CHIEF OFFICER, SANGLI MUNICIPAL COUNCIL Vs. KHADYA PEYA VIKRETAS MALAK SANGH SANGLI

JUDGEMENT

(1.) THIS appeal the main question relates to licence fee or fees payable by manufacturers -cum -retail -dealers of articles of food under the Prevention of Food Adulteration Act, 1954 (hereinafter referred to as the Act) and turns on a proper construction of categories of persons, i.e. manufacturers and dealers, wholesale or retail, mentioned in Appendix (1) in the Schedule to the Rules framed by the Maharashtra Government under the Act.

(2.) THE facts leading to this appeal may briefly be stated. The plaintiff Association, respondent No. 1, (hereinafter referred to as the Association) is a trade union registered with the Registrar of Trade Unions under the Bombay Trade Union Act. Owners of hotels and restaurants at Sangli are members of the Association. They prepare and serve tea and eatables in their hotels and restaurants. In exercise of the powers conferred upon them under the Act, the Central Government and the Maharashtra State Government have framed rules for giving effect to the provisions of the Act, Rule 50(1) of the Central Government Rules prohibits any person from manufacturing or selling any articles of food specified therein except under a licence. The State Rules require a licence to be obtained by a hotel or restaurant keeper for preparation of tea and other eatables on payment of licence fee as prescribed in Appendix (1) and Appendix (2) to the said Rules. It appears that the Sangli Municipal Council who is the licensing authority for granting such licences considered such hotel and restaurant keepers as liable to pay two separate licence fees, that is, both as manufacturers under Serial No. 1 and as retail dealers under Serial No. 8 of the Appendix (1). Accordingly, the Council charged these hotel and restaurant owners Rs. 30 and Rs. 25 as fees for renewal of their licence as manufacturers and retail dealers for the year 1967 -68. For the nest year, i.e. 1968 -69, it was necessary for them to renew their licences on or before February 29, 1968, They, however, contended that they were not liable to pay double licence fees, i.e. both as manufacturer and retail dealers. The Association, therefore, represented its members' said point of view to various officers of the Government of Maharashtra and to the Sangli Municipal Council. Further, it appears that the Director of Public Health, Maharashtra State, who is the Food (Health) Authority under the State Rules, was of the opinion that if a manufacturer is given a licence under Serial No. 1 of the Appendix (1) he was not liable and should not be charged again licence fee for the purpose of retail business under Serial Nos. 3 to 8 of the Appendix (1). By his letter dated August 24, 1967, he expressed his above opinion to the Kolhapur Municipal Council. By his further letter dated November 30, 1967 addressed to the Secretary to Government, Urban Development, Public Health and Housing Department, the Director, in view of his having already expressed his said opinion requested the Government to issue suitable instructions to the Sangli Municipal Council. He also sent a copy of the said letter to the Municipal Council for information. The Association and its members relied upon the above opinion of the Director of Public Health as amounting to a direction binding upon the Municipal Council not to charge the owners of hotels and restaurants licence fees as manufacturers and retail dealers. However, the State Government did not move in the matter and though most of the Municipalities in the State charged hotel owners licence fees only as retail dealers, the appellant Council, by its letter dated February 7, 1968, informed the Association that it would continue to charge twice the licence fees as before and also gave public notice in the issue of daily paper 'Navsandesh' published on February 18, 1968 at Sangli calling for payment of licence fees as before. The Association, therefore, filed on February 20, 1968, the present suit against the Sangli Municipal Council, inter alia, for (i) a declaration that the levy of licence fees on its said members and recoveries thereof made and to be made by the Municipal Council tinder the said two items, namely, Section No. 1 and Section Nos. 3 to 8 of Appendix (1) is illegal and beyond the jurisdiction of the Municipal Council; (ii) a permanent injunction restraining the Municipal Council from making recovery of licence fee under both the said two heads; (iii) refund of Rs. 3,990 already recovered in excess from its members in the year 1967 with interest thereon.

(3.) BEFORE adverting to the parties' contentions regarding the construction of the words 'manufacturer' and 'retail dealer' in Appendix (1) it is convenient to refer at this stage to the provisions of the Act and the Rules framed thereunder relating to licence and the fees payable in respect thereof. As the preamble states, the Act is enacted to make provision for the prevention of adulteration of food. The definition of 'adulterated' in Section 2(i) provides that an article of food shall be deemed to be adulterated in any of events or circumstances mentioned in Clauses (a) to (l) thereof. It shows that such an article can be 'adulterated' at any stage while it is manufactured, sold -wholesale or retail -stored, exhibited or distributed for sale. Section 7(iii) says that no person shall himself or by any person on his behalf manufacture for sale, or store, sell or distribute any article of food for the sale of which a licence is prescribed except in accordance with the conditions of licence. Section 9 empowers the Central or State Government to appoint Food Inspectors for local areas. Section 23(1)(f) empowers the Central Government to make rules, inter alia, regulating by the issue of licences the manufacture or sale of any article of food; and Section 24(1) empowers the State Government to make rules for the purpose of giving effect to the provisions of the Act in matters not falling within the purview of Section 23; and Sub -section (2)(b) thereof, in particular authorises the State Government to prescribe the forms of licences and of application therefor and the fees payable in respect thereof. In pursuance of Sections 23 and 24 of the Act the Central Government and the State Government have framed rules respectively called 'the Prevention of Food Adulteration Rules, 1955' and 'the Maharashtra Prevention of Food Adulteration Rules, 1962.' Sub -rule (1) of Rule 50 of the Central Rules prohibits a person from manufacturing, selling, stocking, distributing or exhibiting for sale any of the articles specified therein except under a licence; Sub -rule (2) authorises the State Government or the local authority to appoint licensing authorities; Sub -rule (4) requires separate licences in respect of premises if articles are manufactured, stored or exhibited for sale at more than one place; and Sub -rule (5) requires the licensing authority to inspect the premises and satisfy itself that it is free from sanitary defects. State Rules of 1962 were amended by the State Government in 1966. Rules 5 of the State Rules to the extent necessary for the present purpose is as follows: