Krishna Kumar vs Municipal Committee

Rewritten Version Notice: This is a rewritten version of the original judgment.

Court: Supreme Court of India

Case Number: Writ Petition (civil) 660 of 1954

Decision Date: 21 February 1957

Coram: N.H. Bhagwati, B. Jagannadhadas, S.J. Imam, P.G. Menon, J.L. Kapur

In the matter titled Krishna Kumar versus Municipal Committee, the Supreme Court rendered its judgment on 21 February 1957. The petition, identified as Writ Petition (civil) 660 of 1954, was filed by Krishna Kumar against the Municipal Committee of Bhatapara, hereinafter referred to as “the Municipality.” The bench hearing the case comprised Justices N.H. Bhagwati, B. Jagannadhadas, S.J. Imam, P.G. Menon and J.L. Kapur, and the opinion was delivered by Justice Syed Jafer Imam.

The petitioner instituted an application under Article 32 of the Constitution, contending that the actions of the Municipality had infringed his fundamental rights guaranteed by Article 19(1)(j), which protects the right to practice any profession, and Article 14, which ensures equality before the law. The factual backdrop involved a market known locally as “Ganj,” which was vested in the Municipality and whose use was governed by bye‑laws framed under Section 179 of the Central Provinces and Berar Municipalities Act (Act 2 of 1922), hereinafter called “the Act.” The Ganj functioned as a venue where grain was bought and sold.

According to the petition, Krishna Kumar was an Adatya by occupation—that is, a commission‑agent who acted on behalf of grain sellers in the market. He alleged that the Municipality, by virtue of a resolution dated 4‑September‑1949, had prohibited him from performing his customary role. The resolution directed municipal employees to cease issuing Ganj receipts to him, which effectively barred him from entering the market and conducting his business as an Adatya for grain sellers. The petitioner further claimed that while he was being excluded, other Adatyas who dealt with grain sellers were still permitted to operate in the Ganj, thereby amounting to discriminatory treatment by the Municipality.

Historically, in 1935 the Government of the Central Provinces issued a notification that confirmed the bye‑laws formulated by the Municipality. Those bye‑laws contained specific provisions regulating market usage. Provision 5(a) stipulated that any person who was not a government officer, a member or officer of the Municipal Committee, a bona‑fide purchaser or his adhatia, an agent or servant, a bona‑fide grain seller, a licensed broker, a measurer, a weighman or a haamal, and who entered the Ganj for purposes other than business, could be ejected by the Ganj Daroga or Moharrir. Provision 5(b) further provided that any person found drunk, disorderly, or causing a disturbance in the Ganj was to be immediately ejected by the same officials. Provision 6 mandated that no person should enter or attempt to enter the Ganj when directed not to do so by an authorised municipal servant, nor should anyone disobey instructions issued under the authority of the Committee or the Ganj Committee regarding the placement of laden carts or animals.

The Court noted that the bye‑law provision permitted a merchant to conduct his business in the Ganj either personally, through an agent, or through a licensed broker who had obtained written authority from the merchant. Every trade that took place in the market had to be recorded by the Moharrir in the register that had been prescribed by the Notified Area Committee for that purpose. In 1948 the Municipality adopted a resolution in which the Committee unanimously resolved that, because traders were carrying out commission‑agency work in the Municipal Ganj, the village cartmen were receiving considerable assistance in disposing of their goods, obtaining accurate measurement and receiving prompt payment after measurement. The resolution stated that, in order to exercise control and supervision over the Arhat system, an amendment to the Ganj bye‑laws should be prepared and the approval of the Provincial Government should be secured. The amendment that was proposed in the resolution was set out as clause 14‑B, which provided that the Municipal Committee would appoint licensed Adhatias (commission agents) in the Ganj to help sellers dispose of their grain promptly and to make payment to the sellers immediately after the grain was measured. The proposed amendment could not become effective until the State Government confirmed it under Section 178(3) of the Act. The State Government declined to confirm the amendment, however, and instead directed the Municipality to submit a Statement of Objects and Reasons justifying the proposed change to the bye‑laws. After considering the Government’s communication, the Municipality passed another resolution on 4‑September‑1949, declaring that the Committee no longer wished to adopt the system of Arhatiyas in its Ganj, that the matter was therefore dropped, and that the Ganj and outpost staff should be instructed to cease issuing Ganj receipts in the name of the Arhatiyas.

