Case Summary

Bhikaji Narain Dhakras & Ors. vs. The State of Madhya Pradesh & Ors

April 14, 2019

In the Supreme Court of India
Original Civil Jurisdiction
Case No. 
1955 AIR 781, 1955 SCR (2) 589
Petitioners
Bhikaji Narain Dhakras and Ors. 
Respondent 
The State of Madhya Pradesh and Ors.
Decided on
29^th September 1955
Bench
Sudhi Ranjan Das, Acting C.J.; H. Bhagwati; L. Venkatarama Aiyyar; Syed Jaffer Imam; 
Chandrasekhara Aiyar, JJ.

Background

During the time of independence, the Constitutional Courts did the stupendous work of interpreting the existing laws with our Constitution. The Doctrine of Eclipse was introduced and established in India with the help of this case. There was a detailed discussion on the application of the pre-existing laws, nature and effect of the Constitutional amendments and how the courts must determine the unconstitutionality of a particular law. Under the Motor Vehicles Act, 1939, a state government is given the power to control the road transport and in pursuance of it in the state of Madhya Pradesh, the C.P and Berar and Motor Vehicles Act was enacted. This case had questioned the constitutional validity of the C.P. and Berar Motor Vehicles (Amendment) Act, 1947 (Act III of 1948) and upheld the impugned Act to be valid.

Political Background

The Act in question was enacted before the advent of the Constitution. The Motor Vehicles Act, 1939 was created by British India where the central government and State government share similar powers in the modifying the rules regarding the road transport. The ultimate aim was to enhance the transport facility for the British officers to have a better control over the movement of goods from one place to another. Moreover, the state autonomy is also recognized by allowing the state governments in fixing the fares and freights for stage carriers, contract carriers and public carriers and rules regarding the permit. It allows the state to involve in the competition with the private sector creating a perfect market.

The State of Madhya Pradesh enacted the C.P and Berar Act with the aim of implementing the policy of nationalisation of the road transport business adopted by the government. Moreover, there was no concept of fundamental rights under the then prevailing Government of India Act, 1935. The impugned Act resulted in significant modifications in Motor Vehicles Act, 1939 which provides extensive powers to the provincial government. Accordingly, the provincial government was capable enough to disrupt the profession and property of the citizens of the state. But at the time of creation, the impugned Act is a valid piece of legislation.

Judicial Background

The pre-existing law is affecting the fundamental rights of the individuals and the issue arose whether under Article 13 of the Constitution of India, the Supreme Court can question an existing law. The fundamental rights were guaranteed to the citizens of India through the Constitution and it was embedded with the restrictions in the same section. Through the First Constitutional Amendment Act, 1951, Article 19(2) was amended and made expressly retrospective, whereas Article 19(6) was also amended but was not made retrospective. Thus it brings out the scenario that the impugned Act is subjective to the pre-amended reasonable restrictions under Article 19(6).

It was also contended that the right to property (the vehicles in the present case) is also affected by the impugned Act under Article 31 of the Constitution. The case was filed on 1955 but the Fourth Constitutional Amendment, 1954 (which amends Article 31 of the Constitution of India) came into force well before the petition. Thus the present case dealt with the nature of the C.P and Berar Act, 1947 and its consistency with Part III of the Constitution of India. Most importantly, the influences of the Constitution Amendment Acts were also critically analyzed.

Constitution and Statutory Provisions Discussed by the Hon’ble Court

Article 13 of Constitution of India (in 1955):

(1) All laws in the force in the territory of India immediately before the commencement of this Constitution, in so far as they are inconsistent with the provisions of this Part, shall, to the extent of such inconsistency, be void.

(2) The State shall not make any law which takes away or abridges the rights conferred by this Part and any law made in contravention of this clause shall, to the extent of the contravention, be void

Article 19(1) (g) of the Constitution of India:

All citizens shall have the right

(g) to practise any profession, or to carry on any occupation, trade or business

Article 19(6) of the Constitution of India before First Constitutional Amendment Act, 1951:

(6) Nothing in sub-clause (g) of the said clause shall affect the operation of any existing law in so far as it imposes, or prevent the State from making any law imposing, in the interests of the general public, reasonable restrictions on the exercise of the right conferred by the said sub-clause, and, in particular, nothing in the said sub-clause shall affect the operation of any existing law in so far as it prescribes or empowers any authority to prescribe, or prevent the State from making any law prescribing or empowering any authority to prescribe, the professional or technical qualification necessary for practising any profession or carrying on any occupation, trade or business.

