judgement:
Special Leave Petitions (Civil) Nos.
2585 2594/79.
From the Judgment and Order dated 9 3 1979 of the Delhi High Court in Civil Writ Petition Nos.
116 122 and 135 137/79.
V. section Desai (In SLP 2585), L. N. Sinha (In SLP.
2586), L. M. Singhvi (In SLP 2587), P.P. Rao (In SLP 2588), R. C. Verma, Y. K. Sabharwal, D. P. Mukherjee, (In SLP 2589 94) and A. K. Ganguli (In all the S.L.Ps.) for the Petitioners.
Soli J. Sorabjee, Addl.
R. K. Bhatt and R. N. Sachthey for the Respondent.
656 The Order of the Court was delivered by DESAI, J. Law touching manufacture, import, use or consumption of liquor (as understood in common parlance) is recently vigorously assailed with almost afflicted sentimentalism that even though we have dismissed this batch of Special Leave Petitions on 23rd March, 1979, in fairness to petitioners on whose behalf all possible contentions that can be formulated by research and dialectics were advanced with eloquence and devoid of inebriation likely to be caused by the subject matter of dispute, we propose shortly to state our reasons for dismissal of the petitions.
To illumine the contours of controversy events preceding the promulgation of the Ordinance amending the Punjab Excise Act, 1914 ( 'Act ' for short), as in force in the Union Territory of Delhi ( 'Delhi ' for short) styled as Punjab Excise (Delhi Amendment) Ordinance, 1979 ( 'Ordinance ' for short) may be stated.
Punjab Excise Act, 1914 has been extended to Delhi.
While implementing the provisions of the Act, the concerned authority used to hold auction for grant of licence in Form L 10 for selling country liquor and at one such auction held on 29th March 1978 the petitioners ' bids were accepted and they were granted licences in Form L 10 for the period 1st April 1978 to 31st March 1979.
The licence included a condition to sell a bottle of 750 ml. of country liquor at Rs. 15/ which was, inter alia, made up of excise duty at the rate of Rs. 10.23 and profit of licensee at the rate of Rs. 2/ .
This excise duty was styled as 'still head duty ' for obvious reasons.
In Writ Petition No. 716/78 filed in the High Court of Delhi by certain petitioners, validity of the levy of 'still head duty ' was challenged inter alia on the ground that it was nothing but countervailing duty and in the absence of manufacture of liquor in Delhi, countervailing duty on the import of liquor cannot be constitutionally levied.
This contention found favour with a learned single Judge of the Delhi High Court and a number of Letters Patent Appeals were filed against that judgment which were pending in the High Court.
In the mean time on 20th January 1979 the President of India, promulgated the Ordinance purporting to amend the Punjab Excise Act with retrospective effect and conferring power on the Government under the provisions of the Act to levy special duty on the import of country liquor in Delhi at rates not exceeding that set out in Schedule I A which was introduced in the Act by the Ordinance Pursuant to the Ordinance amending the principal Act, the Delhi Fiscal Duty Order, 1979, was issued levying special duty at the rates set out in the order on import of country liquor into Delhi.
Some of the petitioners questioned the validity generally of the Ordinance and specifically of the import of special duty in Civil Writ No. 116/79.
A Division Bench of the Delhi 657 High Court heard the Letters Patent Appeals against the judgment of the learned single Judge of the Delhi High Court as well as the aforementioned writ petition and by a common judgment held the Ordinance as well as the impost thereunder valid and dismissed the writ petition and allowed the Letters Patent Appeals setting aside the judgment of the learned single Judge.
This bunch of petitions is filed against the judgment of the Delhi High Court in Civil Writ No. 116/79 and allied writ petitions and the Letters Patent Appeals.
The cardinal question around which the various facts of controversy rotates turns upon the competence of Parliament to enact legislation under challenge which would directly impinge upon the competence of the President to issue the impugned Ordinance.
Article 123 of the Constitution enables the President to issue an Ordinance in the circumstances thereunder mentioned and the power to issue Ordinance is co extensive with the legislative power of Parliament vide Article 123(3).
The question, therefore, is whether Parliament had the power to impose special duty on the import of country liquor in Delhi.
In order to avoid the slightest confusion it must be reiterated that the power of Parliament to legislate for Delhi is in question.
Article 246(1) confers exclusive power on Parliament to make laws with respect to any of the matters enumerated in List I in the Seventh Schedule.
Sub article (3) confers similar power on the Legislature of any state with respect to any of the matters enumerated in List II.
Sub article (2) confers power both on Parliament and the State Legislature to make laws with respect to any of the matters enumerated in List III (Concurrent List).
Sub article (4) reads as under: "Parliament has power to make laws with respect to any matter for any part of the Territory of India not included in a State notwithstanding that such matter is a matter enumerated in the State List".
Article 248(1) provides that Parliament has exclusive power to make any law with respect to any matter not enumerated in the Concurrent List or State List.
In other words, residuary power of legislation is conferred on Parliament Sub article (2) of Article 248 is material and may be extracted: "(2).
Such power shall include the power of making any law imposing a tax not mentioned in either of those Lists".
658 Entry 84 in the Union List reads as under: "84.
Duties of excise on tobacco and other goods manufactured or produced in India except: (a) alcoholic liquors for human consumption; (b) opium, Indian hemp and other narcotic drugs and narcotics, but including medicinal and toilet preparations containing alcohol or any substance included in sub paragraph (b) of this entry".
Entry 97 of the Union List reads as under: "97.
Any other matter not enumerated in List II or List III including any tax not mentioned in either of those Lists".
Entry 51 in the State List reads as under: "51.
Duties of excise on the following goods manufactured or produced in the State and countervailing duties at the same of lower rates on similar goods manufactured or produced elsewhere in India: (a) alcoholic liquors for human consumption; (b) opium, Indian hemp and other narcotic drugs and narcotics; but not including medicinal and toilet preparations containing alcohol or any substance included in sub paragraph (b) of this entry".
Entry 52 is as under: "52.
Taxes on the entry of goods into a local area for consumption, use or sale therein".
The relevant provisions of the impugned Ordinance may also be extracted for convenience of reference.
The Ordinance in its Preamble states that by reason of certain excisable articles not being manufactured or produced in Delhi, one such being country liquor, countervailing duty is not leviable on such articles which are imported into Delhi, and proceeds to define duty in clause 5(a) of section 3 as under: "(5a).
"duty" means the excise duty or countervailing duty or, as the case may be, special duty;" 659 Clause (c) was added to clause (6) of section 3 specifying the words "any spirit".
Clause (18a) was added specifying thereunder the definition of 'special duty ' which reads as under: "(18A). "Special duty" means a tax on the import of any excisable article being an article on which countervailing duty as in mentioned in entry 51 of List II in the Seventh Schedule to the Constitution is not imposable on the ground merely that such article is not being manufactured or produced in the territory to which this Act extends".
Section 31 was amended enabling the Government to levy over and above excise duty a countervailing duty or special duty at such rate or rates not exceeding the rates set forth in Schedule IA which was also added by the Ordinance.
The contention is that Entry 51 in the State List enables the State Legislature to levy duty of excise or countervailing duty on alcoholic liquors for human consumption and that the almost corresponding Entry 84 of the Union List denies power to Parliament to levy duty of excise on alcoholic liquors for human consumption.
Proceeding further it was said that initially countervailing duty was levied on the country liquor imported in Delhi and when it was found that as country liquor was not manufactured in Delhi countervailing duty could not be levied upon it, an attempt was made to levy the same duty by a camouflage of changing the name and that in pith and substance the Ordinance levies countervailing duty which Parliament had no power to levy particularly because country liquor on which duty is levied is not manufactured in Delhi.
It is an admitted position that country liquor, the subject matter of impost, is not manufactured in Delhi.
It is again an admitted position that as country liquor is not manufactured in Delhi, countervailing duty as is commonly understood could not be levied upon its import in Delhi.
The question is: does that exhaust the power of Parliament to levy a duty on the import of country liquor into Delhi ? Scheme underlying distribution of legislative powers in Part XI, Chapter I and especially Articles 246 and 248 is that except the matters specifically enumerated in List II (State List) in the Seventh Schedule, Parliament 's plenary power to legislate extends to all conceivable matters which can be topic of legislation, and even this limitation on its power vanishes when Parliament legislates for part of the territory of India not included in a State.
The three dimensional picture becomes complete, viz., (i) to select topic for legislation; (ii) enactment of legislation on the topic; and (iii) to impose tax in respect 660 of such subject matter of legislation, by reference to article 248 which confers power to make any law with respect to any matter not enumerated in Lists II and III including the power to impose tax not mentioned in either of those Lists.
Under Article 246(4) Parliament has power to make laws with respect to any matter for any part of the territory of India not included in a State notwithstanding that such matter is a matter enumerated in the State List.
Power of Parliament thus to legislate with respect to any matter for Delhi, territory not included in a State, is unabridged or unfettered by the entries in the State List.
Further, residuary power of legislation including the power to levy tax is conferred on Parliament by the combined operation of Articles 246(4), 248(1) & (2) and Entry 97 in the Union List.
That power is untramelled by the limitations prescribed by Articles 246(2) and (3) and Entry 51 of State List and is plenary and absolute subject only to such restrictions as are imposed by the Constitution and we find none such which is material to the present question (vide Mithan Lal vs State of Delhi) (1).
