servants employed by it, and
with the modern idea, expressed in the Crown
Proceedings Act, that the State should be
accountable in wide measure to the law, the
presumption should be that a statute binds the
Crown rather than that it does not.”
Thus, the artificial rule of construction has not escaped
criticism even in England. This rule of construction is
unsuitable to Indian conditions and should never have been
applied to India. Before 1946 there was no settled course
of decisions of the Indian Courts necessitating or
justifying the application of this rule to the construction
of Indian statutes. Rules of English law which could not
suitably be applied to Indian conditions were not introduced
even in the Presidency Town of Calcutta by 13 Geo HI c 63 or
21 Geo III c 70 or any other cognate statute or by the
Charter of Charles II in 1661 see The Mayor of the City of
Lyons v. The Hon. East India Company(2) The Advocate
General of Calcutta v. Ranee Surnomoyee Dossee(3).
Technical rules of English common law were not applied even
in the Presidency Towns if they clashed with principles of
justice, equity and good conscience, see Abdul Kawder v.
Mahomed Mera (4) Mool Chand v. Alwar Chetty (5). In the
mofussil, common law had no force proprio vigore but the
Judges were free to adopt and apply any rule of common law
if it was consonant with principles of justice, equity and
good conscience. Artificial rules of Common Law based on
feudal notions had no application in India. In Mithibai v.
Limii Nowroji Benaji(6), the Bombay High Court refused to
apply the rule in Shelley’s case in a case arising between
Parsis in the mofussil. In The State of Rajasthan v. Mst.
Vidyawati(7)
(1) [1964] 7 S.C.R. 456, 462
(2) [1837]1 M. A. 175, 246-9, 274-5.
(4) I.L.R 4 Mad 410
(5) I.L.R. 39 Mad. 584, 553. Bom. 506,531.
(3) 9 M.I.A,387, 407-13, 424-30.
(7) [1962] 2 Supp. S.C.R 989, 1007.
(6) (1881) I.L.R 5 Bom. 506, 531.
210
this Court refused to apply rules of immunity of the Crown
based on old, feudalistic notions. In interpreting a
statute, it is the duty of the Court to give effect to the
expressed intentions of the legislature. There is no
compelling reason why the Courts in India should not give
full effect to the general words of a statute on the basis
of some artificial rule of construction prevailing in
England.
No doubt, there are many Indian Acts which expressly provide
that the Crown or the Government shall be bound by their
provisions. See the Indian Arbitration Act No. 10 of 1940,
s. 43, Trades and Merchandise Marks Act No. 43 of 1958, s.
130, the Factories Act No. 63 of 1948, s. 116, the Oil
Fields (Regulation and Development) Act No. 53 of 1948, the
Mines Act, 1952, s. 85. Some of these Acts are modelled on
English statutes which contain similar provisions. In some
Acts, the express provision binding the Government is
inserted by way of abundant caution. But the bulk of the
Indian legislation proceeds upon the assumption that the
Government will be bound unless the contrary is stated.
Many Acts like the Code of Civil Procedure, 1908 and the
Indian Contract Act 1872 make special provisions for the
Government in respect of particular matters on the
assumption that in respect of all other matters the
Government will be bound by the general provisions of the
Act. The Indian Limitation Act 1882 provided a special
period of limitation for suits by the Government on the
assumption that the Government like the subjects will be
bound by its other general provisions. To apply the
technical rule of construction exempting the Crown from the
operation of Indian statutes will be to stultify the
intention of the legislature in most cases. The English
Courts have gone to the length of deciding that the Crown is
not bound even by general regulations as to public safety,
see Cooper v. Hawkins(1). Such a result has not escaped
criticism even in England. In India, no one has doubted
that general regulations as to public safety bind the
Government equally like the citizens.
