{"id":97420,"date":"1966-10-28T00:00:00","date_gmt":"1966-10-27T18:30:00","guid":{"rendered":"https:\/\/www.legalindia.com\/judgments\/lala-hari-chand-sarda-vs-mizo-district-council-anr-on-28-october-1966"},"modified":"2019-02-15T20:07:27","modified_gmt":"2019-02-15T14:37:27","slug":"lala-hari-chand-sarda-vs-mizo-district-council-anr-on-28-october-1966","status":"publish","type":"post","link":"https:\/\/www.legalindia.com\/judgments\/lala-hari-chand-sarda-vs-mizo-district-council-anr-on-28-october-1966","title":{"rendered":"Lala Hari Chand Sarda vs Mizo District Council & Anr on 28 October, 1966"},"content":{"rendered":"
Supreme Court of India<\/div>\n
Lala Hari Chand Sarda vs Mizo District Council & Anr on 28 October, 1966<\/div>\n
Equivalent citations: 1967 AIR 829, \t\t 1967 SCR (1)1012<\/div>\n
Author: Shelat<\/div>\n
Bench: Shelat, J.M.<\/div>\n
           PETITIONER:\nLALA HARI CHAND SARDA\n\n\tVs.\n\nRESPONDENT:\nMIZO DISTRICT COUNCIL & ANR.\n\nDATE OF JUDGMENT:\n28\/10\/1966\n\nBENCH:\nSHELAT, J.M.\nBENCH:\nSHELAT, J.M.\nSUBBARAO, K.\nBACHAWAT, R.S.\n\nCITATION:\n 1967 AIR  829\t\t  1967 SCR  (1)1012\n CITATOR INFO :\n D\t    1972 SC1816\t (16)\n D\t    1974 SC1489\t (16)\n RF\t    1978 SC1457\t (62)\n RF\t    1980 SC1789\t (36)\n R\t    1981 SC1829\t (115)\n RF\t    1985 SC 613\t (5)\n\n\nACT:\nLushai Hills District (Trading by non-Tribals) Regulation (2\nof 1963), s. 3-Trading licence to non-Tribal-If violative of\nArt.  19  of the Constitution-Constitution  of\tIndia,\tArt.\n19(1)(g)-If hits s. 3 of Lushai Hills District Regulation.\n\n\n\nHEADNOTE:\nThe Executive Committee of Mizo District Council refused  to\nfurther renew the temporary licence issued to the appellant,\na  non-trader,\tfor trading in Mizo District.\tThe  licence\ncould  be  issued for one year only and\t the  appellant\t was\ntrading\t after applying and obtaining its renewal from\ttime\nto  time.  The appellant filed a writ petition,\t contending,\nthat  the order was mala fide in the sense that\t though\t the\nreason\tgiven for refusal was that the number of  non-Tribal\ntraders\t had reached the maximum, the Committee had in\tfact\ngranted licences to new traders, and that the said order and\ns.  3 of the Lushai Hills District (Trading by\tnon-Tribals)\nRegulation,  1953 was invalid being violative of Art.  19(1)\n(g)  of\t the Constitution.  The High  Court  maintained\t the\norder.\tIn appeal to this Court.\nHELD : (Per Subba Rao, C. J. and Shelat, J.) : Section 3  of\nthe  Regulation\t is  violative\tof  Art.  19(1)(g)  of\t the\nConstitution.\nEven  if the Sixth Schedule can be said to contain a  policy\nand  the  Regulation  may be said to have  been\t enacted  in\npursuance  of  such a policy an analysis of  the  Regulation\nshows  that that is not sufficient.  Even if a statute\tlays\ndown' a policy it is conceivable that its implementation may\nbe  left  in  such  an arbitrary  manner  that\tthe  statute\nproviding  for\tsuch  implementation  would  -amount  to  an\nunreasonable  restriction.   A\tprovision  which  leaves  an\nunbridled  power  to  an authority cannot in  any  sense  be\ncharacterised as reasonable.  Section 3 of the Regulation is\none such provision'.\nThe  Regulation contains no principle or criterion on  which\nthe  Executive Committee should grant or refuse to  grant  a\nlicence\t or its renewal; nor does it provide  any  machinery\nunder which an applicant can show cause why his\t application\nfor  a\tlicence or its renewal should not be  rejected;\t nor\ndoes  it provide any superior authority before whom such  an\napplicant can establish that the refusal by the Committee is\narbitrary  or  without any proper cause; and it\t leaves\t the\ntrader\tnot  only  at the mercy of the\tCommittee  but\talso\nwithout any remedy.\nIn the present case, the Committee had given the reason\t for\nrefusal\t to renew the licence, but the order did  not  state\nwhat  that maximum was or who prescribed such a\t number\t and\nunder  what authority or what was the criterion\t for  fixing\nany particular maximum. [1020 D; 1021 A-F]\n(Per Bachawat, J. dissenting) : Section 3 of the  Regulation\nis   not  violative  of\t Arts.\t14  and\t 19(1)(g)   of\t the\nConstitution.\nIf  paragraph 10 of the Sixth Schedule of  the\tConstitution\ncannot\tbe  regarded as violative of any  provision  in\t the\nConstitution,  it  is  impossible to say that s.  3  of\t the\nRegulation  which is in strict conformity with paragraph  10\nis  violative of Arts. 14 and 19(1)(g).\t The  protection  of\nthe\n 1013.\ninterests  of  the  Scheduled Tribes is to  be\tthe  guiding\npolicy\tregulating  the exercise of the\t discretion  of\t the\nDistrict Council. in. the matter of granting or\t withholding\ntrading licences to non-tribal traders.\nIn the present case, the Executive Committee found that\t the\nmaximum limit of non-tribal traders had been reached, and in\nthe  interest  of the tribal it was not desirable  to  issue\nlicence to more non-tribal traders.  It was neither  alleged\nnor shown that the Committee discriminated between similarly\nsituated persons. [1023 G; 1024 C-D; 1025 H ],\n\n\n\nJUDGMENT:\n<\/pre>\n
CIVIL APPELLATE JURISDICTION : Civil Appeal No. 648 of 1964.
