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1960 Supreme(SC) 177
SUPREME COURT OF INDIA
16th August 1960 :
B.P. SINHA, C.J.I., S.J. IMAM, A.K. SARKAR, K.N. WANCHOO AND J.C. SHAH, JJ.
Director of Rationing and Distribution, Appellant
Versus
The Corporation of Calcutta, Respondent.
1. Attorney-General for India, 2. The State of Punjab, 3. The State of Uttar Pradesh, 4. The State of Madras. 5. The State of Bombay (now Maharashtra) 6. and The State of Andhra Pradesh, Interveners.
Criminal Appeal No. 158 of 1956.
Advocates appeared
Sir S. M. Bose, Advocate-General for the State of West Bengal, M/s A. C. Mitra and B. Sen, Sr. Advocates, (M/s. P. K. Bose and D. Gupta, Advocates, with them), for Appellant; Mr. N. C. Chatterjee, Sr. Advocate, (M/s. Sunil K. Basu and Sukumar Ghose, Advocates, with him), for Respondent; Mr. M. C. Setalyad, Attorney-General for India, (M/s. R. Ganapathy Iyer, R. H. Dhebar and T. M. Sen, Advocates, with him), for Intervener No. 1; Mr. S. M. Sikri, Advocate-General for the State of Punjab, (Mr. D. Gupta, Advocate, with him), for Intervener No. 2; M/s. G. C. Mathur and C. P. Lal, 1357 Advocates, for Intervener No. 3; Mr. V. K. Tiruvenkatachari, Advocate-General for the State of Madras, (Mr. T. M. Sen, Advocate, with him), for Intervener No. 4; Mr. H. M. Seervai, Advocate-General for the State of Maharashtra, (Mr. R. H. Dhebar, Advocate, with him), for Intervener No. 5; Mr. T. M. Sen, Advocate, for Intervener No. 6.
A.C.Mittal, B.SEN, C.P.LAL, D.GUPTA, D.GUTPA, G.C.MATHUR, H.M.SIRVAI, M.C.SETALVAD, N.C.CHATTERJI, P.K.BOSH, R.CANAPATHY IYER, R.H.Dhebar, S.M.BOSE, S.M.Sikri, SUKUMAR GHOSH, SUNIL K.BASU, T.M.SEN, V.K.TIRUVENKATACHARI
The State is not bound by a statute unless expressly provided or by necessary implication. This rule of construction persists in a republic and applies to sovereign functions, particularly exempting the State from penal provisions where fines would be paid to the State itself.
Headnote:(A) Municipal Act - Sections relating to licensing for storage of goods and penal provisions - Constitution - Article 372 - Rule of construction regarding the applicability of statutes to the State - The State is not bound by a statute unless it is so provided in express terms or by necessary implication (Paras 6, 10). This rule, derived from common law, continues to be valid after the adoption of a republican Constitution as it is a rule of interpretation based on the presumed intention of the legislature (Paras 10, 22).
(B) Sovereign Capacity - Immunity from statutory restrictions is available when the State is discharging elementary duties of a sovereign to maintain peace and good government, as opposed to embarking upon a commercial undertaking (Para 11).
(C) Penal Provisions - The State is exempt from penal statutes by necessary implication where the penalty is a fine that would ultimately be paid into the State's own coffers, rendering the prosecution redundant (Para 38).
Facts of the case:
A municipal corporation initiated prosecution against an officer representing a state government department for storing food grains in certain premises without a required license. The trial court acquitted the accused, holding that the statute did not bind the government. The High Court reversed this, ruling that the rule exempting the sovereign from statutes does not apply in a republic.
Findings of Court:
The rule of construction that the State is not bound by a statute unless expressly named or bound by necessary implication remains good law. The activity of rationing and distribution of food was a sovereign function. Furthermore, the penal provision imposing a fine cannot apply to the State by necessary implication.