Accordingly, if excise or countervailing duty could be levied on country liquor manufactured or imported into Delhi, albeit other conditions for the levy of such duty being fulfilled, Parliament would not lack competence to levy the same only because levy of such duty on alcoholic liquors for human consumption is within the competence of a State.
But it must be confessed that as country liquor is not manufactured in Delhi, the Parliament could not under Entry 51 of the State List levy either excise or countervailing duty on it.
Merely because Parliament could not levy countervailing duty on country liquor imported into Delhi because country liquor is not manufactured in Delhi, it does not exhaust the power of Parliament to levy some other duty on the import of liquor if it is otherwise constitutionally permissible.
It was, however, said that Entry 51 in State List being a specific entry providing for levy of duty either on manufacture or import of country liquor and there being no other specific entry enabling to levy special duty it is inconceivable that the framers of the Constitution should have left some such levy on the import of country liquor in respect of Delhi under residuary entry.
In other words, it was said that where there is a specific entry the legislation must squarely fall within the entry and correspondingly is must be assumed that it would not be covered by the residuary entry.
In fact the argument went so far that before resort could be had to the residuary Entry 97 the Court in 661 its exploration to ascertain under which Entry the legislation falls, must proceed from the beginning and in its journey till Entry 97 if it falls somewhere, removing the camouflage under which the legislation is sought to be taken out from the specific entry, it would not be proper to say that the legislation is covered by the residuary entry.
Whenever legislative competence is in question attempt of the Courts is to find out whether the legislation squarely falls in one or the other entry.
If a particular legislation is covered by any specific entry well and good.
If it does not, the second question would be: is it beyond the legislative competence of Parliament ? In undertaking this exercise it is quite often known that a legislation may be covered by more than one entry because an analysis has shown that the entries are overlapping.
If the legislation may fall in one entry partly and part of it may be covered by the residuary entry, the legislation would none the less be immune from the attack on the ground of legislative competence.
This was the approach adopted by a 7 Judges Bench of this Court in Union of India vs H. section Dhillon(1) wherein while examining the constitutional validity of the amended Wealth Tax Act which included the capital value of agricultural land for the purpose of computing net wealth, the controversy was whether the impugned Act was a law with respect to entry, including Entry 49 in the List II or was it one under Entry 86 read with Entry 97 or Entry 97 itself of the List I. Repelling the contention of legislative incompetence this Court held that there is nothing in the Constitution to prevent Parliament from combining its powers under one or other Entry with its power under Entry 97.
The terse observation is that this Court knows no principle which debars Parliament from relying on the powers under the specified entries 1 to 96, List I and supplement them with the powers under Entry 97, List I and Article 248 or even the powers under entries in the Concurrent List.
This authoritative pronouncement would answer the contention that while legislating for the Union Territories the Parliament unhampered by Articles 246(2) and (3) but enriched by Article 248(1) and (2) could legislate on any of the topics either in the List I or in List II or in exercise of the residuary power under Entry 97.
There is thus no dearth of legislative competence of Parliament to enact legislation for a territory not included in a State because the power to legislate takes within its sweep matters included in all the three Lists and added to it is the residuary power on matters not specifically included in any entry in any of the three Lists.
It was, however, said that the observations in Dhillon 's case (supra) are no more good law in view of the opinion of Judges constituting 662 majority in His Holiness Kesavananda Bharati Sripadagalavaru vs State of Kerala(1).
The controversy in Kesavananda Bharati 's case was about the power of the Parliament to amend the Constitution and a contention being the spill over from I.C. Golaknath vs State of Punjab(2) was that apart from Article 368, Entry 97 of List I would confer power on Parliament to amend the Constitution.
After pointing out that when all the three Lists were exhaustively drawn up it is difficult to believe that an important power would be kept hidden in Entry 97 of the Union List leaving to the off chance of the courts locating that power in that entry, it was said that if a subject of legislation was present to the minds of the framers of the Constitution, it could not have been left to be found by the Courts in the residuary powers.
Mr. Seervai 's commentary at p. 1264 on Constitutional Law of India, 2nd Edn., was pressed into service wherein it is observed that a fortiori if a subject of legislative power was prominently present to the minds of the framers of our Constitution, they would not have left it to be found by Courts in the residuary power.
Proceeding ahead it was submitted that while enacting Entry 51 in List II the subject of levying duty on import of alcoholic liquor was present to the minds of the framers of the Constitution and, therefore, it is futile to search that power in the residuary Entry.
The observations in Kesavananda 's case (supra) have to be kept in focus in the context of the controversy whether Article 368 confers specific power of amendment of the Constitution and it was sought to be brushed aside by saying that it merely provided procedure for amendment of the Constitution and, therefore, the power for amendment must be located in the residuary Entry 97 of the Union List.
The position here is materially different.
With the advancement of society, expanding horizons of scientific and technical knowledge, probe into the mystery of creation, it is impossible to conceive that every imaginable head of legislation within human comprehension and within the foreseeable future could have been within the contemplation of the founding fathers and was, therefore, specifically enumerated in one or the other of three Lists, meaning thereby that three Lists were exhaustive of Governmental action and activity.
Demands of welfare State, hopes and aspirations and expectations in a developing society and the complex world situation with inter dependence and hostility amongst nations may necessitate legislation on some such topics that even for visionary they could not have within the contemplation of the founding fathers.
Complex modern governmental administration in a federal set up pro 663 viding distribution of legislative powers coupled with power of judicial review may raise such situations that a subject of legislation may not squarely fall in any specific entry in List I or III.
Simultaneously on correct appraisal it may not be covered by any entry in List II though apparently or on a superficial view it may be covered by an entry in List II.
In such a situation Parliament would have power to legislate on the subject in exercise of residuary power under Entry 97, List I and it would not be proper to unduly circumscribe, corrode or whittle down this power by saying that subject of legislation was present to the mind of the framers of the Constitution because apparently it falls in one of the entries in List II and thereby deny power to legislate under Entry 97.
The history of freedom struggle demonstrates in unequivocal terms the importance of residuary power of legislation being conferred on Parliament.
Therefore, the scope and ambit of Entry 97 need not be whittled down or circumscribed by a process of interpretation.
In any case majority decision in Dhillon 's case (supra) is neither overruled not departed from in Kesavananda 's case (supra).
Accordingly, once the power of Parliament to legislate on a topic is not expressly taken away by any constitutional provision, it remains intact under Entry 97 of List I. Undoubtedly, excise and countervailing duties on alcoholic liquors for human consumption were within the contemplation of the framers of the Constitution.
That is a specific topic of legislation in List II.
It does not exhaust all conceivable levy that can be legitimately imposed on such items if otherwise they could be legally levied by reference to constitutional power to levy the same.
And Entry 97 is a complete answer to the contention.
It was incidentally urged that Entry 52 in the State List which enables the levying of taxes on entry of goods in local area for consumption, use or sale therein was also within the contemplation of the founding fathers and that power under Entry 52 having been exercised by the Delhi Municipal Administration in the form of terminal tax the same cannot be arrogated by Parliament to itself.
Terminal tax is entirely different from the special duty sought to be imposed by the impugned Ordinance.
The impost is on entry of country liquor into Delhi to be recovered by the Delhi Administration for its own use.
Delhi Administration and Delhi Municipal Administration are entirely different, and therefore, it cannot be said that Entry 52 excludes the power of the Parliament to levy tax on import of country liquor in Delhi.
Incidentally, the argument is that the taxing event being the import of liquor in Delhi it is exposed to double taxation, namely, the special 664 duty levied by Parliament and the terminal tax imposed by the Municipal Administration and that is impermissible.
This has merely to be mentioned to be rejected in view of the decision of this Court in Avinder Singh & Ors.
vs State of Punjab & Ors.
,(1) wherein it was observed that if on the same subject the legislature chooses to levy tax twice over there is no inherent invalidity in the fiscal adventure save wherever prohibitions exist.
It was next contended that what is sought to be done by the impugned Ordinance is to circumvent the decision of the learned single Judge of the High Court which invalidated the levy of countervailing duty and that at best it is a colourable legislation and that in pith and substance it is re introduction of countervailing duty under a different nomenclature and hence unsustainable.
If by a legislation tax is sought to be imposed in exercise of certain legislative power which under judicial review is found to be wanting, it does not prohibit the legislature from exercising the same power if it can be traced to provisions of the Constitution.
Merely because an incorrect exercise of legislative power under a misconception of power itself is once invalidated that very legislative power if it is traceable to provisions in the Constitution cannot be struck down on the ground that it is a colourable legislation or a mere camouflage.
Undoubtedly initially countervailing duty was levied but it was found that as country liquor was not manufactured in Delhi legally it was impermissible to levy countervailing duty.
This is admitted in the Preamble of the Ordinance itself.
It was a constitutional error to have levied such a duty and the same was pointed out.
Now, if the very duty could be levied under the power which is available it can never be said that it is a colourable exercise of power or that the new impost is a camouflage for the old one.
What is colourable legislation was explained by this Court in K. C. Gajapati Narayan Deo vs State of Orissa,(2) and it was re affirmed in Maharana Shri Jayvant Singhji Ranmal Singhji etc.
vs State of Gujarat.(3) This Court said that the idea conveyed by the expression "colourable legislation" is that although apparently a legislature in passing a statute purported to act within the limits of its powers, yet in substance and in reality it transgressed those powers, the transgression being veiled by what appears, on proper examination, to be a more pretence or disguise.
Applying this test it is difficult to say that the impugned impost is either a camouflage or a colourable legislation.
Conditions for levy of countervailing duty may not be satisfied.
