Summarize the following court judgment. 80	 80A. 81 and 116 to 213 of 1960. Petitions under article 32 of the Constitution of India for enforcement of Fundamental Rights. section V. Gupta	 M. C. Bhandare	 section N. Andley	 Rameshwar Nath and P. L. Vohra	 for the petitioners. H. N. Sanyal	 Additional Solicitor General of India	 D. N. Mukherjee and P. D. Xenon	 for the respondents. Porus A. Mehta	 J. R. Gagrat	 and G. Gopalakrishnan	 for the interveners. August 11. The judgment of Gajendragadkar	 Hidayatullah	 Shah and Raghubar Dayal	 JJ.	 was delivered by Hidayatullah	 J.	 Subba Rao	:J.	 delivered a separate judgment. 112 HIDAYATULLAH	 J ' These writ petitions raise identical questions	 and a common argument was addressed to the Court in all of them. Petitions Nos. 80 and 80A of 1960 have been filed by two petitioners. One petitioner holds a permanent ' licence and the other	 a temporary licence renewable triennially	 to work as Dalal 's at New. Customs House	 Bombay. In the other petitions also	 petitioners Nos. 1 to 50 hold permanent licences	 and petitioners Nos. 51 to 99 hold temporary but renewable licences. Some of the permanent licences were issued in 1936	 and some of the temporary licences were issued as far back as 1944. These licences	 whether permanent or temporary	 were issued under s.202 of the 	 prior to its amendment by the Sea Customs 'Amendment) Act	 1955 (Act 21 of 1955). They were issued after a brief enquiry and subject to the fulfilment by the applicant of the following conditions : "(1) He must produce at least 2 certificates of character each from a Justice of Peace or other persons of known respectability. (2) He must certify that he has not been convicted of any criminal offence. (3) He must declare that he will have no claim to any accommodation in the Custom House. (4) He must also give a security of Rs. 2000 in cash or Government paper having an equivalent market value and execute a Bond for Rs. 2000 on It fifteen rupees Stamp Paper in the attached form. " In 1955	 by the amending Act	 s.202 was substituted by another section. The section now reads : "202. (1) With effect from such date as the Central Government may	 by notification in the Official Gazette specify	 no person shall act as an agent for the transaction of any business relating to the entrance or 113 clearance of any vessel or the import or export of goods or baggage in any Custom house unless such person holds a licence granted in this behalf in accordance with the rules made under sub section: (2). (2) The Chief Customs authority may make rules for the purpose of carrying out the provisions of this section and in particular such rules may provide for (a) the authority by which a licence may be granted under this section and the period of validity of any such licence; (b) the form of the licence and the fees payable therefor; (c) the qualifications of persons who may apply for a licence (d) the :restrictions and conditions (including the furnishing of a security by the licensee) for his faithful behaviour as regards the custom house regulations and officers) subject to which a licence may be granted ; (e) the circumstances in which a licence may be suspended or revoked; and (f) the appeals	 if any	 against an order of suspension or revocation of a licence	 and the period within which such appeals shall be filed. " As A result of the enactment of this section	 the original licence	 whether permanent or temporary. would have become ineffective after. the date to be specified by the Central Government. It became necessary for the petitioners and others to apply for licences granted in accordance with the rules framed under sub section These rules were framed	 and public notices were issued. inviting applications ; but the dates were postponed 114 till the rules were published in the Gazette on May 14	 1960. It is not necessary to refer to the prior history of these rules and to the many representations that were made	 as they are not relevant. On June 18 1960	 a public	 notice (No. 87) was issued fixing June 25	 1960 as the last date for making applications for the new licences	 and the persons affected were informed that the. operation of the new licences under the rules would commence on July 14	 1960. On June 27	 1960	 Writ Petitions Nos. 80 and 80A of 1960 were filed	 followed by Writ Petitions Nos. 81 and 116 to 213 of 1960 filed on July 12 1960. An ex parte ad interim stay of the revocation of the existing licences was obtained from this Court	 and subsequently	 the respondents undertook to issue to the petitioners special temporary licences renewable yearly till the disposal of these petitions. Prior to the. Custom House Agents Licensing Rules	 1960	 there were four classes of Agents. They were (1) Clearing Agents	 (2) Dalals.	 (3) Muccadams and (4) Baggage Clearing Agents. According to the petitioners	 there were	 100 licensed Clearing Agents	 200 licensed Dalals	 270 Muccadams and about 15 Baggage Clearing Agents. The duties and functions of these four classes of agents were different. Whether these distinctions were always maintained and whether they grew out of regulations or usage is hardly necessary to enquire. By the Rules of 1960	 these classes were merged into one	 and all licensed agents were placed on an equal footing. In other words	 there is to be hereafter one class of agents ' Though the petitioners holding "permanent ' licences and the petitioners holding 'temporary" licences with a term to run out have relied upon the fact that their licences are still valid	 there was no serious attempt to deny that under section 202(1) they would be rendered ineffective after the date to be fixed by Government. The "permanent ' licences 115 also are not in a favourable position in this regard. If the first sub section requires that fresh licences to work as Custom House Agents be obtained	 the distinction between permanent and temporary licences ceases to be material. No part of s.202 was challenged as being void or ultra vires. In these petitions	 only the Rules &ire challenged as in breach of the fundamental rights under articles 14 and 19 of the Constitution and Also as being in excess of the rule making power conferred by sub section (2) of section 202. Form prescribed under the Rules for taking security from the approved agents is also questioned as being in excess of the power to make rules and contrary	 in certain respects	 to the itself. It may be mentioned that the petitioners in all the Writ Petitions are Dalals; but at the hearing	 certain Clearing Agents obtained permission to intervene	 and were also heard. Since the 	 ' in general and section 202	 in particular were. not challenged in the petitions	 we must start with the premise that the authority to insist 	 on fresh licences under the Rules in the case of