\nAppeal by special leave from the judgment and. order  dated,
\nNovember 23, 1960 of Assam and Nagaland High Court. in Civil
\nRule No. 88 of 1960.\n<\/p>\n
Sukumar Ghose, for the appellant.\n<\/p>\n
The respondent did not appear.\n<\/p>\n
The Judgment Of SUBBA RAO, C. J. and SHELAT, J. was  delive-
\nred  by\t SHELAT.,  J. BACHAWAT, J.  delivered  a  dissenting
\nOpinion.\n<\/p>\n
Shelat,\t J.  We\t regret\t our inability\tto  agree  with\t the
\nconclusion reached by Bachawat J.\n<\/p>\n
The appellant, a non-tribal, started trading at Aijal, Mizo,
\nDistrict,  in 1957 under a temporary licence issued  by\t the
\nMizo\t  District  Council  investing\tabout  Rs.  50,000\/-
\ntherein. The temporary licence could be issued at a time for
\na year only and therefore     he  applied for  and  obtained
\nits renewal from time to time upto\tMay  31,  1960.\t  He
\napplied for a further renewal whereupon the  Executive
\nCommittee of the District Council passed an order dated July
\n11, 1960 refusing any further renewal and -directing him to.
\nremove\this properties from the District by the end of\tJuly
\n1960,\t  and imposed a fine of Rs. 5001- in case he  failed
\nto comply with\t    it.\n<\/p>\n
The  appellant\tfiled  a  petition under  Art.\t226  of\t the
\nConstitution  in  the High Court of Assam against  the\tsaid
\norder contending,   that the said order was malafide in\t the
\nsense that though the reason  given for refusal was that the
\nnumber of non-tribal traders had.  reached  the maximum\t the
\nCommittee had in fact granted licences\tto new traders,\t and
\nthat the said order and section 3 of the Lushai\t  Hills
\nDistrict (Trading by non-Tribals) Regulation, 2 of 1953 were
\ninvalid\t being\tviolative of Art. 19(1)(e) and\t(g)  of\t the
\nConstitution.  The  High Court struck down that part of\t the
\nsaid order which    directed  him to remove  his  properties
\nfrom the District and which   imposed fine but dismissed the
\nrest of the petition, firstly, on the\tground of delay\t and
\nsecondly on the ground that the said order was\t  a    valid
\norder  and was not discriminatory.\t    The\t High  Court
\nalso\t  repelled  the\t contention that the  power  of\t the
\nCouncil\t was  unrestricted  or arbitrary.   The\t High  Court
\nobserved
\n1014<\/span>
\n\t      “The power cannot be said to be  unrestricted.
\n\t      The licence is to be granted or refused having
\n\t      regard  to  the  underlying  object  (if\t the
\n\t      enactment.   This\t Regulation  was  passed  in
\n\t      pursuance\t of  the  provisions  of  the  Sixth
\n\t      Schedule\tof  the\t Constitution  which   gives
\n\t      specific power to the District Council to pass
\n\t      regulations affecting the right of non-Tribals
\n\t      to trade within the tribal areas and in  order
\n\t      to effect the purpose underlying the provision
\n\t      of  the  Sixth Schedule  this  Regulation\t was
\n\t      enacted.\t If  having regard to the  scope  of
\n\t      trade in that locality the number of  licences
\n\t      is restricted by the authorities, it cannot be
\n\t      said  that  the exercise of such\ta  power  is
\n\t      discriminatory.”\n<\/p>\n
This  appeal by special leave challenges the correctness  of
\nthis order by which the High Court dismissed the petition.
\nThe appellant’s contention before us was that the said order
\nwas  invalid as it was based on an invalid provision of\t law
\nwhich  infringed his fundamental right to carry on  business
\nat  Aijal under Art. 19(1)(g) that the refusal to allow\t him
\nto  carry  on  his  business  amounted\tto  an\tunreasonable
\nrestriction  and  that\tsection 3 of  the  Regulation  which
\nempowers  the  Council to refuse to permit him to  carry  on
\nbusiness  was  invalid\tas it conferred on  the\t Council  an
\narbitrary  and\tuncanalized power enabling it to  refuse  to
\ngrant a licence or its renewal according to its sweet will.
\nThe Sixth Schedule to the Constitution constitutes the\tMizo
\nDistrict, formerly known as the Lushai Hills District, as an
\nautonomous district.  Paragraph 10 of that Schedule provides
\nfor the power of the District Council to make Regulation for
\nthe  control  of money-lending and trading  by\tnon-tribals.
\nClauses 1 and 2 of that paragraph read as under —\n<\/p>\n
\t      (1)   The\t District Council of  an  autonomous
\n\t      district\t may   make  regulations   for\t the
\n\t      regulation  and  control of  money-lending  or
\n\t      trading  within the district by persons  other
\n\t      than   Scheduled\t Tribes\t resident   in\t the
\n\t      District.\n<\/p><\/blockquote>\n
\t      (2)   In\tparticular and without prejudice  to
\n\t      the  generality of the foregoing\tpower,\tsuch
\n\t      regulations may\n<\/p><\/blockquote>\n
\t      (a)prescribe that no one except the holder  of
\n\t      a licence issued in that behalf shall carry on
\n\t      the business of money landing\n<\/p><\/blockquote>\n
\t      (b)
\n\t      (C)\n<\/p><\/blockquote>\n
\t      (d)prescribe  that  no  person who  is  not  a
\n\t      member of the Scheduled Tribes resident in the
\n\t      District shall
\n\t       1015<\/span>
\n\t      carry  on wholesale or retail business in\t any
\n\t      commodity\t except\t under a licence  issued  in
\n\t      that behalf by the District Council.\n<\/p><\/blockquote>\n
Paragraph  10  thus empowers the District  Council  to\tmake
\nRegulations for regulating and controlling money-lending and
\ntrading by non-tribals in the District and in particular  to
\nprovide\t by such Regulations that no non-tribal shall  carry
\non any trade without a licence.\t In pursuance of this  power
\nthe  District  Councils enacted the  Lushai  Hills  District
\n(Trading  by non-Tribal) Regulation, 2 of 1953 the  preamble
\nof which merely states that it was expedient to provide\t for
\nthe  regulation\t and control of trading\t within\t the  Lushai
\nHills  District\t by  persons  other  than  scheduled  tribes
\nresident  in  the  District.  Section 3\t of  the  Regulation
\nprovides that no person other than a Tribal resident in\t the
\nDistrict shall carry on wholesale or retail business in\t any
\ncommodities except under and in accordance with the terms of
\na licence issued by the District Council.  The first proviso
\nto this section does not concern us as it deals with  perma-
\nnent  licences to be issued to persons who were carrying  on
\nbusiness prior to the enactment of the Regulation.  But\t the
\nsecond\tproviso\t seems\tto  apply  to  both  permanent\t and
\ntemporary  licences  and  lays down that  if  a\t licence  is
\nrefused,  the grounds of refusal should be recorded  by\t the
\nDistrict  Council.   Sections  4  and  5  prescribe  that  a
\nlicensee  should maintain accounts in prescribed  forms\t and
\nsuch accounts should be open to inspection by an  authorised
\nofficer.  Section 6 empowers the Executive Committee to make
\nrules for carrying out the purposes of the Regulation and in
\nparticular  to\tprovide\t the  form  and\t conditions  of\t the
\nlicence, the fees therefor, the procedure for applying for a
\nlicence,  the  forms  of accounts to be\t maintained  by\t the
\nlicensee  and  for  any\t other\tmatter\tconnected  with\t  or
\nancillary to the matters aforesaid.  Section  authorises the
\nExecutive Committee to cancel the licence of a trader if  he
\nwere convicted for contravention of any of the provisions of
\nthe  Regulation.   In exercise of the  aforesaid  power\t the
\nExecutive   Committee  framed  the  Lushai  Hills   District
\n(Trading by non-Tribals) Rules, 1954.  Rule 5(2)(a) provides
\nthat  the  terms  and conditions of  the  licence  shall  be
\nstrictly adhered to by the licensee, a contravention thereof
\nbeing punishable under the law for the time being in  force.