That 665 does not debar the Parliament from levying tax on import of country liquor if it has otherwise power to do so.
It would be too trite a saying that if countervailing duty cannot be imposed there would be no power to impose duty in any form on the import of country liquor into a territory where that country liquor is not manufactured.
In fact, where particular pre requisites for levying a tax are not satisfied and it is so pointed out by a Court of law, the legislature would not lack power to levy that tax if it could be traced to the provisions of the Constitution.
In such a situation Legislature has power to set at naught the judgment of the court by resort to appropriate power.
This is well settled by the decision of this Court in Patel Gordhandas Hargovindas vs Municipal Commissioner, Ahmedabad,(1) where the word 'rate ' as used in Bombay Municipal Boroughs Act, 1925, came up for interpretation and it was held that it can be imposed on the annual letting value of the property but not on the capital value of the property.
The legislature stepped in by enacting Gujarat Imposition of Tax by Municipalities (Validation) Act, 1963, providing in section 3 thereof assessment and collection of rate on lands and buildings on the basis of capital value or a percentage of the capital value and declaring the past levy to be valid by further providing that tax on lands and buildings may be imposed either on the basis of annual letting value or on the basis of capital value.
When the amending and validating Act was questioned Prithvi Cotton Mills Ltd. & Anr.
vs Broach Borough Municipality & Ors.
,(2) this Court observed that the legislature exercised its undoubted powers of redefining 'rate ' so as to equate it to a tax on capital value and convert the tax purported to be collected as a 'rate ' into a tax on lands and buildings, and thus got rid of the judgment in Patel Gordhandas 's case, (supra).
It would thus follow that merely because a statute was found to be invalid on the ground of legislative competence that does not permanently inhibit the Legislature from re enacting the statute if the power to enact the same is properly traced and established.
In such a situation it would not be correct to say that the subsequent legislation would be merely a colourable legislation or a camouflage to re enact the invalidated previous legislation.
In passing it was mentioned that there is inherent evidence to show that the fresh impost was nothing but the invalidated countervailing duty under a guise of different nomenclature.
It was said that special duty can be levied under the Act amended by the Ordinance only on the import of any 'excisable article ' being an article on which countervailing duty as is mentioned in Entry 51 of List, 2, Seventh Schedule to the Constitution is not imposable on the ground merely that such 666 article is not being manufactured or produced in the territory to which the Act is extended.
Reference was then made to the definition of 'excisable article ' in section 3 of the Act.
Excisable article has been defined to mean (a) an alcoholic liquor for human consumption, or (b) any intoxicating drug, (c) spirit, the last being added by the impugned Ordinance.
Apart from the definition, it was urged that excisable article in common parlance or by judicial interpretation has been understood to mean article on which excise is levied, or leviable.
Proceeding further it was said that as country liquor was not manufactured in Delhi, excise could not be levied on it not countervailing duty could be imposed on its import though that very liquor where manufactured may be an excisable article in that area.
It was, therefore, said that subject matter of impost being an excisable article, meaning if manufactured in Delhi excise could be levied on it, the special duty is nothing but invalidated countervailing duty on excisable article.
There is no merit in this submission because the expression 'excisable article ' which alone can be the subject matter of levy of special duty is merely descriptive of the goods subject to charge.
It is only an identifying mark, a tag, which would attract special duty.
If liquor was manufactured in Delhi it would be an excisable article.
It is that article on which, if manufactured in Delhi, excise could be levied which when imported would provide the taxing event for the levy of special duty because in the absence of manufacture in Delhi countervailing duty cannot be imposed upon it.
The expression is used for identifying the subject matter of impost and nothing more need be read into it.
The next important contention was that this impost imposed unreasonable restrictions on the freedom of inter State trade, commerce and intercourse guaranteed by Article 301 or the freedom to carry on trade or business in liquor is a fundamental right under Article 19(1) being not in public interest, the enactment is constitutionally invalid.
That raises the oft repeated vexed question whether right to carry on trade or business in liquor is a fundamental right under Article 19 (1) (g) and that same considerations would apply for acting under Article 301.
This question has cropped up before the Court at regular intervals but it would be sufficient to take note of two decisions to dispose of the contention.
In Har Shankar & Ors. etc.
vs Dy.
Excise & Taxation Commissioner & Ors.(1) after referring to Crowley vs Christansen,(2) and several cases of this Court it was in terms stated that there is no fundamental right to do trade or business in intoxicants.
The State 667 under its regulatory powers, has right to prohibit absolutely every form of activity in relation to intoxicants its manufacture, storage, export, import, sale and possession.
In all their manifestations, these rights are vested in the State and indeed without such vesting there can be no effective regulation of various forms of activities in relation to intoxicants.
In reaching this conclusion the Court took note of an important observation made in the State of Bombay vs R. M. D. Chamarbaugwala,(1) which may be extracted as under: "We find it difficult to persuade ourselves that gambling was ever intended to form any part of this ancient country 's trade, commerce or intercourse to be declared as free under article 301.
It is not our purpose nor is it necessary for us in deciding this case to attempt an exhaustive definition of the word 'trade ', 'business ', or 'intercourse '.
We are, however, clearly of opinion that whatever else may or may not be regarded as falling within the meaning of these words, gambling cannot certainly be taken as one of them.
We are convinced and satisfied that the real purpose of articles 19(1)(g) and 301 could not possibly have been to guarantee or declare the freedom of gambling.
Gambling activities from their very nature and in essence are extra commercium although the external forms, formalities and instruments of trade may be employed and they are not protected either by article 19(1) (g) or article 301 of our Constitution".
After extracting these observations this Court observed in Har Shankar 's case (supra) that the reasons mentioned by Das, C. J. for holding that there can be no fundamental right to do trade or business in an activity like gambling apply with equal force to the alleged right to trade in liquor and those reasons may not be brushed aside by restricting them to gambling operations.
Recently, in P. N. Kaushal & Ors., vs Union of India & Ors.,(2) after an exhaustive review of all previous decisions, this conclusion was affirmed that there is no fundamental right to trade or business in nauseous drinks which includes liquor.
If there is no fundamental right to carry on trade or business in liquor, there is no question of its abridgement by any restriction which can be styled as unreasonable.
In fact, as stated in Har Shankar 's case, (supra) the State under its regulatory power has a right to control or even to prohibit absolutely every form of activity in relation to intoxicants apart from anything else, its import 668 too.
This power of control is question of society 's right to self protection and it rests upon the right of the State to act for the health, moral and welfare of the people.
Liquor traffic is a source of pauperism and crime.
In this background it is now too late in the day to entertain an argument that imposition of tax on the import of liquor which serves the double purpose of restraining its use by making it costly and prohibiting its use on the ground that it trenches upon the manufacturers slowly and gradually to restrict its manufacture directly impinging upon its unrestricted consumption.
Such an impost, therefore, can be said to be one in the public interest for preserving public health and public morals and cannot be said to be one as infringing the inter State freedom of trade and commerce.
Mr. Rao, who appeared for some of the petitioners specifically submitted that this question is no more res integra in view of the decision of a Constitution Bench of this Court in Kalyani Stores vs The State of Orissa & Ors.(1) In that case the validity of a Notification enhancing the duty on the import of foreign liquors from Rs. 40/ to Rs. 70/ per L.P. Gallon was questioned on the ground that it interferes with freedom of inter State trade and commerce guaranteed by Article 301.
This challenge was upheld by the majority decision observing that "the notification levying duty at the enhanced rate is purely a fiscal measure and cannot be said to be a reasonable restriction on the freedom of trade in the public interest.
Without entering upon an exhaustive categorisation of what may be deemed "required in the public interest", it may be, said that restrictions which may validly be imposed under article 304(b) are those which seek to protect public health, safety, morals and property within the territory".
Since Kalyani Stores case (supra) judicial opinion on the vexed question of right to carry on trade or business in intoxicating drinks has undergone a sea change culminating into Har Shankar 's case (supra) which again is a decision of 5 Judges Constitution Bench of this Court.
Unfortunately the judgment in Kalyani Stores case is not referred to in Har Shankar 's case.
However, the undisputed position that now emerges is that there is no fundamental right to do trade or business in intoxicants.
Once that latter pronouncement is unambiguous and incontrovertible a regulatory measure imposing a tax cannot be questioned on the ground of unreasonableness or want to public interest because one must not lose sight of the well accepted legal proposition that all taxes are imposed in public interest.
Even apart from this, the majority judgment in Kalyani Stores case (supra) clearly recognises the test of 669 reasonable restrictions to be judged in the light of the purpose for which the restriction is imposed, i.e. as may be required in the public interest and restrictions that may validly be imposed under Article 304(b) are those which seek to protect public health, safety, morals and property within the territory.
The Preamble to the impugned Ordinance clearly recites that the special duty on the importation of country liquor into Delhi is an endeavour towards bringing about prohibition of consumption of alcoholic drinks, and, therefore, it is a step in the direction of safeguarding public health.
Incidentally, however, it was stated that when the Minister piloted the Bill replacing the Ordinance it was in terms said that the Act replacing the Ordinance was purely a fiscal measure and had nothing to do with the prohibition.
In the same breath it was stated that the Government was committed to total prohibition and would sincerely try to achieve this objective.
Opinion of the Minister would be hardly relevant in examining the object and purpose behind enacting a certain legislation.
