Decided on November 13,1953



Venkatarama Aiyar, J. - (1.) These are petitions filed under Article 226 of the Constitution of India and raise the question whether the notification, G. O. No. 139 (L. A.) issued by the Government of Madras on 31-1-1952 is valid. That notification is as follows: "In exercise of the powers conferred by Section 81, Sub-section (1) of the Madras Village Panchayats Act, 1950 (Madras Act 10 of 1950) His Excellency the Governor of Madras hereby appoints the Official year 1952-53 as the year after the 'commencement of which, no person shall continue to keep open a private market in any panchayat area within the jurisdiction of a panchayat." The petitioners are owners of private markets in the districts of Malabar, North Arcot, Nellore, Tiru-chirapalli and Visakhapatnam. Some of these markets are stated to have been in existence for more than a century. All of them had been run under annual licences granted under the Madras Local Boards Act, 14 of 1920. The petitioners allege that when they applied for renewal of licence to hold the market for the year 1952-53 they were informed by the Panchayat Board, which is the first respondent, that under the provisions of Section 81(1), Madras Village Panchayats Act 10 of 1950 and the notification dated 31-1-1952 issued under that section private markets could no longer be conducted and that no licence would be granted for holding them. Their complaint is that Section 81 (1) of the Act and the notification in question issued thereunder deprived them of their fundamental right to hold and enjoy their property and to carry on business and that they are therefore void as being repugnant to Article 19(1)(f) and (g) of the Constitution. They accordingly pray that a Writ of Mandamus be issued directing the Panchayat Board to issue the necessary licences for holding markets.
(2.) The relevant provisions of the Madras Village Panchayats Act 10 of 1950, hereinafter referred to as the Act, may now be noted: section 1(2) enacts that the Act shall extend to the whole of the State of Madras except the city of Madras, the municipalities governed by the District Municipalities Act 5 of 1920 and cantonments governed by tfie Cantonments Act of 1924. That is to say, it applies to the whole of the rural areas of the State. Under Section 1(3), the Act is to come into force on such date as may be appointed by notification. In accordance therewith it has been brought into operation from 1-4-1951. Sections 80 to 86 of the Act relate to markets. Section 80 provides that the panchayat may open public markets and levy one or more of the fees as are mentioned therein. Sections, 81 and 82 with which we are directly concerned in these petitions are as follows: "81 (1) No person shall open a new private market after the commencement of this Act, or continue to keep open a private market, after the commencement of such, year as the Government may, by notification appoint in this behalf. Provided that nothing in this sub-section shall apply to any private market, existing on the date of the publication of the notification aforesaid, if the income derived from such market after deducting therefrom the cost of collection and management and such other sums as may be prescribed, has been, and continues to be utilised solely for educational, charitable and religious purposes. (2) If any question arises as to whether any market falls within the scope of the proviso to Sub-section (1) or not, the Panchayat shall make a reference thereon to the Government and their decision shall be final. (3) In lieu of each of the private markets closed in pursuance of Subsection (1), the panchayat shall provide a public market. 82(1) No person shall keep open a private market of the nature referred to in the proviso to Sub-section (1) of Section 81 unless he has obtained a licence from the panchayat to do so. Such licence shall be renewed every year. 2(a) The Panchayat shall grant the licence applied for, subject to such conditions as it may think fit as to supervision and inspection, sanitation and water supply, weights and measures to be used, rents and fees to be charged and such other matters as may be prescribed. (b) The panchayat may modify the conditions of the licence to take effect from a specified date. (c) The panchayat may at any time suspend or cancel any licence granted under Clause (a) for breach of the conditions thereof. (d) Any person aggrieved by an order of the panchayat under Clause (a), (b) or (c) may appeal against such order to the Inspector who may, if lie thinks fit, suspend the execution of the order pending the disposal of the appeal. 3. (a) Any person claiming to levy in a private market lawfully established prior to the coming into force of the Madras Local Boards Act, 1884, fees of the nature specified in Section 80, Sub-section (2) shall apply to the Inspector for a certificate recognising his right in that behalf; and the Inspector shall pass orders on such application after giving due notice to the panchayat and considering any representations made by it. (b) Any person aggrieved by an order of the Inspector refusing to grant a certificate under Clause (a) may, within six months from the date of such order, institute a suit to establish the right claimed by him, and subject to the result of such suit, the Inspector's order shall be final. 4. When a licence granted under Sub-section (2) does not permit the levy of any fees, it shall be granted free of charge; but when such permission is given, a fee not exceeding 15 per cent. of the gross Income of the owner from the market in the preceding year shall be charged by the panchayat for such licence. 5. The panchayat or any officer duly authorised by it may close a market which is unlicensed or the licence for which has been suspended or cancelled, or which is held or kept open contrary to the provisions of this Act." The dominant provision is Section 81(1) which prohibits both opening of new private market after the commencement of the Act and the continuance of existing private markets alter the issue of the notification under this section. We are not concerned in these petitions with any new markets opened or sought to be opened after 1-4-1951 when the Act came into force.
(3.) The question which actually arises for determination in these petitions is about the validity of the prohibition contained in Section 81 (1) and in the notification issued thereunder against the continuance of private markets which had been in existence prior to the date of the Act. There is also a further, question raised as regards markets which had been in existence before the coming into force of the Madras Local Boards Act 5 of 1384. That question is whether having regard to Section 82(3) of the Act these markets are outside the operation of Section 81(1). For a correct appreciation of the position it is necessary to refer to the prior legislation on the subject of private markets in the State of Madras. Before the enactment of the Madras Local Boards Act 5 of 1884 there was no law requiring that licence should be taken for holding private markets. Such a provision was for the first time enacted by the Madras Act 6 of 1900 which introduced Sections 117-A to 1I7-J in the Local Boards Act providing 'inter alia' for the regulation of private markets. Section 117(E)(1) required that a licence should be obtained from the Taluk Board for opening a new market or for continuing to use a private market. Section 117-E(3) provides that "the taluk board, as regards private markets lawfully established at the coming into operation of this Act shall, and as regards all other private markets may, at its discretion, grant any licence applied for under this section." Thus the Act made a distinction between private markets which had been in existence prior to the coming into force of Act 5 of 1884 and those which were opened subsequent to that date.;

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