all the operators was properly exercised. The first question to consider is whether the Rules	 speaking generally	 were validly framed and the next question to consider is whether any of the. Rules individually challenged goes beyond the 	 or offends against the Constitution. In questioning the Rules generally	 the petitioners submit that these Rules could only be framed for the purpose of carrying out the purposes of s.202 [ provide sub section (1) ]	 or	 to provide for the	 matters 'mentioned in cls. (a) to (f) of section 202(2). Some of the Rules. it is submitted	 go beyond the general purpose of the section	 which is to license agents and the special 'topics mentioned there	 and seek to further some of the purposes of other parts of the Act. Mention in this connection 116 is made specially of Form 'O ' prescribed by the Rules	 under which the agents personally and the security furnished by them have been made liable for short collection of Customs duty	 etc. The question whether the agents are liable	 in any event	. for such short collection under section 39 is a question	 which will have to be examined on merits separately	 but for repelling the argument in its present from	 it is sufficient to say that it is robbed of all its force by a. 9 of the . under section 202(2)	 the Chief Customs authority is empowered to make rules for the purposes of t hat section. That purpose is the licensing of agents and the regulation of their conduct and functions. But the Chief Customs authority is also empowered by section 9 to make rules consistent with the " 'generally to carry out the provisions of this Act". The power to make rules under section 202 is not the only power which the Chief Customs authority can exercise	 and it is only too clear that power can also be derived from section 9	 if there be need. Thus	 if it is necessary that the agents must carry out certain provisions of the Act	 a rule can be made in the exercise of the two powers together. Though the impugned Rules are headed as framed under s.202 of the .	 they cannot be questioned	 if they carry out not only the special purposes of s.202 but also certain other purposes of the Act	 because the two powers will concur to sustain them. It is only when a rule or rules are pointed out	 which subserve neither the special purpose of the section nor the general purposes of the Act that they can be successfully questioned. In short	 therefore	 the petitioners ' case on the individual Rules alone remains to consider. The first contention is that under the impugned Rules	 the number of licences to be granted at the Customs House can be limited by the Customs. collector	 and that applications can only be made	 if the Customs collector publishes a notice inviting 117 applications. This restriction	 it is contended	 is unconstitutional	 as it interferes with the right of all the petitioners to carry on their profession or a vocation freely as contemplated	 by Art	 19. The Rules bearing upon these matters are rr.4 and 8. The latter Rule says that the number of licences to be granted would be fixed by the Customs collector	 having regard to the volume of import and export business transacted through the Customs House	 and the number is capable of being revised from time to time. The former empowers the Customs collector to invite applications	 as and when he considers it necessary. It cannot be said that the Rules are not designed to advance public interest	 because even a processions or trade has sometimes to be limited in the public interest	 When we pointed out to Mr. Gupta that this kind of limitation on the number of persons allowed to hold licences is common	 as	 for example	 porters in a railway station	 taxicab drivers and so on	 he stated that at least during the transitional period	 the old operators might have been given licences on production of proof that they held licences previously. The argument is really not one based upon the interests of the public but upon the interests of the present holders of the licences. Public interests in the context must override private interests. It cannot be said that all the present operators are equally desirable	 and if their number exceeds the requirement of the Customs House	 it is obvious that some retrenchment in their numbers may legitimately be made	 Every one has an equal chance of applying for the. existing vacancies	 but he must stand in. competition with the others. There is no limitation on the number of applications that can be made	 and thus	 every operator will get ' a chance to have his case examined. It is to be expected that the most exprienced and the most efficient will get preference	 and. no claim can be made on behalf of the incompetant and the inefficient that they should 118 receive equal treatment. Once the number is limited to the requirements of the business	 it is manifest that the Customs collector will invite applications only	 as and when occasion demands. These Rules	 in our opinion	 cannot be said to ' offend against the Constitution. The next contention is about rr.6(a)	 (b) and (c)	 which require the applicant to furnish to the Customs collector satisfactory evidence as to his respectability	 reliability and financial status	 and that he would be in a position to muster sufficient clientele and business in the event of his being granted the licence. The applicant has also to furnish an income tax clearance certificate. These conditions are challenged as being unreasonable restrictions upon the right to carry on a profession or avocation. Serious attempt was not made to establish that the condition about respectability and reliability was unconstitutional. It was	 however	 pointed out that evidence about financial status created a class barrier between the rich and the poor and only the rich were to be preferred. By the words financial status" is not meant that the applicant must be a wealthy person; what is required is that he should not be financially embarrassed	 and proof that he is in easy circumstances. It is obvious that the agents under the Act deal with vast sums of money and valuable articles	 and it may be necessary to scrutinise the financial position the applicant to find out whether or not he would be exposed to temptations. A person heavily indebted or insolvent cannot be trusted in the same way as a person who is not so embarrassed	 and an enquiry into financial status is so much in the public interest	 that we cannot say that the condition must necessarily be unreasonable. Similarly	 the argument. that new entrants would find it difficult to assure that they would have sufficient clientele and business and would thus be discriminated against	 is not correct. The Customs House is not a place where persons can allowed to learn a 119 profession or to take a chance. The movement