Case: Saghir Ahmad Vs. The State Of U. P. And Others.(With Connected Appeal)

commerce and intercourse provided for by Article 301 of the Constitution? Article 301 runs as follows :"Subject to the other provisions of this Part, trade, commerce and intercourse throughout the territory of India shall be free."Article 302 authorises the Parliament to impose such restrictions on the freedom of trade, commerce and intercourse between one State and another or within any part of the territory of India as may be required in the public interests. Under Article 304 (b) it is competent even for the Legislature of a State to impose reasonable restrictions upon freedom of trade, commerce and intercourse mentioned above in the interest of the public, but it is necessary that any bill or amendment for this purpose should first receive the sanction of the President before it is moved or introduced in the Legislature of a State. Article 301 corresponds to Section 92 of the Australian Constitution and is even wider than the latter inasmuch as the Australian Constitution provides for the freedom of inter-State trade only.The High Court has negatived the contention of the appellants on this points primarily on the ground that Article 301 of the Constitution has no application to the present case. What is said is, that the Article 301 provides safeguards for carrying on trade as a whole as distinguished from the rights of an individual to carry it on. In other words, this article is concerned with the passage of commodities or persons either within or outside the State frontiers but not directly with individuals carrying on the commerce or trade. The right of individuals, it is said, is dealt with under Article 19(1)(g) of the Constitution and the two articles have been framed in order to secure two different objects.30. The question is not quite free from difficulty and in view of the fact that we have declared the Act to be unconstitutional on the two grounds mentioned above, we do not consider it necessary to record our decision on the point. We would only desire to indicate the contentions that have been or could be raised upon this point and the different views that are possible to be taken in respect to them so that the Legislature might take these matters into consideration if and when they think of legislating on this subject.31. We desire to point out that in regard to section 92 of the Australian Constitution, which so far as inter-State trade is concerned adopts almost the same language as Article 301 of our Constitution, it has been difinitely held by the Judicial Committee in the case of 1950 AC 235 (J) that the rights of individuals do come within the purview of the section. It is true, as Lord Porter observed, that section 92 does not create any new juristic rights but it does give the citizens of the State or the Common-Wealth, as the case may be, the right to ignore and, if necessary, to call on the judicial power to help him to resist legislative or executive actions which offend against the section. It follows from this as His Lordship pointed out, that the application of section 92 does not involve calculations as to the actual present or possible future effect upon the total value of inter-State trade, the difficulty in applying such a criterion being too obvious. If this view is adopted in regard to Article 301 of our Constitution it can plausibly be argued that the legislation in the present case is invalid as contravening the terms of the article. The question of reasonable restrictions could not also arise in this case, as the bill was not introduced with the previous sanction of the President as required by the proviso to the Section 304 (b). It is true that the consent of the President was taken subsequently but the proviso expressly insists on the sanction being taken previous to the introduction of the bill.32. It may be argued that freedom of trade does not, as Lord Portor observed in the ---Australian Bank case, (J) referred to above, mean unrestricted or unrestrained freedom and that regulation of trade is quite compatible with its freedom. As against this it may be pointed out that the constitution itself has provided in Art.302 and 304 (b) how reasonable restrictions could be imposed upon freedom of trade and commerce and it would not be proper to hold that restrictions can be imposed aliunde these provisions in the Constitution. The question would also arise as to what interpretation should be put upon the expression "reasonable restrictions" and whether or not as would have to apply the same tests as we have applied in regard to Article 19(6) of the Constitution. One material thing to consider in this connection would be that although the constitution was amended in 1951 by insertion of an additional clause in Article 19(6) by which State monopoly in regard to trade or business was taken out of the purview of Article 19(1)(g) of the Constitution, yet no such addition was made in Article 301 or Article 304 of the Constitution and Article 301, as it stands, guarantees freedom of trade, commerce and intercourse subject only to Part XIII of the Constitution and not the other parts of the Constitution including that dealing with fundamental rights.33. The Australian Constitution indeed has no provision like Article 19(1)(g) of the Indian Constitution and it is certainly an arguable point as to whether the rights of individuals alone are dealt with in Article 19(1)(g) of the Constitution leaving the freedom of trade and commerce, meaning by that expression only the free passage of persons and goods, within or without a State to be dealt with under Article 301 and the following articles.34. We have thus indicated only the points that could be raised and the possible views that could be taken but as we have said already, we do not desire to express any final opinion on these points as it is unnecessary for purposes of the present case.

