VENKATARAMIAH, J. - (1.) THIS appeal by certificate arises out of Suit No. 416 of 1960 on the file of the Munsif, Utraula at Gonda instituted by the Tulsipur Sugar Company (hereinafter referred to as 'the Plaintiff)' against the Town Area Committee, Tulsipur (hereinafter referred to as 'the defendant') for a permanent injunction restraining the defendant from levying octroi on goods brought into the premises of the sugar factory belonging to the plaintiff pursuant to the Notification bearing No. 540/XXIII-102 (58-59)-7 dated 15/12/1959 issued by the Commissioner of Faizabad Division in exercise of the powers conferred on him by sub-section (2) of Section 39 of the U. P. Town Area Act, 1914 (U. P. No. 11 of 1914) (hereinafter referred to as the Act) read with the Notification bearing No. 1375 (1)/XXIII-102 (58-50)-24 dated 14/04/1960. The name of the defendant was altered into the Notified Area Committee of Tulsipur by virtue of an order made by the Munsif on 18/08/1962 since the defendant which was originally a Town Area Committee had been reconstituted as a Notified Area Committee with effect from 15/03/1962. The plaintiff is a company carrying on the business of manufacturing sugar in its factory which was established in the year 1936 in Shitlapur village which was situated in the suburb of tulsipur Town. By the Notification bearing No. 1853-IX-86 T-51 dated 22/12/1955 issued by the Governor of Uttar Pradesh under Section 3 of the Act, the limits of the Tulsipur Town Area were extended so as to bring within its limits the village of Shitlapur. Thus the sugar factory of the plaintiff was brought within the jurisdiction of the Tulsipur Town Area Committee. In the year 1959, it was proposed to levy octroi on certain goods which were brought into the limits of the Tulsipur Town Area Committee for purposes of sale, use or consumption and for that purpose a draft notification was published on 28/10/1959 notifying the proposed rules which would govern the levy of octroi and inviting objections and representations thereto. The final Notification was published by the Commissioner on 15/12/1959 under Section 39 of the Act notifying the rules governing the levy of octroi in the Town Area of Tulsipur. In both these notifications there was a reference to two Schedules - Schedule No. 1 and Schedule No. 2 but in fact neither of the two notifications contained the second schedule. The first schedule referred to the rates of octroi leviable on the goods specified therein and the second schedule referred to the limits of the Town Area. When the Commissioner noticed that the Notification dated 15/12/1959 by which the octroi rules were promulgated did not contain the second schedule, he published a notification dated 14/04/1960 in the U. P. Gazette dated 23/04/1960 setting out the octroi limits of the Town Area of Tulsipur by way of amendment to the Notification dated 15/12/1959 incorporating the second schedule containing the limits of the Town Area of Tulsipur in the latter notification. By the said notification dated 14/04/1960, item No. 29 in the first schedule of the Notification dated 15/12/1959 was also directed to be omitted. After the publication of the Notification dated 15/12/1959, the plaintiff was called upon to pay octroi on some of the materials, articles and stores brought into its sugar factory which was situated within the limits of the Tulsipur Town Area for being used in the manufacture and sale of sugar. Aggrieved by the said levy, the plaintiff instituted the above suit on 18/11/1960 for permanent injunction as stated above questioning the validity of the Notification dated 22/08/1955 issued by the Governor of Uttar Pradesh extending the limits of the Tulsipur Town Area so as to include the area in which the factory of the plaintiff was situated and also the Notification dated 15/12/1959 and the amendment of the said Notification by Notification dated 14/04/1960 issued by the Commissioner of Faizabad.
(2.) THE contention of the plaintiff with regard to the Notification dated Aug. 22, 1955 was that since it had been promulgated without giving a prior opportunity to all those concerned to make representation regarding the advisability of extending the limits of the Tulsipur Town Area Committee so as to include the village of Shitlapur within whose limits the factory of the plaintiff was situated, it was liable to be declared as void. In so far as the Notification dated 15/12/1959 was concerned, it was urged by the plaintiff that it was liable to be struck down on the ground that it was inchoate as the second schedule defining the limits of the Tulsipur Town Area had not been incorporated either in the draft notification dated 28/10/1959 or in the final Notification dated 15/12/1959. It was also urged that the above defect could not be cured by the issue of the Notification dated 14/04/1960 by which the Notification dated 15/12/1959 was amended without following all the procedure prescribed for promulgating rules under S. 39 of the Act. THE defendant pleaded that neither of the two contentions urged by the plaintiff was tenable. THE defendant pleaded that since all the legal formalities required for the extensions of its limits and for the imposition of the octroi had been followed, it was not open to the plaintiff to question any of the above notifications. THE trial court held that the validity of the Notification dated 23/08/1955 was not open to question before the civil court but it however declared the draft Notification issued on 28/10/1959, the final Notification issued on 15/12/1959 and the amending Notification dated 14/04/1960 as invalid and ineffective on the ground that the omission to include the second schedule containing the octroi limits in the draft Notification and the Notification dated November 15, 1959 was a material illegality and the Notification dated 14/04/1960 which had been issued without following all the formalities could not have the effect of validating the Notification dated 15/12/1959. In view of the above finding, the trial court held that there was no valid levy of octroi by the defendant. Accordingly, the trial court passed a decree restraining the dependent from levying octroi on goods brought by the plaintiff into its factory. THE defendant filed an appeal against the said decree before the District Judge, Gonda in Civil Appeal No. 2 of 1963. THE plaintiff filed cross objections in that appeal. That appeal was heard by Civil Judge, Gonda who allowed the same and dismissed the cross objections. THE suit instituted by the plaintiff was consequently dismissed. THE plaintiff thereafter filed a second appeal before the High Court of Allahabad (Lucknow Bench) in Second Civil Appeal No. 462 of 1964 questioning the decree passed by first appellate court. By its judgment dated 17/01/1968, the