of goods	 the due performance	 of the duties and functions under the and observance of the regulations are not easy matters for a person	 who is not sufficiently experienced and who has not got the backing of a certain amount of business and the experience which such business affords. It may be necessary for a person to apprentice himself for some time to get to know the importers and exporters	 and to prove to the Customsauthority that by reason of his apprenticeship and his business connections lie would be in a position to handle the work in the Customs House from the moment he is licensed. The Rule is designed to avoid entry into the Customs House premises of persons who	 being there	 are unable to do business	 and merely add to the number of persons present. The last condition is the production of an income tax clearance certificate. The petitioners rely upon a decision of the Madras High Court reported in K. Raman and Co. vs State of Madras (1). In that case	 it was hold that the fact that a person was in arrears of income tax was not germane to the issue of a licence under the Yarn Dealers Control Order	 and that the insistence on the production of an income tax clearance certificate was extraneous to the carrying on of the business. The position of an agent who handles other persons ' moneys and goods is different from that of a dealer who deals with goods on his own behalf. As part of an enquiry into an applicant 's respectability	 reliability and financial status	 an enquiry can also be made to see whether he has discharged his debts to the State. If a person is liable to income tax and pays it punctually	 he would have no difficulty in proving it. If	 however	 for some good reason the payment has been delayed	 there would be nothing to prevent. him from proving it. (1) A.I.R. 1953 Mad '. 8A. 120 insistence upon the production of the certificate is	 in our opinion	 connected with the enquiry into his respectability and financial status. to find out if he can be trusted with other persons ' money and goods. The next Rule which is questioned is r. 9	 which provides for an examination of the applicant. This examination follows a scrutiny of the application under the other Rules	 and embraces questions on various subjects. The duties of the agents require them to handle goods	 and the examination is designed to find out whether a candidate knows the elements of the law relating to the arrival	 entry and clearance of vessels and goods. Objection is not raised to the examination as a whole but only to cl. (p) of r. 9 (2) under which a candidate is supposed to know the procedure in the matter of refund of claims	 appeals and revision petitions under the . It is contended that these are matters in which an agent is not interested as an agent	 but are matters for the owner and the Castoms authorities to know. It is true that the curriculum for the examination is somewhat extensive ; but it is also	 clear that what is expected of the candidate is knowledge	 not necessarily exhaustive but sufficient	 of the laws relating to the arrival	 entry and clearance of vessels and goods. We do not think that it is wrong for the. authorities to insist upon at least a working knowledge of the laws applicable to the kind of work the agents are required to do. When licences are issued under other laws	 a candidate is sometimes required to answer questions relating to the law under which the licence is issued. One well known example is the questioning of a candidate about the rules of the road when he is issued a licence to drive a mechanically propelled vehicle. These Rules advance efficiency	 and the additional know	 ledge about refunds	 appeals and revisions under the Act may be necessary where an agent handles 121 goods of a principal	 who is himself not present to file appeals or revisions or to claim refunds. The Rule	 in our opinion	 is perfectly valid. Rule 10 is the next subject of attack. It provides that the Customs collector shall reject an application	 for the grant of a licence (a) if the candidate fails to pass the examination	 or (b) the number of vacancies do not justify the grant of such licence	 or (c) the applicant is not otherwise considered suitable. Objection is taken to cl. It is said to confer a very wide discretion on the Customs collector	 and reference is made to sub r.(2)	 in which it is provided that no appeal shall lie from the order. of the Customs collector rejecting an application. It is further pointed out that in July	 1960	 the Rules were amended by the addition of r. 25	 under which an appeal is to lie to the Chief Customs authority against every order of the Customs collector (i) rejecting an application for the renewal of a licence granted under these Rules; (ii) rejecting a fresh application made in accordance with r. 17 ; and (iii) refusing the grant or renewal of a special temporary licence under r. 24. It is argued that even though an appeal has been provided for these matters. 	 no appeal has been provided for the rejection under r. 10(1)(c). No doubt	 other reasons may exist for rejecting the application of a candidate	 as for example	 when he is found to be a leper or an epileptic ; but one would expect that an order of this kind would ' be backed by reasons to be recorded in writing. It must be remembered that there is first a scrutiny of the application and an enquiry into the respectability	 reliability and financial status of the candidate. follows an examination	 If a ' candidate satisfies 'all the above condition 's	 there would hardly be any ground left. for rejecting his application	 except probably his physical unfitness to. the work	 The Rule which: is framed is so gel general that it leaves to discretion of the 122 Customs collector to reject a. candidate for a trumpery reason (which he need not state)	 even though the candidate may be otherwise suitable. In out opinion	 if a candidate is found fit under the other Rules and has successfully passed the examination	 he should only be rejected under a rule which requires the Customs collector to state his. reasons for the rejection	 and the rules must provide for an appeal against that order	 as they do in the other cases. As the Rule stands	 it cannot be considered to be a reasonable restriction upon the right of the successful candidate to carry on his avocation. The next Rule which is questioned is r. 11	 which enjoins the payment of a fee of Rs. 50 both for a fresh application as well as renewal of the licence. In so far as the fee for the grant of a licence in the first instance is concerned	 it cannot be said that the charge is exorbitant. It is not disputed that a fee is an amount collected to reimburse the Government for the expenses of licensing. It must reasonably be measured against the cost which may be entailed in the