Provision in Punjab Excise Act, 1914, conferring power on the State to direct closure of liquor shops on certain days in a week, month or year was challenged as one not of a regulatory character but introduced with the avowed object of enforcing prohibition and a contention was raised that way back in 1914 the then rulers could not have thought of enforcing prohibition through the provisions of the Punjab Act which was specifically enacted for the purpose of collecting revenue from liquor vendors and indirectly from liquor consumers.
This Court in P. N. Kaushal 's case (supra) while repelling this contention observed as under: "In short, while the imperial masters were concerned about the revenues they could make from the liquor trade they were not indifferent to the social control of this business which, if left unbridled, was fraught with danger to health, morals, public order and the flow of life without stress or distress.
Indeed, even collection of revenue was intertwined with orderly milieu; and these twin objects are reflected in the scheme and provisions of the Act".
The present levy under the amended provisions of the Act in its application to Delhi could certainly be said to be one enacted both with the object of regulating the trade or business in intoxicants and with a view to realising the goal fixed in Article 47 of the Constitution Therefore, one can look upon this measure both as a fiscal measure and the one safeguarding public health and even public morals because it is 670 well recognised that liquor trade is instinct with injury to individual and community and has serious side effects recognised everywhere in every age.
[Not to control alcohol business is to abdicate the right to rule for the good of the people] [see P. N. Kaushal 's case (supra)].
In this very breath it was, however, contended that if this Ordinance was promulgated with a view to advancing the policy of prohibition enunciated in article 47 it could only be prospective and not retrospective because one cannot introduce prohibition retrospectively.
This argument overlooks the twin objects sought to be achieved by the measure, namely, validating an import which was found to be invalid on the ground that it was countervailing duty which could not have been legitimately imposed, and also a measure to safeguard public health and public morals.
These twin objects underlying the measure would clearly permit its being retrospective because retrospective validation of impost has been recognised in a number of decisions (see Prithvi Cotton Mills case) (supra).
Therefore, there is no substance in the contention that the retrospectivity of the Ordinance is illegal and invalid.
Having given the matter our anxious consideration not swayed in any manner by moral, religious, ethical or extraneous preachers ' considerations the altruistic grievance of the petitioners by proxy for consumers strikes as hollow because even with the impost the petitioners ' profit of Rs. 2/ per bottle is guaranteed and they are in no way adversely affected by the impost because the levy is passed on to consumers.
For years the impugned levy was paid as countervailing duty.
Then a loophole appeared which is sought to be plugged by a valid legislation.
And even with this turmoil the licensee in L 10 Form having country liquor vend is assured of this profit of Rs. 2/ per bottle.
The entire impost is passed on to the shoulder of consumers except for the detention of his money for a day or two when he pays in advance while taking the bottles from the Warehouse and recovers it when he sells the bottle and this detention of his money for a period of two days is a triviality which need not detain any one.
It is a part of any business.
Therefore, we see no substance in these petitions.
V.D.K. Petitions dismissed.

summary/full:
While implementing the provisions of the Punjab Excise Act, 1914 as in force in the Union Territory of Delhi, the concerned authority used to hold auction for grant of licence in Form L 10 for selling country liquor and at one such auction held on 29th March 1978, the petitioners ' bids were accepted and they were granted licences in Form L 10 for the period 1st April 1978 to 31st March 1979.
The licence included a condition to sell a bottle of 750 ml. of country liquor at Rs. 15/ which was inter alia made up at excise duty (styled as still head duty) at the rate of Rs. 10.23 and profit of licensee at the rate of Rs. 2/ .
In W.P. 716/78, validity of the levy of 'still head duty ' was challenged by certain petitioners inter alia on the ground that it was nothing but countervailing duty and in the absence of manufacture of liquor in Delhi, countervailing duty on the import of liquor cannot be constitutionally levied.
This contention found favour with a learned single judge of the Delhi High Court and a number of Letters Patent Appeals were filed against that Judgment.
During the pendency of these appeals President of India promulgated an Ordinance purporting to amend the Punjab Excise Act, 1914, styled as Punjab Excise (Delhi Amendment) Ordinance, 1979 with retrospective effect, conferring power on the Government under the provisions of the Act to levy 'special duty ' on the import of country liquor in Delhi at rates not exceeding that set out in Schedule I A which was introduced in the Act by the Ordinance.
Pursuant to the Ordinance amending the Principal Act, the Delhi Fiscal Duty Order, 1979 was issued levying special duty at the rates set out in the order on import of country liquor into Delhi.
Some of the petitioners questioned the validity generally of the Ordinance and specifically of the impost of special duty in Civil Writ No. 16/79.
A Division Bench of the Delhi High Court heard the Letters Patent Appeals and the Writ Petition No. 116/79 and by a common judgment held the ordinance as well as the impost of the special duty thereunder valid, dismissed the Writ Petition and allowed the Letters Patent Appeals.
652 Dismissing the special leave petitions, the Court ^ HELD: 1.
Scheme underlying distribution of Legislative power in Part XI Chapter I and especially Articles 246 and 248 is that except the matters specifically enumerated in List II (State List) in the Seventh Schedule, Parliament 's plenary power to legislate extends to all conceivable matters which can be topic of legislation, and even this limitation on its power vanishes when Parliament legislates for part of the territory of India not included in a State.
The three dimensional picture becomes complete, viz. (i) to select topic for legislation (ii) enactment of legislation on the topic and (iii) to impose tax in respect of such subject matter of legislation by reference to article 248 which confers power to make any law with respect to any matter not enumerated in Lists II and III including the power to impose tax not mentioned in either of those lists.
Under article 246 (4) Parliament has power to make laws with respect to any matter for any part of the territory of India, not included in a State notwithstanding that such matter is a matter enumerated in the State List.
Power of Parliament thus to legislate with respect to any matter for Delhi, territory not included in a State is unabridged or unfettered by the entries in the State List.
Further residuary power of legislation including the power to levy tax is conferred on Parliament by the combined operation of Articles 246(4), 248(1) and (2) and Entry 97 in the Union List.
That power is untrammelled by the limitations prescribed by Article 246(2) and (3) and Entry 51 of State List and is plenary and absolute subject only to such restrictions as imposed by the Constitution.
[659 G H, 660 A C] Mithan Lal vs State of Delhi, ; @ 451; referred to.
While legislating for the Union Territories the Parliament unhampered by Articles 246(2) and (3) but enriched by Article 248(1) and (2) could legislate on any of the topics either in the List I and III or in List II or in exercise of the residuary power under Entry 97.
There is nothing in the Constitution to prevent Parliament from combining its powers under one or other Entry with its power under Entry 97.
Parliament can rely on the powers under specified Entries I to 96 List I and supplement them with the powers under Entry 97 List I and Article 24 or even the powers under Entries in the concurrent list.
There is no dearth of legislative competence of Parliament to enact legislation for a territory not included in a State because the power to legislate takes within its sweep matters included in all the three lists and added to it is the residuary power on matters not specifically included in any entry in any of the three lists.
[661 D G] If exercise or countervailing duty could be levied on country liquor manufactured or imported into Delhi, Parliament would not lack competence to levy the same only because levy of such duty on alcoholic liquors for human consumption is within the competence of a State.
As country liquor is not manufactured in Delhi, the Parliament could not under Entry 51 of the State List levy either excise or countervailing duty on it.
Merely because Parliament could not levy countervailing duty on country liquor imported into Delhi because country liquor is not manufactured in Delhi it does not exhaust the power of Parliament to levy some other duty on the import of liquor if it is otherwise constitutionally permissible.
[660 D F] Union of India vs H. section Dhillon, ; ; followed.
653 3.
With the advancement of society, expanding horizons of scientific and technical knowledge, probe into the mystery of creation, it is impossible to conceive that every imaginable head of legislation within human comprehension and within the foreseeable future could have been within the contemplation of the founding fathers and was, therefore, specifically enumerated in one or the other of the three Lists, meaning thereby that three Lists were exhaustive of Governmental action and activity.
Demands of welfare State, hopes and aspirations and expectations in a developing society and the complex world situation with inter dependence and hostility amongst nations may necessitate legislation on some such topics that even for visionary they could not have been within the contemplation of the founding fathers.
Complex modern governmental administration in a federal set up providing distribution of legislative power coupled with power of judicial review may raise such situations that a subject of legislation may not squarely fall in any specific entry in List I or II.
Simultaneously on correct appraisal it may not be covered by any entry in List II though apparently or on a superficial view it may be covered by an entry in List II.
In such a situation Parliament would have power to legislate on the subject in exercise of residuary power under Entry 97, List I and it would not be proper to unduly circumscribe, corrode or whittle down this power by a process of interpretation by saying that subject of legislation was present to the mind of the framers of the Constitution because apparently it falls in one of the entries in List II and thereby deny power to legislate under Entry 97.
The history of freedom struggle demonstrates in unequivocal terms the importance of residuary power of legislation being conferred on Parliament.
Accordingly, once the power of Parliament to legislate on a topic is not expressly taken away by any constitutional provision, it remains intact under Entry 97 of List I. [662 G H, 663 A D] Undoubtedly excise and countervailing duties on alcoholic liquors for human consumption were within the contemplation of the framers of the Constitution.
That is a specific topic of legislation in List II.
It does not exhaust a conceivable levy that can be legitimately imposed on such items if otherwise they could be legally imposed on such items by reference to constitutional power to levy the same.
And Entry 97 is a complete answer to the contention.
[663 D E] His Holiness Kesavananda Bharati Sripadagalavaru vs State of Kerala, ; explained and discussed.
