IMPORTANT POINT
The Commissioner of Municipal Corporation of Hyderabad has no power under Section 521 of Hyderabad Municipal Corporation Act to insist the money lenders and pawn brokers only run their business on the basis of a licence issued by him.

Headnote:Hyderabad Municipal Corporation Act-Section 521(e)(ii)-Notification under increasing licence fee for issuance of licence from all money lenders and pawn brokers-Writ petition against-Whether Commissioner has power under Section 521 to insist that money lenders and pawn brokers can run their business only on the basis of a licence issued by Municipal Corporation of Hyderabad? -Single Judge holding Yes on ground that money lending or pawn brokerage was dangerous to property-In appeal DB holding it was necessary to control nuisance caused by money lending and pawn brokerage-Appeal against to Supreme Court-Whether High Court was right? (No)-Appeal allowed-High Court reversed and writ petition allowed-Case law explained.
       Held : It is admitted that the Notification is under Section 521(e)(ii). Section 521 provides for "certain things not to be kept and certain trades and operations not to be carried on without a licence". Sub-section 1 starts with the words "Except under and in conformity with the terms and conditions of a licence granted by the Commissioner." Thus the whole purpose of Section 521 is to ensure that the Commissioner is in a position to regulate the trade or operation or to prevent things from being kept except on certain terms and conditions, which may be fixed by the licence. It, therefore, automatically follows that if there are no terms and conditions which can be imposed by a Commissioner or the Municipality in respect of a particular trade or operation then even if the Commissioner is of the opinion that that trade or operation is dangerous to life or health or property or that it is likely to create a nuisance he would not be able to regulate or control that trade or operation. Insistence on getting a licence, in such a case, would be a useless formality and would not be authorised by Section 521. (Para 9)
       In pursuance of the direction issued on 23rd of January, 2001, a copy of the licence issued by the Respondents had been produced. On a perusal of the licence it was clear that there was not a single term or condition, in that licence, which could apply to this trade or occupation. (Para 11)
       In this view of the matter we are of the opinion that the impugned judgment cannot be sustained. The same is accordingly set aside. The Writ Petition of the Appellants is allowed. (Para 14)

JUDGMENT

S.N. Variava, J.-Leave granted.

2. This Appeal is against a Judgment dated 27th November, 1998.

3. Briefly stated the facts are as follows :

The Appellants are an Association of money lenders and pawn brokers. The Respondent-Corporation had in the year 1972 by a Notification dated 14th/15th April, 1972, notified the business of money tenders and pawn-brokers as one which required a licence Under Section 523 of the Hyderabad Municipal Corporation Act. Having so notified a licence fee of Rs.50/- was charged from all money lenders and pawn brokers. At that time no challenge was made to the Notification. However, by another Notification dated 11th April, 1987, the licence fees was enhanced from RS.50/- to R.S.500/- in case of money lending and pawn broking business and Rs.200/- in case of money exchange operations.

4. The Appellants filed a writ petition in the High Court of Andhra Pradesh challenging the Notification dated 11th April, 1987, inter alia, on the ground that Section 521 did not empower the Commissioner to notify the trades of money lending and pawn broking as being trades for which a licence is necessary. The Writ Petition came to be dismissed by a single Judge of the High Court on 18th of February, 1994. The single Judge, Inter alia, held that the business of money lending and pawn broking were dangerous to property in the sense that they involved a risk to property of the persons who hypothecate the same with the money lenders and that having regard to the manner in which and the circumstances under which such business is carried on they are likely to create nuisance.

5. Against the Judgment of the learned single Judge, the Appellants filed an Appeal. The Appeal came to be dismissed by the impugned Judgment dated 27th November, 1998. By the impugned Judgment, the learned Judges have dis-agreed with the single Judge and held that the business of money lending or pawn broking is not dangerous to property. They have, however, held that these are operations which are likely to create a nuisance inter alia on the following reasoning:

"Approaching the term in the background of the above meanings and definitions; more especially the concept of "nuisance in fact"/ nuisance per accidents", one can say that running of a money lending or pledge shop is likely to create nuisance to the residents of locality at times. Let us take a case where such a shop is set up in the thick of a residential locality inhabited by middle class and poor families and the proprietors resort to advertisements and other types of canvassing so as to lure the vulnerable sections of society to borrow money at high rates of interest by pledging the jewellry and so on. A section of population residing in that locality may feel annoyed or entertain a feeling of insecurity. The activity of pledging and money lending on security of articles held precious the families may affect susceptibilities of the family members and other residents of the locality. The ramifications or the impact of the business may not necessarily be confined within the precincts of the shop, but it may stretch beyond that and percolate into the day to day life stream of the residents of the locality.

Let us take another example which equally holds good not only for the money lender s shop, but also for any other trade in a City. Supposing the shop is set up at a crowded place, just adjacent to, or encroaching on the foot path and the pursuit of the business involves visits by large number of customers. It is likely to cause obstruction or inconvenience to the passers-by. Thus, the location of a money lending or pawn broker s shop more often assumes good deal of importance. Viewed from this angle, the possibility of a professional money lender s shop causing nuisance in some degree or the other cannot be ruled out. It may not cause nuisance at all times and in all localities, but under certain situations or circumstances or at certain times, the running of such s

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2001 Supreme(SC) 425

IMPORTANT POINTThe Commissioner of Municipal Corporation of Hyderabad has no power under Section 521 of Hyderabad Municipal Corporation Act to insist the money lenders and pawn brokers only run their business on the basis of a licence issued by him.

Cases Referred (2)

IMPORTANT POINT
The Commissioner of Municipal Corporation of Hyderabad has no power under Section 521 of Hyderabad Municipal Corporation Act to insist the money lenders and pawn brokers only run their business on the basis of a licence issued by him.