process of granting licences. In the initial stage	 the Customs authorities have to scrutinise applications	 subject the candidates to an examination	 and provide them with licences to carry on their work. A fee of Rs. 50 initially may not be considered unreasonable	 regard being had to the services involved. The same	 however	 cannot be said in the case of renewals. It is pointed out in the petition that formerly the charge was only 50 nP. It is averred in the petition that all that the licensing authority does	 is to make an endorsement on the licence that it is renewed for a further period. It has been ruled in this Court that under the guise of a fee there must not be an attempt to raise revenue for the general funds of the State. In our opinion	 a renewal fee of Rs. 50 does not entail services which can be reasonably said to measure against the charge. It may be pointed out that	 though this averment was made in the petition	 123 No. attempt was made by the answering respondents to traverse it. In our judgment the renewal fee of Rs. 50 ceases to be a fee	 and is	 in its nature	 a tax to raise revenue. Such an impost cannot be justified ' as a fee	 and we accordingly	 hold that this charge is improper. It would	 however	 be open to the Government to frame a rule in which the renewal fee to be charged is reasonable in the circumstances. The next objection is to sub r.(g) and sub r.(k) of Rs. 15. Sub rule (g) requires a Custom House Agent to pay over to Government all sums received for payment and to account to his client for monies in his hands. Sub rule (k) requires him to maintain accounts in such form and manner as may be directed from time to time by the Castoms collector	 and submit them for inspection to the Customs collector or an officer authorised by him. No exception can be taken to sub r.(g) which only states what must be regarded as an inevitable obligation on the part of the Agent. Sub rule (k) is said to be excessive control on the part of the Customs authorities of the way in which the agent may keep his own account. :The licensing of an agent creates an assurance		 in the minds of the prospective clients	 and the Rule is designed to ensure that the monies which the agents handle are properly accounted for. In our opinion	 these Rules are salutary	 and further the control over the agents	 who stand in a fiduciary capacity both in regard to their own clients and the Government. Rule	 17	 which enjoins upon a firm which acts as a licensee to report to the Customs collector as early as possible and	 in any event	 within a period of three days of a change in the constitution of the firm	 is next challenged. It is said that the period of three days is too short ; but it" must be remembered that 'a large number of transactions may go through without the licensing authority being aware that the constitution of a firm has changed. The Rule is designed to bring promptly to the notice 124 of the Customs collector the change in the constitution of the firm	 so that he may be in a position to decide for himself whether the licence in the changed circumstances should be allowed to operate or be suspended or revoked. In our judgment	 this Rule	 cannot be questioned. Mr. Porus Mehta who argued the case on behalf of the Clearing Agents	 stated that the newly constituted firm is required to make a fresh application which is to be dealt with in accordance with the provisions of rr. 6 to 13. According to him	 every change in the	 constitution of the firm requires the firm to go through the entire process of scrutiny and examination	 which he ' terms unnecessary. The rule is designed to ensure that the new members of firm answer the requirements which have been laid down is Rules 6 to 13	 and these requirements may be necessary	 if new	entrants come in. It is to be noticed that pending the disposal of the application	 the Customs collector is authorised by the rule in his discretion to allow the existing firm to carry on the business of Custom ' House Agents. This softens the rigorous of the rule	 because the work of the agents in proper cases would not be hampered	 and the application would stand over for disposal to a later date. Rule 19 which also enjoins the maintenance and inspection of accounts by a firm was criticised in the same manner as was r. 15	 and for the reasons which we have given	 we hold it to be conducive to the proper control of the financial activities of a firm as licensee. Rule 22 deals with the cancellation of the licence for failure of the agent to comply with Any conditions of the bond executed by him	 under "the Rules	 for failure to comply with any of the	 provisions of the Rules and for misconduct on. his part which	 in the opinion of the Customs colloctor renders him unfit	 to transact business in the 125 Customs House. It is contended that	the rules are so exhaustive and numerous thatno agent would ever be able to keep out of theoperation of that Rule	 and that he would be ' perpetually exposed to the penalty of suspension or revocation of his licence. Rules are made for compliance and not for breach	 and even though strict	 they are all designed to ensure efficient and proper working on the part of the agents. A rule insisting upon such compliance with the other rules on pain of penalty _cannot be said to be outside the rulemaking power of the Customs authorities. Every order of suspension or revocation is subject to appeal	 and there is thus room for interference if the Customs collector acts arbitrarily or perversely. In our: opinion	 with the existence of an appeal	 the rigour of the rule	 if any	 is taken away except in those flagrant cases	 where suspension or revocation of the licence would be merited. Lastly	 it is contended that the Rules control a licensed agent in a manner which makes him an unpaid servant ' of the Customs authorities. This is one way of looking at the matter. The right way to look at it is that a profession is being regulated	 and the profession is one in which an agent deals with the property of another and by the law is deemed to be owner of the property. A person in such a high fiduciary position must	 of necessity	 be subjected to strict control	 and the licensing authority in holding him forth to the prospective principals as a reliable and trustworthy person must see that persons acting on the faith of the assurance of the licence are in no way damning. The Rules	 therefore	 subserve a very salutary and necessary principle	 and	 in our judgment	 are designed to advance public interest and cannot be questioned	 unless a person wishes to act	 dishonestly and wants to avoid control. It is wellknown that many underhand practices are common at Customs Houses	 and 'the Customs authorities 126 have to be vigilant in preventing them. They must	 therefore	 see that