Under Section 53 of the Act, the Deputy Commissioner was empowered to suspend a resolution of a Municipality in certain circumstances, and the Municipality consequently sought the Deputy Commissioner’s intervention to suspend the resolution of 4‑September‑1949. The Additional Deputy Commissioner prepared a report, after which the Deputy Commissioner imposed a one‑month suspension of the municipal resolution and called upon the Municipality to provide an explanation. After hearing the parties and considering the Municipality’s explanation, the Deputy Commissioner declined to set aside the resolution and issued his final order on 7‑November‑1951. The petitioner then filed an application under Article 226 of the Constitution in the High Court of Judicature at Nagpur; that application was considered by the learned judges of the High Court and was dismissed on 18‑January‑1954. The petitioner did not seek special leave to approach this Court but instead filed the present application under Article 32 of the Constitution on 10‑December‑1954. In its affidavit filed in this Court, the Municipality denied that any fundamental right of the petitioner had been infringed by any act of the Municipality or its employees, and it also denied that it had discriminated between the petitioner and other Adatyas who were sellers of grain in the market.

The municipality had adopted a policy of refusing Ganj receipts in the names of all Adatyas who dealt in grain because it discovered that the actual owners of the grain were being victimised. Earlier, the grain belonging to a villager was sold in the market by the Adatya who presented himself as the owner of the produce. The municipal authorities received complaints that many grain owners did not obtain a fair price from the Adatyas and, in certain instances, were not paid the sale proceeds at all. To prevent this abuse, the municipality passed the resolution that is the subject of the present dispute on 4‑9‑1949, relying on the authority granted by Bye‑law 5(a). The municipality asserted that the petitioner was not barred from carrying on his business in the market as an Adatya purchaser of grain, nor was he prevented from engaging in any other market activity for which he was a registered dealer. The refusal of Ganj receipts was intended to ensure that only legitimate owners, and not intermediary Adatyas, could claim market transactions for grain sold. By eliminating the ability of Adatyas to obtain receipts in their own names, the municipality aimed to protect grain owners from exploitation and to promote transparent market practices.

Before examining whether the petitioner’s fundamental rights were infringed or whether discrimination occurred, the Court observed that the petitioner had delayed filing the present petition under Article 32 for an unreasonable length of time. The resolution was issued on 4‑9‑1949, yet the petitioner first approached the High Court under Article 226 only in 1953, suggesting he had pursued the remedies then available to set aside the municipal resolution. Nonetheless, after the High Court dismissed his application, the petitioner waited almost an entire year before filing the present petition, a delay that could not be justified. The petitioner could have, if he chose, sought special leave to appeal the High Court’s order in this Court, or he could have instituted a suit to enforce his alleged fundamental rights immediately after the dismissal. Had he done so, the suit might have been decided by now; instead, his prolonged inactivity amounted to gross laches, which alone could have warranted dismissal of the petition. Although the Court recognized the petitioner’s counsel was fully heard, it decided to address the submissions raised by the petitioner before considering dismissal on the ground of laches. The first substantive issue presented was whether the municipality had discriminated against the petitioner. The petitioner relied on two Nakka receipts, labelled Annexures B‑1 and B‑2, to argue that while he was denied the right to transact as an Adatya of grain sellers, other Adatyas were allowed to do so. The Court noted that the receipts themselves did not inherently prove the petitioner’s allegation. The municipality, in its affidavit, denied that the receipts had ever been issued to any Adatya. Consequently, the Court found that there was no reliable material before it to establish that the petitioner had been subjected to discrimination. These receipts were

The receipts referred to as Nakka and Ganj were issued only to the owners who actually brought grain to the market. The Court found no reason to doubt the affidavit submitted by the Municipality, which categorically stated that the receipts were not issued to any Adatya. Consequently, the Court was of the opinion that there was no reliable material before it to demonstrate that the petitioner was being discriminated against. In the absence of any such evidence, the Court concluded that even if a question of discrimination were to arise, it could not give rise to a violation of the fundamental right guaranteed under Article 14 of the Constitution.

Having examined the bye‑laws framed by the Municipality, the Court observed that none of the provisions infringed any fundamental right of any citizen of India. Article 19(1)(g) guarantees every citizen the right to practice any profession or to carry on any occupation, trade or business, and the Court found that no municipal bye‑law actually prevented any citizen from conducting his occupation, trade, or business within the market. A careful reading of the bye‑laws revealed that the intention of the Municipality was merely to ensure that persons entered the market for legitimate commercial purposes. The petitioner himself relied on Bye‑law 5(a) to argue that there was nothing in that provision which barred an Adatya who dealt in grain from entering the market and carrying on his business.