I. C. Golaknath vs State of Punjab, ; referred to.
Union of India vs H. section Dhillon, ; , affirmed.
Terminal tax is entirely different from the special duty sought to be imposed by the impugned Ordinance.
The impost is on entry of country liquor into Delhi to be recovered by the Delhi Administration for its own use.
Delhi Administration and Delhi Municipal Administration are entirely different, and, therefore, it cannot be said that Entry 52 excludes the power of the Parliament to levy tax on import of country liquor in Delhi.
[663 F G] 5.
If on the same subject the legislature chooses to levy tax twice over there is no inherent invalidity in the fiscal adventure.
More so when Special Duty levied by Parliament and the terminal tax imposed by the Municipal Administration on the import of liquor in Delhi can be traced to independent source of power.
[664 A B] 654 Avinder Singh and Ors.
vs State of Punjab and Ors.
; ; followed.
The idea conveyed by the expression "colourable legislation" is that although apparently a legislature in passing a statute purported to be within the limits of its powers, yet in substance and in reality it transgressed those powers, the transgression being veiled by what appears, on proper examination, to be a mere pretence or disguise.
Applying this test it is difficult to say that the impugned impost is either a camouflage or a colourable legislation.
[664 G H] Merely because a statute was found to be invalid on the ground of legislative competence that does not permanently inhibit the legislature from re enacting the statute if the power to enact the same is properly traced and established.
In such a situation it would not be correct to say that the subsequent legislation would be merely a colourable legislation or a camouflage to re enact the invalidated previous legislation.
[665 E F] K. C. Gajapati Narayan Deo vs State of Orissa, ; , Maharana Sri Jayvant Singhji Ranmal Singhji etc.
vs State of Gujarat, [1962] Suppl.
2 SCR 411 @ 440, Patel Gordhandas Hargovindas vs Municipal Commissioner, Ahmedabad, ; , Prithvi Cotton Mills Ltd. and Ors.
vs Broach Borough Municipality and Ors., ; referred to.
The expression 'excisable article ' which alone can be the subject matter of levy special duty is merely descriptive of the goods subject to change.
It is only an identifying mark, a tag, which would attract special duty.
If liquor was manufactured in Delhi it would be an excisable article.
It is that article on which, if manufactured in Delhi excise duty could be levied which when imported would provide the taxing event for the levy of special duty because in the absence of manufacture in Delhi countervailing duty cannot be imposed upon it.
The expression is used for identifying the subject matter of impost and nothing more need be read into it.
[666D E] 8.
There is no fundamental right to do trade or business in intoxicants.
The State under its regulatory powers, has right to prohibit absolutely every form of activity in relation to intoxicants its manufacture, storage, export import, sale and possession.
In all their manifestations these rights are vested in the State and indeed without such vesting there can be no effective regulation of various forms of activities in relation to intoxicants.
[666 H, 667 A] If there is no fundamental right to carry on trade or business in liquor, there is no question of its abridgement by any restriction which can be styled as unreasonable.
The State under its regulatory power has a right to control or even to prohibit absolutely every form of activity in relation to intoxicants apart from anything else, its import too.
This power of control is question of society 's right to self protection and it rests upon the right of the State to act for the health, moral and welfare of the people.
Liquor traffic is a source of pauperism and crime.
Such an impost, therefore, is one in the public interest for preserving public health and public moral and is not one as infringing the interstate freedom of trade and commerce.
All taxes are imposed in public interest.
[667 F H, 668 A B] In the instant case the Preamble to the impugned Ordinance clearly recites that the special duty on the importation of country liquor into Delhi an endeavour towards bringing about prohibition of consumption of alcoholic drinks, and, 655 therefore, it is a step in the direction of safeguarding public health and with a view to realising the goal fixed in Article 47 of the Constitution.
It is a fiscal measure and the one safeguarding public health and even public morals because it is well recognised that liquor trade is instinct with injury to individual and community and has serious side effects recognized everywhere in every age.
Not to control alcohol business is to abdicate the right to rule for the good of the people.
[669 B, G H, 670 A] Har Shanker and Ors. etc.
vs Dy.
Excise and Taxation Commissioner and Ors.
; , State of Bombay vs R.M.D. Chamarbaughwala; , ; P. N. Kaushal and Ors.
vs Union of India and Ors.
, ; ; applied.
Crowley vs Christansen, ; quoted with approval.
P. N. Kaushal and Ors.
vs Union of India and Ors.
, ; ; referred to.
There is no substance in the contention that the retrospectivity of the Ordinance is illegal and invalid.
The argument overlooks the twin objects sought to be achieved by the measure namely, validating an import which was found to be invalid on the ground that it was countervailing duty which could not have been legitimately imposed and also the object to safeguard public health and public moral [670 B D] Prithvi Cotton Mills Ltd. and Anr.
vs Broach Borough Municipality and Ors., ; applied.
The altruistic grievance of the petitioner by proxy for consumers strikes as hollow because even with the impost the petitioners ' profit of Rs. 2/ per bottle is guaranteed and they are in no way adversely affected by the impost because the levy is passed on to consumers, except for the detention of their money for a day or two when they pay in advance while taking the bottles from the Warehouse and recovers it when they sell the bottle and this detention of their money for a period of two days is a triviality and is a part of any business.
[670 E F]


judgement:
os. 651 of 1954 and 39, 46, 51 and 176 of 1955.
45 Under Article 32 of the Constitution of India for the enforcement of fundamental rights.
section P. Sinha (section D. Sekhari, with him), for the petitioner in Petition No. 651 of 1954.
section P., Sinha (B. K. Saran and M. M. Sinha, with him), for the petitioner in Petition No. 39 of 1955.
B. K. Saran and M. M. Sinha, for the petitioner in Petition No. 46 of 1955.
section D. Sekhari, for the petitioner in Petition No. 51 of 1955.
R. Patnaik, for the petitioner in Petition No. 176 of 1955.
M. C. Setalvad, Attorney General of India (R. Ganapathy Iyer and P. G. Gokhale, with him) for respondents in all the Petitions.
January 20.
The Judgment of the Court was delivered by JAGANNADHADAS J.
These are five petitions under article 32 of the Constitution by the heads of five Maths in the State of Orissa of which four known as Mahiparakash Math, Uttaraparswa Math, Dakshinaparswa Math and Radhakant Math are situated in Puri and the fifth known as Manapur Math is near Tirtol in Cuttack district.
In all these petitions certain provisions of the Orissa Hindu Religious Endowments Act, 1951 (Orissa Act II of 1952) as amended by Orissa Act XVIII of 1954 are challenged as being unconstitutional and ultra vires.
Since the questions raised are mostly common, all the petitions are dealt with by this single judgment.
These petitions have a background of previous history of legislation and litigation which it is necessary to set out in order that the questions raised, may be properly appreciated.
The first statutory interference by the Provincial Legislature with the management of Hindu religious endowments in Orissa was by the Orissa Hindu Religious Endowments Act, 1939 (Orissa Act IV of 1939) which came into operation 46 on the 31st August, 1939.
This was modelled on a similar Act operating in the Province of Madras at thetime.
ThevalidityoftheActasawholeasalso, of certain provisions thereof we 're challenged by the Mahants of the various Maths in Orissa, about 30 in number, by instituting a suit in the year 1940.
The suit was on behalf of the individual Maths who figured as plaintiffs (including three of the present petitioners, viz. Mahants of Mahiparakash Math, Dakshinaparswa Math and Radhakanta Math) and also in a representative capacity under Order I, rule 8 of the Civil Procedure Code.
(Vide printed record of this Court in Case No. I of 1950).
That suit was dismissed by the District Judge of Cuttack and came up in appeal to the High Court of Orissa.
The High Court upheld the validity of the Act and of the various sections thereof by its judgment dated the 13th September, 1949, which is reported in Mahant Sri Gadadhar Ramanuj Das vs The Province of Orissa(1).
An appeal was filed therefrom to the Supreme Court in Jaiiuary, '1950, which was numbered as Case No. I of 1950.
This appeal remained pending for over four years and came up for final hearing in February, 1954.
During the period of pendency of the appeal the Orissa Legislature passed two further Acts relating to Hindu religious endowments.
The first of them was Orissa Act II of 1952 which was an Act to "amend and consolidate the law relating to the ad ministration and governance of Hindu religious institutions and endowments in the State of Orissa" and which on its coming into force was intended to repeal the pre existing Orissa Act IV of 1939.
This Act became law on the 16th February, 1952, by the assent of the President.
It did not however come into force at once on account of sub section (3) of section I therein which provided that the Act is to "come into force on such date as the State Government may, by notification, direct".
No such notification was issued during the pendency of the appeal in the Supreme Court.
This Act was, in fact, brought into force much later, i.e., only as from the 1st Janu (1) I.L.R. [19491 Cuttack 656.
47 ary, 1955, by a notification of the Government of Orissa dated the 22nd December, 1954, published in the Orissa Gazette dated the 31st December, 1954.
While thus the 1952 Act remained on the statute book without its coming into force.
, other independent statutory provisions amending the Act of 1939 were passed and brought into operation.
The first of them was Orissa Ordinance No. 11 of 1953 which was promulgated by the Governor of Orissa on the 16th May, 1953.
This was later superseded and substituted by Orissa Act XVIII of 1953 which came into operation on the 28th October, 1953.
By these two successive legislative measures, the Act of 1939 was amended in certain respects and it is the Act so amended that was in operation during the period from May, 1953 to March, 1954, falling within the later portion of the pendency of Case No. I of 1950 in the Supreme Court.
