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Lalji Mulji Vs. the State of Maharashtra - Court Judgment

LegalCrystal Citation
SubjectCriminal;Constitution
CourtMumbai High Court
Decided On
Case NumberCriminal Appeal No. 1788 of 1963
Judge
Reported in(1965)67BOMLR484
AppellantLalji Mulji
RespondentThe State of Maharashtra
DispositionAppeal dismissed
Excerpt:
bombay municipal corporation act (bom. iii of 1888), section 394-petroleum act (xxx of 1934), sections 2(a)(b)(c), 7, 8, 31-constitution of india. articles 246, 254, 29(1)(f)(g); seventh schedule, list i entry 53, list ii entries 1, 5, 6, 23-whether section 394 of bom. act iii of 1888 ultra vires-entry 53 in list i of constitution whether in conflict with entries 1, 5 & 6 in list ii.;section 394 of the bombay municipal corporation act, 1888, is intra vires the state legislature.;caltex (india) ltd. v. director w.b. f. services [1960] a.i.r. cal. 219, agreed with. the provisions of entry no. 53 in list i of the seventh schedule to the constitution of india, and the provisions of entries nos. 1, 5 and 6 in list ii of the constitution do not stand in conflict with one another.;it will be.....naik, j.1. the appellant, who would hereafter be called the accused, was convicted under section 471 read with section 394(1)(a)(ii) of the bombay municipal corporation act and sentenced to pay a fine of rs. 201, in default, to undergo 15 days' rigorous imprisonment. the accused has preferred an appeal from the order of conviction and sentence. it was noticed that the vires of section 394 of the bombay municipal corporation act was called in question, and, therefore, a notice was issued to the advocate-general. the learned government pleader has appeared on behalf of the state as also on behalf of the advocate-general. 'when the matter came up for hearing before me sitting singly, a request was made by mr, ganatra on behalf of the accused, and also by the learned government pleader that,.....
Judgment:

Naik, J.

1. The appellant, who would hereafter be called the accused, was convicted under Section 471 read with Section 394(1)(a)(ii) of the Bombay Municipal Corporation Act and sentenced to pay a fine of Rs. 201, in default, to undergo 15 days' rigorous imprisonment. The accused has preferred an appeal from the order of conviction and sentence. It was noticed that the vires of Section 394 of the Bombay Municipal Corporation Act was called in question, and, therefore, a notice was issued to the Advocate-General. The learned Government Pleader has appeared on behalf of the State as also on behalf of the Advocate-General. 'When the matter came up for hearing before me sitting singly, a request was made by Mr, Ganatra on behalf of the accused, and also by the learned Government Pleader that, in view of the importance of. the question involved, the case may be referred to a Division Bench. Accordingly, the criminal appeal has been referred to a Division Bench, and, that is how, the matter has come up before us for final decision.

2. The accused has been keeping lubricating oil in Plot No, 56-58 at Mazgaon without a valid permit from the Municipal Commissioner, On November 26, 1962, an inspector visited the premises and found that lubricating oil was kept stored in 162 drums. It was found that each of these drums contained 45 gallons. The total quantity of lubricating oil came to 7290 gallons. A complaint was lodged on February 8, 1963, against the accused for contravention of the provisions of Section 394(1)(a)(ii).

3. The accused pleaded not guilty to the charge. He contended that Section 394(1)(a)(ii) read with Schedule. M of the Bombay Municipal Corporation Act was ultra vires Entry No. 53, List I, of Seventh Schedule of the Constitution of India. lie also contended that the provisions of Section 394 are in conflict with the provisions of the Petroleum Act, 1934 (Central Act No. XXX of 1934). The trying Magistrate rejected the defence set up on behalf of the accused and found the accused guilty of the offence with which he was charged and convicted and sentenced him as stated above. It is against that judgment that the accused has come up in appeal.

4. The points urged by Mr. Ganatra on behalf of the accused may be outlined as follows:-

(1) The provisions of Section 394(1)(a)(ii) read with Schedule M, Part II (a), (b) and (c) are ultra vires Article 246 read with Entries 53, 93 and 95 of List I, Seventh Schedule, of the Constitution of India.

(2) Assuming that the impugned legislation fell in any of the entries in List II, the impugned section substantially and seriously encroached upon the Union field of legislation, viz., Entry No. 53 and the Petroleum Act of 1934.

(3) The impugned section is inconsistent with the provisions of the Petroleum Act of 1934 and, therefore, void.

(4) In view of Section 31 of the Petroleum Act and the notification issued thereunder, the provisions of the impugned section must be read subject to all the provisions of the. Petroleum Act.

(5) The impugned section infringes the fundamental right of the accused guaranteed under Article 19(1)(f) and (g).

5. Before proceeding to discuss the merits of these contentions, it will be convenient to set out the arguments advanced by the learned Government Pleader. They are-

(1) The impugned Act is within the legislative competence of the State Legislature under Entries 1, 5, 6, 25, 64 and 65. According to the doctrine of pith and substance, the object, purpose and design of the impugned Act is not to legislate on petroleum or petroleum products, but to legislate for the purposes of securing public order, public health and hygiene, and to regulate trade and commerce for that purpose and confer necessary powers to the municipality in that regard, and, also to provide for penalties for contravention of the regulations.

(2) As petroleum happens to be a hazardous article, the impugned Act-makes provision for controlling or regulating the storage and possession of the petroleum for achieving the objects mentioned above, viz., securing of the public order, public health and hygiene and to regulate trade and commerce. These provisions, however, are ancillary to the main purpose of the Act. At best, the provisions may make an incidental inroad or entrenchment on the topic of petroleum, but such incidental encroachment does not constitute usurpation of the powers of the Union Legislature.

(3) Once it is held that the Act is within the competence of the State Legislature, the question of repugnancy raised on behalf of the accused does not survive for consideration.

(4) Assuming' that the question of repugnancy is relevant, in fact, there is no repugnancy nor any collision between the impugned Act and the Petroleum Act.

(5) That in respect of heavy oil (flashing point of which is above 200F), all that the impugned Act does is to occupy a field which has been left unoccupied by the Petroleum Act. It will not be correct to say that the impugned provision reoccupies a field already occupied by the Petroleum Act.

(6) In respect of petroleum, the flashing point of which is below 200F, the Petroleum Act is silent and makes no provisions. In fact, Section 31 contemplates occupation of the field left unoccupied by the State enactments. Such occupation, therefore, is clearly permissible.

(7) The impugned provision in no way infringes the fundamental right guaranteed under Article 19(1)(f) and (g).

6. In order to appreciate the rival contentions raised on behalf of the parties, it is necessary first of all to see what is the nature, scope and ambit of the impugned provision. In every ease, where the vires of an enactment are challenged, the proper approach is to consider the real nature, purpose and design of the impugned enactment and see whether the enactment falls within any of the items assigned to the Legislature which has passed the enactment.

7. The first provision to be considered in that connection is Section 394 of the Bombay Municipal Corporation Act, the vires of which have been called in question in these proceedings. Section 394, as it stood before its amendment by Maharashtra Act No. XXXII of 1962, in effect provided-

(1) Except under and in conformity with the terms and conditions of a licence granted by the Commissioner, no person shall-

(a) keep, in or upon any premises, for any purpose whatever,

(i) any article specified in Part I of Schedule M, or

(ii) any article specified in Part II of Schedule M, in excess of the quantity therein prescribed as the maximum quantity of such article which may at any one time be kept in or upon the same premises without a licence.

The Sub-section (1) of Section 394 as amended after 1962 is substantially similar to the section before amendment. Important changes, however, have been effected in the Schedule. So far as Part II of Schedule M is concerned the quantity of petroleum, which was permissible for being kept with a licence in any premises, was upto 10 gallons. Schedule M has been completely overhauled by the Amending Act No. XXXII of 1962. The 'Statement of Objects and Reasons' runs as follows:

Section 394 of the Bombay Municipal Corporation Act provides that certain articles shall not be kept, and certain trades shall not be carried on, without a licence, because they are dangerous or likely to create a nuisance. Since it is noticed that fires and explosions occur in the City due to unauthorised or negligent storage and handling of explosive or dangerous materials in or near residential buildings resulting in considerable loss of life and property, the question of tightening up the law was engaging the attention of Government. It is now proposed to make better provision for the prevention of fire, explosion and other danger to life, health and property where such articles are stored or such trades and processes are carried on. The control and supervision of the Commissioner will be stricter and the punishment for defaulters more severe.

The preamble to Act No. XXXII of 1962 substantially incorporates these objects. The preamble runs thus:

WHEREAS, it is expedient to make better provision for the prevention of fire, explosion and other danger to life, health and property in premises where certain articles are stored, and certain trades and processes are carried on, and for that and certain other purposes further to amend the Bombay Municipal Corporation Act;...

Turning to Schedule M Part II, mineral oils with which we are concerned in this case fall under the category ' A-Combustible Liquids'. Schedule M, Part II (b) provides that, mineral oils of all kinds (Plash point above 76F) ; oils of all kinds excluding essential and mineral oils; paints of all kinds (Flash point above 76F) ; ...shall not be kept without a licence in or upon any premises exceeding 50 litres. Part II (c) of Schedule M provides that, mineral oils of all kinds (Flash point below 76F) ; paints of all kinds (Flash point below 76F); varnish (Flash point below 76F); ...shall not be kept without a licence in or upon any premises exceeding 10 litres.

