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TMI Blog1980 (2) TMI 262X X X X Extracts X X X X X X X X Extracts X X X X ..... .P. No. II of 1914) (hereinafter referred to as 'the Act') read with the Notification bearing No. 1375(1)/XXIII-102(58-59)-24 dated April 14, 1960. The name of the defendant was altered into the Notified Area Committee of Tulsipur by virtue of an order made by the Munsif on August 18, 1962 since the defendant which was originally a Town Area Committee had been re-constituted as a Notified Area Committee with effect from March 15, 1962. The plaintiff is a company carrying on the business of manufacturing sugar in its factory which was established in the year 1936 in Shitlapur village which was situated in the suburb of Tulsipur Town. By the Notification bearing No. 1853-IX-86 T-51 dated December 22, 1955 issued by the Governor of Uttar Pradesh under section 3 of the Act, the limits of the Tulsipur Town Area were extended so as to bring within its limits the village of Shitlapur. Thus the sugar factory of the plaintiff was brought within the jurisdiction of the Tulsipur Town Area Committee. In the year 1959, it was proposed to levy octroi on certain goods which were brought into the limits of the Tulsipur Town Area Committee for purposes of sale, use or consumption and for th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he advisability of extending the limits of the Tulsipur Town Area Committee so as to include the village of Shitlapur within whose limits the factory of the plaintiff was situated, it was liable to be declared as void. In so far as the Notification dated December 15, 1959 was concerned, it was urged by the plaintiff that it was liable to be struck down on the ground that it was inchoate as the second schedule defining the limits of the Tulsipur Town Area had not been incorporated either in the draft notification dated October 28, 1959 or in the final Notification dated December 15, 1959. It was also urged that the above defect could not be cured by the issue of the Notification dated April 14, 1960 by which the Notification dated December 15, 1959 was amended without following all the procedure prescribed for promulgating rules under section 39 of the Act. The defendant pleaded that neither of the two contentions urged by the plaintiff was tenable. The defendant pleaded that since all the legal formalities required for the extension of its limits and for the imposition of the octroi had been followed, it was not open to the plaintiff to question any of the above notifications. The ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he said Act to define the limits of the said town area as shown in the schedule hereto. SCHEDULE BOUNDARIES OF TULSIPUR TOWN AREA DISTRICT GONDA North: Janakpur forest road crossing at Nakti Nala to station road upto Public Works Department inspection house railway crossing. West: From the terminating point of Northern Boundary of Public Works Department Inspection House railway crossing towards south upto plot No. 223 of village Tulsipur on Tulsipur Chaudhari Dih Road. South: From plot No. 2418 of village Tulsipur to the 3rd furlong pillar of 18th mile on Balrampur Road and therefrom upto plot No. 359 on Tulsipur Chaudharidih pucca Road and from there to plot No. 223 of village Tulsipur. East: From the terminating point of southern Boundary at plot No. 2418 towards north parallel to Nakti Nala upto the point where Pachperwa Road meets and therefrom upto Sugar Factory railway crossing, Sugar Factory railway line to the eastern side of the Sugar Factory upto the terminating point of the Northern Boundary at Nakti Nala. Section 3 of the Act reads: 3. Declaration and definition of town areas:- (1) The State Government may, by notification in the Official Gaze ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ure would invalidate any declaration made under section 3. The above contention is based on the assumption that the duty imposed on the State Government is in the nature of an administrative power in the exercise of which the State Government should follow the principles of natural justice. The solution to the question raised before us principally depends upon the nature of the function that is performed by the State Government under section 3 of the Act. If that function is judicial or quasi-judicial involving adjudication of the rights of any person resulting in civil consequences, it no doubt becomes necessary to follow the maxim audi alteram partem (hear the other side) before taking a decision. It is also true that in order to establish that a duty to act judicially applies to the performance of a particular function, it is no longer necessary to show that the function is analytically of a judicial character or involves the determination of a lis inter partes; though a presumption that natural justice must be observed will arise more readily where there is an express duty to decide only after conducting a hearing or inquiry or where the decision is one entailing the determi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ase where the question whether in the absence of an express provision requiring it to do so, an authority which has to exercise a legislative function should follow the principles of natural justice before discharging such function arose for consideration. We are concerned in the present case with the power of the State Government to make a declaration constituting a geographical area into a town area under section 3 of the Act which does not require the State Government to make such declaration after giving notice of its intention so to do to the members of the public and inviting their representations regarding such action. The power of the State Government to make a declaration under section 3 of the Act is legislative in character because the application of the rest of the provisions of the Act to the geographical area which is declared as a town area is dependent upon such declaration. Section 3 of the Act is in the nature of a conditional legislation. Dealing with the nature of functions of a non-judicial authority, Prof. S. A. De Smith in Judicial Review of Administrative Action (Third Edition) observes at page 163:- However, the analytical classification of a functio ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nt function: It is legislative rather than administrative or executive. The function of the committee is to make or refuse to make a legislative instrument under delegated powers. The order, when made, will lay down the remuneration for solicitors generally; and the terms of the order will have to be considered and construed and applied in numberless cases in the future. Let me accept that in the sphere of the so-called quasi-judicial the rules of natural justice run, and that in the administrative or executive field there is a general duty of fairness. Nevertheless, these considerations