Rashid Ahmed v. The Municipal Board, Kairana [1950 AIR 163, 1950 SCR 566]

Procedural History:

• This was the application under Article 32 (1) of the Constitution of India for the enforcement of the applicant’s fundamental right to carry on his business which was guaranteed by Article 19 (1) of the Constitution.
• The Supreme Court of India has original jurisdiction over the case as there was a violation of the fundamental rights of Rashid Ahmed.

Facts of the Case

• Rashid Ahmed, an Aratia(commission agent) has been carrying out his wholesale business in a rented shop in Bazar Jama Masjid of selling fruits and vegetables for two years now at Kairana in the District of Muzaffarnagar in the State of Uttar Pradesh.
• There have been no bylaws till now which regulate the sale of fruits and vegetables permissible within the municipality.
• In March 1949, the Municipal Board of Kairana published bylaws made under section 298 of the U.P. Municipalities Act, 1916. The bylaws were passed by the Municipal Board on 19^thApril 1949 and later, came into force on 1^st January 1950, till the time when our constitution of India also came into force.
• While amidst the passing of the bylaws, there was an action taken by the Municipal Board for the contract of wholesale of vegetables, thereby giving the monopoly right to do the wholesale business. The contract was auctioned to Habib Ahmad the highest bidder consecutive for 3 years and for Rs. 72750 payables in equal quarterly instalments in advance.
• On 31^st December 1949; the board also fixed another place for the wholesale trade of fruits and vegetables near Police Post Imam.
• Rashid Ahmed after knowing about the change in the place for wholesale applied for a license to carry out his wholesale business at his rented shop.
• Petitioner’s application was rejected by the Municipal Board following resolution no.188. the chairman of the board rejected the application, but no reason was provided for the rejection. It was later noted that ‘there were no by-laws made which can approve the request of the license. Also, it is noted that the place was auctioned to Habib Ahmad, so it can be one of the reasons for the rejection of the license.
• Later, notice was served to the petitioner Rashid Ahmed for not obeying the constant reminders given to him by the Municipal Board to not do business in Kairana district as it has already been auctioned to Habib Ahmad and a different place was allotted near Police Post Imam.
• After constant notices and verbal warnings, Rashid continued to sell his wholesale at the place which was auctioned to Habib Ahmad.
• According to Municipal Board, Rashid Ahmad’s conduct was unlawful and in contravention to bylaws of the Board.
• His whole business was stopped and was allegedly prosecuted for breach of Bylaws.

 Issues of the Case

• After several notices given to Rashid Ahmad to stop doing his wholesale business at the rented shop near Jama Masjid otherwise known as Qazi Wala, and rejecting his license for same, he continued selling vegetables and paid no heed to any notices served or verbal warnings given by an employee of the Board.
• After paying no heed to the notice, a complaint was registered under the bylaws in the Court of Pargana Officer, Tahsil Kairana. Though the complaint is still pending. Rashid is using the two-way street, selling his wholesale by auction and vegetable near Jama Masjid Bazaar.
• Rashid’s continued act of selling vegetables at the auctioned place has affected the interests of not only the Board but also the contractor. It was also suggested by the Board everybody can trade and do business in wholesale purchase and sale of vegetables at the place only approved by the Board, i.e., at the place near Police Post Imam.
• Only Habib Ahmad could business.

Has Rashid Ahmad violated the bylaws of the Municipal Board by selling the vegetables at Kairana district which was auctioned to Habib Ahmad? Why was Rashid Ahmad’s license refused without stating the grounds of refusal? Isn’t it Rashid’s fundamental right to trade or conduct business at any place he wishes to?

Holding (Judgement + Rule of Law)

It was held by the Supreme Court of India that Rashid Ahmad the petitioner – fundamental rights have been infringed and he is entitled to have his grievance redressed.

• It was also advised to the Board that the petitioner has the full right for carrying out the trade of the wholesale dealers and commission agent of selling fruits and vegetables within the limits of the Municipal Board only following the Bylaws. It was also held that the prosecution against the petitioner is dropped and to pay the costs of the damage. It is the fundamental right of every citizen according to Art. 32 of the Constitution for the enforcement of his fundamental right as a citizen to carry on his business which was guaranteed by Art. 19 (1) of the Constitution.
• It was also held that by-law no.2 became absolute as in the absence of the provision of authorizing the license to the petitioner and the municipal board for granting the license, the restrictions imposed were unreasonable.
• Therefore, bylaws were said to be void and the prosecution of the petitioner was illegal as it infringed the fundamental rights.
• Lastly, it was held that an appeal under Section 318 of the Municipalities Act does not provide legal remedy and thus disentitle the petitioner.