8. It was contended by Mr. Ganatra that Section 394, in effect, legislates upon a topic which falls in Entry 53 of List I, Seventh Schedule of the Constitution of India. Entry No. 53 runs thus:

Regulation and development of oilfields and mineral oil resources; petroleum and petroleum products; other liquids and substances declared by Parliament by law to be dangerously inflammable.

In this connection, Mr. Ganatra pointed out that the Indian Legislature had passed an Act known as Petroleum Act, 1934, which relates to the import, transport, storage, production, refining and blending of petroleum and other inflammable substances. It is necessary to refer to some of the provisions of this Act without which it will be difficult to understand the significance of the expressions 'Flashing Point above 76F' and 'Flashing point below 76F', etc. 'Flashing Point' has been defined in Section 2(c) of the Petroleum Act, 1934, as-

'flashing point' of any petroleum means the lowest temperature at which it yields a vapour which will give a momentary flash when ignited, determined in accordance with the provisions of Chapter II and the rules made thereunder;

Chapter II of the Petroleum Act, 1934, relates to 'Testing of Petroleum'. 'Dangerous Petroleum' has been denned in Section 2(b) to mean, 'petroleum having its flashing-point below seventy six degree Fahrenheit', 'We will refer to the other relevant provisions of this Act as we proceed with the discussion of the points urged and also when we will consider the arguments advanced by Mr. Ganatra relating to the possible conflict or repugnancy of the provisions of the legislation of the State Legislature and the legislation of the Indian Legislature of 1934.

9. In addition to the Petroleum Act, 1934, the Parliament had passed another enactment known as 'Inflammable Substances Act, 1952' (Act No. XX of 1952). It will be recalled that Entry No. 53 of List I, Seventh Schedule, not only relates to petroleum and petroleum products but also relates to other liquids and substances declared by Parliament by law to be dangerously inflammable. The object of the Inflammable Substances Act, 1952, is to declare certain substances to be dangerously inflammable. It is not necessary to refer to the provisions of this enactment any further so far as the decision of the present case is concerned.

10. Mr. Ganatra contended that the entry 'petroleum and petroleum products' must be interpreted liberally, and, not in a doctrinaire, restricted and pedantic sense. These are words of wide amplitude and his argument was that these words are not qualified by words, such as regulation and development, which qualify the first Part of the entry relating to the oilfields and mineral oil resources. Mr, Ganatra, therefore, contended that it is the exclusive jurisdiction of the Parliament to pass legislation on every aspect relating to petroleum and petroleum products, such as, storage, import, possession, transport, etc. He also pointed out that the Indian Legislature has actually passed a comprehensive legislation covering import, transport, storage, production, refining and blending of petroleum and other inflammable substances. The word 'petroleum' has been defined in Section 2(a) of the Petroleum Act, 1934, to mean

any liquid hydrocarbon or mixture of hydrocarbons, and any inflammable mixture (liquid, viscous or solid) containing any liquid hydrocarbon.

The comments by the Chief Inspector of Explosives show that crude oil and lubricating oils fall within the general description 'liquid hydrocarbon or mixture of hydrocarbons'. Chapter I of the Petroleum Act, 1934, relates to 'control over petroleum'. Section 3(1) provides-

No one shall import, transport or store any petroleum save in accordance with the rules made under Section 4.

Sub-section (2) of Section 3 provides-

Save in accordance with the conditions of any licence for the purpose which he may be required to obtain by rules made under Section 4, no one shall import any dangerous petroleum, and no one shall transport or store any petroleum.

Mr. Ganatra emphasized the word 'store' and pointed out that even for the purpose of storage, a licence is required, and the storing is required to be made In accordance with the conditions of the licence. Section 4 empowers the Central Government to make rules for the import, transport and storage of petroleum. Clauses (a), (b) and (c) of Section 4 relate to the import and the conditions governing the import. Clauses (d) and (e) relate to the regulation of the transport. Clauses (f) and (g) relate to regulations about storage. It is necessary to set out these clauses in full:

The Central Government may make rules....

(f) regulating the places at which and prescribing the conditions subject to which petroleum may be stored;

(g) specifying the nature, situation and condition of all receptacles in which petroleum may be stored.

Clause (h) relates both to transport and storage and the form and conditions of licence for the import in regard to the same. It is not necessary to refer to Clauses (i), (j) and (k). Clause (1) runs thus:-

(1) generally, providing for any matter which in its opinion is expedient for proper control over the import, transport and storage of petroleum.

Section 7 provides:-

Notwithstanding anything contained in this Chapter, a person need not obtain a licence for the transport or storage of non-dangerous petroleum if the total quantity in his possession at any one place does not exceed five hundred gallons and none of it is contained in a receptacle exceeding two hundred gallons in capacity.

Section 8(1) provides:-

Notwithstanding anything contained in this Chapter, a person need not obtain a licence for the import, transport or storage of dangerous petroleum not intended for sale if the total quantity in his possession does not exceed six gallons.

Section 11 speaks of exemption of heavy oils and provides:-

Nothing in this Chapter shall apply to any petroleum which has its flashing-point not below two hundred degrees Fahrenheit.

Chapter II of the said Act relates to 'The Testing of Petroleum'. Chapter III relates to 'Penalties and Procedure'. Chapter IV incorporates what are called supplemental provisions. Section 29 makes supplemental provisions relating to the rules and, in effect, provides that, in making any rules, the Central Government may provide for any matter ancillary to such rules. Section 31 is important and runs thus:

Power to limit powers of local authorities over petroleum,-Where any enactment confers powers upon any local authority in respect of the transport or storage of petroleum, the Central Government may, by notification in the Official Gazette,-

(a) limit the operation of such enactment, or

(b) restrict the exercise of such powers, in any manner it deems fit.

It is not necessary to refer to the rules framed by the Central Government under the said Act, except to point out that 'heavy petroleum' has been defined to mean 'petroleum which has its flashing-point not below 150F', (i.e. 150F and above). Chapter IV of the Rules makes provisions for the storage of petroleum requiring licence. Chapter V of the Rules relates to the storage of petroleum not requiring licence. Rule 109, which is the first rule of Chapter V, provides for exemption of heavy petroleum. It is as under:Exemption of heavy petroleum,-(1) Notwithstanding anything contained in these rules, it shall be permissible to store without licence, subject to the conditions of this Chapter, heavy petroleum in quantities not exceeding 10,000 gallons which is not stored in the same installation or storage shed as other petroleum.

11. The learned Government Pleader, without disputing the correctness of the proposition pressed by Mr. Ganatra, viz., that the petroleum and petroleum products mentioned in Entry No. 53 of List I, Schedule 7, must receive their widest connotations, and without challenging the position that it would be open to the Parliament to legislate regarding the storage of petrol in any place in India, pointed out that, it is competent to State Government to pass legislation regulating the storage of petroleum and petroleum products in certain localities and empowering the local authority to make rules in that regard. He argued that, whereas the object of the Indian Legislature or the Parliament would be to make appropriate provisions about petroleum and petroleum products, in various aspects of these matters, it would still be competent for the State Government to pass a legislation for the storage of the petrol under Entries 1, 5, 6, 26, 64 and 65 of List II of the Seventh Schedule. As stated above, all that Section 394 of the Bombay Municipal Corporation Act provides is that, no person shall keep petroleum and petroleum products, except in accordance with the terms and conditions of licence granted by the Commissioner, in excess of the quantities specified as the maximum quantity in Schedule M. The object of the State legislation which empowers the Municipal Commissioner to issue licences setting out such terms and conditions as he finds necessary and desirable is to ensure the purposes set out in the various items mentioned above in List II.

12. Before coming to the entries in List II on which reliance is placed on behalf of the Government Pleader, it is necessary to discuss the general principles of the construction of the various items in the Schedule attached to the Constitution of India. The essence of a federal, constitution consists in the distribution of powers between the federating units and the federal centre. With this end in view, the Constitution of India has prepared three lists setting out the items which fall in one or the other of these lists. List I of Seventh Schedule sets out the topics which fall within the exclusive domain of the Parliament. List II relates to the subjects which fall within the exclusive jurisdiction of the State Legislature. And List III covers the topics over which both the Parliament and the State Legislature would exercise concurrent jurisdiction. The object of setting out various items and assigning them to separate lists is to make the division of power as clear cut and as exhaustive as possible. Notwithstanding any attempt at meticulous enumeration of the various topics and of arranging them in different lists, there is bound to be an amount of overlapping between the topics of the same list and also overlapping between topics of one list and those of the other. Article 246 of the Constitution of India is divided into three clauses. The first clause provides-

(1) Notwithstanding anything in Clauses (2) and (3), Parliament has exclusive-power to make laws with respect to any of the matters enumerated in List I in the Seventh Schedule (in this Constitution referred to as the 'Union List').