Article 19 (6) of the Constitution of India after First Constitutional Amendment Act, 1951:

(i) the professional or technical qualifications necessary for practising any profession or carrying on any occupation, trade or business, or

(ii) the carrying on by the state, or by a corporation owned or controlled by the State, of any trade, business, industry or service, whether to the exclusion, complete or partial, of citizens or otherwise.

Article 31 of Constitution of India after Fourth Constitutional Amendment Act, 1955:

(2) No property shall be compulsorily acquired or requisitioned save for a public purpose and save by authority of a law which provides for compensation for the property so acquired or requisitioned and either fixes the amount of the compensation or specifies the principles on which, and the manner in which, the compensation is to be determined and given; and no such law shall be called in question in any court on the ground that the compensation provided by that law is not adequate. (2-A) Where a law does not provide for the transfer of the ownership or right to possession of any property to the State or to a corporation owned or controlled by the State, it shall not be deemed to provide for the compulsory acquisition or requisitioning of property, notwithstanding that it deprives any person of his property.

§58 of the Motor Vehicles Act, 1939 (Prior to the amendment by the Impugned Act

58 (1). A permit other than a temporary permit issued under section 62 shall be effective without renewal for such period, not less than three years and not more than five years, as the Regional Transport Authority may in its discretion specify in the permit.

Provided that in the case of a permit issued or renewed within two years of the commencement of this Act, the permit shall be effective without renewal for such period of less than three years as the Provincial Government may prescribe.

§43 of the Motor Vehicles Act, 1939 (after the amendment by the Impugned Act

(ii) fix maximum, minimum or specified fares or freights for stage carriages and public carriers to be applicable throughout the province or within any area or any route within the province, or

(iii) notwithstanding anything contained in section 58 or section 60 cancel any permit granted under the Act in respect of a transport vehicle or class of such permits either generally or in any area specified in the notification :

Provided that no such notification shall be issued before the expiry of a period of three months from the date of a notification declaring its intention to do so :

Provided further that when any such permit has been cancelled, the permit-holder shall be entitled to such compensation as may be provided in the rules; or

(iv) declare that it will engage in the business of road transport service either generally or in any area specified in the notification.

(3) Notwithstanding anything contained in sub-section (1), the Provincial Government may order a Regional Transport Authority or the Provincial Transport Authority to limit the period for which any permit or class of permits is issued to any period less than the minimum specified in the Act.

§58A of the Motor Vehicles Act, 1939

58-A. Notwithstanding anything hereinbefore contained the Provincial Government may by order direct any Regional Transport Authority or the Provincial Transport Authority to grant a stage carriage permit to the Provincial Government or any undertaking in which the Provincial Government is financially interested or a permitholder whose permit has been cancelled under section 43 or any local authority specified in the order.

The case also discussed Article 31A, 32 of the constitution of India and §299 of Government of India Act, 1935.

Facts

Five writ petitions (Nos. 189 to 193 of 1955) have been filed under Article 32 of the Constitution of India. The petitioners had been carrying on the business as stage carriage operator for years under permit granted to them under §58 of the Motor Vehicle Act, 1939. The petitions have the common objective of questioning the constitutional validity of C.P and Berar Act, 1947 as the resultant amendments in Motor Vehicles Act, 1939 has rendered enormous powers which would affect the fundamental right of the citizens to carry any business, profession, occupation or trade by significantly impacting the fares, duration of permit, monopolization of working field and acting as a threatening intervener.

In the state of Madhya Pradesh, C.P Transport Services Ltd and Provincial Transport Company Ltd are the major transport companies in which the state of Madhya Pradesh and the Union of India held eighty five (85%) of the share capital (at the time of filing of the writ petitions). With this alarming rate of influence by the government, the transport business of the private sector is highly affected which pose a threat to their livelihood.

Procedure:

The petitions were filed under Article 32 of the Constitution of India before the Hon’ble Supreme Court of India as it was contended that the fundamental rights of the citizens to carry on the business and right to property is affected by the impugned Act. The case was accepted as the Supreme Court is having the power to judicially review the Acts under the Original Civil Jurisdiction. The case has not approached the Apex Court through any appeal procedures. Since all the petitions share the same objective, this judgment disposes off all the five petitions filed before the Hon’ble Supreme Court.

