Case: Calcutta Gas Company (Proprietary) Ltd Vs. State of West Bengal &amp; Others

2. The facts that have given rise to this appeal may be briefly stated. The Oriental Gas Company was originally constituted by a deed of settlement dated April 25, 1853, by the name of the Oriental Gas Company, and it was subsequently registered in England under the provisions of the English Joint Stock Companies Act, 1862. By Act V of 1857 passed by the Legislative Council of India, it was empowered to lay pipes in Calcutta and its suburbs and to excavate the streets for the said purpose. By Acts of the Legislative Council of India passed from time to time special powers were conferred on the said Company. In 1946 Messrs. Soorajmull Nagarmull, a firm carrying on business in India, purchased 98 per cent of the shares of the said Oriental Gas Company Limited. The said firm floated a limited liability Company named the Calcutta Gas Co. (Proprietary) Limited and it was registered in India with the registered office at Calcutta. On July 24, 1948, under an agreement entered into between the Oriental Gas Company, and the Calcutta Gas Company the latter was appointed the manager of the former Company in India for a period of 20 years from July 5, 1948. The Oriental Gas Company is the owner of the industrial undertaking, inter alia, for the production, manufacture, supply, distribution and sale of fuel gas Calcutta. The Calcutta Gas Company, by virtue of the aforesaid arrangement, was in charge of its general management for a period of 20 years for remuneration. The West Bengal Legislature passed the impugned Act and it received the assent of the President on October 1, 1960. On October 3, 1960, the West Bengal Government issued three notifications - the first declaring that the said Act would come into force on October 3, 1960, the second containing the rules framed under the Act. And the third specifying October 7, 1960, as the date with effect from which the State Government would take over for a period of five years the management and control of the undertaking of the Oriental Gas Company for the purposes of, and in accordance with, the provisions of the said Act. The appellant, i.e., the Calcutta Gas Company, filed a petition under Art. 226 of the Constitution in the High Court for West Bengal at Calcutta for appropriate writs for restraining the State Government from giving effect to the said Act and for quashing the said notifications. Respondents 1 to 4 to the petition were the State of West Bengal and the concerned officers, and respondent 5 was the Oriental Gas Company Limited. In the petition, the appellant contested the constitutional validity of the Act on various grounds, and in the counter affidavit, the contesting respondents i.e., respondents 1 to 4, sought to sustain its validity and also questioned the maintainability of the petition at the instance of the appellant. Ray, J., gave the following findings on the contentions raised before him : (1) The appellant has no legal right to maintain the petition; (2) the appellant cannot question the validity of the Act on the ground that its provisions infringed his fundamental rights under Arts. 14, 19 and 31 in view of Art. 31A(1)(b) of the Constitution; (3) the West Bengal Legislature had the Legislative competence to pass the impugned Act by virtue of entry 42 of List III of the Seventh Schedule to the Constitution; (4) entry 25 of List II also confers sufficient authority and power on the State Legislature to make laws affecting gas and gas work; and (5) even if the Act incidentally trenches upon any production aspect, the pith and substance of the legislation is gas and gas-work within the meaning of entry 25 of List II. The learned Judge rejected all the contentions of the appellant and dismissed the petition by his order dated November 15, 1960. Hence the appealLearned Attorney-General, appearing for the appellant, has repeated before us all the contentions, except that relating to fundamental rights, which his client had unsuccessfully raised before the High Court. His contentions may be summarized thus : (1) The finding of the High Court that the appellant has no locus standi to file the petition cannot be sustained, as under the impugned Act the appellants legal rights under the agreement entered into by it with the Oriental Gas Company on July 24, 1948 were seriously affected. (2) Under Art. 246 of the Constitution Parliament has exclusive power to make laws with respect to any of the matters enumerated in List I : Parliament in exercise of the said power passed the Industries (Development and Regulation) Act, 1951, by virtue of entry 52 of said List; the two entries in List II, namely, entries 24, and 25, cannot sustain the Act, as entry 24 is subject to the provisions of entry 52 of List I; and entry 25 must be confined to matters other than those covered by entry 24, and, therefore, the West Bengal Legislature is not Competent to make a law regulating the gas industry. (3) Assuming that the State Legislature has power to pass the Act by virtue of entry 25 of List II, under Art. 254 (1) of the Constitution the law made by Parliament, namely, the Industries (Development and Regulation) Act, 1951, shall prevail, and the law made by the State Legislature, namely, the impugned Act be void to the extent of repugnancy. And (4) the view of the High Court that the validity of the Act could be sustained under entry 42 of List III is wrong, as under the impugned Act the State only takes over the management of the Company and manages it for and on behalf of the Company, whereas the concept of requisition under the said entry requires that the State shall take legal possession of property of the person from whom it is requisitioned, on its own behalf or on behalf of a petitioner other than the owner thereofThe learned Advocate-General of West Bengal, and Mr. Sen, who followed him, seek to sustain the validity of the impugned Act not only under entry 25 of List II but also under entries 33 and 42 of List III of the Seventh Schedule to the Constitution. They further contend that the appellant was constituted as agent under the said agreement and that, as its rights were preserved by s. 4 of the impugned Act, it has no locus standi to file the petition under Art. 226