\nThe  Rule also provides that no temporary licence  shall  be
\ngranted for a period exceeding one year at one time.   Rules
\n6  and\t7 deal with permanent licences,\t that  is,  licences
\ngranted\t to  non-tribals  carrying on  business\t before\t the
\nenactment of the said Regulation.  We are not concerned with
\nthose  Rules  as the appellant is not one of  those  persons
\nentitled to a permanent licence.\n<\/p>\n
The appellant being a citizen of India and the Mizo District
\nbeing  part  of\t the Union Territory he\t has  undoubtedly  a
\nfundamental  right under Art. 19(1)(g) to carry on trade  in
\nany part of
\n1016<\/span>
\nthe  country including the Mizo District.   Any\t restriction
\ninfringing  such  a right can only be sustained if it  is  a
\nreasonable  restriction\t imposed  in  the  interest  of\t the
\ngeneral\t public\t as envisaged by Art. 19(6).   In  State  of
\nMadras v. V.G. Row<\/a>(1) this Court laid down an elaborate test
\nof  reasonableness which has since been accepted in  several
\nsubsequent  decisions.\t Patanjali  Sastri  C.\tJ.  in\tthat
\ndecision observed :-\n<\/p>\n
\t      “In  considering\tthe reasonableness  of\tlaws
\n\t      imposing\trestrictions on\t fundamental  rights
\n\t      both the substantive and procedural aspects of
\n\t      the  impugned law should be examined from\t the
\n\t      point  of view of reasonableness and the\ttest
\n\t      of reasonableness, wherever prescribed  should
\n\t      be applied to each individual statute impugned
\n\t      and  no abstract -standard or general  pattern
\n\t      of   reasonableness  can\tbe  laid   down\t  as
\n\t      applicable  to all cases.\t The nature  of\t the
\n\t      right  alleged  to have  been  infringed,\t the
\n\t      underlying purpose of the restriction imposed,
\n\t      the extent or urgency of the evil sought to be
\n\t      remedied\t thereby,   the\t  disproportion\t  of
\n\t      imposition,  the prevailing conditions at\t the
\n\t      time  should enter into the judicial  verdict.
\n\t      ”\n<\/p><\/blockquote>\n
In  the State of Rajasthan v. Nath Mal<\/a>(2) clause 25  of\t the
\nRajasthan  Foodgrains Control Order, 1949 empowered  certain
\nspecified  officers to freeze any stocks of foodgrains\theld
\nby  any\t person and further provided that such\tstocks\twere
\nliable\tto be requisitioned or disposed of under  orders  of
\nthe  said  authority at the rate fixed for  the\t purpose  of
\nGovernment procurement.\t The clause was struck down by\tthis
\nCourt  on the ground that while the authorities may fix\t the
\nceiling\t price\tat which foodgrains should be  sold  in\t the
\nmarket\tby the dealers there was no such limitation  on\t the
\npower  of  the Government to acquire the stocks.   It  would
\ntherefore  be  open  to the Government\tto  requisition\t the
\nstocks at a price lower than the ceiling price thus  causing
\nloss  to the persons whose stocks are freezed, while at\t the
\nsame  time  the Government would be free to  sell  the\tsame
\nstocks\tat a higher price and make profit.  No dealer  would
\ntherefore be prepared to buy foodgrains at the market  price
\nwhen  he knew that he was exposed to the risk of his  stocks
\nbeing freezed any moment and the same being requisitioned at
\nthe  procurement rate.\tThe clause thus left it entirely  to
\nthe  discretion of the executive to fix any compensation  it
\nliked.\t  The  decision\t held  that  clause  25\t placed\t  an
\nunreasonable  restriction upon the carrying on of  trade  or
\nbusiness,  was thus an infringement of the right under\tArt.
\n19(1)(g)  and  was therefore to that extent void.   In\tR.M.
\nSeshadri   ‘v.\tThe  District  Magistrate,  Tanjore(3)\t two
\nconditions  subject  to which the appellant  was  granted  a
\nlicence\t and  which compelled a licensee to exhibit  in\t his
\ncinema theatre at each performance
\n(1)[1952] S. C. R. 597. (3) [1955] 1 S. C. R. 686.
