1. This is an appeal against the judgment and decree, dated 16th May 1942 of the Civil Judge of Benares by which he reversed the judgment and decree, dated 2nd June 1941 of the City Munsif of Benares in a suit for an injunction. The plaintiff Jamna Prasad is the sole agent at Benares of the Ganesh Flour Mills, Cawnpore, for the sale of Vanaspati manufuetured by the said Mills. On 22nd October 1940 he made an application to the Health Officer of the Benares Municipality for a licence 'to sell Vanaspati at premises 29/22 in mohalla Rajgir Tola, Halqa Chauk of Benares City.' These premises are situated in close proximity to Kachauri Gali of Benares where a number of confectionery, sweetmeat and cake shops, etc., exist. The Health Officer, taking the view that the sale of Vanaspati in that locality would facilitate adulteration of fat with ghee and prevent detection and would not be in the interest of public health, refused the licence and directed the plaintiff to close his shop under the threat of a prosecution in default. The plaintiff closed his shop under protest and soon after raised an action in the Court of the Munsif of Benares for
a permanent injunction not to interfere with the plaintiff's business in Rajgir Tola as regards the sale of Vanaspati so far as it is consistent with other requisites for the same.
2. At the trial the relief of injunction in the wide form quoted above was not pressed and the controversy was narrowed down to the question whether the Municipal Board, Benares had or had not the power to refuse the licence, and the injunction was limited to a direction to the Municipal Board that on plaintiff's making a proper application and paying the requisite fee the Municipal Board is restrained from refusing to grant a licence to the plaintiff for the sale of Vanaspati in the premises mentioned above. The trial Court holding that the power of the Municipal Board to refuse a licence is controlled by the United Provinces Prevention of Adulteration Act, 1912, and by the rules made by the Government thereunder and as the statute and the rules do not provide for the withholding of a licence in the interest of public health the Municipal Board had no power, under the statute or under any rule or regulation, to refuse a licence when an application was made on payment of proper fee for a licence, as was done in this case, granted the plaintiff an injunction to the limited extent indicated above. On appeal by the Municipal Board, the Civil Judge of Benares holding that a power to grant licence carries with it an implied power to refuse a licence on valid grounds and as the refusal of the Municipal Board was made in the interest of public health, cancelled the injunction and dismissed the claim. We have now a second appeal by the plaintiff and the short question for our consideration in the case is whether, in the events that have happened, the Municipal Board had or had not the power to refuse the licence;
3. It is necessary to bear in mind that the Municipal Board had not absolutely prohibited the plaintiff from selling Vanaspati at Benares. They had only refused him a licence to sell Vanaspati at particular premises in Benares and this refusal was made properly for reasons of public health and was not made arbitrarily, unjustly or oppressively and the controversy before us is limited to the question whether, in these circumstances, the Municipal Board is under any obligation to issue a licence. The authority of the Municipal Board to grant a licence is derived under Section 16, U.P. Prevention of Adulteration Act (6 of 1912) as amended by Acts 1 of 1916, 2 of 1930 and 13 of 1932 and under rules which have been framed by the Local Government under that Act and which are called 'Butter, Ghee and Pat Licensing Rules, 1930.' Section 16 is as follows:
The Local Government may by notification prescribe that no person shall sell, or offer or expose for sale, or manufacture or store for sale, any specific article of food or drug except under a licence containing Such conditions and given by such authority as the Government may, by the said notification, prescribe.
Butter, Ghee and Fat Licensing Rules, 1930, are thirteen in number of which Rules 3, 6, 7 and 11 are as follows:
3. No person shall sell or offer or expose for sale or manufacture or store for sale any of the following articles of food, except under licence granted by a local authority:
(2) Ghee, and
'6. Any person granted a licence for manufacturing, storing or selling ghee, shall not be granted a licence to manufacture, store or sell fat in the same local area.'
'7. Any person granted a licence for manufacturing, storing or selling 'fat' shall not be granted a licence for manufacturing, storing or selling ghee in the same local area.'
'11. A fee not exceeding Rs. 2 has to be paid to a local authority for the grant of a licence which will cover a period of one year ending with 31st March.