they do not license the wrong type of person is and in the interests of the Revenue and more so	 in the inte rests of persons who employ licensed agents	 these Rules have	 been framed. Looking at the Rules generally	 we are of opinion that though they	 are strict	 they axe Absolutely necessary	 and their strictness would be felt only by persons	 who	 are not otherwise honest. The main argument in the case is upon r.12 read with From It	 which is the bond which every applicant has to executive in favour of the President of India	 and its enforcement against the applicant under certain 'circumstances. Under r. 12	 it is provided that before a licence is granted under the Rules	 the Customs collector shall require the applicant to enter into a bond in Form 'C ' for the 7 due observance of these Rules. and the conditions of his licence and also to furnish a security of Rs. 3	000 in cash or securities and a solvent surety for a sum of Rs. 2	000. The surety is required to execute ' a separate bond in	 Form 'D '. A proviso added to the 'Rule says that the security may be: increased or	 decreased by the Customs collector at any time	 should he	 consider it necessary to do so	 having regard to the volume and type of the business which the applicant will transact as Custom House Agent. It may be mentioned here	 that the four classes of agents which had grown in the past have now been fused into one	 and an agent under the Rules may not confine his activities to those of any one or more of the four classes previously existing. Objection	 however	 is taken to the basic figure of security and particularly	 the cash security of Rs 3000	 which are innovations under the present Rules. Reference is made to the provisions of Form 'C '	 in which it is provided as follows: 127 "It is also agreed and declared that the President of India may apply the above sum of Rs. . in making good wholly or in part	 any short collection of duty or other charges in respect of any transactions made by the said. on behalf of importers in the event of such sums remaining unpaid		 even after issue of demands under section 39 of the . " The petitioners contend. that the increased security	 particularly	 in cash	 puts an unreasonable restriction upon the right to carry on the profession or avocation. They point to the fact that in the	 past a security of Rs. 2	000 had been considered adequate	 and from 1937 onwards	 that security alone was demanded. They also contend that as Dalals they are only required	 to present the shipping bills and the assessment or appraisement of the customs duty is the function of the Customs Officer. If any mistakes are made	 due to an error on the part of the Customs authority	 or even due to a wrong declaration of the real value of the goods by the importer	 the collection of duty should be made from the owner of the goods and not from them. They also contend that this is the meaning and intent of section 39	 which	 in terms	 makes the owner of the goods liable to make up for the short collections and puts no responsibility on the agents. They further. contend that the last clause of the bond	 quoted earlier	 makes the agent liable for payment of the balance of the duty before any attempt is made to recover it from the owner or importer. The last point need not detain us long	 because it is raised on the existence of the ' word " 'even" in the clause "even after issue of demands under section 39 of the ". The word "even" does not mean that the agent 's security can be touched before the notice is given. It rather indicates that the security would be utilised to make up the deficit only when a notice 128 is given and if even after notice there is no compliance. This would indicate that before the 	security is so utilised	 a notice must go to the agent or his principal	 and the bond makes the notice a sine qua non of an action to recoup the deficit duty from the security amount. The larger question whether the agent can be made responsible for the short collection of duty under s.39 may be deferred for the moment. Previous to the promulgation of the Rules	 there were	 as already stated	 four classes of Agents	 and their duties	 by custom and usage	 were also different. It is now contemplated to make a single class of agents and also to restrict the number of such agents. It is quite clear	 therefore	 that the amount of business which would be done by the agents who are licensed	 would grow significantly. Also	 each agent would be entitled to do all kinds of businesses which were handled separately. This justifies the demand for increased security	 and it should be noticed that there is room for the reduction of the duty in individual cases	 if the amount of business which the agent would carry on	 would be small. Similarly	 there is provision for demanding increased security from a person who does or is expected to do a much larger amount of business as an agent. There is thus no room for a proper adjustment of the amount of security to be obtained from each individual licensed agent	 commensurate with the volume and type of business which he will transact. We do not	 therefore	 consider that r. 12 is defective on this ground. Before we deal with section 39	 it is necessary to review certain other sections of the . Under the 	 it is not obligatory upon a principal to appoint a licensed agent. An importer or exporter	 as the case may be	 can also appoint any person with the approval of the Customs collector as 129 his agent	 who need not be a licensed agent. (R.3). The Rules are me ant to control action of agents	 particularly the licensed agents. Under the Act	 the position of an agent	 whether licensed or not	 is indicated in section 4	 which reads "When any person is expressly or impliedly authorized by the owner of any goods to be his agent in respect of such goods for all or any of the purposes of this Act. and such authorization is approved by the Customs collector	 such person shall	 for such purposes be deemed to be the owner of such goods." 	 One of the duties of the ' owner of the goods is to make a declaration of the real value of the goods in a bill of entry or shipping bill. Under section 29	 on the importation into	 or exportation from	 any customs port of any goods	 whether liable to duty or not	 the owner of such goods must	 in his bill of entry or shipping bill as the case may be	 state the real value	 quantity and description of such goods to the best of his knowledge and belief	 and must subscribe a declaration of the truth of such statement at the foot of such bill. Under the same section	 the Customs collector may require the production of invoices	 broker 's note	 policy of insurance or other document to satisfy himself about the real value	 quantity or description of such goods. The Customs Collector is also authorized to inspect the goods for the same purpose. Under sections 29A and 29B	 there may be an assessment of duty prior to the examination of the goods and a provisional assessment of duty and its payment even prior to	 the production of the documents above mentioned or the inspection of the goods. Section 30 of the Act defines "real value" and that is the value on which the assessment of the goods takes place. That section is not dependent upon the 'declaration of the owner	 but defines "real value" in terms of a formula which	 on its application determines of the real value	 apart from any declaration. 