\n(2) [1954] S. C. R. 982.\n<\/p>\n
 1017<\/span><\/p>\n
one  or\t more  approved films of such length  and  for\tsuch
\nlength of time, as the Provincial or the Central  Government
\nmay direct and which also compelled the licensee to  exhibit
\nat  the commencement of each performance not less than\t2000
\nfeet  of  one  or more approved films were  struck  down  as
\nimposing  unreasonable\trestrictions  on the  right  of\t the
\nlicensee  to  carry  on his business.  At page\t689  of\t the
\nReport the Court observed :-\n<\/p>\n
\t      “Neither the length of the film nor the period
\n\t      of time for which it may be shown is specified
\n\t      in the condition and the Government is  vested
\n\t      with  an\tunregulated discretion to  compel  a
\n\t      licensee\tto exhibit a film of any  length  at
\n\t      its discretion which may consume the whole  or
\n\t      the  greater part of the time for\t which\teach
\n\t      performance  is  given….  As  the  condition
\n\t      stands, there can be no doubt that there is no
\n\t      principle to guide the licensing authority and
\n\t      a condition such as the above may lead to\t the
\n\t      loss-  or\t total extinction  of  the  business
\n\t      itself.\tA  condition couched  in  such\twide
\n\t      language is bound to operate harshly upon\t the
\n\t      cinema  business and cannot be regarded  as  a
\n\t      reasonable  restriction.\tIt savours  more  of
\n\t      the   nature   of\t  an   imposition   than   a
\n\t      restriction.”\n<\/p><\/blockquote>\n
In  Mineral Development Ltd. v. The State of  Bihar<\/a>(1)\tthis
\nCourt on the other hand upheld the validity of S. 25()(c) of
\nthe  Bihar Mica Act, 1947 on the ground that the  provisions
\nof that section did not impose any unreasonable restriction.
\nIn  upholding the validity of the said provisions the  court
\nobserved  that\tthe section clearly  provided  ascertainable
\nstandards for the State Government to apply to the facts  of
\neach  case.  Clauses (a), (b), (c) and (d) of section  25(1)
\ndescribed  with sufficient particularity the nature  of\t the
\ndefaults  to be committed and the abuses to be guilty of  by
\nthe  licensee  in  order to attract  the  penal\t provisions.
\nClause\t(c) with which the Court was concerned embodied\t the
\nlast step that could be resorted to by the State  Government
\nto  eliminate  a  recalcitrant operator from  the  field  of
\nmining industry provided he was guilty of repeated  failures
\nto comply with any of the provisions of the Act or the rules
\nmade  thereunder.   The discretion of the  State  Government
\nunder  cl.  (c)\t of s. 25 (1) was  hedged  in  by  important
\nrestrictions, viz., the repeated failure on the part of\t the
\nlicensee  and  the  necessity for the  State  Government  to
\nafford\treasonable opportunity to him to show cause why\t his
\nlicence\t should not be cancelled.  In Kishan Chand Arora  v.
\nThe Commissioner of Police<\/a>(2) the majority judgment observed
\nthat  in  order\t to decide whether a  provision\t in  a\tpre-
\nConstitution   statute\tlike  the  one\tin  question   there
\nsatisfied  the test of constitutionality laid down  by\tArt.
\n19(1)(g)  read with Art. 19(6) the impugned section must  be
\nread
\n(1) [1960] 2 S.C.R. 609.\n<\/p>\n
M17Sup.CI\/66-20
\n(2) [1961] 3 S. C. R. 135.\n<\/p>\n
1018<\/span><\/p>\n
as  a whole and in a fair and reasonable manner\t and  should
\nnot be declared void simply because considerations  relevant
\nto  those  articles are not immediately\t apparent  from\t its
\nlanguage.  These observations were made in connection with a
\npre-Constitution  enactment.  Even then Subba Rao J. (as  he
\nthen  was)  with whom Sinha C. J. agreed uttered a  note  of
\ncaution saying that it was not the function of the court  to
\nsearch\tfor  an undisclosed policy in the  crevices  of\t the
\nstatute,  for  by  doing so “this court\t will  not  only  be
\nfinding an excuse to resuscitate an invalid law but also  be
\nencouraging the making of laws by appropriate authorities in
\nderogation  of\tfundamental rights.” Even according  to\t the
\nmajority  decision, there must be disclosed in\tthe  statute
\napparently  or otherwise, a policy guiding the\texercise  of
\npower conferred thereunder by the concerned authority.
\nThese  authorities clearly demonstrate that the\t fundamental
\nright of a citizen to carry on trade can be restricted\tonly
\nby  making  a law imposing in the interest  of\tthe  general
\npublic\treasonable  restrictions on the exercise of  such  a
\nright,\tthat  such restrictions should not be  arbitrary  or
\nexcessive or beyond what is required in the interest of\t the
\ngeneral\t public\t and that an  uncontrolled  and\t uncanalized
\npower  conferred on the authority would be  an\tunreasonable
\nrestriction on such right.  Though a legislative policy\t may
\nbe  expressed  in  a statute, it  must\tprovide\t a  suitable
\nmachinery for implementing that policy in such a manner that
\nsuch  implementation does not result in undue  or  excessive
\nhardship   and\tarbitrariness.\t The  question\t whether   a
\nrestriction  is reasonable or not is clearly  a\t justiciable
\nconcept and it is for the court to come to one conclusion or
\nthe  other having regard to the considerations laid down  in
\nState of Madras v. V. G. Row.<\/a>(1) It is also well established
\nthat where a provision restricts any one of the\t fundamental
\nrights\tit is for the State to establish the  reasonableness
\nof such restriction and for the court to decide in the light
\nof the circumstances in each case, the policy and the object
\nof  the\t impugned legislation and the mischief it  seeks  to
\nprevent.\n<\/p>\n
With  this background we now proceed to examine\t the  provi-
\nsions  of  the\tRegulation and consider\t whether  the  power
\ngranted under section 3 amounts to a reasonable\t restriction
\nso as to save it under Art. 19(6).  As already stated, under
\nParagraph 10 of the Sixth Schedule the District Council\t has
\nthe   power   to  enact\t Regulations  for   regulating\t and
\ncontrolling  money-lending or trading by non-Tribals in\t the
\nDistrict.  Clause 1 empowers the Council in general terms to
\nmake  Regulations and Clause 2 empowers it in particular  to
\nmake  Regulations  prescribing that a non-tribal  after\t the
\nenactment  of  such a Regulation shall not  carry  on  trade
\nexcept under a licence.\t Reading Paragraph 10 fairly and  as
\na
\n(1)  [1952] S.C.R. 597.\n<\/p>\n
 1019<\/span><\/p>\n
whole  it  would  seem\tthat  the  Constitution-makers\twere
\nanxious\t that the tribals should be safeguarded from  unfair
\nexploitation  by  non-tribals  entering\t the  District\t and
\ncarrying on money-lending and other activities.\t It  appears
\nthat  Regulation 2 of 1953 was passed for the avowed  object
\nset  out  in Paragraph 10 of the Sixth Schedule\t though\t its
\npreamble merely states that it was expedient to regulate and
\ncontrol\t trade by non-tribals.\tSection 3 of the  Regulation
\nlays  down a prohibition against any one carrying  on  trade
\nwithout a licence and except in accordance with the terms of
\nsuch licence.  The effect of this section is that if a\tnon-
\ntribal\twishes\tto  carry on trade in the  District  but  is
\nrefused\t the licence, such refusal would result in  a  total
\nprohibition against him from carrying on any trade.  Even if
\na  licence is issued it can only be a temporary licence\t for
\none  year  only.  If the Executive Committee to\t which\tthis
\npower  is delegated by the Rules were to refuse to renew  it
\nsuch refusal would mean that he has to stop the trade  which
\nhe  was until then carrying on.\t In the first case it  is  a
\nprohibition  and  in  the other a total\t extinction  of\t his
\ntrade.\t It is clear from the Regulation and the Rules\tmade
\nthereunder that there is no right of appeal to any  superior
\nauthority  against  a refusal to grant or renew\t a  licence.