Some time in 1953, subsequent to the month of May, the Commissioner of Hindu Religious Endowments, Orissa, appears to have initiated proceedings for the framing of schemes in respect of a number of Matbs, and schemes were actually framed during this period as regards the four Maths, Mahiparakash, Uttaraparswa, Daksbinaparswa and Radhakanta comprised in Petitions Nos.
651 of 1954, 49, 46 and 51 of 1955, respectively.
These schemes were brought into operation and the administration of some of these Matbs was taken over by the Trustees under the schemes.
Thereafter Mahants of three of the affected Maths, Mahiparakash, Uttaraparswa and Radhakanta, who are also petitioners before us, filed applications under article 226 before the High Court of Orissa challenging the alidity of the schemes.
Those applications were dismissed by the High Court on the 17th February, 1954.
Meanwhile the Mahant of Dakshinaparswa Math who was a petitioner in the High Court and also before filed along with another Mahant, a petition under icle 32 of the Constitution to this Court on the d December, 1953, challenging the Act then in force as being in violation of their fundamental rights.
This was Petition No. 405 of 1953.
This petition as 48 well as Case No. 1 of 1950, referred to above, came up for hearing, together, in this Court on the 9th, 10th and 11th February, 1954.
Judgment of this Court therein was delivered on the 16th March, 1954, and is reported in Mahant Sri Jagannath Ramanuj Das vs The State of Orissa(2).
As a result thereof, sections 38 and 39 of Orissa Act IV of 1939 as amended in 1953, under which the schemes were framed were declared unconstitutional.
Accordingly, the schemes became invalid and therefore the possession of such of the Matbs which had been, taken over under the schemes was restored to the Mahants.
(It may be mentioned in passing, in this context, that the judgment of this Court refers to Orissa Act II of 1952 as being the one in force at the time and whose provisions were under consideration by the Court.
This is a slip.
The Act then in force was, as already stated, the Act of 1939 as amended in 1953.
That this is a slip in the judgment is admitted before us.
That does not however in any way detract from the reasoning and the bind ing character of the judgment, since as a fact what were really referred to were the sections of the 1939 Act as amended in 1953).
Now, after the judgment of this Court was delivered in March, 1954.
, the Orissa Legislature again intervened and passed another Act, Orissa Act XVIII of 1954.
This Act purported to amend not the 1939 Act which was by then in operation but the 1952 Act which had not by then come into force.
Orissa Act XVIII of 1954 received the assent of the President on the 2nd December, 1954; and came into force at once and therefore Orissa Act II of 1952 became pro tanto amended and modified.
By that date the 1952 Act so amended was awaiting the issue of notification under section 1(3) thereof for being brought into force.
This notification, as alreay stated, was ultimately issued on the 22nd December.
1954, bringing Orissa Act II of 1952 as amended Act XVIII of 1954 into force from the 1st January, 1955, and thereby repealing Orissa Act IV of 1939 amended in 1953.
The first of the petitions before us, relating to Mahiparakash Math was filed in this (1) ; 49 Court, anticipating this notification, while the other four were filed after the notification was issued.
As already stated, all these petitions challenge the validity of various sections of Act 11 of 1952 as amended in 1954 (hereinafter referred to as the present Act).
The challenge is entirely based upon the principles laid down by this Court in Mahant Sri Jagannath Ramanuj Das vs The State of Ori8sa(1).
The ' above is the history of the relevant legislation and the connected parallel litigation.
The main attack is in respect of sections 42 and 79 A of the present Act relating to the schemes for religious institutions of the kind with which we are concerned in these petitions.
There can be no doubt that the two sections apply to these Maths.
The phrase "religious institution" occurring in section 42 has been defined as meaning (also) "a math and endowments attached thereto".
A Math is "an institution succession to the headship of which devolves in accordance with the directions of the founder or is regulated by custom" and a hereditary trustee is "a trustee of an institution succession to whose office devolves by custom or is specifically provided for by the founder".
A Math is therefore a religious institution presided over or managed by a hereditary trustee so as to render section 42 (1) (b) applicable.
To appreciate the ground of attack it is necessary to trace the changes in the provisions relating to the framing of schemes for such institutions in the successive legislative measures.
In the Act as it, stood in 1939 the provisions in this behalf are sections 38, 39 and 40.
Since the attack is mainly as regards the procedure for the framing of the scheme, it is sufficient to notice what the gist of these three provisions is in so far as it relates to the procedure for an enquiry to frame a scheme.
Under these three sections the enquiry is to be held by the Commissioner for Endowments appointed under the Act.
For this purpose he is to function jointly with one or more persons in the service of the Crown appointed by the Provincial Government in (1) ; 7 50 this behalf.
The enquiry has to be conducted "in such manner as may be prescribed".
In making the enquiry the Commissioner and the person or persons associated with him therein are to consult the trustee and the persons having interest.
After the scheme is settled and the order determining the scheme is published in the prescribed manner the trustee or any person having interest may, within six months of the date of such publication, institute a suit in the court to modify or set aside such order.
The order settling a scheme is final and binding on the trustee and all persons having interest, subject to the result of the suit, if any, as above mentioned.
Of course, the result of the suit itself would, under the general law, be subject to further appeal under the Civil Procedure Code in the ordinary way.
Changes were made in these provisions in 1953 first by Orissa Ordinance II of 1953 and then by Orissa Act XVIII of 1953 as already stated.
The modification is that sub section (4) of section 39 which provided for a right of suit, by the trustee or the person interested, in the regular civil court (with the concomitant further appeals to higher courts) was deleted and the following was substituted as sub section (4) of section 39: "Every order under this section shall be published in the prescribed manner and the order so passed shall be final and binding on the trustee and all persons having interest".
As a consequence thereof section 40 of the 1939 Act, which stated that "subject to the result of the suit the order settling a scheme is final", was omitted.
The result of these two changes was that once the Commissioner with the assistance of one or more Government officers who were to be specially nominated, settled a scheme after making the prescribed enquiry, that order was not open to any further question or correction in the ordinary courts.
It was at this stage that the validity of the provisions relating to the framing of a scheme came up for consideration before this Court in March, 1954.
This Court held that the legislation in so far as it authorised the 51 framing of a scheme by the Commissioner along with his associates and declared such determination as final without any scope for correction thereof by judicial intervention, was an unreasonable restriction on the right of the head of the Math with reference to his interest in the Math.
Accordingly sections 38 and 39 of the Act then in force were struck down as unconstitutional and invalid.
The present provisions which are the result of a later amendment are contained in sections 42 and 44 of the present Act and are substantially different.
The relevant portions thereof are as follows: "42.
(1) Whenever there is reason to believe that in the interest of the proper administration of religious institution a scheme may be settled for it, or when not less than five persons having interest make an application in writing stating that in the interests of the proper administration of a religious institution a scheme should be settled for it, the Assistant Commissioner or the Commissioner, as the case may be, shall proceed to frame a scheme in the manners hereinafter provided (a) (b) in the case of a religious institution presided over or managed by a hereditary trustee, the Assistant Commissioner shall make such enquiry as he thinks fit and submit his report to the Commissioner who shall hold an enquiry in the manner prescribed and so far as may be, in accordance with the provisions of the Code of Civil Procedure, 1908, relating to the trial of suits and if he is satisfied that in the interests of the proper administration of such institution a scheme of administration should be settled, he shall consult in the prescribed manner the trustee and the persons having interest and by order settle a scheme of administration for the institution.
(7)Every order of the Commissioner settling a scheme under this section shall, subject to the provisions of Section 44, be binding on the trustee, the Executive Officer and all persons having interest.
(1) 52 (2) Any party aggrieved by the order of the Commissioner under sub section (1) of section 42 may appeal to the High Court within thirty days from the date of the order or publication thereof as the case may be".
The effect of these provisions of the present Act is (1) that a scheme can be framed by the Commissioner alone on a report of the Assistant Commissioner on such enquiry as he thinks fit and not by the Commissioner in association with one or more Government officers to be appointed for the purpose by the Government, (2) that there is no right of suit for cballenging the validity or the correctness of the scheme framed by the Commissioner but there is only an appeal to the High Court direct.
It is urged that these provisions still continue to be unreasonable restrictions on the rights of the Mathadipathi and are accordingly ultra vires and unconstitutional.
In the case reported in the Commissioner, Hindu Religious Endowments, Madras vs Sri Lakshmindra Thirtha Swamiar of Sri Shirur Mutth (1) the interest of Mathadipathi in the Math has been recognised as property falling within the scope of article 19(1)(f) of the Constitution.
It was recognised that the ingredients, of office and property, of duties and personal interest, are blended together in the rights of a Mahant and that the Mahant has the right to enjoy the property or the beneficial interest so long as he is entitled to hold his office.
It was recognised that the beneficial interest which the Mahant enjoys is appurtenant to his duties and that as he is in charge of a public institution, reasonable restrictions can always be placed upon his rights in the interests of the public.
It was however held therein that provisions for the framing of a scheme which by its terms operate by way of unreasonable restriction would be unconstitutional and invalid.
It is this principle that was applied in the next decision of this Court relating to Orissa Maths in Mahant Sri Jagannath Ramanuj Das vs The State of Orissa(2).
There, the validity of the then provisions of the Act, i.e., of sections 38 and 39 of (1) (1954] S.C.R. 1005.
(2) ; 53 Orissa Act IV of 1939 as amended in 1953 was adjudged in the following terms: "Sections 38 and 39 relate to the framing of a scheme.