130 Section 31 provides for the examination of ad valorem goods	 and if the real value such goods is correctly stated in the bill of entry or shipping bill	 the goods are assesssed in accordance therewith. Section 32 provides for the procedure	 if it appears that such goods are properly chargeable. with a higher rate or amount of duty than that to which they were subject according to the value stated in the bill of entry or shipping bill. The Officer may then detain the goods and collect the proper duty. Sections 33	 34A and 35 deal with abatement allowed or disallowed under certain circumstances. Sections 36	 37 and 38 deal with the alteration of import and export duties or tariff valuations. When the proper duty has been paid according to the checks and inspections	 if any	 the goods are allowed to be cleared. Section 39	 as the marginal note	 shows correctly	 deals with payment of duties not levied	 short levied or erroneously refunded. 	 The first subsection	 provides as follows : "(1) When customs duties or charges have	 not been levied or have been short levied through inadvertence	 error	 or collusion or misconstruction on the part.of the Officers of Customs	 or through misstatement as to real value	 quantity. or description on the part of the owner or when any such duty or charge	 after having been levied	 or has been	 owing to any such cause	 erroneously refunded	 the person chargeable with the duty or charge which has not been levied or which has been so short levied or to whom such refund has erroneously been made	 shall pay the duty or charge or the deficiency or repay the amount paid to him in excess.	 on a notice of demand being issued to him within three months from the relevant date as defined in sub section (2); 131 and the Customs collector may refuse to pass any goods belonging to such person until the said duties or charges or the said deficiency or excess be paid or repaid	 ' The second sub section need not be quoted, because ,it does not bear upon the controversy. The contention of the Petitioners is that although in the first paragraph of section 39(1) the word owner" may comprehend an agent who is deemed to be an_owner	 if authorised under the Act	 the	 section does not use the word "owner" in the latter part	 and speaks of "the person chargeable with the duty"	 meaning thereby a change over to the real owner of the goods in contradistinction to the agent. They urge that this is even more apparent from the words of the fourth paragraph of the first sub	section which authorises the Customs collector to refuse to pass any goods belonging to "	such person" which must mean the goods belonging to the real owner	 who is properly chargeable with the duty. It is contended	 therefore	 that as the agent is not within the reach of s.39	 the demand of duty from him cannot be made	 and that the provisions of the bond by which the agent and his security are made liable	 are beyond the provisions of section 39 and thus invalid. One	 thing is clear that the Customs authorities may have no dealing with the real owner of the goods where the agent has been authorised to deal with them for the purposes of the or any of its provisions. Section	 4 clearly lays down a fiction	 that if the agent is authorised by the real owner in respect of any of the matters in the Act	 the Customs authorities would deal ' with the agent as if he were the owner. The effect of the fiction is	 therefore	 to make an agent answerable to the Customs authorities within the four corners of his authorisation. The fiction operates only within those limits. An agent may be authorised 132 to declare the real value and to pay the customs duty or other charges. If an agent is authorised in this manner	 under the fiction created by section 4 he would be regarded as the owner and would be dealt with as such	 by the Customs authorities. It bar	 already been pointed out that the real value	 quantity and description of the goods have to be declared in the bill of entry or the shipping bill. A form was shown to us at the bearing in which the declaration has to be made either by the real owner or the agent. The form emphasis also that all responsibility for the declaration and for the payment of the proper duty and charges may be taken by an agent. Once an agent has made a declaration and has also been authorised to pay the duty etc. 	 it is to him that the Customs authorities would look for payment or additional payment	 and it is to him that refunds would be	 made. The Customs authorities would not deal with the real owner	 and that is the scheme of the Act. When section 39 says that where customs duties or charges have not been levied or have been short levied through inadvertence	 error collusion or misconstruction on the part of the officers of Customs	 or through misstatement as to real value	 quantity or description on the part of the owner	 it refers not only to the real owner		 but also to an agent	 if the latter can be deemed to be the owner. 	 This is indeed	 conceded by the petitioners. The question then arises	 what does the section mean when it speaks of " 'the person chargeable with the duty or charge which has not been levied or Which has been so short levied	 or to whom such refund has erroneously been made"? Obviously enough	 the person to be charged	 in so far as the Customs authorities are concerned	 is not the	 real owner but the agent	 a fictional owner of the goods. If a 'fictional owner	 can be read into the first part 133 of the section there is no reason why the words "the person chargeable with duty" cannot also be applied to him. In the circumstances in which the agent makes a declaration with authorisation from the real owner	 the agent is the person chargeable with the duty. Otherwise	 for the duty chargeable in the first instance the agent would be the person charge able with the duty and 'for any short payment he would cease to be such a person and the Customs authorities would have to deal with the real owner	 who made no declaration or payment. The words "the person chargeable with the duty. "	 therefore	 have advisedly been used not to exclude the agent but to describe in a neutral way the person from whom such a demand can