\nThere  is also no provision either in the Regulation  or  in
\nthe  Rules empowering any civil court to adjudicate  against
\nany  such  order of the Executive  Committee.\tA  nontribal
\ntrader\ttherefore has no remedy whatsoever against  such  an
\norder though the refusal to grant or renew a licence amounts
\nto his being totally barred from trading in one case and his
\nbusiness  or trade being destroyed in the other.  Even if  a
\nnon-Tribal  obtains a licence and starts a  trade  investing
\ntherein\t a  large, capital, there would be no  security\t for
\nsuch  trade as the licence would be for one year only.\t The
\nExecutive Committee can refuse to renew his licence and such
\nrefusal would as aforesaid result in the total extinction of
\nhis  trade.   Under  the second proviso\t to  section  3\t the
\nCommittee no doubt has to record the grounds for refusal but
\nthat  is  hardly a safeguard against an\t arbitrary  refusal,
\nfor,  the  Regulation  does  not  constitute  any   superior
\nauthority with power to revise such an order or to%  examine
\nwhether\t the  grounds  are  legal  or  proper.\t Though\t the
\nRegulation  provides  that no non-tribal can  carry  on\t any
\ntrade  without\ta licence issued by the Council\t it  is\t the
\nExecutive Committee under the Rules to which an\t application
\nhas  to be made for such a licence or for a renewal  thereof
\nand  in the event of the Committee refusing to grant such  a
\nlicence\t or  refusing  to renew it  the\t applicant  is\tleft
\nwithout any remedy whatsoever.\tA perusal of the  Regulation
\nshows  that it nowhere provides any principles or  standards
\non  which the Executive Committee has to act in granting  or
\nrefusing to grant the licence.\tThe non-tribal trader either
\nwishing to start a trade or continue his trade started on  a
\ngrant  of licence is entirely at the mercy of the  Executive
\nCommittee for the grant or the renewal of a licence.\n<\/p>\n
1020<\/span><\/p>\n
There  being  no principles or standards laid down  in\tthe’
\nRegulation  there  are\tobviously no  restraints  or  limits
\nwithin which the power of the Executive Committee to  refuse
\nto  grant  or  renew a licence is  to  be  exercised.\tThis
\nsituation is clearly seen from the fact that though  section
\n9  of the Regulation authorises the Executive  Committee  to
\ncancel a licence-presumably both permanent and\ttemporary-if
\nthe  licensee  is convicted of contravention of any  of\t the
\nprovisions  of\tthe Regulation, the power of  refusal  under
\nsection\t 3  is\tnot limited or\tcircumscribed  by  any\tsuch
\nprovision  or any other criterion.  The power of refusal  is
\nthus left entirely unguided and untrammelled.  How arbitrary
\nthe exercise of such unguided power can be is seen from\t the
\nfact that the Executive Committee not only refused to  renew
\nthe appellant’s licence but also directed him to remove\t his
\nproperty  by the end of July 1960 and imposed a fine  if  he
\nfailed to do so.\n<\/p>\n
It is true that the Executive Committee in the present\tcase
\nhas given the reason for refusal to renew the licence, viz.,
\nthat  the number of licensees had reached the maximum.\t But
\nthe  order  does  not  state what that\tmaximum\t is  or\t who
\nprescribed such a number and under what authority or what is
\nthe  criterion\tfor fixing any particular  maximum.   Indeed
\nthere  is nothing in the Regulation empowering\tthe  Council
\nmuch  less  the\t Executive Committee to lay  down  any\tsuch
\nmaximum\t number\t nor  does  the\t Regulation  prescribe\t any
\nprinciples  on which such a maximum number is to  be  fixed.
\nThe  Executive\tCommittee can at any time and  on  its\twhim
\narbitrarily  fix  a maximum number and refuse  to  grant  or
\nrenew  a licence.  Such a maximum number may also vary\tfrom
\ntime  to time.\tThe result would be to prevent any  newcomer
\nto  trade  in  the District or to destroy  the\ttrade  of  a
\nlicensee  carrying on his business under a licence.  At\t the
\nend  of\t each year every nontribal trader would\t be  at\t the
\nmercy  of  the Executive Committee and would not  even\tknow
\nwhether\t he would be permitted to continue his trade.\tEven
\nthe  Rules  made  under\t section  6  do\t not  lay  down\t any
\nprinciples or standards.  Rule 7 is couched in general terms
\nand  provides  that the Executive Committee  may  refuse  to
\nrenew  any licence granted to a non-tribal trader after\t the
\ncommencement  of  the  Regulation.   Rule  4  empowers\t the
\nCommittee  to make such enquiry as it deems proper into\t the
\nantecedents  and  character of any new\tapplicant  and\tthen
\nreject\tor accept his application.  The Rule, however,\tdoes
\nnot  lay  down\tany  standards on the  basis  of  which\t the
\nCommittee  has\tto  decide whether the\tantecedents  or\t the
\ncharacter are such that the application should be  rejected.