The scheme can certainly be settled to ensure due administration of the endowed property but the objection seems to be that the Act provides for the framing of a scheme not by a civil court or under its supervision but by the Commissioner, who is a ' mere administrative or executive officer.
There is also no provision for appeal against his order to the court. .
We think that the settling of a scheme in regard to a religious institution by an executive officer without the intervention of any judicial tribunal amounts to an unreasonable restriction upon the right of property of the superior of the religious institution which is blended with his office.
Sections 38 and 39 of the Act must, therefore, be held to be invalid".
It is urged that though the obvious purpose of the amending Act of 1954 passed after this decision by the Supreme Court, was to remedy the defect above pointed out by providing for a right of appeal direct to the High Court from the determination of the Commissioner settling the scheme, the present provisions still continue to be unreasonable restrictions on the right of property of the Mahant.
It is further urged that the initial decision in a scheme proceeding is still on the basis of an executive enquiry by an executive officer and that in any case a direct appeal to the High Court as against the Commissioner 's order cannot be as adequate a safeguard regarding the rights of the Mahants, as a suit and a right of appeal therefrom in the ordinary course to the higher courts would be.
It is undoubtedly true that from a litigant 's point of view an appeal to the High Court from the Commissioner 's order is not the same as, an independent right of suit and an appeal to the higher courts from the result of that suit.
But in order to judge whether the provisions in the present Act operate by way of unreasonable restriction for constitutional purposes what is to be seen is whether the person affected gets a reasonable chance of presenting his entire case before the original tribunal which has to 54 determine judicially the questions raised and whether he has a regular appeal to the ordinarily constituted court or courts to correct the errors, if any, of the tribunal of first instance.
For that purpose it is relevant to notice that in the present Act, the Commissioner of Endowments has, by virtue of section 4 thereof, to be a member of the Judicial Service (of the State) not being below the rank of a Subordinate Judge, while under section 7 of Act IV of 1939 a Commissioner of Endowments could be a person of either the judicial or the executive service and that even where a member of the judicial service is appointed he may be a person below the rank of a Subordinate Judge.
Another important difference has also to be noticed, viz., that while under section 38 of the previous Act the enquiry has to be conducted "in such manner as may be prescribed" which means as prescribed by the Provincial Government by rules made under the Act and hence changeable by the Government, under the present Act, section 42(1) (b) specifically enjoins that "the Commissioner shall hold an enquiry in the manner prescribed and so far as may be in accordance with the provisions of the Code of Civil Procedure relating to the trial of suits".
It may also be noticed that before the Commissioner starts his enquiry it is expected that the Assistant Commissioner, who, by virtue of section 5(2), is to be a person holding a judicial office not lower in rank than that of a Munsif, is to make such enquiry as he thinks fit and submit his report.
Thus in the initial stage of the framing of the scheme under the provisions of the present Act there is first of all something in the nature of a preliminary enquiry by a judicial officer of the rank of a Munsif and this is followed by a regular and full enquiry before the Commissioner who is of the rank of a Subordinate Judge.
The enquiry before the Commissioner is assimilated to and is governed by the provisions relating to the trial of suits by enjoining that, as far as may be, it is to be in accordance with the provisions of the Code of Civil Procedure relating to trial of suits.
While, therefore, under the prior Act the enquiry before the Commissioner might well 55 have been of the nature of an executive enquiry by an executive officer, the enquiry under the present Act is by itself in the nature of a judicial enquiry by judicial officers followed up by a right of regular appeal to the High Court.
A scheme framed with reference to such a procedure cannot ipsofacto be pronounced to be in the nature of unreasonable restriction on the rights of the Mahant.
The legislature ' might well have thought that, instead of making the enquiry before the Commissioner more or less in the nature of a preliminary executive enquiry to be followed up by the affected Mahant by way of a regular suit in the Civil Court '.
it is much more satisfactory and in the public interests, to impress the enquiry before the Commissioner himself with the stamp of greater seriousness and effectiveness and to assimilate the same to a regular enquiry by the judicial officer according to judicial procedure and then to provide a right of direct appeal to the High Court.
It has been strongly urged that a mere right to appeal to the High Court would virtually be in the nature of a limited appeal confined to challenge only on certain basic matters and probably limited to questions of law.
We can find no warrant for any such apprehension.
The right of appeal is given in very wide and general terms.
Obviously the appeal can be both on facts and on law and would relate not merely to the merits of the scheme but also to all basic matters whose determination is implicit in the very framing of a scheme.
In our opinion the present provisions cannot be struck down as being in the nature of unreasonable restriction on the rights of the Mahant.
Two other minor provisions in this connection have been brought to our notice and relied upon as indicating unreasonable restriction on the rights.
One is that while under the 1939 Act the period of limitation for a right of suit was six months, the period allowed for an appeal under the present Act is only 30 days.
Another is that under section 74(3) the operation of the order of the Commissioner is not to be stayed pending the disposal of the appeal.
It 56 has been urged that these provisions operate very harshly against the Mahant affected by a scheme when framed.
It is pointed out that as the result of a scheme being put into operation immediately, the Mahant may be deprived of the effective possession of the Math and hence of the wherewithal to file an appeal within the very short time that is allowed, as also of the resources to conduct the appeal in the High Court or to maintain himself during its pendency which may take years.
There is not much force in this contention.
In so far as the question of filing of an appeal is concerned, there should be no difficulty since the provisions relating to appeals in forma pauperis would be applicable and can be availed of if the circumstances call for it.
In so far as any situation may arise which may call for financial facilities for the conducting of the appeal or for interim maintenance, the learned Attorney General suggests that the appellate Court would have inherent power and discretion to give appropriate directions for supply of funds out of the trust estate and that in any view, such power and discretion have to be implied in the provision for an appeal so that the said right of appeal may not become illusory.
Having regard to the suggestion thus put forward, which we accept, we cannot hold that the provision in section 74(3) that the operation of the order of the Commissioner framing a scheme is not to be stayed pending the disposal of the appeal, brings about an unreasonable restriction.
In this view we think that the incidental provisions above referred to do not in any way detract from the reasonableness of the main provisions.
In our opinion, therefore, the provisions in the present Act of 1952 as amended in 1954, relating to the framing of schemes are not open to any of the constitutional objections raised, and are valid.
The next point that has been urged, depends on the fact that in four of the petitions before us relating to the Maths of Mahiparakash, Uttaraparswa, Dakshinaparswa and Radhakanta, schemes were in fact framed in the year 1953 under the provisions of 57 Orissa Act IV of 1939 as amended in 1953.
It may be recalled that these provisions were held invalid by the decision of this Court in March, 1954, above referred to.
It must therefore be taken that these schemes were void as the law then stood.
It is with reference to that situation that the Orissa Legislature by an amendment in 1954 of the 1952 Act introduced section 79 A into this Act which runs as follows: "Notwithstanding anything contained in any of the other provisions of this Act or in any judgment, decree or order of any court all schemes purporting to have been settled in pursuance of sections 38 and 39 of the Orissa Hindu Religious Endowments Act, 1939, after the commencement of the Orissa Hindu Religious Endowments (Amendment) Ordinance, 1953, and before the commencement of this Act shall be deemed to have been settled under the provisions of this Act and any person aggrieved by any such scheme may within sixty days from the date of commencement of this Act prefer an appeal to the High Court and such appeal shall be dealt with and disposed of in the same manner as appeals provided for under sub section (2) of section 44".
This purports to revive the schemes which were pronounced to be invalid by the judgment of this Court and attempts to remove the defect noticed in the judgment of this Court by providing for a regular appeal to the High Court against that very scheme within 60 days from the date of the commencement of the Act.
It may be noticed that the schemes so revived are only those which were settled after the commencement of Orissa Hindu Religious Endowments (Amendment) Ordinance, 1953, and before the commencement of the 1952 Act, i.e., between 16th May, 1953 to 31st December, 1954, (hereinafter referred to as the specified period).
This was exactly the period within which the amendment of 1939 Act made in 1953 was in force, abolishing the right of suit and making the scheme as determined by the Commissioner final and conclusive.
Section 79 A in terms purports to revive the invalid scheme notwith 8 58 standing any judgment, decree or order of any court, which means that though a court may have pronounced the scheme as void still that is deemed to be alive.
It has been suggested that this is directly flouting the decision of this Court and that the legislature has no power to declare as valid and constitutional what was decided by this Court as invalid and unconstitutional.
But it is to be observed that the legislature does not purport to do anything of the kind.
What it does is not to deem the schemes previously settled as having been validly settled on those very dates, under the then existing law.
This of course is beyond legislative competence since the legislature has not the power to override unconstitutionality as such.
But what the legislature has purported to do is to take up those very schemes and deem them to have been settled under the _provisions of the present Act and thereby to lay them open to any attack available under the present law.
Such a pro vision is not uncommon in legislative practice, and is enacted in order to avoid the public inconvenience of having to re do what has previously been done.
The result of section 79 A is to treat the schemes framed within the specified period as schemes framed immediately after the commencement of the present Act and to impute thereto, by a fiction, compliance with the various procedural and other steps which are requisite under section 42.
We can see no reason for thinking that such a provision is not within the competence of the Legislature.
It has been suggested that this is really interfering with the jurisdiction of this Court under article 32.
But there is no substance in that suggestion.
The right of any person to seek remedy under article 32 in respect of any violation of his fundamental rights is in no way curtailed or affected by the fact that an actual decision of this Court on an application under article 32 is, in effect, nullified by appropriate and competent legislative measures.