Court's reasoning:
Article 226 confers a very wide power on the High Court to issue directions and writs of the nature mentioned therein for the enforcement of any of the rights conferred by Part III or for any other purpose. It is, therefore, clear that persons other than those claiming fundamental right can also approach the court seeking a relief thereunder. The Article in terms does not describe the classes of persons entitled to apply thereunder; but it is implicit in the exercise of the extraordinary jurisdiction that the relief asked for must be one to enforce a legal right. In The State of Orissa v. Madan Gopal Rungta ((1952) S.C.R. 28.) this Court has ruled that the existence of the right is the foundation of the exercise of jurisdiction of the court under Art. 226 of the Constitution. In Chiranjit Lal Chowdhuri v. The Union of India ((1950) S.C.R. 869), it has been held by this Court that the legal right that can be enforced under Art. 32 must ordinarily be the right of the petitioner himself who complains of infraction of such right and approaches the court for relief. We do not see any reason why a different principle should apply in the case of a petitioner under Art. 226 of the Constitution. The right that can be enforced under Art. 226 also shall ordinarily be the personal or individual right of the petitioner himself, though in the case of some of the writs like habeas corpus or quo warranto this rule may have to be relaxed or modifiedThe petitioner entered into an agreement dated July 24, 1948, with respondent No. 5 in regard to the management of the Oriental Gas Company. Under the agreement, the appellant was appointed as Manager and the general management of the affairs of the Company was entrusted to it for a period of 20 years. The appellant would receive thereunder by way of remuneration for its services, (a) an office allowance of Rs. 3, 000/- per mensem, (b) a commission of 10 per cent, on the net yearly profit of the Company, subject to a minimum of Rs. 60, 000/- per year in the case of absence of or inadequacy of profits and (c) a commission of Rs. 1/- per ton of all coal purchased and negotiated by the Manager. In its capacity as Manager, the appellant-Company was put in charge of the entire business and its assets in India and it was given all the incidental powers necessary for the said management. Under the agreement, therefore, the appellant had the right to manage the Oriental Gas Company for a period of 20 years and to receive the aforesaid amounts toward its remuneration for its services. The power to legislate is given to the appropriate Legislatures by Art. 246 of the Constitution. The entries in the there Lists are only legislative heads or fields of legislation; they demarcate the area over which the appropriate Legislatures can operate. It is also well settled that widest amplitude should be given to the language of the entries. But some of the entries in the different List or in the same List may overlap and sometimes may also appear to be in direct conflict with each other. It is then the duty of this Court to reconcile the entries and bring about harmony between them. There are three possible constructions, namely, (1) entry 24 of List II, which provides for industries generally, covers the industrial aspect of gas and gas works leaving entry 25 to provide for other aspects of gas and gas-works; (2) entry 24 provides generally for industries, and entry 25 carves out of it the specific industry of gas and gas-works, with the result that the industry of gas and gas-works is excluded from entry 24; and (3) the industry of gas and gas-works falls under both the entries, that is, there is a real overlaping of the said entries. Having regard to the aforesaid principle, while giving the widest scope to both the entries, we shall adopt the interpretation which reconciles and harmonizes themThe first question that occurs to ones mind is, what is the meaning of the expression "industry" in entry 24 of List II ? Is it different from the meaning of that expression in entry 52 of List I ? Whatever may be its connotation, it must bear the same meaning in both the entries for the two entries are so interconnected that conflicting or different meanings given to them would snap the connection. Entry 24 is subject to the provisions of entry 7 and entry 52 of List I. Entry 7 of List I provides for industries declared by Parliament by law to be necessary for the purpose of defence or for the prosecution of war; and entry 52 for industries the control of which by the Union is declared by Parliament by law to be expedient in the public interest. Therefore ordinarily industry is in the field of State legislation; but, if Parliament by law makes a relevant declaration or declarations, the industry or industries so declared would be taken off its field and passed on to Parliament. In the premises, the expression "industry" in all the entries must be given the same meaning. Now, what is the meaning of word "industry" ? In Ch. Tika Ramji v. State of Uttar Pradesh ((1956) S.C.R. 393.), the expression "industries" is defined to mean the process of manufacture or production and does not include the raw materials used in the industry or the distribution of the products of the industry. It was contended that the word "industry" was a word of wide import and should be construed as including not only the process of manufacture or production but also activities antecedent thereto such as acquisition of raw materials and subsequent thereto such as disposal of the finished products of that industry. But that contention was not accepted. It is not necessary in this case to attempt to define the expression "industry" precisely or to state exhaustively all its ingredients. Assuming that the expression means only production or manufacture, would it take in its sweep production or manufacture, of gas ? Entry 24 in List II in its widest amplitude takes in all industries, including that of gas and gas-works. So too, entry 25 of the said List comprehends gas industry. There is, therefore, an apparent conflict between the two entries and they overlap each other. In such a contingency the doctrine