\nThe  Committee\ttherefore can in any given  case  reject  an
\napplication  merely  stating  that  the\t antecedents  of  an
\napplicant  are\tnot  good or proper  without  the  applicant
\nknowing what standards of character or antecedents he has to
\nconform to.\n<\/p>\n
1021<\/span><\/p>\n
Even  though it may perhaps be said that the Sixth  Schedule
\nto the Constitution shows a policy to safeguard the  tribals
\nfrom  being  exploited\tand the Regulation  was\t enacted  in
\nexercise  of  the  power conferred thereunder  that  is\t not
\nenough\tto  save  the restriction from\tthe  vice  of  being
\nunreasonable.\tIt  provides no principles on which  such  a
\npolicy\tis  to\tbe  implemented.   As  already\tstated,\t the
\nRegulation  contains no principle or criterion on which\t the
\nExecutive  Committee  should  grant or\trefuse\tto  grant  a
\nlicence\t or its renewal.  It does not provide any  machinery
\nunder  which an applicant can show cause why Ms\t application
\nfor  a\tlicence or its renewal should not be  rejected.\t  It
\ndoes  not  also provide any superior authority\tbefore\twhom
\nsuch  an  applicant can establish that the  refusal  by\t the
\nCommittee is arbitrary or without any proper cause.   Indeed
\nthe  Regulation does not contain any provision\tlaying\tdown
\nwhat is and what is not a proper cause for refusal.  Equally
\nit  does  not  show  any  guiding  criterion  on  which\t the
\nCommittee should decide to grant or refuse a licence or\t its
\nrenewal.  The Regulation contains no provisions on the basis
\nof  which an applicant would know what he has to satisfy  in
\norder  to entitle him to a licence.  The power to  grant  or
\nnot  to\t grant is thus entirely unrestrained  and  unguided.
\nThe Regulation leaves a trader not only at the mercy of\t the
\nCommittee  but also without any remedy.\t Therefore  even  if
\nthe  Sixth Schedule can be said to contain a policy and\t the
\nRegulation may be said to have been enacted in pursuance  of
\nsuch a policy the analysis of the Regulation shows that that
\nis not sufficient.  Even if a statute lays down a policy  it
\nis  conceivable that its implementation may be left in\tsuch
\nan  arbitrary  manner that the statute\tproviding  for\tsuch
\nimplementation would amount to an unreasonable\trestriction.
\nA provision which leaves an unbridled power to an  authority
\ncannot in any sense be characterised as reasonable.  Section
\n3  of the Regulation is one such provision and is  therefore
\nliable to be struck down as violative of Art. 19(1)(g).
\nFor  the reasons aforesaid, we would declare that section  3
\nof  the\t Regulation is an unreasonable\trestriction  on\t the
\nfundamental   right  guaranteed\t under\tArt.  19(1)(g)\t and
\ntherefore  void.  The said order dated July 11, 1960  having
\nbeen  made under such a void provision is illegal and  void.
\nWe  would therefore set aside the said order as having\tbeen
\nmade under an illegal provision of law and allow the  appeal
\nwith costs.\n<\/p>\n
Bachawat,  J. The appellant is a non-tribal  trader.   Since
\n1957 he carried on business at Aijal in Mizo District  under
\ntemporary licenses issued on behalf of the District Council.
\nThe  license  was  renewed from time to time.\tIn  1959,  a
\nlicense valid till December 31, 1959 was issued, and at\t the
\nappellant’s request, the period of the license was  extended
\nfrom time to time up to May 3 1, 1960.\tBy his letter  dated
\nJuly  11, 1960, the Revenue Officer, Mizo  District  Council
\ninformed the appellant that the Executive
\n1022<\/span>
\nCommittee of the Mizo District Council had decided that\t his
\nlicense could not be extended as the number of the  license-
\nholders had reached its maximum limit, and the appellant was
\ndirected  to  shift  all his  properties  outside  the\tMizo
\nDistrict within July 1960, failing which a fine of Rs. 400\/-
\nwould  be  imposed  upon him.  The appellant  filed  a\twrit
\napplication in the Assam High Court asking for the issue  of
\na  writ\t setting  aside this order and\tdirecting  the\tMizo
\nDistrict Council to renew his license.\tThe Assam High Court
\nquashed\t the  order in so far as it imposed a  fine  of\t Rs.
\n500\/-, and directed the appellant to remove his goods.\t The
\nHigh  Court, however, maintained the order in so far  as  it
\nrefused to renew the license.  The appellant now appeals  to
\nthis Court by special leave.\n<\/p>\n
The  Mizo  District  formerly  known  as  the  Lushai  Hills
\nDistrict  is  a\t tribal area in Assam, and  is\tone  of\t the
\nautonomous districts constituted by paragraph 1 of the Sixth
\nSchedule to the Constitution of India.\tParagraph 10 of\t the
\nSixth  Schedule gives power to the District Council to\tmake
\nregulations for the control of money lending and trading  by
\nnon-tribals.  The material part of paragraph 10 is in  these
\nterms;\n<\/p>\n
\t      “10.   Power  of\tDistrict  Council  to\tmake
\n\t      regulations  for the control of  money-lending
\n\t      and trading by non-tribals.-\n<\/p><\/blockquote>\n
\t      (1)The  District Council of  an  autonomous
\n\t      district\t may   make  regulations   for\t the
\n\t      regulation  and  control of  money-lending  or
\n\t      trading  within the district by persons  other
\n\t      than   Scheduled\t Tribes\t resident   in\t the
\n\t      district.\n<\/p><\/blockquote>\n
\t      (2)In  particular and without prejudice  to
\n\t      the  generality of the foregoing\tpower,\tsuch
\n\t      regulations may.\n<\/p><\/blockquote>\n
\t      (d)Prescribe  that no person who is  not\ta
\n\t      member of the Scheduled Tribes resident in the
\n\t      district\tshall carry on wholesale  or  retail
\n\t      business\tin  any\t commodity  except  under  a
\n\t      licence issued in that behalf by the  District
\n\t      Council :\n<\/p><\/blockquote>\n
\t      Provided that no regulations may be made under
\n\t      this  paragraph  unless they are passed  by  a
\n\t      majority of not less than three-fourths of the
\n\t      total membership of the District Council :
\n\t      Provided\t further  that\tit  shall   not\t  be
\n\t      competent\t under\tany  such.  regulations\t  to
\n\t      refuse  the  grant of a licence  to  a  money-
\n\t      lender  or a trader who has “been carrying  on
\n\t      business within the district since before\t the
\n\t      time of the making of such regulations.”\n<\/p><\/blockquote>\n
On March 17, 1953 the Lushai Hills District Council with the
\nassent\tof  the\t Governor of Assam and in  exercise  of\t its
\npowers\tunder  paragraph  10 of the Sixth  Schedule  to\t the
\nConstitution made
\n 1023<\/span>
\nand  promulgated the Lushai Hills District (Trading by\tnon-
\nTribals)  Regulation,  1953  (Regulation  No.  2  of  1953).
