1966 (12) TMI 67 - SC - Indian Laws

Summary

Issues Involved:
1. Whether the State is bound by the provisions of a statute unless expressly named or included by necessary implication.
2. Whether the rule of construction favoring the State applies equally to sovereign and non-sovereign activities.
3. Whether the Supreme Court has the power to review its earlier judgment.

Issue-Wise Detailed Analysis:

1. State Bound by Statute:
The primary issue was whether the State of West Bengal was bound by the Calcutta Municipal Act, 1951, specifically Section 218, which required a license to carry on trade. The State did not obtain a license for the year 1960-61 and argued that it was not bound by the Act. The High Court of Calcutta convicted the State, holding it was as much bound as a private citizen. The Supreme Court examined the historical context and the rule of construction that the Crown is not bound by a statute unless expressly named or by necessary implication. The Court noted the common law of England and its application in India, as established by previous decisions, including the Privy Council's ruling in *Province of Bombay v. Municipal Corporation of the City of Bombay*. However, the Court found that this rule of construction was not universally accepted in India and was inconsistent with the legal philosophy of the Indian Constitution. The Court concluded that the State is not exempt from the operation of Section 218 of the Act.

2. Sovereign and Non-Sovereign Activities:
The Court addressed whether the rule of construction in favor of the State applied to both sovereign and non-sovereign activities. The Court noted that in modern times, the State engages in various activities, including trading, which are essential for public welfare. It was argued that the distinction between sovereign and non-sovereign activities is blurred, and the State should not be exempt from statutory obligations in its trading activities. The Court held that the rule of construction should not be applied to exempt the State from statutes in either capacity, as it would lead to anomalies and inconsistencies.

3. Power to Review Earlier Judgment:
The third contention was whether the Supreme Court has the power to review its earlier judgment. The Court referred to its previous decision in *The Bengal Immunity Company Limited v. The State of Bihar*, where it was held that the Supreme Court could depart from its previous decisions if it was satisfied of its error and its adverse effect on public interests. The Court emphasized the need to correct mistakes in constitutional matters to ensure the smooth evolution of the rule of law. The Court reaffirmed its power to review and correct its earlier judgments.

Conclusion:
The Supreme Court held that the State of West Bengal was not exempt from the provisions of Section 218 of the Calcutta Municipal Act, 1951, and was required to obtain a license to carry on trade. The rule of construction favoring the State was not accepted as a binding rule of law in India and was inconsistent with the republican polity and the principle of equality enshrined in the Constitution. The Court also reaffirmed its power to review and correct its earlier judgments. The appeal was dismissed, upholding the conviction of the State of West Bengal.