Clause (1) begins with what is known as the 'non obstante clause'. The power of the Parliament in respect of the topics mentioned in List I is absolute and paramount and is not trammelled by anything set out in Clauses (2) and (3). Clause (2) runs thus:

(2) Notwithstanding anything in Clause (3), Parliament, and, subject to Clause (1) the Legislature of any State also, have power to make laws with respect to any of the matters enumerated in List III in the Seventh Schedule (in this Constitution referred to as the 'Concurrent List').

It is clear from Clause (2) that even in respect of the subjects mentioned in the Concurrent List, the power of the Parliament is paramount and superior to the power of the State Legislature. The Parliament can exercise its legislative functions in regard to the topics in the Concurrent List notwithstanding anything stated in Clause (3) which deals with the powers of the State Legislature to legislate on topics in the State List. The power of the Legislature of the State is qualified with the word 'also'. We will discuss the significance of Clause (2) at a later stage of the judgment, while discussing the question of the field of legislation occupied by a parliamentary legislation. Clause (3) of Article 246 runs thus:

(3) Subject to Clauses (1) and (2), the Legislature of any State has exclusive power to make laws for such State or any part thereof with respect to any of the matters enumerated in List II in the Seventh Schedule (in this Constitution referred to as the 'State List').

It is clear from the opening words of this clause that the power of the State Legislature is subject to Clauses (1) and (2). It is not necessary to consider Clause (4) of Article 246 for our present discussion. At this stage, we may conveniently refer to the provisions of Article 254, Sub-section (1). It runs thus:-

254. (1) If any provision of a law made by the Legislature of a State is repugnant to any provision of a law made by Parliament which Parliament is competent to enact, or to any provision of any existing law with respect to one of the matters enumerated in the Concurrent list, then, subject to the provisions of Clause (2), the law made by Parliament, whether passed before or after the law made by the Legislature of such State, or, as the case may be, the existing law, shall prevail and the law made by the Legislature of the State shall, to the extent of the repugnancy, be void.

Article 254 embodies the doctrine of repugnancy. There is some controversy as to when this doctrine of repugnancy can be invoked,-one authority holding that the doctrine can come into play only when the topics are mentioned in the Concurrent List and another holding that there can be repugnancy even, if the rival legislations relate to topics falling in different lists. It is not necessary for us to probe into this controversy, and, we may touch upon it in passing so far as it becomes necessary for the advancement of the point of view which is adopted in our judgment.

13. We have already pointed out that the proper approach in considering the question as to whether a particular legislation is ultra vires the powers of the Legislature is to take the legislation as it is, consider the pith and substance thereof, or the real nature and substance of the legislation, or the purpose, design and scheme thereof, and see whether, in its real sense, the legislation can legitimately fall in any of the items of the list over which the Legislature wields powers. If it is found that, in pith and substance, the legislation relates to a topic falling within the jurisdiction of the Legislature, then even if there is an incidental trenching upon the powers of the rival Legislature, still the legislation will continue to remain valid. In State of Bombay v. R.M. D. Chamarbaughwala : [1957]1SCR874 , Das C. J., who delivered the judgment for the Court, has set out the correct approach to be adopted in a case like the present one. He says:

When the validity of an Act is called in question, the first thing for the Court to do is to examine whether the Act is a law with respect to a topic assigned to the particular Legislature which enacted it. If it is, then the Court is next to consider whether, in the case of an Act passed by the Legislature of a Province (now a State), its operation extends beyond the boundaries of the Province or the State, for under the provisions conferring legislative powers on it such Legislature can only make a law for its territories or any part thereof and its laws cannot, in the absence of a territorial nexus, have any extra-territorial operation. If the impugned law satisfies both these tests, then finally the Court has to ascertain if there is anything in any other part of the Constitution which places any fetter on the legislative powers of such Legislature. The impugned law has to pass all these three tests.

So far as the principles of construction of the words used in the items are concerned, the earliest and most important pronouncement comes from the Federal Court in In re The Central Provinces and Berar Act. No. XIV of [1939] F.C.R. 18., Sir Maurice Gwyer, C.J., who gave the judgment for the Court, stated:

This is the first case of importance that has come before the Federal Court; and it is desirable, more particularly in view of some of the arguments addressed to us during the hearing, to refer briefly to certain principles which the Court will take for its guidance. It will adhere to canons of interpretation and construction which are now well-known and established. It will seek to ascertain the meaning and intention of Parliament from the language of the statute itself; but with the motives of Parliament it has no concern. It is not for the Court to express, or indeed to entertain, any opinion on the expediency of a particular piece of legislation, if it is satisfied that it was within the competence of the Legislature which enacted it;...

The Judicial Committee have observed that a Constitution is not to be construed in any narrow and pedantic sense. The rules which apply to the interpretation of other statutes apply, it is true, equally to the interpretation of a constitutional enactment. But their application is of necessity conditioned by the subject-matter of the enactment itself; and I respectfully adopt the words of a learned Australian Judge:- 'Although we are to interpret the words of the Constitution on the same principles of interpretation as we apply to any ordinary law, these very principles of interpretation compel us to take into account the nature and scope of the Act that we are interpreting,- to remember that it is a Constitution, a mechanism under which laws are to be made, and not a mere Act which declares what the law is to be: ...it (Federal Court) may rightly reflect that a Constitution of government is a living and organic thing, which of all instruments has the greatest claim to be construed lit res magis valeat quam per eat....

Again, at page 38, His Lordship observed:-

In Attorney-General for Ontario v. Attorney-General for Canada [1912] A.C. 571, the Committee observed that in the interpretation of the British North America Act, 'if the text is explicit, the text is conclusive, alike in what it directs and what it forbids'...

At page 39, his Lordship has referred to the case of Citizens Insurance Com-, pany of Chnada v. Parsons-. Queen Insurance Co. v. Parsons (1881) 7 App. Cas. 96 and, has quoted a passage therefrom, which runs thus:

In these cases it is the duty of the Courts, however difficult it may be, to ascertain in what degree, and to what extent, authority to deal with matters falling within these classes of subjects exists in each Legislature, and to define in the particular case before them the limits of their respective powers. It would not have been the intention that a conflict should exist; and in order to prevent such a result, the two sections must be read together and the language of one interpreted, and, where necessary, modified by that of the other. In this way it may, in most cases, be found possible to arrive at a reasonable and practical construction of the language of the sections, so as to reconcile the respective powers they contain, and to give effect to all of them. In performing this difficult duty it will be a wise course for those on whom it is thrown, to decide each case which arises as best they can, without entering more largely upon an interpretation of the statute than is necessary for a decision of the particular question in hand.

Again, in The United Provinces v. Atiqua Bagum [1940] F.C.R. 110. Sir Maurice Gwyer, C.J. observed (p. 134) :..I think however that none of the items in the Lists is to be read in a narrow or restricted sense, and that each general word should be held to extend to all ancillary or subsidiary matters which can fairly and reasonably be said to be comprehended in it.

In Subrahmanyan Chettiar v. Muttuswami Goundan [1940] F.C.R. 188 the Court approved of the doctrine of pith and substance which had been evolved in interpreting items in the Lists defining the distribution of powers between the Centre and the 'States in a Federal Constitution. In that case, the validity of the Madras Agriculturists Relief Act passed by the Provincial Legislature was called in question. The Act provided for the scaling' down of the decretal debt. The question arose as to whether the provision entrenched upon the power of the Central Legislature to legislate on a topic with respect to negotiable instruments. Sir Maurice Gwyer C.J. and Varadachariar J. held that it did not. After referring to the provisions of Section 100(1) of the Government of India Act, 1935, which are similar to the provisions of Article 246 of the Constitution of India, their Lordships proceeded to observe (p. 201) :

It must inevitably happen from time to time that legislation, though purporting to deal with a subject in one list, touches also on a subject in another list, and the different provisions of the enactment may be so closely interwined that blind adherence to a strictly verbal interpretation would result in a large number of statutes being declared invalid because the Legislature enacting them may appear to have legislated in a forbidden sphere. Hence the rule which has been evolved by the Judicial Committee' whereby the impugned statute is examined to ascertain its 'pith and substance', or its 'true nature and character', for the purpose of determining whether it is legislation with respect to matters in this list or in that...

Applying the doctrine of pith and substance, the majority of the Federal Court held that the Madras Act cannot be regarded as legislating in respect of negotiable instruments, a subject falling within the domain of the Central Legislature. They dismissed the argument that the Act will affect the majority of the debts evidenced by or based upon negotiable instruments as, quite immaterial, observing, 'That is an accidental circumstance which cannot affect the question'. Sulaiman J. who gave a dissenting judgment, but, who agreed, on the general principles of interpretation, observed at page 208 as follows:.Nevertheless, in view of the large number of items in the three Lists, it is almost impossible to prevent a certain amount of overlapping. Absolutely sharp and distinct lines of demarcation are not always possible...

After referring to the doctrine of pith and substance at page 210, his Lordship referred to the possibility of an incidental encroachment and stated that such an encroachment is not really forbidden.