\nSection 3 of the Regulation reads:\n<\/p>\n
\t      “3. No person, other than a Tribal resident in
\n\t      the  District  shall  carry  on  wholesale  or
\n\t      retail  business\tin any commodities  in\tthis
\n\t      District\texcept under and in accordance\twith
\n\t      the -terms of a license issued in that  behalf
\n\t      by  the District Council under the  provisions
\n\t      of this Regulation:\n<\/p><\/blockquote>\n
\t      Provided\tthat  such a license  shall  not  be
\n\t      refused  to a person who has been carrying  on
\n\t      such business within the district since before
\n\t      the commencement of this Regulation :
\n\t      Provided\tfurther\t that if such a\t license  is
\n\t      refused,\tthe  grounds  of  refusal  shall  be
\n\t      recorded in writing by the District Council.”\n<\/p><\/blockquote>\n
The  contention\t of  the  appellant is\tthat  s.  3  of\t the
\nRegulation gives to the District Council an arbitrary  power
\nof  issuing and withholding licenses to a non-tribal and  is
\nrepugnant to Arts. 14 and 19(1)(g) of the Constitution.\t The
\nHigh  Court held that the section is not violative  of\tArt.\n<\/p>\n
14.  The point that the section infringes Art. 19(1)(g)\t was
\nnot  argued in the High Court.\tHowever, on the\t merits\t the
\nattack\ton  s. 3 based on both Arts. 14\t and  19(1)(g)\tmust
\nfail.\n<\/p>\n
Paragraph 10(2)(d) of the Sixth Schedule to the Constitution
\nof  India specifically empowers the District Council  of  an
\nautonomous  district to make regulations prescribing that  a
\nnontribal  resident  of\t the District  shall  not  carry  on
\nbusiness  in any commodity except under a license issued  in
\nthat behalf by the District Council.  The Sixth Schedule  to
\nthe Constitution lays down the policy for the administration
\nof the tribal areas in the State of Assam.  Paragraph 10  is
\nan  integral part of this Schedule.  This paragraph  is\t not
\nviolative of Arts. 14 and 19(1)(g), nor is it so  contended.
\nSection\t 3  of the Regulation is in strict  conformity\twith
\nthis  paragraph.   If  paragraph 10 of\tthe  Sixth  Schedule
\ncannot\tbe  regarded as violative of any  provision  in\t the
\nConstitution,  it  is  impossible to say that s.  3  of\t the
\nRegulation  which is in strict conformity with paragraph  10
\nis violative of Arts. 14 and 19 (1)(g) of the  Constitution.
\nThis  conclusion  is sufficient to dispose of  the  argument
\nbased on Arts. 14 and 19(1)(g).\n<\/p>\n
The attack based on Arts. 14 and 19(1)(g) must fail on other
\ngrounds\t also.\t For  economic and  political  reasons,\t our
\nConstitution has taken special care of the Scheduled Tribes.
\nOne  of the guiding principles of State policy\tembodied  in
\nArt. 46 of the Constitution is that the State shall  promote
\nwith special care the edu-\n<\/p>\n
1024<\/span><\/p>\n
cational  and economic interests of the weaker\tsections  of
\nthe  people  and, in particular, the Scheduled\tTribes,\t and
\nshall  protect them from social injustice and all  forms  of
\nexploitation.\tPursuant  to this policy,  the\tConstitution
\nitself\thas made numerous provisions for the  protection  of
\nthe  Scheduled\tTribes.\t  Paragraph 10(2)(d)  of  the  Sixth
\nSchedule  is  one  of such provisions.\t Section  3  of\t the
\nRegulation has been enacted pursuant to the power  conferred
\nby  paragraph 10(2)(d)of the Sixth Schedule with the  object
\nof  preventing exploitation of the Scheduled Tribes by\tnon-
\ntribal traders and protecting the interests of the Scheduled
\nTribes.\t  The  licensing  power is vested  in  the  District
\nCouncil\t which\tis  a high ranking  body  with\tlegislative,
\njudicial  and  executive functions.  It is apparent  on\t the
\nface of the Constitution of which paragraph 10(2)(d) of\t the
\nSixth Schedule forms an intergral part and on a fair reading
\nof  s.\t3 of the Regulation read in the light  of  paragraph
\n10(2)(d)  that\tthe  protection\t of  the  interests  of\t the
\nScheduled Tribes is to be the guiding policy regulating\t the
\nexercise  of the discretion of the District Council  in\t the
\nmatter\tof granting or withholding trading licenses to\tnon-
\ntribal\ttraders.   It  is left to the  District\t Council  to
\ndecide\tin  each individual case whether the  grant  of\t the
\nlicense\t would best promote the interests of  the  Scheduled
\nTribes.\t  The restriction imposed by s. 3 on the right of  a
\nnon-tribal  to\tcarry on business in a tribal  area  is\t not
\narbitrary  or unreasonable and is not violative of Arts.  14
\nand 19(1)(g).\n<\/p>\n
Another\t contention of the appellant is that  the  licensing
\nauthority  could  refuse to issue license only if  it  found
\nthat  the appellant did not show good conduct and  behaviour
\nwhile in the Mizo Hills, as stated in condition No. 1 of the
\ntemporary  trading  license.   I am unable  to\taccept\tthis
\ncontention.   Rules  2 (a), 4, 5 and 7 of the  Lushai  Hills
\nDistrict  (Trading by non-Tribals) Rules, 1954 made  by\t the
\nExecutive  Committee  of  the  District\t Council  with\t the
\nprevious  approval of the the Governor of Assam in  exercise
\nof  the\t powers conferred by s. 6 of the Regulation  are  as
\nfollows :\n<\/p>\n