Result of amendment in Motor vehicle Act, 1939

Extensive power was given to the government to fix the fares or freights throughout the province or for any route.
The power to cancel any permit after the expiry of three months from the date of notification declaring its intention to do so and payment of compensation.
The power to declare the intention of the government to engage in the road transport business or in any area specified in the notification.
To limit the period of license notwithstanding the minimum period specified in the Motor Vehicles Act, 1939.
To direct the specified Transport Authority to grant permit to the Provincial government or any undertaking in which the court is financially interested.

These powers are alleged to be violating the Fundamental rights of the stage carrier operators to carry out the profession, occupation, trade or business.

Issues which are in challenge

1. Whether the C.P and Berar Amendment Act, 1947 which amends the Motor Vehicles Act, 1939 is constitutionally valid?

2. Whether the impugned Act is violative of Article 19(1)(g) of the Constitution of India?

3. Whether the impugned Act is violative of Article 31 of Constitution of India?

4. Whether Article 13 of the Constitution of India allows the judicial review of pre-existing laws?

5. Whether the reasonable restrictions under Article 19(6) include prohibition and monopoly by state?

6. Whether the First and Fourth Constitutional Amendment Acts have retrospective effects?

Arguments

Contentions of the Petitioners:

The impugned Act is against Article 19(1) (f) of the constitution of India and since it contravenes Part III of the constitution of India, the act must is constitutionally invalid.
The law (impugned Act) became void because of the unconstitutionality of the Act.
The law was dead as a whole and it could not be vitalized by a subsequent constitutional amendment and by contravening the fundamental rights. The constitution objected the legislation going against Part III of the constitution of India (Article 13).
The fundamental right to property is getting affected as the impugned Act prohibits the right to ply motor vehicles for gain which is an interest in a commercial undertaking and thus the impugned Act contravenes Article 31 of the Constitution of India. (This point was not raised in the plaint/ petition but in the due course of the arguments)
The First and Fourth constitutional amendments which came into force on 1951 and 27^th April 1955 are not retrospective in nature and thus they cannot be applied to the present case.
Reliance has been placed on American authority, Cooley’s work on Constitutional Limitation, Vol. I, p. 384 Note and Indian case, Shagir Ahmed v. State of Uttar Pradesh and Ors., (1955) 1 SCR 707.
The impugned Act must be held unconstitutional as it contravenes Part III of the constitution of India.

Contentions of the respondents:

Though the impugned Act was inconsistent with Article 19(1) (f) when the Constitution came into force in 1950, by 1951 this defect was nullified by the First Constitutional Amendment, 1951.
The Fundamental rights conferred to citizens under Article 19 are not absolute and they are limited by the reasonable restrictions given under clauses 2 to 6 of Article 19 of Constitution of India.
The First constitutional amendment Act, amended Article 19(6) which was the clause that sets restrictions to the fundamental right of a citizen to practice any profession, occupation, trade or business.
The Act ceased to be inconsistent with the fundamental right to practice any profession as it is a step taken in general public interest and the amended clause allows the state to involve in a business and permits creation of law of state monopoly in respect of transport and it became operative even against its citizens.
Since it is not violative of any fundamental rights, the validity of the impugned Act must be upheld and the petitions must be dismissed.

Judgment

Ratio Decidendi

The judgment concentrated on the construction of Article 13 of Constitution of India. In Keshavan Madhava Menon v. The State of Bombay, by the majority decision, the Apex Court held that the word ‘void’ is already discussed and it is not a new or untouched subject matter. The law becomes not void in toto or for all purposes or all time or for all persons but only to the extent of such inconsistency with the Part III of the Constitution of India. Thus Article 13(1) cannot be construed as obliterated the entire functioning of the inconsistent law and law still governed the past transactions and for enforcement of rights and liabilities accrued before the Commencement of the Constitution and also even after the Constitution as of against the non-citizens. Hereby the doctrine of eclipse was established through this case.

If the Constitution was not amended then the impugned Act will be struck invalid to the extent it contravenes the right to profession but with the First Constitutional Amendment Act, 1951, the defect was removed. The First Constitutional Amendment allowed the state monopoly which was not permitted before the amendment.

After the amendment, clause (6) of Article 19 was not made retrospective and thus it is not applicable for the rights and liabilities that arose between 26^th January, 1950 and 18^th June 1951. But after the amendment, the restrictions are applicable to all the citizens of the country. The notification declaring the intention of the government to take over all the bus routes was published on 4^th February, 1955 when the state is having the power to make such a notification.