14. The most important case dealing with the question of the extent of invasion is to be found in Prafulla Kumar v. Bank of Commerce, Khulna. [1947] A.I.R. P.C. 60. In that case, the validity of the Bengal Money-lenders Act was called in question on the ground that it entrenched upon a topic of negotiable instruments which falls within the domain of the Federal Lists. At page 65, their Lordships of the Privy Council cite with approval a passage from the judgment of Sir Maurice Gwyer, C.J. in Subrahmanyam Chettiar v. Muttuswami Goundan; which has been already reproduced above, and stated in paras. 36, 37 and 38:

Their Lordships agree that this passage (which is already set out above by us) correctly describes the grounds upon which the rule is founded, and that it applies to Indian as well as to Dominion legislation. No doubt experience of past difficulties has made the provisions of the Indian Act more exact in some particulars and the existence of the Concurrent List has made it easier to distinguish between those matters which are essential in determining to which list particular provisions should be attributed and those which are merely incidental. But the overlapping of subject-matter is not avoided by substituting three lists for two or even by arranging for a hierarchy of jurisdictions.

Subjects must still overlap and where they do the question must be asked what in pith and substance is the effect of the enactment of which complaint is made and in what list is its true nature and character to be found. If these questions could not be asked, much beneficient legislation would be stifled at birth, and many of the subjects entrusted to Provincial Legislation could never effectively be dealt with.

Thirdly, the extent of the invasion by the Provinces into subjects enumerated in the Federal List has to be considered. No doubt it is an important matter, not, as their Lordships think, because the validity of an Act can be determined by discriminating' between degrees of invasion, but for the purpose of determining what is the pith and substance of the impugned Act. Its provisions may advance so far into Federal territory as to show that its true nature is not concerned with Provincial matters, but the-question is not, has it trespassed more or less, but is the trespass, whatever it be, such, as to show that the pith and substance of the impugned Act is not money-lending but promissory notes or banking? Once that question is determined the Act falls on one or the other side of the line and can be seen as valid or invalid according to its true-content....

It will be clear from the above that overlapping of the topics cannot be avoided in spite of the arrangement of the topics in three separate Lists. That being' the case, it is necessary to look to the substance and the pith of each legislation remembering that some invasion into the domain reserved for the rival Legislature is unavoidable. The real point to be considered is the extent of that invasion, but, even the extent of invasion is material for the purpose of determining whether, in substance, the legislation is in respect of a topic reserved for the Provincial or the State Legislature, or, covers a topic which has been assigned to the Central Legislature or the Parliament, In other words, the question, for .consideration would be, whether the State Legislature, under the guise of legislating1 upon a topic falling into their domain, has really legislated upon a topic which falls in the domain of the Central Legislature or the Parliament.

15. Pausing here for a moment, let us try to examine the impugned legislation with a view to find out the pith and substance underlying that legislation. We have already referred to the Statement of Objects and Reasons and also the preamble of the Act which introduced the present Section 394 into the Bombay Municipal Corporation Act. The concern which has motivated the amended Section 394 is to prevent an outbreak of fire, and, with that end in view, to provide for certain precautionary measures or safeguards. It is true that the Petroleum Act, which is a Central legislation, also deals with the question of storage of petroleum and petroleum products. It is also true that it provides for certain precautions and safeguards which were required to be taken in the matter of transport and storage of petroleum and petroleum products. With that end in view, rules have been made requiring the taking of a licence. Rules framed under the Act also regulate the place at which and the conditions subject to which petroleum may be stored, and, also specify the nature and condition of receptacle in which petroleum may be stored. The provisions of the Petroleum Act are based on the fundamental distinction between dangerous petroleum and non-dangerous petroleum. A dangerous petroleum is petroleum the flashing-point of which is below 76F. In regard to non-dangerous petroleum, Section 7 provides that, no licence would be necessary for storing petroleum upto 500 gallons. In regard to dangerous petroleum, Section 8 provides that, no licence is necessary for the possession of petroleum not exceeding six gallons. Section 11 makes it clear that the provisions of the Act do not apply to petroleum whose flashing-point is 200F and above. Such petroleum falls within the category of 'heavy petroleum' as defined in the Rules. Heavy petroleum is exempted from the operation of the provisions of the Petroleum Act. It will thus be seen that the precautions envisaged in the Act are based upon the intrinsic character of the petroleum and the degree at which its flashing-point is reached. If the flashing-point is reached at a higher temperature than 150F, then no licence would be necessary. The impugned provision is designed to meet a different set of situation. It not only takes into account the intrinsic character of the petroleum, but it also takes into account the conditions prevailing in a crowded city. The cumulative effect of the intrinsic character of the product and the special conditions prevailing in a crowded city form the basis of the additional precautions which are envisaged in Section 394, that is, the impugned section. It is settled law that the objects and reasons which have motivated a legislation are relevant for the purpose of finding out the conditions which prevailed at the time the legislation is passed, and the evil which it sought to remedy.

The statement of objects and reasons is certainly not admissible as an aid to the construction of a statute. But it can be referred to for the limited purpose of ascertaining the conditions prevailing at the time which actuated the sponsor of the Bill to introduce the same and the extent and urgency of the evil which he sought to remedy': (M.K. Ranganathan v. Govt. of Madras. : [1955]2SCR374 )

The objects and reasons have referred to the fact of the occurrence of fires and explosions in the city due to unauthorized or negligent storage and handling of explosive or dangerous material in or near residential buildings resulting in considerable loss of life and property. It further says that, because of this, the 'question of tightening of the law was engaging the attention of the Government. It proceeds to say:

It is now proposed to make better provision for the prevention of fire, explosion and other danger to life, health and property where such articles are stored or such trades and processes are carried on.

The expression 'better provision for the prevention of fire, explosion and other-danger to life, health and property' is extremely significant. It emphasizes the need for additional precautions, that is to say, precautions which must be superimposed upon the precautions called upon by the Petroleum Act because of the-situation prevailing in a crowded city, The Petroleum Act extends to the entire land. The provisions, therefore, are of a general character and are not designed to meet peculiar situations prevailing in crowded towns.

16. Turning to the preamble, we notice that emphasis has been laid upon the need to make better provision for the prevention of fire, explosion and other danger to life, health and property in premises where certain articles are stored. It is with that end in view that the impugned provision has been designed. The provision does not relate to petroleum and petroleum products, nor it is in respect of petroleum and petroleum products as described in Entry 53 of List I of the Seventh Schedule. The legislation has nothing to do with petroleum and petroleum products as such. It is true that it will be open to the Parliament to make legislation ancillary or subsidiary to matters, such as, the storage of petroleum or petroleum products. Even the learned Government Pleader did not challenge such a position. But it is clear that, any provision relating to the storage or any precaution required by the Act for the purpose of storage or for subsidiary or ancillary character, made by the Central Legislature, has been made by it with the object of advancing the main purpose of the Central Act. The object of preventing the occurrence of fire and preventing consequent danger to-life and property evidently falls within entry No. 1 of List II (State List). The-expression 'public order' mentioned in this entry has been authoritatively interpreted by the Supreme Court as being synonymous with public peace, safety and tranquillity.... (vide The Supdt., Central Prison v. Dr. Lohia,) : 1960CriLJ1002 . So, the question of public safety is a concern of the State Government, and it is open-to the State Government to pass a legislation to safeguard public safety. Item No, 5 of List II runs thus:

Local government, that is to say, the constitution and powers of municipal corporations, improvement trusts, district boards, mining settlement authorities and other local authorities for the purpose of local self-government or village administration.

Under this item, it is competent to the State Legislature to constitute a local authority and to confer powers of local self-government or village administration on that body. A Municipal Corporation is such a local authority which is. entrusted with powers of local self-government. One of the duties and functions of a municipal body will be to ensure the safety of the citizens from sporadic fires breaking out as a result of disorganized and chaotic storage of dangerous and inflammable materials. Item No. 6 in the List relates to public health, sanitation, hospitals and dispensaries. The task of ensuring sanitation and public health also can be and usually are delegated to the local authority. In this connection, it is interesting to refer to the provisions of Section 61 of the Bombay Municipal Corporation Act, which falls under Chapter III relating to duties and powers of the municipal authorities. Section 61 is the first amongst the sections falling under the sub-heading 'Obligatory and discretionary duties of the Corporation'. Section 61 relates to the obligatory duties and, in effect, provides that,

It shall be incumbent on the corporation to make adequate provision, by any means or measures which it is lawfully competent to them to use or to take, for each of the following matters.