Issues: Whether the rule of construction that the State is not bound by a statute unless expressly provided or by necessary implication continues to apply after the advent of the Constitution and whether the penal provisions of the municipal act applied to the state government.
Ratio Decidendi: The court held that the immunity of the government from certain statutes is a rule of interpretation based on public policy and the presumed intention of the legislature, not merely a royal prerogative. Under Article 372, such rules of construction continue to be valid. Additionally, the State is exempt from penal provisions where the penalty is a fine that would be paid to the State itself.
Result: Appeal allowed.
SINHA, C.J.I. : (On behalf of himself, Jafer Imam and Shah JJ.) This appeal by special leave is directed against the judgment and order of the High Court at Calcutta dated February 9, 1955, whereby that Court, in its revisional jurisdiction, set aside an order of acquittal dated December 15, 1953, passed by the Municipal Magistrate, Calcutta, in respect of the prosecution launched by the Corporation of Calcutta, respondent in this Court against the appellant.
2. The relevant facts are these On July 1, 1952, the Corporation of Calcutta made an application for summons under S. 488 of Bengal Act III of 1923, which was substituted by West Bengal Act XXXIII of 1951, against "the Director of Rationing and Distribution representing and Food Department of the Government of West Bengal". The offence complained of was "for using or permitting to be used premises No. 259, Chitpur Road, Upper, for the purpose of storing rice etc., under the provisions of the Bengal Rationing Order, 1943, without a licence under S. 386 for the year, 1951-52, corresponding S. 437 of the C. M. C. Act, 1951". Section 386(1)(a) of the Calcutta Municipal Act is in these terms :
"No person shall use or permit to be used any premises for any of the following purposes without or otherwise than in conformity with the terms of a licence granted by the Corporation in this behalf, namely, any of the purposes specified in Schedule XIX".
Item 8 of the said Schedule is "storing, packing, pressing, cleansing, preparing or manufacturing, by any process whatever, any of the following articles" and the articles mentioned include rice, flour etc.
3. The facts alleged by the prosecution were not denied on behalf of the Department, which was in the position of the accused, but it was contended by way of a preliminary objection that the prosecution was not maintainable in law. After hearing arguments for the parties the learned trial Magistrate passed an order acquitting the accused relying upon a decision of the Calcutta High Court in the case of Corporation of Calcutta v. Sub-Postmaster, Dharamtola Post Office, 54 Cal WN 429 holding that the provisions of S. 386 of the Act, neither in terms nor by necessary implication, bound the Government. The respondent moved the Calcutta High Court in its revisional jurisdiction in Criminal Revision No. 282 of 1954, which was heard by a Division Bench consisting of J. P. Mitter and S. N. Guha Ray, JJ. Guha Ray, J., who delivered the judgment of the Court, Mitter, J. concurring, held that the previous decision of the same High Court in 54 Cal WN 429 was clearly distinguishable. The distinction pointed out was that the previous decision of the Court had relied upon the decision of the Judicial Committee of the Privy Council in Province of Bombay v. Municipal Corporation of the City of Bombay, 73 Ind App 271 : in a case arising before the coming into force of the Constitution. As the present case arose after the advent of the Constitution, the High Court did not feel bound by the aforesaid decision of the Privy Council and therefore examined the legal position afresh. On such an examination, the High Court came to the conclusion that the Indian Legislature in enacting laws acted on the assumption that the Government would be bound unless excluded either expressly or by necessary implication oftener than on the assumption that it would not be bound, unless the Legislature so provided expressly or by necessary implication. The High Court took the view that the decision of the Division Bench of the Madras High Court in Bell v. Municipal Commrs. for the City of Madras, ILR 25 Mad 457 was more in consonance with the law in India than the opposite view expressed in the Privy Council judgment aforesaid. They definitely decided that the law of India, even before the coming into effect of the Constitution, and even at the time of the passing of the Government of India Act, 1935, was that the Government was bound by a Statute unless it was exempte