be made. They are wide enough in their ambit to take in	 not only the real owner but also a "deemed owner" under the Act. So far	 there is no difficulty	 and the objection of the learned counsel for the petitioners that a simpler method would have been to use the word " 'owner" in this part of the section 	is without substance	 because the legislature may express its meaning and intention in different ways. The critical argument	 however	 is	 on the. fourth paragraph of section 39(1). There	 it is provided that if the excess charge is not paid	 "the Customs collector may refuse to Pass any goods belonging to 'such person ' until the said duties or charges or the said deficiency or excess be paid or repaid". It is contended that an agent deals with numerous owners at the same time	 and if this paragraph is applied literally	 then the Customs collector would be entitled to refuse to pass the goods belonging to other Owners	 handled by the same agent. This argument	 in our opinion	 does not represent the true state of the law. An agent	 when he works for different owners with authorisation	 undoubtedly becomes a fictional owner of the goods belonging to them; but he does not become. a single	 owner in respect of the good belonging to 134 different clients. He becomes an owner quoad each client and his ownership of the goods is diversified and is not one. The agent	 therefore	 stands in the shoes of several persons at the same time	 and is himself a multitude of owners. It is only when short payment has been made in his capacity as one fictional owner	 that he can be asked to pay that which he ought to have paid in the first instance. He is exposed to the penalty of having his goods detained in the	 same capacity as owner quoad his defaulting client	 and the goods within his control for the same client will be detained until the duty has been paid. It is only the goods of the defaulting owner in respect of which he is also the deemed owner	 that would suffer the penalty of detention but not the goods of a different owner	 even though the agent may be authorised to deal on his behalf. It is in this way that the section must be read ' without contradiction in its several parts	 because to read it as suggested by the petitioners	 creates a contradiction between the first paragraph and the other paragraphs that follow. An authorised agent is an owner for all purposes of the Act (including payment of duty). If one were to say that in the other paragraphs of section 39(1) he is not included	 then the fiction which is created by section 4 would cease to be worked out to its logical limits. Once it is held that the words "	 'the person chargeable with the duty. . . are apt to describe not only the real owner but also his authorised agent (and there is no reason why these words should be restricted)	 the fourth paragraph falls in line with the others	 and the ownership of the agent is	 therefore	 limited to one client at a ' time	 and the goods of that client of which the agent is also the deemed owner	 are exposed to the. penalty of detention. It must be remembered that the Act makes the 'goods ' liable to duty and the payment of duty by owners clears the goods. The law goes further	 and says that other goods of the owner are also liable for an deficit	 if the 135 liable to duty are 'cleared. ' before the full duty has been paid. The condition in the bond is limited by the operation of s.39 to the transactions of one constituent at a time	 and the for feature of security is also limited to the constituent in default. The bond prescribes for recouping of the deficiency in the customs duty or charges from the security	 even after notice is given. This notice must be given within three months from the relevant date as demand in the section. The limit of three months also applies to the agent as the deemed owner in the same way as it does to the real owner. If no notice. is given	 then the bond	 on its own terms	 cannot be enforced. In our opinion	 the contentions of the petitioners are not	 sustainable. In the result	 the petitions must fail except to the extent that we declare r. 10(c) to be an unreasonable restraint upon the right of the petitioners to carry on their avocation and r.11 when it prescribes a renewal fee of Rs. 50	 invalid inasmuch as it has provided not for a fee but for a tax. Subject to this	 the petitions are dismissed. The petitioners will pay the costs of the other side (one set only)	 as they have lost substantially. SUBBA RAO	 J. I have	 had the advantage of '	 perusing the judgment prepared by my learned brother	 Hidayatullah	 J. I agree with him except in regard to r. 6(c) of ' the Custom House Agents Licensing Rules	 1960 (hereinafter called the Rules). Rules 6(c) says : "An applicant for a licence shall furnish an income tax clearance certificate. " The Rules were made to regulate the conduct of the clearing agents so that they may discharge their duties to the satisfaction of not only the Customs Authorities but also the public. In my view	 the production of income tax clearance certificate is extraneous to the issue	 of a licence to a customs house agent. How ' does the 'production of such a certificate improve the credentials of an applicant 136 for selection as a customs house agent	 An applicant may be financially sound and also otherwise duly qualified; he may have discharged all his debts	 and paid all his taxes except a small portion of his income tax: he may not have paid the income tax for good reasons. Yet	 if he goes. not produce the income tax clearance certificate	 he is disqualified. What is. the reasonable nexus between the production of such a certificate and a person 's right to do business as a clearing agent ? There is none	 except a remote and fanciful presumption that a man who pays the income tax. may also pay the dues payable to the Customs Authorities. In K. Raman & Co.	 Tellicherry vs State of Madras (1)	 in the context of issue of a licence under the Yarn Dealers Control Order	 as Judge of the Madras High Court		 I have held	 "the fact that a person is in arrears of income tax is not germane to the issue of a licence under the Yarn Dealers Control Order. It is a	 circumstance extraneous to the petitioner 's right to carry on his business. The Income tax Act provides an adequate machinery for realising the arrears due from an assessee. I am of the view that the restriction imposed is unreasonable and is not in the interests of the general public. " I still adhere to that view. Every taxing Act has a machinery for collecting the tax imposed by it	 but the said rule	 in effect and substance	 provides for an additional machinery for collection of income tax. I would	 therefore	 hold that the nonproductive of an income tax clearance certificate is not germane to the issue of a licence under the said Rules. I would therefore strike out r.6(c) of the Rules on the ground that it constitutes an unreasonable restriction on the right of an applicant to do business as customs	 house agent	 (1) A.I.R. 1953 mad. 137 BY COURT: In accordance 'with the opinion	 of the majority	 the petitions must fail except to the extent that we declare r.10 (c) to be: an unreasonable restraint upon the right of the	 petitioners to carry on their avocation	 and r.11	 when it prescribes a renewal fee of Rs. 50	 invalid inasmuch as it has provided not for a fee but for a tax. Subject to this	 the petitions are dismissed. The petitioners will pay the costs of the other side (one set only)	 as they have lost substantially.