The matters are thereafter enumerated from Clause (a) to Clause (f). Matter (g) relates to measures for preventing and checking the spread of dangerous diseases. Matter (j) relates to regulation of offensive and dangerous trade. Matter (k) relates to the entertainment of a fire-brigade and protection of life and property in case of fire. These are the obligatory duties cast upon the municipal corporation, and, it is not suggested that the duties do not fall within the purview of the powers of the State Legislature. The State Legislature is, undoubtedly, competent to transfer these powers and obligations enumerated in Section 61 upon a corporation. Just as the adoption of certain precautionary measures are found necessary in the interest of the prevention of the breaking out of fire, it may be equally necessary to take certain measures for preventing spread of contagious diseases as a result of the chaotic storage in large quantities of lubricating oil, Mr. Ganatra contended that there is no evidence to show that the storage of lubricating oil would be responsible for spreading any virus or bacteria. lie further argued that the Corporation has not led any expert evidence on that point. It is not necessary to consider this question at any length, and, it is sufficient to observe that in certain extreme contingencies, the possibility of the spread of contagious diseases or virus cannot be ruled out. Mr. Ganatra contended that Section 394 itself does not lay down the conditions of the licence and leaves the matter entirely to the discretion of the Commissioner. He suggested that if the object of the legislation was to provide for certain precautions for preventing fires or the spread of diseases, etc., it was the duty of the Legislature to set out the precautions which are designed for that purpose. 'We do not think that it makes 'any difference in substance whether provisions have been made in the section itself for the precautions required to be taken or they are left to the discretion of the Municipal Commissioner. A copy of the licence containing the condition was placed in our hands in the course of the arguments by the learned Government Pleader, and we notice that a distinction has been made between 'dangerous' and 'non-dangerous' mineral oils, with reference to the flashing-points. The conditions of the licence in respect of non-dangerous mineral oils are materially different from the conditions in respect of dangerous mineral oils. The licence for keeping mineral oils of all kinds (flash point above 76F), etc., lays down two conditions: (1) any of the above articles licensed herein should be kept either in vessels of sufficient strength with lid on the top and made of non-fragile material or in bottles tightly closed; and (2) no unauthorised person should have an access to the storage. The licence, on the other hand, for keeping mineral oils of all kinds, flash-point of which is below 76P, lays down six conditions, which are more stringent than the conditions in the case of 'non-dangerous' mineral oils. In addition to the requirement of a suitable receptacle or vessels in which these oils are required to be kept, other precautions have been envisaged, such as the distance from the residential buildings and the construction of storage premises. It has been provided that the premises should be of R.C.C. type or a metal enclosure where there are no structures around these premises. The conditions also provide that other licensable articles should not be kept side by side with the mineral oils etc. They also-provide that the manufacturing or packing in smaller receptacles or processing etc. should not be done near the storage. Finally it is laid down that the storage should not be near the main entrance of the premises or of any room. The conditions of the licences give us a clear picture of the precautions which were considered necessary for the storage of petroleum products in the City of Bombay.

17. Turning now to the Items, Item No. 26 in List II relates to trade and commerce within the State. Items Nos. 64 and 65 relate to offences against laws with respect to any of the matters in the List and jurisdiction and powers of Courts, of course, except the Supreme Court, with respect to any of the matters in this List respectively. Under Item No. 26, the State can delegate its powers and functions to the local authority in respect of trade and commerce. It is under this delegation that it is open to the corporation to make provisions for regulating certain kinds of dangerous trades and provisions.

18. Before leaving the question of the scheme, design and purpose of the enactment, it is necessary to note that petroleum and petroleum products are but small fraction of items falling within Schedule M. Part I of the Schedule M relates to alloys and metals and other substances of explosive nature. Part II falls into four parts, A-Combustible Liquids, B-Combustible Solids and Semi Solids, C-Oxidising Substances; and D-Corrosive or poisonous Substances. In respect of articles falling within Part II, different quantities have been prescribed for different kinds of materials. It is evident that, these quantities have been determined on the basis of the danger emanating therefrom for the safety of the locality.

19. It will be clear from the object, scheme and design of the impugned legislation that the Legislature wanted to provide for topics which clearly fall in List II. The pith and substance of the impugned legislation, therefore, is not to deal with or dabble in petroleum and petroleum products as such, but to devise special measures for ensuring the protection and safety of the citizens of a crowded city like Bombay. It is true that, in so far as the Central Legislation can also provide for storage and the conditions in respect thereof, and in so far as they have actually passed a legislation which makes provision for these matters, it can be said that there is some amount of impingement or encroachment or trespass into the field of legislation reserved for the Parliament. But the extent of invasion is insignificant, and, as we will labour to point out at a later stage, the provisions made have no relation to the field which has already been occupied by the Central legislation, but they concern the field which has teen left unoccupied by the Central legislation. As has been rightly pointed out by the Privy Council in Prafulla Kumar's case, the extent of invasion is relevant not for the purpose of determining or discriminating between degrees of invasion, but for determining the pith and substance. If the invasion is extensive and on a large scale, then the reasonable inference would be that the State Legislature is passing a colourable legislation, that is to say, under the guise of legislating on a topic falling within their domain, they have invaded or trespassed upon the topics reserved for the Parliament.

20. Mr. Ganatra contended that petroleum and petroleum product has always been the exclusive sphere of the Central legislation. He argued that this legislative history and the background of the various laws passed in respect thereof has to be taken into account in considering the question of the pith and substance. The first Petroleum Act was passed in 1881, which is Act No. VIII of 1881. The preamble stated that this is an Act to regulate the importation, possession and transport of petroleum and other fluids of a like nature. This Act was repealed and replaced by the Petroleum Act XII of 1886, the preamble of which was similarly worded. It is, however, interesting to note that, in both these Acts, viz. the Act of 1881 and the Act of 1886, power was given to the local government to make rules consistent with the Act for regulating the importation of petroleum, of course, with the previous sanction of the Governor-General. The -third Act was Act No. VIII of 1889. The purpose of the Act as set out in the preamble was to consolidate and amend the law relating to the importation, possession and transport of petroleum and other substances. Section 9 of this Act also gave power to local government to make rules to regulate the importation of petroleum and the granting of licences to possess or to transport petroleum within the Province. In the same connection, Mr. Ganatra pointed out that the Bombay Municipal Corporation Act, which is Act No. Ill of 1888, was passed after the first two Petroleum Acts were enacted. The last Act, which is still in force, is the Petroleum Act XXX of 1934, which consolidates and amends the law relating to the import, transport, storage, production, refining and blending of petroleum and other inflammable substances. We have been unable to understand how the legislative history and the fact that the Central Legislature have made provisions for the storage of petroleum in all its. Acts in any way help Mr. Ganatra in the point he has. advanced before us. It is necessary to note that before the Government of India Act of 1935, the Indian Government was unitary in form. The entire power was concentrated in the Central Government, and the Provinces enjoyed such power as was delegated to them. The principle of devolution and decentralization of power was given effect to in small measure by the Government of India Act, 1919. Section 45A of the Government of India Act, 1919, empowered the Central Government to make rules for classification of central and provincial subjects. Accordingly, rules known as 'devolution rules' were framed under Section 45A. One of these rules relates to the classification of the subjects as Central and Provincial. Entry No. 23 in the Central subjects relates to control of petroleum and explosives. Among the Provincial subjects are mentioned local self-government, which is entry No. 1, and, public health and sanitation, which is. entry No. 3. Even in respect of the Provincial subjects, the Government of India Act, 1919, envisaged a diarchic form of government, that is to say, a distinction was made between reserved subjects and transferred subjects. Transferred subjects were the subjects which were transferred to the control of the Legislative Council. The Petroleum Act of 1934 was passed during the prevalence of Government of India Act, 1919. At that time, the Government was unitary, and notwithstanding the devolution and classification of subjects between Central and Provincial subjects, the power of the Centre was supreme in all fields and could not be called into question in any Court of law. The classification of subjects is not the same thing as the rigid division of powers as envisaged in Federal Constitution. Under the latter, authority is vested in the Courts to maintain delicate balance of power between the Centre and the States. This is not to suggest that even under the Constitution, the Union is not competent to pass a legislation similar to the Petroleum Act, 1934, nor is it suggested that the provisions of Petroleum Act, 1934, are in any way ultra vires the Constitution. The object in referring to the various provisions of the Government of India Act, 1919, and the constitutional position prevailing thereunder is to demonstrate the futility of any argument based upon the legislative history. The legislative history is not going to give us any guidance or clue in determining the powers of the respective Legislatures. Before concluding this topic, it is somewhat interesting to refer to the entry relating to petroleum in List I of the Government of India Act, 1935. It is entry No. 32 which runs thus:

Petroleum and other liquids and substances declared by Dominion law to be dangerously inflammable, so far as regards possession, storage and transport.

It is evident that the scope of this entry is much more narrow and limited than the entry No. 53 in List I of the Constitution of India. Entry No. 53 envisages regulation and development of oil fields and mineral oil resources, and mentions petroleum and petroleum products simpliciter without any qualifying words. The enlargement in the scope is obviously due to the fact that India is now a free and sovereign country. Any way, the legislative history affords no clue to find out an answer to the question which has been raised in this proceeding about the vires of the impugned legislation. Reliance has been placed on the decision of the Supreme Court in Navinchandra v. Commr. of I.-T., Bombay : [1954]26ITR758(SC) , in which it has been held that, the 'reference to legislative practice may be admissible for cutting down the meaning of a word in order to reconcile two conflicting provisions in two legislative lists as was done in In re the Central Provinces and Berar Act XVI of [1939] F.C.R. 18, or to enlarge their ordinary meaning as in State of Bombay v. F. N. Bahara : [1951]2SCR682 , s.c. 53 Bom. L.R. 982.,.' (p. 61). In fact, according to us, the provisions of entry No. 53 in List I, and the provisions of entries Nos. 1, 5 and 6 in List II do not stand in conflict with one another and, therefore, the question of resolving that conflict does not arise. Again, the legislative practice does not help us in resolving the conflict for reasons set out above. After referring to the rule in C.P. and Berar Act case, their Lordships have proceeded to observe (p. 61) :.The cardinal rule of interpretation, however, is that words should be read in their ordinary, natural and grammatical meaning subject to this rider that in construing words in a constitutional enactment conferring legislative power the most liberal construction should be put upon the words so that the same may have effect in their widest amplitude.