Decision (1 = appeal accepted, 0 = rejected): 1

Explanation:
1[ds]Over the latter the State claims and exercises a plenary power of control. Ayyar, J. has, in our opinion, rightly pointed out that this doctrine of franchise has no place in our Constitution. Under the Indian Constitution the contract carriers as well as the common carriers would occupy the same position so far as the guaranteed right under Article 19(1)(g) is concerned and both are liable to be controlled by appropriate regulations under clause (6) of that Article.We are in entire agreement with the statement of law made in these passages. Within the limits imposed by State regulations any member of the public can ply motor vehicle on a public road. To the extent he can also carry on the business of transporting passengers with the aid of the vehicles. It is to this carrying on of the trade or business that the guarantee in Article 19(1)(g) is attracted and a citizen can legitimately complain if any legislation takes away or curtails that right any more than is permissible under clause (6) of that article.Article 19(6) of the Constitution as it stands after the amendment of 1951, makes a three-fold provision by way of exception to or limitation upon clause (1) (g) of the Article. In the first place it empowers the State to impose reasonable restriction upon the freedom of trade, business, occupation or profession in the interest of the general public. In the second place it empowers the State to prescribe the professional and technical qualifications necessary for practising any profession or carrying on any occupation, trade or business. Thirdly,....and this is the result of the Constitution (First) Amendment Act of 1951 --- it enables the State to carry on any trade or business either by itself or through a corporation owned or controlled by the State to the exclusion of private citizens wholly or in part.Against this view it may be urged that the use of the words "deprivation" and "restrictions" as interchangeable expressions is not altogether unusual in ordinary language and the nature and extent of restrictions might in some cases amount to a negation of themay be mentioned here that the Excise Regulation is not a prohibitory statute which prohibits trading in liquor by private citizens altogether. It purports to regulate the trade in a particular way, namely, by putting up the right of trading in liquor in specified areas to the highest bidder in auction sale. The general observations occurring in the judgment cited above must therefore have to be taken with reference to the facts of that case.21. Be that as it may although in our opinion the normal use of the word "restriction" seems to be in the sense of limitation and not extinction, we would on this occasion prefer not to express any final opinion on this matter. If the word, restriction does not include total prohibition then the law under review cannot be justified under Article 19(6). In that case the law would be void unless it can be supported by Article 31. That point will be dealt with under the other point raised in the appeal. If however the word "restriction" in Article 19 (6) of the Constitution be taken in certain circumstances to include prohibition as well, the point for consideration then would be, whether prohibition of the right of all private citizens to carry on the business of motor transport on public roads within the State of Uttar Pradesh as laid down by the Act can be justified as reasonable restrictions imposed in the interests of the generalorder to judge whether State monopoly is reasonable or not, regard therefore must be had to the facts of each particular case in its own setting if time and circumstances . It is not enough to say as an efficient transport service is conducive to the interests of the people, a legislation which makes provision for such service must always be held valid irrespective of the fact as to what the effect of such legislation would be and irrespective of the particular conditions and circumstances under which the legislation was passed. It is not enough that the restrictions are for the benefit of the public, they must be reasonable as well and reasonableness could be decided only on a conspectus of all relevant facts andis undoubtedly a presumption in favour of the constitutionality of a legislation. But when the enactment on the face of it is found to violate a fundamental right guaranteed under Article 19 (1)(g) of the Constitution, it must be held to be invalid unless those who support the legislation can bring it within the purview of the exception laid down in clause (6) of the article. If the respondents do not place any materials before the Court to establish that the legislation comes within the permissible limits of clause (6), it is surely not for the appellants to prove negatively that the legislation was not reasonable and was not conductive to the welfare of thething, however, in our opinion, has a decided bearing on the question of reasonableness and that is the immediate effect which the legislation is likely to produce. Hundreds of citizens are earning their livelihood by carrying on this business on various routes within the State of Uttar Pradesh. Although they carry on the business only with the aid of permits, which are granted to them by the authorities under the Motor Vehicles Act, no compensation has been allowed to them under the statute. It goes without saying that as a result of the Act they will all be deprived of the means of supporting themselves and their families and they will be left with their buses which will be of no further use to them and which they may not be able to dispose of easily or at a reasonable price.It may be pointed out in this connection that in Part IV of the Constitution which enunciates the directive