Regarding the contention that the fundamental right to property is affected by the impugned Act, the court held that the impugned Act is saved by the Fourth Constitutional Amendment Act, 1955 which amends Article 31. The impugned Act was inconsistent with Article 31 when the constitution was founded till 27^th April 1955. The present writ petition was filed on 27^th May 1955, exactly a month after the amendment came into force. It was held that on parity of reasoning the petitioners cannot be allowed to challenge the constitutionality of the impugned Act as the law was in consonance with the constitution.

Obiter Dicta

The Hon’ble Supreme Court is of the opinion that the case would have turned other way round, if the petition has been filed before 27^th April, 1955. Though the amendment Acts are not having the retrospective effect, with the delay in filing the petitions, the legal scenario that existed on the date of petition prevailed. The case was dealt by the Apex Court under both the situations, before and after the amendments. Through this type of analysis, the impact of every amendment is taken into consideration. It was accepted by the Hon’ble Court that the impugned Act will be inconsistent with Article 19(1) (6) when it was filed before 18^th June 1951.

The plea of contravening Article 31 was not given importance as the plea was not raised in any of the petitions and was submitted in the due course of the arguments. Since it was a point which will take the respondents in surprise, the court refused to accept the argument. Moreover, even if that point is taken into consideration, due to the delay in filing the petition, the impugned Act will be protected by the Fourth Constitutional Amendment Act, 1955.

The petitioners heavily relied on American Authorities which was not accepted by this Hon’ble Forum. The American Authorities apply only to the post-constitutional cases in America whereas; India had to deal with both pre-existing laws and post constitutional laws. It will not be appropriate to depend on the American authorities as they will not form a close analogy and the position of pre-existing laws cannot be equated with the post constitutional laws.

Parallel Developments

The case was filed before the court based on Shagir Ahmed case where the Uttar Pradesh Act was which is similar to that of C.P and Berar Act, 1947. But the case was presented before the constitutional amendments whereas, in the present case, the petitioners failed to take appropriate action within reasonable time. The Shagir Ahmed case held that word “restriction” must be construed as limitation and not extinction and if this finding is applied then the State monopolization in road transport by the provincial government is against the freedom of profession. Owing to the amendments in constitution, the provincial government is allowed to monopolize a particular field in the interests of general public and the reasonable restrictions include the power of the State to enter into competition and also to exclude the players from competition.

Pertaining to the doctrine of Eclipse, though it is the first case to establish the Doctrine, the essence of this principle was already discussed in Keshavan Madhava Menon v. State of Bombay. The Court affirmed that the law cannot be made void in toto and can be held invalid only to the extent that it is unconstitutional. It would be unjust that the legislation must be held invalid for a few unconstitutional provisions. Every law is subjected to change with tides of time and by striking down laws for few mistakes which will cause confusions in understanding the rights and liabilities of the Act.

Relevancy and Applicability

Will the case apply to the present scenario? No. The precedent was overruled by Deep Chand v. State of Uttar Pradesh and Ors. The Courts still follow the Doctrine of Eclipse which is evident from striking down §497 of Indian Penal Code as unconstitutional. But the reasoning in the present case would be different with the consideration of Doctrine of Basic Structure pertaining the analysis of the Constitutional Amendments. If the Constitutional amendment is against the basic structure then the law will be held invalid.

Conclusion

On comparing with the present scenario it is evident that there was a paradigm shift in the power of the Parliament. The Court has also recorded that the constitutional amendments passed were to authorize the Act which were formed before the commencement of the constitution. The act was also checked on to what extent there prevails unconstitutionality. It was considered that Part III of the constitution is the only yardstick to determine the validity of the Act but there was no due concern on the extensive power of the government to amend the constitution and create laws accordingly. But here the petitioners have failed not because of the political scenario but due to their own delay. Though there is not limitation, the writ petitions have to field within reasonable time to render a perfect cause of action. Though the Constitutional amendments were not retrospective by filing the petitions a month delay upheld the constitutionality of the Act.

Edited by Chiranjeeb Prateek Mohanty
Approved & Published – Sakshi Raje

References

1. Bhikaji Narain Dhakras and Ors. v. State of Madhya Pradesh and Ors., AIR 1955 SC 781.

2. Shagir Ahmad v. The State of U.P. & Others, [1955] 1 SCR 70.

3. Keshavan Madhava Menon v. The State of Bombay, 1951 Cri LJ 680.

4. Deep Chand v. State of Uttar Pradesh and Ors., AIR 1959 SC 648.

5. Keshavananda Bharati v. State of Kerala and Anr., (1973) 4 SCC 225.