4. The other rules which are not necessary to quote in extenso provide for maintenance of a register of licence-holders, for inspection of licensed shops, for putting up a signboard and for the use of a metallic badge. Rule 12 authorises a local authority to frame bye-laws and 'to cancel or suspend any licence in case of any breach of the above rules or any bye-laws.' It is a matter of admission that Vanaspati is a fat within the meaning of the above Act and Rules and that the Municipal Board, Benares, is a local authority within the meaning of the Act and Rules and the Municipal Board of Benares acting under Rule 12 have not yet framed any bye-laws in conformity with the above rules.
5. The plaintiff contends that under Rule 3 and Rule 11 mentioned above the Municipal Board has no option but to issue a licence when an application is made by a person to that authority, on payment of the requisite fee, except in a case which is covered by Rules 6 and 7 which admittedly do not apply to this case; and the only other way in which the Municipal Board can refuse a licence is by making bye-laws, the provisions of which may give them a right to refuse a licence and which bye-laws admittedly have not yet been framed by the board and for this contention reliance is placed on Rossi v. Edinburgh Corporation (1905) 1905 A.C. 21; Rex v. Metropolitan Police Commissioner (1911) 2 K.B. 1131; Rustom Jamshed Irani v. Hartley Kennedy ('02) 26 Bom. 396; Somu Pillai v. Municipal Council, Mayavaram ('05) 28 Mad. 520 and Ratanshaw Nusserwanji v. Geoffrey William MCElhinny ('42) 29 A.I.R. 1942 Bom. 1. The defendant, on the other hand, contends that a power to grant licence also carries with it a power to refuse licence unless there is Something to show, in the statute or in the rules and regulations by which the power was conferred that the power to refuse licence was taken away or circumscribed and for this contention reliance is placed on Haji Ismail Haji Essac v. Municipal Commissioner of Bombay ('04) 28 Bom. 253 and I.L.R. (1937) Bom. 774.
6. The licensing power conferred on authority by a statute or by a rule or regulation may be expressed in language which is obligatory or which is discretionary or it may be expressed in language which shows that in certain conditions power was to be exercised and in certain conditions it was not to be exercised. It is a question of construction in each case in what terms the power is expressed. (1905) A.C. 211 was one in which the regulations framed under the statute which were called 'Licence' exceeded the authority given by the statute, Rex v. Metropolitan Police Commissioner (1911) 2 K.B. 1131 was one in which the exercise of power and the refusal -to exercise the power both were circumscribed by the statute and rules and regulations. In 26 Bom. 396 3 the power was expressed in obligatory language and in I.L.R. (1942) Bom. 2595 the exercise of power and its refusal were both subject to conditions. Section 16, U.P. Prevention of Adulteration Act, and Rule 3 which is framed thereunder expressly and in clear terms take away the right of a person to sell butter, ghee and fat according to his wish and these articles can only be sold under a licence granted by a local authority. It is nowhere stated in Rule 3 that the local authority shall grant a licence or even may grant a licence. The entire obligation under Rule 3 is laid upon the person who wishes to sell butter, ghee or fat and the rule puts upon him a liability that he can sell these articles if, and only if, he could secure a licence from the local authority. It will be further noticed that under Rule 11 by which a licensing fee of Rs. 2 is charged no obligation is laid to issue a licence, if the fee is offered. The power to grant licence under Rule 3 given to a local authority is not an express power but it arises by implication and this power which arises by implication also carries with it, by implication, a power to refuse licence and does not become an obligation to issue a licence as a matter of course.
7. It is contended that Rules 6 and 7 provide that a licence shall be refused to the same person to sell fat and ghee simultaneously and as there is no other express power of refusal this necessarily implies that in any other case a licence has to be granted as a matter of course and cannot be refused. We do not think this is a correct interpretation of Rules 6 and 7. By those rules the power was taken away from a local authority to grant a licence to the same person to sell fat and ghee even if it wanted to do so, but those rules or other rules do not impose any obligation upon the Municipal Board to issue a licence when, in the interest of public health, they do not consider it proper to do so. Under Rule 12, the Municipal Board, can cancel the licence of a person who may be guilty of the breach of any provisions contained in Rules 4, 5, 8, 9 and 10. If the contention of the appellant is sound, then it will be open to the person whose licence has been cancelled to apply for a fresh licence next day after the cancellation and the board would have no option but to grant the same. In our opinion, this is not a case in which power was expressed in obligatory language or in which the granting of a licence or not granting of a licence depended on conditions. We are of opinion that the power given to the local authority under the rules is a discretionary one and so long as the discretion is not exercised arbitrarily, unjustly or oppressively it is not open to challenge. We therefore dismiss this appeal with costs.