of harmonious construction must be invoked. Both the learned counsel accept this principle. While the learned Attorney-General seeks to harmonize both the entries by giving the widest meaning to the word "industry" so as to include the industrial aspect of gas and gas-works and leaving the other aspects to be covered by entry 25, learned counsel for the contesting respondents seeks to reconcile them by carving out gas and gas-works in all its aspects from entry 24. If industry in entry 24 is interpreted to include gas and gas-works, entry 25 may become redundant, and in the context of the succeeding entries, namely, entry 26, dealing with trade and commerce, and entry 27, dealing with production, supply and distribution of goods, it will be deprived of all its contents and reduced to "useless lumber". If industrial, trade, production and supply aspects are taken out of entry 25, the substratum of the said entry would disappear : in that event we would be attributing to the authors of the Constitution ineptitude, want of precision and tautology. On the other hand, the alternative contention enables enters 24 and 25 to operate fully in their respective fields : while entry 24 covers a very wide field, that is, the field of the entire industry in the State, entry 25. dealing with gas and gas-works, can be confined to a specific industry, that is, the gas industry. There may be many good reasons for the authors of the Constitution giving separate treatment to gas and gas-works. If one can surmise, it may be that, as the industry of gas and gas-works was confined to one or two States and was not of all-India importance, it was carved out of entry 24 and given a separate entry, as otherwise if a declaration by law was made by Parliament within the meaning of entry 7 or entry 52 of List I, it would be taken out of the legislative power of States. Be it as it may, the express intention of the Constitution is to treat it, in normal times, as a state subject and it is not in the province of this Court to ascertain and scrutinize the reasons for doing so. It is suggested that this interpretation would prevent Parliament in make law in respect of gas and gas-works during war or other national emergency. Apart from the relevancy of such a consideration, the apprehension has no justification, for under Art. 249 Parliament is enabled to take up for legislation any matter which is specifically enumerated in List II whenever the Council of States resolves by two-thirds majority that such a legislation is necessary or expedient in the national interest. So too, under Art. 250 Parliament can make laws with respect to any of the matters enumerated in the State List, if a Proclamation of Emergency is in operation. Article 252 authorizes the Parliament to legislate for two or more States, if the Houses of the Legislatures of those States give their consent to the said course. Subject to such emergency or extra-ordinary powers, the entire industry of gas and gas-works is within exclusive legislative competence of a State. It is, therefore, clear that the scheme of harmonious construction suggested on behalf of the State gives full and effective scope of operation for both the entries in their respective fields, while that suggested by learned counsel for the appellant deprives entry 25 of all its content and even makes it redundant. The former interpretation must, therefore, be accepted in preference to the latter. In this view, gas and gas works are within the exclusive field allotted to the States. On this interpretation the argument of the learned Attorney-General that, under Art. 246 of the Constitution, the legislative power of State is subject to that of Parliament ceases to have any force, for the gas industry is outside the legislative field of Parliament and is within the exclusive field of the Legislature of the State. We, therefore, hold that the impugned Act was within the legislative competence of the West Bengal Legislature and was, therefore, validly madeIn this view the alternative argument advanced on behalf of the State, namely, that the impugned Act was made by virtue of entry 33 and entry 42 of List III need not be considered. We should not be understood to have expressed our view one way or other on this aspect of the case9. Nor is the contention of learned Attorney-General that s. 20 of the Central Act would still be valid vis-a-vis gas industry has any force. Under s. 20 of the Central Act10. We have expressed the view that the Legislature of a State has the exclusive power to make law in respect of gas industry by virtue of entry 25 of List II, and that entry 24 does not comprehend gas industry. As we have indicated earlier, the expression "industry" in entry 52 of List I bears the same meaning as that in entry 24 of List II, with the result that the said expression in entry 52 of List I also does not take in a gas industry. If so, it follows that the Central Act, in so far as it purported to deal with the gas industry, is beyond the legislative competence of Parliament. Section 20 is an integral part of the Central Act, and if it is taken out of the Act, it can only operate in vacuum. The said section was introduced for the effective implementation of the provisions of the Central Act. It was also enacted by virtue of entry 52 of List I of the Seventh Schedule to the Constitution. If the Act was constitutionally void in so far as it purported to effect the gas industry, for the aforesaid reasons, s. 20 would equally be void to the same extent for the same reasons. In this context two decisions of this Court, namely, Raghubir Singh v. State of Ajmer ((1959) Supp. (1) S.C.R. 478.) and State of Bihar v. Umesh Jha (A.I.R. 1962 S.C. 50.) may usefully be consulted, for in the said decisions this Court held that ancillary provisions enacted for carrying out the objects of a main Act would fall with the main Act on the ground that they were enacted only to subserve the purpose of the main Act. Section 20, therefore, will not avail the appellant to question the validity of the State actionIn the result, we agree with the High Court that the impugned Act was within the legislative competence of the West Bengal State Legislature and was validly made.