Rationale

The rationale behind the judgement given by the Supreme Court of India was that-

According to the Municipal Board, the petitioner Rashid Ahmed has violated by-law no. 2, by-law no.4.

1. By-law no. 2 of the Municipal Board which came into force on 1st January 1950 states that “no person shall establish any new market or place for wholesale transactions without obtaining the previous permission of the board, and nobody shall sell or expose purchasable any vegetable, fruit, etc. at any place other than that fixed by the board for the purpose”.
2. By-law no.4 of the Municipal Board permits that the grant of a monopoly to a contractor to deal in wholesale transactions at the place fixed as a market. Following bylaw no.4, the sole right to do business was auctioned for three years by the municipal board and was granted to the highest bidder, Habib Ahmad and another place was also fixed by the board for wholesale business.
3. The petitioner, Rashid Ahmad who has been carrying out his wholesale business for two years at a rented shop within the municipality before the bylaws came into force.
4. Though he applied for a license to continue his wholesale business, it was rejected, and the grounds of refusal was that no bylaw allows him to do so, and therefore, he was prosecuted for contravention of the bylaws.
5. On the other hand, the petitioner applied for under Article 32 of the constitution which states that the right of individuals to move to the Supreme Court to seek justice once they feel that their right has been ‘unduly deprived’. And unless there is some Constitutional amendment, the rights guaranteed by this text cannot be suspended. it is for the enforcement of his fundamental rights as a citizen to carry on his business which was guaranteed by Art. 19 (1) of the Constitution.
6. The prohibition of bylaw no.2 became absolute as there is no provision of issuing the license and the monopoly restrictions to do business were ab-initio as the scope of Article 19(6) of the Constitution of India. Therefore, the bylaws were declared void and the complaint filed by the respondent board was illegal.
7. Also, the fact that the constitution came into force after the bylaws came into force.
8. To be noted, According to Section 318 of the U.P. Municipalities Act, an appeal was made that the circumstance was not the correct legal remedy, the existence of which can be disentitle, Rashid Ahmad, from maintaining the application.

Therefore, according to all the points stated above, it was the rationale behind the judgement given.

Dicta

The Learned Advocate General of Uttar Pradesh stated that – in accordance to Section 318 of the U.P. Municipalities Act,1916- Rashid Ahmad’s appeal was legal, adequate, and certain. It was a request to the court to not grant any writ of nature, as the scope of Article 32 of the Indian Constitution is much wider and is not only confined to issuing writs.

Dissent

An appeal under section 318 of the U. P. Municipalities Act was not within the circumstances an adequate legal remedy the existence of which might disentitle the petitioner from maintaining this application.

Party’s Arguments

The respondent Municipal Board repeatedly stated that the change in place of wholesale was done “in the city by the beat of the drum through a Kharkob” (sweeper) that expect Habib Ahmad (contractor of vegetables in the Municipal Board of Kairana) no one can do the wholesale business of vegetables other than the place finalized by the Board. Still, Rashid kept selling vegetables by wholesale despite occasional verbal warnings conveyed through the employee of the Board. He was then served with a notice in writing dated 3rd January 1950. After paying no attention, then a grievance was filed against him under violation of bylaws of the Municipal Board.

The petitioner Rashid Ahmad’s lawyer stated that – he was doing the wholesale business at a rented shop in the Kairana District for about 2 years now when there was no existence of any bylaws. Now, if the place is auctioned to the contractor and we must do business in another place allocated by the Board, there was a problem. More than that, there was not a single bylaw that stated to grant the license to continue doing business at the original place, and his license was rejected.

It is the fundamental right according to Article 32 of the constitution and Article 19(1)(G) to practice any profession or to carry on any occupation, trade, or business.

Comments

The petitioner Rashid Ahmad’s rights were violated, and he was authorized to have his injustice redressed. The court ordered the Board to let the petitioner carry out the trade of his wholesale of vegetables and fruits which was in the jurisdiction of the Municipal Board. Once the bylaws will be framed in a way that has every provision, then only it will be legal and constitutional. It was also advised to withdraw the pending prosecution against the petitioner and to pay the cost.