The Director of Rationing and Distribution’s case(2) left
open the question whether the State could claim immunity
from the provisions of a statute with regard to its trading
or commercial activities. But the executive power of the
State extends to the carrying on of a trade or business, see
Art. 298 of the Constitution. On a question of construction
of a statute, no rational distinction can be made between
the trading and non-trading activities of the State. If the
State is not bound by a statute, it would seem that it is
not so bound in respect of all its activities.
in a country having a federal system of government, it is
difficult to apply the rule of Crown exemption from
statutes. In
(1) [1904] 2 K.B. 164.
(2) [1961] 1 S.C.R. 158.
211
R v. Sutton(1), the High Court of Australia held that this
presumption should not, be applied so as to bring about
either State exemption from federal laws or federal
exemption from State statutes. But the contrary opinion
seems to have prevailed in later cases, see Minister of
Works (W.A.) v. Gulson(2). The Commonwealth of Australia v.
Bogle(3). This branch of Australian law is discussed in
detail by Dr. Wynes in his book on Legislative, Executive
and Judicial Powers, 3rd Edition pp. 518 to 544. We should
not import in this country either the English rule of
implied exception of the Crown or the subtle distinctions
engrafted on it by the Australian Courts. Our system of
Government is federal in character. The taxing power is
vested both in the Union and the States. Subject to certain
constitutional restrictions, the Union can tax the State and
the State can tax the Union. There is no ground for
presuming that the States are excluded from the scope of a
general taxing statute enacted by Parliament or that the
Union is outside the purview of the general words of a
taxing statute enacted by a State legislature.
I am therefore of the opinion that the rule that the Govern-
ment is not bound by a statute unless it is expressly named
or bound by necessary implication does not prevail in this
country and the decisions in the Province of Bombay’s
case(4) and The Director of Rationing and Distribution’s
case(s) and the subsequent decisions applying the rule to
the construction of Indian Acts should not be followed. The
imposition of this artificial rule has been harmful to our
body politic. We have power to reconsider our previous
decisions, see The Bengal Immunity Company Ltd. v. The State
of Bihar(6). This is a fit case where we should exercise
this power. If the rule of common law controlling the
operation of a statute on the ground of the prerogative
applied to India, it would be a law in force before the
Constitution and would continue to be in force by virtue of
Art. 372 of the Constitution. It would be the law in force
because it would limit and control the operation of the
existing Indian Acts. But we have ample power to say that
this rule was not in force in India and the Indian law was
not correctly laid down by the Privy Council in the Province
of Bombay’s case(4) and the decisions which followed it.
There is no presumption that the provisions of an Act do not
bind the State (using the expression “State” in a
compendious sense as including the Union and the States).
In each case, it is a question of fair construction of the
Act whether or not any particular provision of the Act binds
the State. The intention of the legislature has to be
gathered on a careful scrutiny of the Act in question.
Particular care should be taken in scrutinising the pro-
visions of a taxing or a penal Act. If the application of
the Act
(1) [1908] 5 C. L. R. 789.
(3) [1953] 89 C. L. R. 229, 254.
(5) [1961] 1. S.C.R. 158.
(2) [1944] 69 C. L. R. 338.
(4) [1946] L.R. 73 I.A. 271.
(6) [1955] 2 S.C.R. 603.
212
leads to some absurdity, that may be a ground for holding
that the State is excluded from its operation by necessary
implication. If the only penalty for an offence is
imprisonment, the State cannot be convicted of the offence,
for the State cannot be locked up in prison. If the penalty
for the offence is fine and the fine goes to the
consolidated fund of the State, it may be presumed that the
penal provision does not bind the State, for the legislature
could not have intended that the State will be the payer as
well as the receiver of the fine. Presumably, the Union is
not bound by the Central Income-tax Act because if it paid
income-tax, it will be both the payer and the receiver.
Likewise, a State is prima facie not bound by a State
Agricultural Income-tax Act where the tax is receivable by
it. Moreover cases may conceivably arise where “press
provisions in a statute binding the State in respect of
certain specific matters may give rise to the necessary
implication that the State is not bound in respect of other
matters.
The Calcutta Municipal Act, 1951 contains special provisions
exempting the Government from some of its provisions.