\t      “2.  Definition.-In these rules, unless  there
\n\t      is anything repugnant or the context otherwise
\n\t      requires :-\n<\/p><\/blockquote>\n
\t      (a)’Executive  Committee’ means the  Executive
\n\t      Committee of the Lushai Hills District Council
\n\t      constituted   under   the\t  Assam\t  Autonomous
\n\t      Districts\t  (Constitution\t of   the   District
\n\t      Councils) Rules, 1951.\n<\/p><\/blockquote>\n
\t      “4.  Verification of  applicant’s\t antecedents
\n\t      and  character.–The Executive  Committee\t may
\n\t      after making such enquiries as it deems proper
\n\t      into the antecedents and character of any\t new
\n\t      applicant, reject or accept any application,
\n\t       1025<\/span>\n<\/p><\/blockquote>\n
\t      5.Grant  of License.-(1) When  application
\n\t      is accepted a license to trade shall be
\n\t      issued  to the applicant\t(hereinafter  called
\n\t      ‘Licensed Trader’) after receipt of the fee as
\n\t      specified in these rules.\n<\/p><\/blockquote>\n
\t      Temporary trade License.-(2)(a). The terms and
\n\t      conditions  of the license as entered  on\t the
\n\t      face  of the license as in Appendix ‘A’  shall
\n\t      be  strictly adhered to by the  licensee,\t and
\n\t      any contravention thereof shall be  punishable
\n\t      under the law for the time being in force.\n<\/p><\/blockquote>\n
\t      (b)No  temporary License shall  be  granted
\n\t      for  a  period exceeding one year at  any\t one
\n\t      time.\n<\/p><\/blockquote>\n
\t      7.Provision for refusal to renew permanent
\n\t      license.-Subject to the provisions of  section
\n\t      3\t of  the Lushai Hills District\t(Trading  by
\n\t      Non-Tribals)  Regulation, 1953, the  Executive
\n\t      Committee\t may  refuse to\t renew\tany  license
\n\t      granted  to the Non-Tribal Traders  after\t the
\n\t      commencement of the Regulation.”
\n\t      The  standard  terms  and\t conditions  of\t the
\n\t      temporary license in Form ‘T’ are as follows :
\n\t      “1.  This license is cancellable or  renewable
\n\t      by the Executive Committee as and when thought
\n\t      fit  contingent on good conduct and  behaviour
\n\t      while in Lushai Hills.\n<\/p><\/blockquote>\n
\t      2.    Trading  should  be done on\t cash  basis
\n\t      only.\n<\/p><\/blockquote>\n
\t      3.    The License holder should report without
\n\t      fail to the
\n\t      Executive\t Committee  on\tthe  expiry  of\t the
\n\t      validity\tof  this license,  and\tsubmit\tthis
\n\t      license.”\n<\/p><\/blockquote>\n
The   Executive\t Committee  of\tthe  District\tCouncil\t  is
\nconstituted  under  r. 19 of the Assam\tAutonomous  District
\n(Constitution  of District Councils) Rules, 1951  framed  by
\nthe Governor of Assam in exercise of the powers conferred by
\nsub-paragraph  (6) of paragraph 2 of the Sixth\tSchedule  to
\nthe  Constitution,  and\t is vested,  inter  alia,  with\t the
\nexecutive functions of the District Council.
\nThe  validity  of  the Rules is not in\tissue.\t It  is\t not
\ncontended  that\t the Rules are ultra vires  the\t Regulation.
\nThe discretion vested in the licensing authority by Rules 4,
\n5 and 7 is not restricted by condition No. 1 of the license.
\nThe licensing authority may refuse to renew or to issue\t the
\nlicense\t if  it finds that such a course would\tpromote\t the
\ninterests of the Scheduled Tribes.  In the present case, the
\nExecutive  Committee  found that the maximum limit  of\tnon-
\ntribal traders had been reached, and in the interest of\t the
\ntribals it was not desirable to issue license to more
\n1026<\/span>
\nnon-tribal  traders.  It is neither alleged nor\t shown\tthat
\nthe  Executive\tCommittee  discriminated  between  similarly
\nsituated persons.\n<\/p>\n
In the result, the appeal is dismissed.\n<\/p>\n
\t\t\t   ORDER
\nIn  accordance with the Opinion of the majority, the  appeal
\nis allowed with costs.\n<\/p>\n
Y.P.\n<\/p>\n
M17Sup.cl\/66-2,500-14-6-67-GIPF.\n<\/p>\n
1<\/span><\/p>\n","protected":false},"excerpt":{"rendered":"
Supreme Court of India Lala Hari Chand Sarda vs Mizo District Council & Anr on 28 October, 1966 Equivalent citations: 1967 AIR 829, 1967 SCR (1)1012 Author: Shelat Bench: Shelat, J.M. PETITIONER: LALA HARI CHAND SARDA Vs. RESPONDENT: MIZO DISTRICT COUNCIL & ANR. DATE OF JUDGMENT: 28\/10\/1966 BENCH: SHELAT, J.M. BENCH: SHELAT, J.M. SUBBARAO, K. […]<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_lmt_disableupdate":"","_lmt_disable":"","_jetpack_memberships_contains_paid_content":false,"footnotes":""},"categories":[30],"tags":[],"class_list":["post-97420","post","type-post","status-publish","format-standard","hentry","category-supreme-court-of-india"],"yoast_head":"\nLala Hari Chand Sarda vs Mizo District Council & Anr on 28 October, 1966 - Free Judgements of Supreme Court & High Court | Legal India<\/title>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/www.legalindia.com\/judgments\/lala-hari-chand-sarda-vs-mizo-district-council-anr-on-28-october-1966\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"Lala Hari Chand Sarda vs Mizo District Council & Anr on 28 October, 1966 - 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