On the same page, their Lordships have-approved of the decisions of the Federal Court to which reference has already been made, so far as the principles of interpretation are concerned.

21. We have already pointed out that some overlapping between the topics in. the same Lists -as also topics in different Lists is unavoidable. In Union Colliery Company of British Columbia v. Bryden [1899] A.c. 580 a question arose as to-whether Section 4 of the British Columbian 'Coal Mines Regulation Act, 1890', which prohibits Chinamen of full age from employment in underground coal workings, is in that respect ultra vires of the Provincial Legislature, in view of the exclusive authority of the Dominion Parliament in regard to 'naturalization and aliens'. The Privy Council after examining the provisions of the impugned legislation pointed out that:.the leading feature of the enactments consists in this that they have, and can. have, no application except to Chinamen who are aliens or naturalized subjects, and that they establish no rule or regulation except that these aliens or naturalized subjects shall not work, or be allowed to work, in underground coal mines within the Province of British Columbia, (p. 587).

They further held that, the whole pith and substance of the enactments of Section 4 of the Coal Mines Regulation Act, consists in establishing a statutory prohibition which affects aliens or naturalized subjects and therefore trench upon the-exclusive authority of the Parliament of Canada. 'We are unable to understand how this decision in any way helps Mr. Granatra in the point he is urging, before us. Emphasis was laid upon the leading feature of the enactment, which affords a guide or clue in arriving at the pith and substance. So far as the impugned legislation is concerned, the leading feature is to provide for the need of securing licences for storing mineral oils under certain conditions. It is only incidental, that the Act also relates to a topic which falls under the jurisdiction of the Parliament. The extent of encroachment and the significance to. be derived therefrom has been discussed by the Supreme Court in the case of A.S. Krishna v. Madras State. A.I.R. [1957] S.C. 293. Venkatrama Ayyar J., who delivered the-judgment of the Court, after referring to the overlapping of the fields of legislation and the need for evolving the doctrine of pith and substance for resolving the conflict, observes (p. 301) :.The extent of the encroachment on matters beyond its competence may be art element in determining whether the legislation is colourable, that is, whether in the guise of making a law on a matter within its competence, the legislature is, in truth, making a law on a subject beyond its competence. But where that is not the position, then the fact of encroachment does not affect the vires of the law even as Regards the area of encroachment.

He has further laid down that the statute must be approached as an organic whole and it is not permissible to disintegrate it into different parts. To as certain the true character of the legislation which is impugned on the ground that it is ultra, vires the powers of the Legislature which enacted it, one must have regard to the enactment as 'a whole, to its objects and to the scope and effect of its provisions. It would be quite an erroneous approach to the question, to view such a statute not as an organic whole, but as a mere collection of sections, then disintegrate it into parts, examine under what heads of legislation those parts would severally fall, and by that process determine what portions thereof are intra vires, and what are not. In that case, their Lordships were considering the vires of the Madras Prohibition Act which made certain sub-rules and the argument was that in making these rules, it made inroad upon a topic which was in the exclusive domain of the Central Government,

22. Mr. Ganatra relied upon the decision of the Federal Court in Ralla Bam v. Province of East Punjab[1949] A.I.R. F.C. 81 and argued that the extent of encroachment is very much material in determining the pith and substance of the impugned Act. Their Lordships were considering the vires of the provisions of the Punjab Urban Immoveable Property Tax Act levying1 certain tax as property tax. It was contended that this legislation conflicted with the item of income-tax which falls within the domain of the Central Legislature. At page 88, their Lordships observe;.The conclusion we have arrived at is that in substance the impugned tax is not a tax on income, that it is not impossible to reconcile the seeming conflict between the provisions of the two -Acts, and that the extent of the alleged invasion by the Provincial Legislature into the field of the Federal Legislature is not so great in the present case as to justify the view that in pith and substance the impugned tax is a tax on income.

This passage again shows that the object of referring to the extent of invasion is to see whether in pith and substance the Legislature passes a legislation which will affect a topic reserved for the Centre under the guise of legislating on the topic falling within its own field. In the same context he referred to the decision of the Supreme Court in State of Rajasthan v. G. Chawla : 1959CriLJ660 to emphasize the argument that what is tolerated is slight transgression and nothing more. Although the expression '(slight transgression' has been used in the aforesaid ruling (State of Rajasthan v. G. Chawla), we do not think that it makes any departure from the principles laid down in the rulings referred to above, viz., that the extent of encroachment is material only for the purpose of determining or ascertaining the pith and substance, and the degree of encroachment in itself is not decisive of the point. The entire legal position in this respect has been summed up in Cat. Gas Co, (Prop.) Ltd. v. State of W.B. : AIR1962SC1044 Their Lordships observed:

In the matter of construing entries in the Lists given in Schedule VII of the Constitution, the following rules of interpretation are now well settled. The power to legislate is given to the appropriate Legislatures by Article 246 of the Constitution. The entries in the three Lists are only legislative heads or fields of legislation, they demarcate the area over which the appropriate Legislatures can operate. It is also settled that widest amplitude should be given to the language of the entries. But some of the entries in the different lists or in the same list may overlap and sometimes may also appear to be in direct conflict with each other. It is then the duty of the Court to reconcile the entries and bring about harmony between them. The underlying principle in such cases is that a general power ought not to be so construed as to make a nullity of a particular power conferred by the same Constitution and operating in the same field, when by reading the former in a more restricted sense effect can be given to the latter in its ordinary and natural meaning. Thus, every attempt should be made to harmonize the apparently conflicting entries not only of different Lists but also of the same List and to reject that construction which will rob one of the entries of its entire content and make it nugatory.

It would be thus seen that it is the duty of the Court to try to reconcile the conflict, if there is any, between the entries. In doing so, one of the principles to be borne in mind is that an entry which is specific would take precedence over the entry which is general. The general power ought not to be so construed as to make a nullity of a particular power conferred by the same Constitution and operating in the same field. Applying this principle to the present case, the power to deal with the question of possession and storage of petroleum and petroleum products under entry No. 53 is of a general character; whereas the power under entries Nos. 1, 5 and 6 of the State List is of a special character so far as the regulations relating to the storage are concerned, because these regulations have a bearing upon the question of public order, health, and hygiene, and local self-government which fall within the domain of the State List. To similar effect is the decision of the Supreme Court in Jagannath Baksh Singh v. State of V.P. : [1962]46ITR169(SC) . In addition to the rule about the need of harmonizing the entries and reconciling the conflicts, another rule has been laid down by the Supreme Court in Waverly Jute Mills v. Raymon & Co. : [1963]3SCR209 . That rule has been set out by Venkatarama Aiyar J. in the following terms:

The entries in the Lists in the Seventh Schedule should be so construed as to give effect to all of them and a construction which will result in any of them being rendered futile or otiose must be avoided. Where there are two entries, one general in its character and the other specific, the former must be construed as excluding the latter. This is only an application of the general maxim that Generally specialibus non derogant.

We must, therefore, make an attempt to give effect not only to entry No. 53 in List I, but also to entries 1, 5 and 6 of the State List. Applying these principles, we feel no hesitation in holding that the impugned -legislation fairly and squarely falls within entries 1, 5, 6 and 23 of List II of the Constitution of India.

23. The above conclusion would be strengthened by reference to the decision of the Privy Council in Gallagher v., Lynn. [1937] A.C. 863. The facts were as follows: The appellant was a dairy farmer in the county of Donegal in the Irish Free State, where, for many years, he had carried on business and had been selling milk by retail in the city of Londonderry for human consumption, and since the imposition of customs duty on milk imported into Northern Ireland he had paid the appropriate duty on the milk so brought in by him. By Section I, Sub-section I., of the Milk and Milk Products (Northern Ireland) Act, 1934, passed by the Parliament of Northern Ireland, it was provided that

a person shall not, either by himself or by any servant or agent... (c) sell or offer or expose for sale any milk except under and in accordance with this Act and such licence, if any, as may be required under this Act',

and by Section I, Sub-section 6, it was provided that

milk shall not be sold or offered or exposed for sale for the purpose of human consumption unless it is milk of Grade A, Grade B, or Grade C.

By Section 2, Sub-section I, it was provided that

a person shall not sell milk of Grade A, Grade B or Grade C unless he holds a licence under this section, being either (a) a Producer's licence, that is to say, a licence for the production and sale of milk; or (b) a Distributor's licence, that is to say, a licence for the purchase and resale of milk, whether by wholesale or by retail;

and by Sub-section 2,

the Ministry of Agriculture shall, on application being made in the prescribed manner, and on payment of the appropriate fee specified in this section, grant to any person upon the prescribed conditions a licence under this section.

24. After the passing of the Act the appellant applied for but was refused, a Producer's licence under, the Act so as to enable him to continue to sell in Londonderry milk for human consumption produced at his dairy in the county of Donegal, The licence was refused by the Ministry of Agriculture on the ground that licences under the Act could be granted only to persons whose dairies where the milk was produced were situate in Northern Ireland. Licences were also refused to other dairy farmers for the same reason.