principles of State policy, Article 39(a) expressly lays down that the State shall direct its policy towards securing "that the citizens, men and women equally, have the right to an adequate means of livelihood."The new clause in Article 19(6) has no doubt been introduced with a view to provide that a State can create a monopoly in its own favour in respect of any trade or business but the amendment does not make the establishment of such monopoly a reasonable restriction within the meaning of the first clause of Art. 19(6). The result of the amendment is that the State would not have to justify such action as reasonable at all in a court of law and no objection could be taken to it on the ground that it is an infringement of the right guaranteed under Article 19(1)(g) of theamendment of the constitution, which came later, cannot be involved to validate an earlier legislation which must be regarded as unconstitutional when it wasthink that this is sound law and our conclusion is that the legislation in question which violates the fundamental right of the appellants under Article 19(1)(g) of the Constitution and is not shown to be protected by the Clause (6) of the Article as it stood at the time of the enactment, must be held to be void under Article 13(2) of theview of that majority decision it must be taken to be settled now that Clause (1) and (2) of Article 31 are not mutually exclusive in scope but should be read together as dealing with the same subject, namely, the protection of the right to property by means of limitations on the States powers, the deprivation contemplated in Clause (1) being no other than acquisition or taking possession of the property referred to in Clausefact that the buses belonging to the appellants have not been acquired by the Government is also not material. The property of a business may be both tangible and intangible. Under the statute the Government may not deprive the appellants of their buses or any other tangible property but they are depriving them of the business of running buses on hire on public roads. We think therefore that in these circumstances the legislation does conflict with the provision of Article 31 (2) of the Constitution and as the requirements of that clause have not been complied with, it should be held to be invalid on thatis well settled that mere differentiation does not make a legislation obnoxious to the equal protection clause. The Legislature has always the power to make classification and all that is necessary is that the classification should not be arbitrary but must bear a reasonable relation to the object which the legislation has in view. There is no doubt that classification is inherent in the concept of a monopoly; and if the object of legislation is to create monopoly in favour of the State with regard to a particular business, obviously the State cannot but be differentiated from ordinary citizens and placed in a separate category so far as the running of the business is concerned and this classification would have a perfectly rational relation to the object of the statute. No doubt if the creation of a monoply in favour of the State is itself bad on the ground of violating some constitutional provisions, the statute would be invalid for those reasons and the question of discrimination would not be material at all. In our opinion, the argument of Mr. Pathak that the State ceases to function as a State as soon as it engages itself in a trade like ordinary trader cannot be accepted as a sound proposition of law under the Constitution of India at the present3 of the Act authorises the State Government to declare that the road transport service in general or on particular routes should be run and operated by the State Government exclusively or by the State Government in conjunction with railway or partly by the State Government and partly by others in accordance with the provisions of the Act. The whole question is how is the last part of the section to be implemented and carried out ? If the State can choose any and every person it likes for the purpose of being associated with the transport service and there are no rules to guide its discretion, plainly the provision would offend against Article 14 of thedoes not appear to us to be an unreasonable construction to be put upon the relevant portion of Section 3 of the act and it receives support from what is laid down in Section 7(c) of the act. On this construction the discretion to be exercised by the State would be a regulated discretion guided by statuary rules. We hold therefore that the appellant cannot make any grievance on this score and that the statute does not offend against Article 14 of theagainst this it may be pointed out that the constitution itself has provided in Art.302 and 304 (b) how reasonable restrictions could be imposed upon freedom of trade and commerce and it would not be proper to hold that restrictions can be imposed aliunde these provisions in the Constitution. The question would also arise as to what interpretation should be put upon the expression "reasonable restrictions" and whether or not as would have to apply the same tests as we have applied in regard to Article 19(6) of the Constitution. One material thing to consider in this connection would be that although the constitution was amended in 1951 by insertion of an additional clause in Article 19(6) by which State monopoly in regard to trade or business was taken out of the purview of Article 19(1)(g) of the Constitution, yet no such addition was made in Article 301 or Article 304 of the Constitution and Article 301, as it stands, guarantees freedom of trade, commerce and intercourse subject only to Part XIII of the Constitution and not the other parts of the Constitution including that dealing with fundamental rights.