Indeed, the right has been, in fact, successfully invoked on the prior occasion and has again been invoked on the present occasion.
If it fails this time it is not because the right and the remedy under 59 article 32 have been taken away or affected but because the unconstitutionality has been removed.
Section 79 A, therefore, is not open to any objection on the ground of legislative incompetence.
It has further been urged that to treat the scheme prepared with reference to the Act of 1939 as amended in 1953 as a scheme prepared under the present Act by means of a fiction is really in the nature of deprivation of certain advantages which an aggrieved person would have had if in fact the scheme was settled under the present Act, and that therefore such a scheme would still operate by way of unreasonable restriction.
This contention is also without substance.
It is true that in the present Act the procedure relating to the scheme has four steps which are as follows: (1) The scheme is to be framed by a Commissioner, who is, by appointment, a judicial officer.
(2) The procedure is, as far as may be, the same as that in the trial of suits.
(3) There is a preliminary enquiry by the Assistant Commissioner.
(4) There is an appeal to the High Court.
Out of these four, the substantial item is the last one and that has been specifically provided for under section 79 A and a period of sixty days from the date of the commencement of the Act has been provided for the right of appeal.
There can be no complaint on this score.
It is true that the schemes under the Act then in operation, i.e., during the specified period, might possibly have been framed by (a) an executive officer, as also (b) in pursuance of procedure under the rules framed by the Executive Government which may not approximate to that of a trial of a suit.
But this was merely a theoretical possibility.
In fact, as appears from the record and, as has beenstated to us by the learned Attorney General on behalf of the State and not disputed on the other side, the Endo wment Commissioner during the specified period was a Subordinate Judge of the Orissa Judicial Service.
The actual procedure which was in force at the time under the rules as then prescribed was also in fact in 60 consonance with the trial of suits under the Civil Procedure Code.
This appears clearly from rules 51 to 109 of the Rules framed by the Government of Orissa, an official copy of which has been supplied to us in court by the learned Attorney General on behalf of the State.
As regards the provision that the enquiry by the Commissioner under the present Act has to be preceded by a preliminary enquiry by an Assistant Commissioner who is of the rank if a Munsif, the argument that the deprivation of this feature by the deeming provision in section 79 A operates to the disadvantage of the Mahants is not by any means a serious point.
It is to be noticed that this is setoff by the fact that schemes under the 1939 Act are framed not by the Commissioner alone but along with one or more Government officers appointed by the Government.
We are, therefore, unable to, uphold the contention that the deeming provision under section 79 A which treats the previous schemes as schemes framed under the present Act results in bringing about any substantial disadvantages to the detriment of the Mahants.
We accordingly hold that section 79 A of the present Act is not open to any constitutional objection.
We are, therefore, clearly of the opinion that sections 42(1)(b), 42(7) and 44(2) as well as section 79 A of the present Act are not open to the constitutional objections raised before us.
It may be mentioned that in the petitions before us some other provisions of the present Act have also been challenged as being unconstitutional.
But no arguments have been advanced before us in respect thereof.
It may also be mentioned that the petitions before us have not raised any questions relating to the merits of the scheme in so far as any specific provisions thereof may have operated by way of unreasonable restrictions, in the light of the considera tions pointed out by this Court in its judgment in the Commi8sioner, Hindu Religious Endowments, Madras vs Sri Lakshmindra Thirtha Swamiar of Sri Shirur Mutth(1).
Nor does it appear that any appeal as (1) ; 61 provided in section 79 A has been filed to the High Court in respect of these cases challenging the validity or the propriety of the various provisions in the scheme or correctness of the decision, express or implied, on the basic facts which are the foundation of the scheme proceedings.
We express no opinion on any of these matters.
In the last of the petitions relating to Manapur Math, the facts appear to be slightly dissimilar but this makes no substantial or material difference.
In that case the original scheme was one framed under sections 38 and 39 of the 1939 Act as they stood before their amendment in 1953 which provided for a right of suit.
The scheme itself was dated the 22nd May, 1948.
Previous to the framing of the scheme there appears to have been a claim by the Mahant that the institution was a private one and not a public one and that it did not fulfil the definition of the word "Math" under the Act.
There appears to have been a compromise between the then Mahant and the public of the village in which the Math is situated, who were interested in the Math.
The compromise was to the effect that the institution was to be declared a Math but that the then Mahant was to be recognised as the hereditary trustee thereof.
This compromise was recognised by the Commissioner by his order dated the 12th May, 1947, formally making the above declarations.
It was on the basis of this that, later on, a scheme was framed on the 22nd May, 1948.
It does not appear that the Mahant filed any suit which was then available to him.
But it is stated to us by the learned Advocate appearing for the petitioner that an application was filed in the High Court for a writ to qudsh the scheme, and that it was dismissed by the High Court on the 16th November, 1954.
The scheme became final under the original Act of 1939 as it stood before the 1953 amendment.
Obviously, with reference to the facts of such a case, no argument of the kind that has been addressed to us in the other four petitions was available.
In the result, therefore, all the five petitions must be dismissed with costs.

dataset_name: IN-Abs

summary/full:
Sections 38 and 39 of the Orissa Hindu Religious Endowments Act, 1939 (Orissa Act IV of 1939) as amended by Orissa Act XVIII of 1953 were declared unconstitutional and void by the Supreme Court in Mahant Sri Jagannath Bamanuj Das vs The State of Orissa ([1954] S.C.R. 1046) on the ground that legislation in so far as it authorised the framing of a scheme by the Commissioner along with his associates and declared such determination as final without any scope for correction thereof by judicial intervention was an unrea sonable restriction on the right of the head of the Math as respects his interest in the Math which is a, right to bold property within the meaning of article 19(1)(f) of the Constitution.
After the judgment dated 16th March 1954 delivered by the Supreme Court in the Case Of Mahant Sri Jagannath Bamanuj Das vs The State of Orissa, ([1954] S.C.R. 1046) the Orissa Legislature passed the Orissa Act XVIII of 1954 purporting to amend not the 1939 Act which was then in operation but the Orissa Act II of 1952 which had not then come into force.
The Orissa Act XVIII of 1954 received the assent of the President on the 2nd December 1954 and came into force at once and thus the Orissa Act II of 1952 became pro tnnto amended and modified.
The 1952 Act so amended came into force from the 1st January 1955 by virtue of a notification dated 22nd December 1954 issued under the provisions of section 1(3) thereof which provided that the Act wag to come into force on such date as the State Government may.
by notification provide.
The five petitions under article 32 of the Constitution in the present case challenged the validity of various sections of the Orissa Act II of 1952 as amended by Act XVIII of 1954 on the principles laid down in the case of Mahant Sri Jagannath Bamanuj Das vs The State of Orissa, ([1954] S.C.R. 1046).
Held, that sections 42(1)(b), 42(7), 44(2) as well as section 79(A) of Orissa Hindu Religious Endowments Act, 1951 (Orissa Act II of 1952) as amended by Orissa Act XVIII of 1954 are not unconstitutional and 44 ultra vires and the contention that the provisions of sections 42 and 44 of the present Act to the effect (1) that a scheme can be framed by the Commissioner alone on a report of the Assistant Commissioner on such inquiry as he thinks fit and not by the Commissioner in association with one or more Government Officers to be appointed for the purpose by the Government (2) that there is no right of suit for challenging the validity or the correctness of the scheme framed by the Commissioner but there is only an appeal to the High Court, still continue to be unreasonable restrictions on the right of Mathadipathi as in the case of Mahant Sri Jagannath Bamanuj Das vs The State of Orissa [(1954) S.C.R. 1046] is without substance.
In the initial stage of the framing of the scheme under the provisions of the present Act there is first of all something in the nature of a preliminary enquiry by a judicial officer of the rank of a Munsif and this is followed by a regular and full enquiry before the Commissioner who is of the rank of a Subordinate Judge.
The enquiry before the Commissioner is assimilated to and is governed by the provisions relating to the trial of suits by enjoining that, as far as may be, it is to be in accordance with the provisions of the Code of Civil Procedure relating to trial of suits. 'While, therefore, under the prior Act the enquiry before the Commissioner might well have been of the nature of an executive enquiry by an executive officer, the enquiry under the present Act is by itself in the nature of a judicial enquiry by judicial officers followed up by a right of regular appeal to the High Court.
A scheme framed with reference to such a procedure cannot ipso facto be pronounced to be in the nature of an unreasonable restriction on the rights of the Mahant.
The legislature might well have thought that instead of making the enquiry before the Commissioner more or less in the nature of a preliminary executive enquiry to be followed up by the affected Mahant by a regular , suit in the Civil Court, it is much more satisfactory and in the public interests, to vest the enquiry before the Commissioner himself with the stamp of greater seriousness and effectiveness and to assimilate the same to a regular enquiry by the judicial officer according to judicial procedure and then to provide a right of direct appeal to the High Court.
The right of appeal to the High Court is given in very wide and general terms because the appeal can be both on facts and on law.
Mahant Sri Gadadhar Bamanuj Dos vs The Province of Orissa, (I.L.R [1949] Cuttack 656), Mahant Sri Jagannath Bamanuj Das vs The State of Orissa ([1954] S.C.R. 1046) and Commissioner, Hindu Beligious Endowments, Madras vs Sri Lakshmindra Thirtha Swamiar of Sri Shirur Matth, ([1964) S.C.R. 1006], referred to.