25. As the appellant sold milk in Londonderry without having obtained a licence under the Act, proceedings were taken against him and he was convicted, and on appeal that conviction was upheld. At the hearing of the appeal it was contended inter alia, that the Milk Act, 1934, was ultra vires as being an undue interference with trade and so in violation of Section 4 of the Government of Ireland Act, 1920, which provides that

Subject to the provisions of this Act...the Parliament of Northern Ireland shall.. have power to make laws for the peace, order, and good government of...Northern Ireland with the following limitation,...

The Court of Appeal of Northern Ireland held that the primary object of the Milk Act, 1934, was not interference with trade, and therefore the Act did not come within the limitation imposed by Section 4, Sub-section 7, of the Government of Ireland Act, 1920. The House of Lords relied upon the expression, 'have power to make laws for the peace, order, and good government of'...Northern Ireland for justifying the Milk and Milk Products (Northern Ireland) Act, 1934. Lord Atkin emphasized that,.the Milk Act is not a law 'in respect of trade; but is a law for the peace, order and good government of Northern Ireland 'in respect of precautions taken to secure the health of the inhabitants of Northern Ireland by protecting them from, the dangers of an unregulated supply of milk, (p. 869).

He then proceeded to refer to the well established general principles and observed (p. 870) ;.It is well established that you are to look at the 'true nature and character of the legislation'... 'the pith and substance of the legislation'. If, on the view of the statute as a whole, you find that the substance of the legislation is within the express powers, then it is not invalidated if incidentally it affect's matters which are outside the authorized field. The legislation must not under the guise of dealing with one matter in fact encroach upon the forbidden field... In the present case any suggestion of an indirect attack upon trade is disclaimed by the appellant. There could be no foundation for it. The true nature and character of the Act, its pith and substance, is that it is an Act to protect the health of the inhabitants of Northern Ireland; and in those circumstances, though it may incidentally affect trade with County Donegal, it is not passed, 'in respect of trade, and is therefore not subject to attack on that ground...

26. Applying these principles, it is clear to us that the impugned section is not a legislation in respect of petroleum and petroleum products. The words conferring power (upon the Parliament of Northern Ireland were of a general character, viz. 'the Parliament shall have power to make laws for peace, order and good government'. It is on the basis of these general words that the Milk Products Act was held intra vires as the dominant object was to take precautions to secure the health of the inhabitants of Northern Ireland by protecting them from the danger of unregulated supply of milk. The entry 1 of List II specifically refers, to public order, entry 5 to local government and entry 6 to public health and sanitation. The words employed in these entries are far more specific and clear than the general words 'peace, order and good government'. Therefore, if the legislation of the Irish Parliament could be justified on the basis of the general words 'peace, order and good government', there can be no doubt that the present impugned, legislation could be justified with greater force and strength on the basis of the more specific words used in the entries referred to above.

27. Having come to the conclusion that, in pith and substance, the impugned legislation falls within any one or more of the entries in List II, all that is necessary now to see is whether by reason of certain overlapping on a narrow field, viz., the field of storage of petroleum and petroleum products, there can arise a clash between the State legislation and the Central legislation, particularly, on the ground that the Central legislation, is occupying the whole of the same field. If the encroachment is incidental and is confined to a narrow ground, that would not introduce a serious infirmity in the enactment except when it relates to a field which has been already occupied by a Central legislation. If the encroachment is on unoccupied field and the encroachment is also-of a minor character, then the legislation would not be invalid. Before considering the question as to whether, as a matter of fact, the whole field is occupied, and whether there has been any encroachment by the State Legislature over the occupied part of the field, it is necessary to consider some of the general principles that have been evolved on this point. Mr. Ganatra contended that the provisions of the impugned section are inconsistent or repugnant with some of the provisions of the Petroleum Act, 1934. Nicholas in his Australian Constitution, 2nd edn., p. 303, has laid down, three tests of inconsistency or repugnancy:-(1) There may be inconsistency in the actual terms of the competing statutes; (2) Though there may be no direct conflict, a State law may be inoperative because the Commonwealth law, or the award of the Commonwealth Court, is intended to be a complete exhaustive code; and (3) Even in the absence of intention, a conflict may arise when both State and Commonwealth seek to exercise their powers over the same subject-matter. These principles have been approved of by the Supreme Court in Ch. Tika Ramji v. The State of Uttar Pradesh : [1956]1SCR393 and in Deep Chand v. State of V.P. : AIR1959SC648 ., As has been explained by Bhagwati, J. in Ch. Tika Bamji's case,.Repugnancy falls to be considered when the law made by Parliament and the law made by the State Legislature occupy the same field because, if both these pieces of legislation deal with separate and distinct matters though of a cognate and allied character, repugnancy does not arise.

At page 425, he has cited a passage from the judgment of Dixon, J. in Ex. parts Mclean [1930] 43 C.L.R. 472 with approval, which is as under:

When the Parliament of the Commonwealth and the Parliament of a State each legislate upon the same subject and prescribe what the rule of conduct shall be, they make laws which are inconsistent, notwithstanding that the rule of conduct is identical which each prescribes, and Section 109 applies. That this is so is settled, at least when the sanctions they impose are diverse... But the reason is that, by prescribing the rule to be observed, the Federal statute shows an intention to cover the subject matter and provide what the law upon it shall be. If it appeared that the Federal law was intended to be supplementary to or cumulative upon State law, then no Inconsistency would be exhibited in imposing the same duties or in inflicting different penalties. The inconsistency does not lie in the mere coexistence of two laws which are susceptible of simultaneous obedience. It depends upon the intention of the paramount Legislature to express by its enactment, completely, exhaustively, or exclusively, what Shall be the law governing the particular conduct or matter to which its attention is directed. When a Federal statute discloses such an intention, it is inconsistent with it for the law of a State to govern the same conduct or matter.

At page 427, Bhagwati J. has cited a passage from the judgment of Sulaiman J. in Shyamakant Lal v. Rambhajan Singh [1939] F.C.R. 193, in which the following sentence occurs:

Further, repugnancy must exist in fact, and not depend merely on a possibility.

In Deep Chand v. State of V.P., Subba Rao J., after citing the three tests laid down by Nicholas in his Australian Constitution, has explained the meaning of the three tests in the following', terms (p, 665) :

Repugnancy between two statutes may thus be ascertained on the basis of the following three principles:

(1) Whether there is direct conflict between the two provisions;

(2) Whether Parliament intended to lay down an exhaustive code in respect of the subject matter replacing the Act of the State legislature; and

(3) Whether the law made by Parliament and the law made by the State Legislature occupy the same field.

These three propositions are virtually the paraphrase of the propositions laid down by Nicholas.

28. Bearing these principles in mind, let us examine the provisions of the Petroleum Act to see, firstly, whether it was intended to be an exhaustive code and what field it has occupied. We have already pointed out that the dominant object of the Petroleum Act is not to make regulation, relating to storage. The object of the Central legislation is far wider and covers several other matters, viz., import, export, production, refining and blending petroleum and other inflammable substances. On the other hand, the object of the impugned legislation is to make regulations relating to the storage of petrol in the City of Bombay with a view to protect life and property. Mr. Ganatra contended that the two legislations are made on one point, viz., the storage of petroleum and petroleum products, and this field has been occupied by Central legislation. He further argued that in so far as the State Legislature undertakes to cover the same field, it makes a serious and substantial invasion upon the field occupied by the Central legislation, viz., the Petroleum Act. 'We have already referred to the various provisions relating to the storage of the Petroleum Act, The most important provision to be considered on this aspect of the problem is Section 31 which runs thus:

Power to limit powers of local authorities over petroleum-Where any enactment confers powers upon any local authority in respect of the transport or storage of petroleum, the Central Government may, by notification in the official Gazette,-

(a) limit the operation of such enactment, or

(b) restrict the exercise of such powers, in any manner it deems fit.