do not seem to me to affect the process of legislation, whether primary or delegated. Many of those affected by delegated legislation, and effected very substantially, are never consulted in the process of enacting that legislation, and yet they have no remedy. Of course the informal consultation of representative bodies by the legislative authority is a commonplace, but although a few statutes have specifically provided for a general process of publishing draft delegated legislation and considering objections (see for example, the Factories Act 1961, Schedule 4), I do not know of any implied right ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... pelling the contention urged against the validity of the aforesaid section 9, Lord Selborne observed at page 193 thus: Legislation which does not directly fix the period for its own commencement, but leaves that to be done by an external authority, may with quite as much reason be called incomplete, as that which does not itself immediately determine the whole area to which it is to be applied, but leaves this to be done by the same external authority. If it is an act of legislation on the part of the external authority so trusted to enlarge the area within which a law actually in operation is to be applied, it would seem a fortiori to be an act of legislation to bring the law originally into operation by fixing the time for its commencement . Proceeding further, the learned Lord observed at page 195: Their Lordships think that it is a fallacy to speak of the powers thus conferred upon the Lieutenant- Governor (large as they undoubtedly are) as if, when they were exercised, the efficacy of the acts done under them would be due to any other legislative authority than that of the Governor-General in Council. Their whole operation is, directly and immediately, under and by v ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... example of the not uncommon legislative power by which the local application of the provisions of a statute is determined by the judgment of a local administrative body as to its necessity. Thus, conditional legislation has all along been treated in judicial pronouncements not to be a species of delegated legislation at all. It comes under a separate category, and, if in a particular case all the elements of a conditional legislation exist, the question does not arise as to whether in leaving the task of determining the condition to an outside authority, the legislature acted beyond the scope of its powers. In Basant Kumar Sarkar Ors. v. Eagle Rolling Mills Ltd. Ors. this Court was required to consider the question whether section 1(3) of the Employees' State Insurance Act, 1948 was valid. One of the conditions urged by the appellants in that case was that the said provision suffered from the vice of excessive delegation on the ground that the power given to the Central Government to apply the provisions of that Act by notification, conferred on the Central Government absolute discretion, the exercise of which was not guided by any legislative provision and was, the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... er but conditional legislation because the prohibition of importation was a legislative act of Parliament itself and the effect of sub-s. (g) of s. 52 was only to confer upon the Governor-General in Council the discretion to determine to which class of goods other than those specified in the section and under what conditions the prohibition should apply. All that the legislature has done in the present case is that it has specified certain articles on which octroi duty can be imposed and it has also given to the Municipal Corporation the discretion to determine on what other goods and under what conditions the tax should be levied. We are, therefore, of the view that a notification issued under section 3 of the Act which has the effect of making the Act applicable to a geographical area is in the nature of a conditional legislation and that it cannot be characterised as a piece of subordinate legislation. In view of the foregoing, we hold that the contention of the plaintiff that the declaration made by the State Government under section 3 of the Act declaring the area in which the sugar factory of the plaintiff is situated as a part of the Tulsipur town area is invalid is not ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sed to make the following rules for the assessment and collection of octroi in the Town Area, Tulsipur, District Gonda, after their previous publication in the aforesaid notification as required by sub-section (3) of section 39 of the said Act. Rules 1. Octroi shall be levied according to the rates and description given in Schedule I on goods and animals brought within the octroi limits of Town Area Tulsipur (hereinafter called the town area) as specified in Schedule II for consumption, use or sale therein. 2. No person shall bring within the limits of the Town Area any laden vehicles or laden animal in respect of which octroi is leviable under these rules until the octroi due in respect of the commodities has been paid to such persons (hereinafter called the Moharrirs) and at such barriers as the Town Area Committee (hereinafter called the Committee) may appoint from time to time. 3. No laden coolie from whom octroi is leviable in respect of commodities under his charge, shall enter the limits of the Town Area until he has paid the octroi for such commodities in the manner aforesaid. ...... ...... ...... Schedule of Octroi rates in Town Area, Tulsipur ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... terested in opposing the levy of octroi by way of making any representation in that behalf were misled as to the local area in which octroi would be levied. On a fair reading of Rule 1 we feel that the authority which promulgated the rules only intended to set out in the second schedule the limits of the Town Area which had already been published in the notification dated August 22, 1955 under section 3 of the Act declaring the geographical area situated within the boundaries set out therein as the Town Area of Tulsipur. By the notification dated April 14, 1960, the notification dated December 15, 1959 was amended by incorporation of the second schedule with the very same boundaries of the Town Area found in the notification dated August 22, 1955. Since the intention of the authority imposing octroi in the Town Area of Tulsipur is made explicit in the opening part of the notification dated December 15 1959, we do not think that the omission to set out the boundaries of Tulsipur Town in that notification can make the levy of octroi ineffective as there could be no room for any doubt about the local area within whose limits the said impost would be effective. The declaration made on ..... X X X X Extracts X X X X X X X X Extracts X X X X
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