The petitioners were working as Dalals at New Customs 109 House	 Bombay	 under licences issued under section 202 of the Sea Customs Act	 1 878. In 1955 by an amending Act	 section 202 was substituted by another section and	 by sub s.(1) of section 202 it was enacted : "no person shall act as an agent for the transaction of any business relating to the entrance or clearance of vessel or the import or export of goods or baggage in any custom house unless such person hold '$ a licence granted in this behalf in accordance with the rules made under sub section (2) ". By sub section (2) the Chief Customs authority was empowered to make rules for the purpose of carrying out the provisions of the section. Section 4 provided that "when any person was . authorised by the owner of the goods to be his agent in respect of such goods for all or any of the purpose	 of thisAct. such person shall for such purposes be deemed to be the owner of such goods". The petitioners who	 after the enactment of the news.202	 had to apply for licences to be granted in accordance with 'the rules framed under sub s(2)	 challenged the validity of certain of the rules on the ground that they contravened articles 14 and 19 of the Constitution of India and also that they were in excess of the rule making power conferred by s.202 (2). In particular	 they questioned power validity or r. 12 under which inter alia the agent was required to enter into a bond in Form C by which he was made liable for short collection of customs duty under section 39 and also to furnish security which might be increased or decreased by the Customs collector. Held : (1) that the rules in question though they were headed as framed under section 202 of the 	 cannot be impugned on the ground that some of them go beyond the special purposes of that section and seek to further some of the general purposes of other parts of the Act	 since the Chief Customs authority is also empowered under section 9 of the Act to make. rules consistent with the Act "generally to carry out the provisions of the Act." (2) that rr. 4 and 8 under which the Customs collector could limit the number of licences to be granted at the Customs House and applications could only be made if the Customscollector published a notice inviting applications	 do not contravene article 19 of the Constitution	 as they are only designed to advance public interest. (3) that rr. 6(a) and 6(b) which require the applicant	 to furnish to the Custom 's collector satisfactory evidence as to his respectability	 reliability and financial status and that he would be in a position to muster sufficient clientel	 110 and business in the event of his being granted the licencee	 are reasonable restrictions within the meaning of article 19(6) and are valid. (4) that cl. (p) of r. 9(2) whicn requires the licensee to have a working knowledge of the procedure in the matter of refund of claims	 appeals and revision petitions under the 	 is valid	 since it is necessary where an	 agent handles goods of the principal. (5) that r. 10 (1)(c) which gives the Customs collector a wide discretion to reject an application for the grant of a licence	 if he considers the applicant to be not suitable	 is an unreasonable restriction upon the right of the successful candidate to carry on his avocation	 and is invalid. If a candidate is found fit under the other rules and has successfully passed the examination	 he should only be rejected under a rule which requires the Customs collector to state his reasons for the rejection	 and the rules must provide for an appeal against the order. (6) that r. 11	 in so far as it prescribes a renewal fee of Rs. 50	is invalid inasmuch as it has thereby provided not for a fee but for a tax to raise revenue. It would be open to the Government to frame a rule in which the renewal fee to be charged is reasonable in the circumstances. (7) that rr. 15(g)	 15(k)	 17 and 19	 are designed to have a control over agents	 including firms which act as agents	 who stand in a fiduciary capacity both in regard to their own clients and the Government	 and are valid. (8) that r	 22 which enables the Customs collector to cance a licence for non compliance by the agent with the other rules or for misconduct on the part of the agent	 which in the opinion of the Customs collector	 renders him unfit to transact business in the Custom House	 is within the rule. making power of the Customs authorities and is valid. (9) that the words "the person chargeable with the duty or charge" in section 39(1) of the. Act are wide enough. in their ambit to take in	 not only the	 real owner but also a "deemed owner" within the meaning of s.4 of the Act. (10) that on its true construction of s.39(1) it is only the goods of the defaulting owner in respect of Which	 the agent is also the deemed owner that would suffer the penalty of detention	 but not the goods of a different owner	 111 even though the agent may be authorised to deal on his behalf. (11) that r. 12 read with Form C	 which makes an agent liable for short collection of customs duties under section 39	 is valid and the rule is not invalid on the ground that it enables the Customs authorities to make a proper adjustment of the security to be obtained from each individual agent commensurate with the volume and type of business which he might transact. Held	 further (Subba Rao	 J. dissenting	) that r. 6(c)	 which requires the applicant to produce an income tax clearance certificate	 is connected with the enquiry into his respectability and financial status to find out if fie can be trusted with other persons ' money and goods	 and is valid. K. Raman and Co. vs State of Madras	 A. I. R. 1953 Mad. 84	 distinguished. Per Subba Rao	 J. Non production of an income tax clearance certificate is not germane to the issue of a licence under the Custom House Agents Licensing Rules	 1960	 and the principle in K. Raman and Co. vs State of Madras	 A. I.R. 	 is applicable. Accordingly	 r. 6(c) constitutes an unreasonable restriction on the right of an applicant to do business as Custom house agent	 and is invalid.