The Court then turned to the resolution dated 4‑9‑1949 to determine whether it violated any of the petitioner’s fundamental rights. By operation of that resolution, the Municipality ceased to issue Nakka and Ganj receipts and passes to the petitioner. The resolution provided that such receipts and passes were to be issued only to the owner of the grain who brought his produce to the market for sale. The Court recognised that the owner of the grain naturally possessed the right to request and receive these documents. The remaining issue was whether a person who was not the owner of the grain being sold possessed a comparable right, and if so, whether that right qualified as a fundamental right. The municipal bye‑laws contained no provision authorising the issuance of Nakka and Ganj receipts and passes in the name of an Adatya acting on behalf of the grain’s owner. Instead, the bye‑laws set out a series of regulations that benefitted the actual owner of the grain and outlined his obligations and liabilities while his produce was stocked at the market. The owner was required to pay market dues to the Municipality, for which a receipt was issued. Except for quantities less than a bag, all grain sales were to be conducted by auction under the supervision of the Municipal Moharrir. When a seller accepted a bid, the sale was effected to the highest bidder, who then became bound to purchase the grain at that price. The purchaser was obliged to pay the seller immediately a sum of two rupees per cart unless the purchaser had already deposited twenty‑five rupees as security with the Municipality.

The purchaser measured the grains between sunrise and sunset and was required to pay the seller the full sale price within twenty‑four hours of the bargain, doing so in the presence of the Municipal Moharrir of the market. After payment, the purchaser filled in certain entries in the Ganj receipts that were in the seller’s possession. Any grain that remained on the ground after the measurement belonged to the seller; no broker, measurer or hamal could claim any share of it. Bye‑law 21 prohibited any deduction in kind or cost for any grain or commodity exposed for sale or purchase on the grounds of charity, alms, private service or any other plea. The Court observed that the benefit and protection afforded by these provisions would be unavailable to the owner of grain if the receipts and passes were issued in another person’s name and that other person was recorded by the Municipality as the owner. Nevertheless, the Court held that the Municipality’s records must contain an accurate and faithful statement of the market’s sale and purchase transactions, which were controlled and managed by the Municipality, and that neither law nor morality could justify otherwise. The evidence before the Court showed that, for some time, the practice of issuing the receipts and passes in the name of Adatyas with respect to grain sales had developed and was initially thought to benefit the grain owners who brought produce to market. Over time, however, it became clear that the practice turned into an evil one causing loss to the grain owners. The Court found no reason to doubt the Municipality’s claim that simple villagers often did not receive the full sale price of their grain, and in some cases received no payment at all. Complaints received by the Municipality led to the resolution dated 4‑9‑1949, which was intended to stop the continued practice. While the Municipality did not deny that the petitioner entered the market on legitimate business, it insisted that receipts and passes be issued in the name of the grain owner. The Court concluded that the Municipality was within its rights to refuse issuance of receipts and passes to anyone other than the owner of the grain brought for sale, and that no legal provision had been identified that granted the petitioner a right to have such documents issued in his name.

The Court observed that the impugned resolution did not, in any manner, bar the petitioner from continuing his occupation as an Adatya. The effect of the resolution was limited to prohibiting employees of the Municipality from issuing Ganj receipts in the petitioner’s name with respect to grain that was not his property. The Court affirmed that such a direction fell within the lawful competence of the Municipality to give to its officers, and that no right of the petitioner could be said to have been infringed when the true purpose of the resolution was taken into account. Even assuming that the petitioner possessed a fundamental right under Article 19(1)(g) of the Constitution to pursue his business as an Adatya, the Court held that the Municipal bye‑laws did not create a blanket prohibition against the exercise of that business. The Municipality, through its affidavit, had contended that the resolution dated 4‑9‑1949 terminated the practice of levying an “adat” on grain sellers by the petitioner and other commission agents, because such a practice was not supported by any existing bye‑law governing market transactions. From this admission and from the fact that Bye‑law 5(a) made no reference to an Adatya acting on behalf of a grain seller, the Court inferred that the bye‑laws were not intended to forbid the petitioner or other Adatyas from carrying on their agency activities, but merely to prevent them from receiving Ganj receipts in their own names as if they were owners of the grain. The Court concluded that this constituted a restriction on the petitioner’s occupational activity as an Adatya, yet it did not amount to an outright ban. Considering the evidence that the market, owned by the Municipality, was primarily designed for the sale of agricultural produce and that the various bye‑laws aimed to protect such sellers, the Court found the restriction to be a reasonable limitation on the petitioner’s fundamental right. Accordingly, the Court determined that the petitioner’s claim of violation of his fundamental right could not be sustained. Finally, the Court held that the petition lacked merit and ordered its dismissal, directing the petitioner to pay the costs incurred.