High Court dismissed the second appeal. On the basis of a certificate issued by the High Court under Article 133 (1) (b) of the Constitution, the plaintiff has come up in appeal to this Court. We shall first examine the correctness of the contention advanced on behalf of the plaintiff relating to the validity of the Notification dated 22/08/1955 declaring the area in which the sugar factory of the plaintiff is situated as a town area. The said Notification reads as follows :- 22/08/1955 "No. 1853 A-IX 85 T-51 - In exercise of the powers conferred by clause (a) of sub-section (1) of Section 3 of the U. P. Town Area Act, 1914 (U. P. Act No. II of 1914), the Governor of Uttar Pradesh is pleased to declare the town of Tulsipur in Gonda district to be a town area for the purpose of the said Act and under clause (b) of sub-section (1) Section 3 of the said Act to define the limits of the said town area as shown in the schedule hereto. SCHEDULE BOUNDARIES OF TULSIPUR TOWN AREA DISTRICT GONDA North : Janakpur forest road crossing at Nakti Nala to station road up to Public Works Department inspection house railway crossing. West : From the terminating point of Northern Boundary at Public Works Department Inspection House railway crossing towards south up to plot No. 223 of village Tulsipur on Tulsipur Chaudhri Dih Road. South : From plot No. 2418 of village Tulsipur to the 3rd furlong pillar of 18th mile on Balrampur Road and therefrom up to plot No. 559 on tulsipur Chaudhari Dih pucca Road and from there to plot No. 223 of village Tulsipur. East : From the terminating point of southern Boundary at plot No. 2418 towards north parallel to Nakti Nala up to the point where Pachperwa Road meets and therefrom up to Sugar Factory railway crossing, Sugar Factory railway line to the eastern side on the Sugar Factory up to the terminating point of the Northern Boundary at Nakti Nala." Section 3 of the Act reads : "3. Declaration and definition of town areas :- (1) The State Government may, by notification in the Official Gazatte. (a) declare any town village, suburb, bazar or inhabited place to be a town area for the purpose of this Act, and may unite, for the purpose of declaring the area constituted by such union to be a town area, the whole or a portion of town, village, suburb, bazar or inhabited place with the whole or a portion of any other town, village, suburb, bazar for inhabited place; (b) define the limits of any town area for the like purposes; (c) include or exclude any area in or from any town area so declared or defined; and (d) at any time cancel any notification under this section; Provided that an agricultural village shall not be declared, or included within the limits of a town area; (2) The decision of the State Government that any inhabited area is not an agricultural village within the meaning of the proviso to sub-section (1) of this section shall be final and conclusive, and the publication in the Official Gazette of a Notification declaring such area to be a town area or within the limits of a town area shall be conclusive proof of such decision."
(3.) THE Act does not provide that the State Government should give previous publicity to its proposal to declare any area as a town area and should make such declaration after taking into consideration any representation or objection filed in that behalf by the members of the public. It is not in dispute that no such previous publication was made in the instant case. THE contention of the plaintiff is that even though the statute does not expressly require such previous publication and consideration of representation and objections made to the proposal to declare any area as a town area since a declaration of any area as a town area involves certain civil consequences such as the obligations arising from the implementation of the provisions of the Act in that area, we should hold that the exercise of the power of the State Government under Section 3 of the Act by necessary implication imposes a duty on the State Government to follow the principles of natural justice i.e. to give publicity to its proposal to declare any area as a town area and to decide the question whether any declaration under Section 3 of the Act should be made or not after taking into consideration the representations or objections submitted by the members of the public in that regard and failure to comply with such procedure would invalidate any declaration made under Section 3. THE above contention is based on the assumption that the duty imposed on the State Government is in the nature of an administrative power in the exercise of which the State Government should follow the principles of natural justice. The solution to the question raised before us principally depends upon the nature of the function that is performed by the State Government under Section 3 of the Act. If that function is judicial or quasi-judicial involving adjudication of the rights of any person resulting in civil consequences, it no doubt becomes necessary to follow the maxim audi alteram partem (hear the other side) before taking a decision. It is also true that in order to establish that a duty to act judicially applies to the performance of a particular function, it is no longer necessary to show that the function is analytically of a judicial character or involves the determination of a lis inter partes; though a presumption that natural justice must be observed will arise more readily where there is an express duty to decide only after conducting a hearing or inquiry or where the decision is one entailing the determination of disputed questions of law and fact. Prima facie, moreover, a duty to act judicially will arise in the exercise of a power to deprive a person of his livelihood or of his legal status where the statue is not merely terminable at pleasure, or to deprive a person of liberty or property rights or another legitimate interest or expectation, or to impose a penalty on him; though the conferment of a wide discretionary power exercisable in the public interest may be indicative of the absence of an obligation to act judicially. Where a discretionary power to encroach upon individual rights is exercised the factors pointing to whether it must be exercised judicially include the nature of the interests to be affected, the circumstances in which the power falls to be exercised and the nature of the sanctions, if any, involved. Exceptionally, a duty to act judicially may arise in the course of exercising a function not culminating in a binding decision, if the wording of the grant of powers or the context indicates that a fair hearing ought to be extended to persons likely to be prejudicially affected by an investigation or recommendation. (Halsbury's Law of England, Vol. I, Fourth Edition, Para 65 at p.77).;