It is evident from the language of Section 31 that the Central Legislature envisaged the possibility of Provincial Legislature passing enactments conferring powers upon local authority in respect of transport or storage of petroleum. In other words, it evinces a clear intention of not occupying or covering the entire field. The intention to operate in a limited field is implicit in the wording of Section 31. Of course, it is open to the Central Government to limit the operation of any such enactment or to restrict exercise of such powers in any manner it deems fit by issuing an appropriate notification. How far the provisions contained in Clauses (a) and (b) of Section 31 would be valid after the promulgation of the Constitution of India is a matter, which, it is not necessary for us to consider. It is possible to argue that, after the promulgation of the Constitution, the Parliament has lost the jurisdiction to limit the operation of the State legislations in regard to the storage of petroleum. For the purpose of discussion, however, we are assuming that the powers of the Parliament in the matter of limiting the operation of the State enactments remain intact. Even so, it is clear that the Parliament had no intention of occupying the entire field in so far as it has allowed the Provincial Legislatures to confer upon the local authorities certain powers relating to the transport or storage of petroleum. In this connection, it is interesting to note that a notification has been issued under Section 31 on April 1, 1950, in exercise of the powers conferred by Section 31 of the Petroleum Act. In effect, the notification declares that the Central Government is pleased to limit the operation of the enactments specified in the Schedule annexed, in so far as the said enactments relate to the storage or transport of petroleum other than petroleum which has its flashing point not below 200F to specified quantities.... It is significant to note that Section 394 has operated on the field which was left open by this notification. One of the enactments referred to in this Schedule of the notification is the City of Bombay Municipal Act, 1888 (Bombay Act III of 1888). We are, therefore, unable to understand how it is open to contend that the entire field relating to the regulation of storage has been occupied by the Central Legislature. In this connection, we may refer to another important provision of the Act, viz. Section 11 which lays down that, nothing in this Chapter shall apply to any petroleum which has its flashing-point not below two hundred degrees Fahrenheit, that is, 200 and above. In other words, heavy oils, the flashing point of which is 200 degrees, are wholly excluded from the operation of the Petroleum Act, and in so far as Section 394 and Schedule M lay down the need of a licence in respect of certain quantities, it provides for a matter which has been left out of consideration by the Central: Act. Mr. Ganatra contended that there is a clear contradiction in the terms of the two statutes. Whereas the Central enactment lays down in Sections 7 and 8 respectively that no licence is needed for small stocks of non-dangerous petroleum, and, for small quantities of dangerous petroleum, Section 394 of the Bombay Municipal Corporation Act prescribes a licence precisely in respect of the same material. We have already explained that the motivation and purpose of the Central enactment was to take certain precautions in respect of petroleum and petroleum products in so far as they arise out of the intrinsic quality of the material. The licence which is required under Section 394 is based on a different consideration, viz. ensuring safety of the lives of persons inhabiting a crowded city. In our view, there is no contradiction whatsoever in the Central enactment under which no licence is required for certain cases, and Section 394 under which licence is required in respect of these very cases. It appears to us that far from there being any contradiction between the two statutes, one is supplementary to or cumulative of the other (to borrow the phraseology of Dixon, J. in Ex parte Mclean.) According to us, none of the three tests laid down by Nicholas applies to the present case. There is no direct conflict between the two provisions. The Central Act was in no sense of the term intended to be an exhaustive code. Finally the two legislations viz. the Petroleum Act and Section 394 of the Bombay Municipal Corporation Act do not occupy the same field.

29. Mr. Ganatra then referred to the decision of the Privy Council in Att.-Gen. for Alberta v. Att.-Gen. for Canada [1943] A.C. 356, and contended that the impugned section constitutes a serious and substantial invasion of the exclusive powers of the Parliament as set out in entry No. 53. The question that arose for consideration before the Privy Council was whether the Debt Adjustment Act, the main purpose of which was to relieve persons from an enforceable liability to pay debts and, in many oases, to compel the creditors to accept compositions, was ultra vires the Provincial Legislature. The Act purported to preclude persons from any access to the Courts to enforce their rights without the permission of the Board. It is on that account that it was held that, in so far as the access to Courts was barred, the Provincial enactment was, in pith and substance, a legislation in relation to insolvency and as a whole constitutes a substantial invasion of the exclusive legislative powers of the Parliament of Canada. It is also held that it obstructs and interferes with the actual legislation of the Dominion Parliament on those matters. It is on these grounds that the invasion by the Provincial Legislature was treated as a serious and substantial invasion so as to make it ultra vires. It must be remembered that by applying the doctrine of pith and substance, their Lordships came to the conclusion that it constituted a substantial and serious invasion over the right of the Parliament to legislate in respect of bankruptcy and insolvency. Furthermore, there was another enactment passed by the Parliament on the topic with, which it came with serious clash. The observations of the Privy Council which were made in this context are of no assistance to Mr. Ganatra on the facts of the present case in determining the question on hand.

30. We do not think that the question of colourable legislation falls to be considered in the present case, The doctrine of colourable legislation is based on the well-recognized principle that the Legislatures cannot do indirectly what they have been prohibited from doing directly. As has been pointed out by Mukherjea J. in K.C. Gajapati Narwyan Deo v. The State of Orissa: : [1954]1SCR1 .The whole doctrine resolves itself into the question of competency of a particular legislature to enact a particular law. If the legislature is competent to pass a particular law, the motives which impelled it to act are really irrelevant.,. Such transgression may be patent, manifest or direct, but it may also be disguised, covert and indirect and it is to this latter class of cases that the expression 'colourable legislation' has been applied in certain judicial pronouncements. The idea conveyed by the expression is that although apparently a legislature in passing a statute purported to act within the limits of its powers, yet in substance and in Reality it transgressed these powers, the transgression being veiled by what appears, on proper examination, to -be a mere pretence or disguise.

We have discussed all the aspects that were urged by Mr. Ganatra in support of his proposition that the provisions of the impugned legislation and those of the Central Legislature are repugnant and that there is a collision between the two, and also the question as to whether and how far the field of storing petrol has been occupied by the Legislature, and, we feel no hesitation in holding that there is no repugnancy or inconsistency 'between the two. The two legislations operate in different fields, and there is no clash, much less, a collision between the two.

31. The learned Government Pleader referred us to a decision of the Calcutta High Court reported in Caltex (India) Ltd. y. Director, W.B. F. Services : AIR1960Cal219 where the questions raised by Mr. Ganatra were directly brought in issue and answered. In that case, the petitioner was a company which had installations on certain roads in Calcutta for the storage of petroleum, petroleum products and kerosene. The company stored petroleum by virtue of licences issued under the Petroleum Act. In May 1952, the Corporation of Calcutta demanded licence-fees from the petitioner-company for 1950-51 for storage of petroleum at the same place. The licence was demanded under the West Bengal Fire Services Act, 1950, and the question that was canvassed before the Court was whether the provisions of the West Bengal Fire Services Act- were repugnant to the provisions of the Petroleum Act. In the course of the judgment, a reference was made to the earlier decisions of the Division Bench of the Calcutta High Court in which the same question had come up for consideration and decided. It was held that the Fire Services Act is in pith and substance an Act which comes within the subject-matter of items 5 and 6, certainly item 6 in list II, 7th Schedule of the Constitution. It was further held that the Petroleum Act, 1934, if it comes, under the Union List can only come under item 53 and the subject-matter thereof is not identical with items 5 and 6 in the State List, It was, therefore, decided that even if the State Act made an incidental encroachment upon the Central Act, it was not rendered invalid thereby. The subject-matter of the two legislations are not the same although some of the provisions overlap. It is also held that, even if the provisions overlap, there is no repugnancy, between the two Acts, because by its own premises the Petroleum Act, 1934, is not meant to be ex elusive but is supplementary to, and contemplates the existence of, State Acts relating to the storage of petroleum. Therefore, there is no repugnancy. For the same reasons, the argument of the 'occupied, field' also fails. A reference was made to Section 31 as also the notification issued thereunder. We respectfully agree with the view taken by the Calcutta High Court and hold that the impugned provision is intra vires.

32. Mr. Ganatra contended that the provisions of Section 394 of the Bombay Municipal Corporation Act must be read subject to the notification issued under Section 31 of the Petroleum Act. We have already' pointed out that the question as to whether the Parliament continues to have the power of limiting the operations of the State enactment after the promulgation of the Constitution by issuing a notification is a moot one. Assuming, however, that such a notification can be issued so as to limit the operation of the State enactments, still, we are unable to understand how the notification comes in the way of the requirement of a licence as laid down by Section 394 of the Bombay Municipal Corporation Act. The notification expressly states that the Government is pleased to limit the operation of the enactments specified in the Schedule in so far as the said enactments relate to the storage or transport of petroleum other than petroleum which has its flashing point not below 200F. In other words, the operation of the enactments set out in the Schedule are limited only in respect of petroleum which has its flashing point below 200F. In the present case, the flashing point of the article stored is 360F, that is, above 200F. That being the case, the question of limitation of the operation of provision in Section 394 by reason of the notification does not arise at all.

33. Mr. Ganatra finally contended that the impugned provision violates the accused's fundamental right guaranteed by Article 19(1)(f) and (g) of the Constitution of India. Article 19(1)(f) provides that, all citizens shall have the right to acquire, hold and dispose of property, and Article 19(1)(g) provides that they shall have the right to practise any profession, or to carry on any occupation, trade or business. The Government Pleader referred to Article 358 of the Constitution and argued that since the proclamation of emergency is still in force, the operation of Article 19 is suspended, and it is not open to any citizen to invoke that article in aid of the rights guaranteed thereby. We are not disposed to pronounce any verdict on this aspect of the matter, because we find that the question can be answered by reference to Clauses (5) and (6) of Article 19 relating to reasonable restrictions in the interest of general: public. The requirement of securing a licence from the Municipal Commissioner appears to us clearly a reasonable restriction in the interest of general public. It is necessary to remember that the quantity of gallons stored by the accused is 7290 gallons. If Mr. Ganatra, 's contention is accepted, it means that he will be free to store even thousands of gallons or millions of gallons of heavy oil without a licence in any part of the Bombay City irrespective of the local situation prevailing therein. In our view, the restriction imposed by Section 394 is not only not unreasonable but is also called for in the interest of general public to safeguard their lives and property.

34. In the result, the appeal fails and is dismissed.


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