Section 167(2) exempts from the consolidated rate certain
open spaces and parade grounds which are the property of the
Government. Section 208(1)(b) exempts certain carriages and
animals belonging to the Government from payment of tax on
carriages and animals. Section 225(1) (c) proviso exempts
carts which are the property of the Government from payment
of registration fees. Sections 218(1) and 541(1)(b) are
however framed in general terms and do not expressly exempt
the Government from their operation. Under s. 218(1) it is
the duty of every person carrying on any of the trades
mentioned in schedule TV to take out a licence and to pay
the prescribed fee. Under s. 541(1) (b) any person carrying
on such a trade without taking out the licence is punishable
with fine. Prima facie, the two provisions apply to all
persons including the State Government. Section 218 is a
taxing section and its object is to levy revenue for the
municipality. There is no reason why the State Government
like any other person should not take out a license and pay
the prescribed fee if it chooses to exercise or carry on a
trade and why it should not be punished with fine under S.
541(1)(b) if it chooses to carry on a trade without taking a
license. By S. 541(2), such fine, when levied, is taken by
the Municipality in full satisfaction of the demand on
account of the license Fee. Section II 5 of the Act no
doubt provides that all monies realised or realisable under
the Act (other than fine levied by magistrates) shall be
credited to the municipal fund. Reading sections 115 and
541(2) together it appears that the excepting words “other
than fine levied by magistrates” in s. 115 do not refer to
the fine levied under s. 541. The general provisions of s.
115 must be read subject to the special provisions of s.
541(2) and the fine realisable under s. 541 is receivby the
Municipality. It follows that the State Government is
213
the payer but is not the receiver of the fine. There is
nothing to indicate that the State Government should be
excluded from the purview of s. 218(1) and s. 541(1)(b).
Section 218 renders the State liable to pay the license fee.
Section 541(1) provides the remedy for the recovery of the
fee in case of default in taking out the license and payment
of the fee. If we are to hold that s. 218 (1) applies to
the State but s. 541(1) (b) does not, the result would be
that though the State is liable to pay the license fee, the
Municipality will have no remedy against the State for the
recovery of the fee. The legislature could not have
contemplated such a result.
Section 541 (1)(b) is a penal provision. But the State is
not necessarily exempt from the operation of a statute
having a punitive aspect. No doubt, under s. 547(A) the
Court is competent to direct imprisonment of the offender in
default of the payment of fine under s. 547(1)(b).
Obviously, this provision cannot be applied to the State,
because the State cannot be detained in prison. But there
is no reason why s. 541(1) (b) should not be applied to the
State. In Rani Sonavati Kumari v. The State of Bihar(‘)
this Court held that under the punitive provisions of 0 –
39, r. 2(3) of the Code of Civil Procedure, 1908, the Court
could direct attachment of the property of the State for
breach of an order of injunction, though the Court could not
direct detention of the State in civil prison.
The High Court found that the State of West Bengal was
carrying on a trade referred to in schedule IV of the
Calcutta Municipal Act, 1951, and was bound to take out a
license under s. 218(1). It is common case that the State
did not take out a license for 1960-61. The State was
therefore rightly convicted by the High Court under s.
541(1). In the judgment of the High Court it is stated by
inadvertence that the conviction was under s. 537, but from
the materials on the record it is clear that the High Court
intended to pass the order of conviction under s. 541. It
was argued that the State was the owner of a market and did
not carry on any business. it was suggested that the trades,
if any, in the market were carried on by the stall-holders
and not by the Government. But the High Court has recorded
the finding that the Government carried on a trade. In this
appeal under Art. 136 of the Constitution, I do not propose
to interfere with this finding Of fact. This judgment will
not preclude the Government from proving in any future case
that it is not carrying on any trade or business at 1,
Orphanage Road, Calcutta,
The appeal is dismissed.
ORDER
In accordance with the opinion of the majority, the appeal
is dismissed.
Y. P.
(1) [1961] S.C.R.728.
214