D.N. Sinha, J.
1. This application and two other applications were heard one after another, and the points of law involved are the same, and there was a common set of arguments. The point involved is the interpretation of Section 229 of thp Calcutta Municipal Act, 1951, (hereinafter called the 'Act'). That Section runs as follows:
'Every person who erects, exhibits, fixes or retains upon or over any land, building, wall, hoarding or structure any advertisement, or who displays any advertisement to public view in any manner whatsoever, visible from a public street or other public place, shall pay for every advertisement which is so erected, exhibited, fixed, retained or displayed to public view, a license fee calculated at such rate and in such manner and subject to such exemptions as the Corporation may prescribe by rules, with the approval of the State Government.'
2. The petitioners in all these applications carry on the business of exhibiting cinema films in Cinema Houses situated within the boundaries of the Corporation of Calcutta. Advertisements are displayed on cinema screens by means of slides, as also by moving pictures. The Corporation framed rules by a resolution dated August 27, 1954 which was approved by Government by notification No. 5002/M.3R-1/55, dated 16-6-1955, as published in the Calcutta Gazette dated June 30, 1955 for the levy of license fees on advertisements under Section 229 of the Act. Section 230 of the Act lays down that after rules have been prescribed for the levy of license fee under Section 229, no advertisement for which a license fee is leviable shall be erected, exhibited, fixed or retained upon or over any land, building, wall, boarding or structure, or shall be displayed to public view in any manner whatsoever, in any place, without a license from the Commissioner.
3 Rule 1 of the said rules lays down that for every license granted under Section 230 of the Calcutta Municipal Act, 1951 a fee shall be charged at the rates specified in the schedule to the Rules, or at such other rates as may, from time to time, be prescribed by the Corporation in lieu thereof, by rules, with the approval of the State Government.
4. Rule 2 lays down that the license fee may be imposed on an annual basis or a monthly basis.
5. Rule 4 lays down that the Commissioner may, for reasons to be recorded by him and which he considers to be sufficient, exempt from the payment of fees, advertisements, which relate to public charitable institutions, public educational institutions, public hospitals, or free dispensaries, places of public worship or such as, give the public, information or directions. The schedule of fees contains many items, e. g. advertisement on hoardings, walls or posrs, advertisements on cloth hung across streets or footpaths, advertisements fixed to or against the wall or cuter face of a building, advertisements suspended over or across the street etc. What we are concerned with in these cases is, however, item No. 10 which runs as follows:
'Advertisements exhibited on screen by means of lantern slides or similar devices (including the slide advertisements exhibited on the screen in Cinema houses):
Per month.Per year.
(a)For a space upto 5 sq. ft.6400(b)For aspace over 5 sq. ft. and 25 sq. ft.8000(c)For every additional 25 sq. ft. or less.8000'
6. Although the rates have been specified, the rule is entirely vague as to how the amount due is to be actually calculated. It is well known that in Calcutta cinema houses there are several shows each day. Advertisements therefore, tend to be repeated, and the same advertisement may continue to be exhibited for weeks or months or even years. It is not stated in the rule as to whether a particular advertisement is to be made liable for payment of license fee for each exhibition, or for a series of exhibitions. The only indication is that the fee may be imposed on an annual basis or on a monthly basis. The learned Advocate-General who appeared for the State urged that the rules as they stand prescribe one license-fee for the continuous exhibition of the same advertisement during a month or a year, according to the basis adopted under Rule 2, (read with item 10) and calculated according to the area occupied by the advertisement on the screen. I also agree that under the rules as they stand such must be the interpretation. As a matter of fact, if this is done on an annual basis for each advertisement, as indicated in item 10, the petitioners in these cases are willing not to press the applications, but learned Counsel appearing on behalf of the Corporation is not authorised to accept this offer.
7. The petitioner No. 1 in this case carries on the business of a cinema house known as the Purna Theatre, situate in Bhowanipore in the suburbs of Calcutta. By letter dated 11-8-1955, the Acting License Officer of the Corporation of Calcutta drew the attention of the petitioner to the fact that the Corporation had framed rules under Section 229 of the Act, and the petitioner must accordingly take out a license for the exhibition of advertisements on the screens inside the petitioner's cinema house and pay necessary fees therefor. Similar notices were served upon the other petitioners. The petitioners protested against the imposition of such fees, and this Rule and the other Rules have been taken out challenging the validity of the same.
8. The grounds staled on behalf of the petitioners in these cases may be formulated as follows:
(1) The words used in Section 229 are: 'visible from a public street or other public place'. It is argued that the inside of a cinema-house is not a public place and. therefore, upon a construction of the section itself, no fees are leviable upon exhibition of advertisements displayed on the screens inside the cinema houses.
(2) The words 'public place' must be taken 'ejusdem generis' and must be in the nature of a public street. Since the inside of a cinema house is not of the same nature as a public street, the exhibition of advertisements on circuma screens does not come within the mischief of this section.
(3) The payment contemplated under Section 229 is a license fee and described as such. The requirements of law for the purposes of imposing a license fee, have not been complied with. There is no 'quid pro quo' on the pant of the Corporation in exchange of the demand for any licence fee.
(4) Under Section 229, the Corporation with the approval of Government, can levy a license fee at any rate, or in any manner, or subject to any ex-emption as may be prescribed. The power is arbitrary and unfettered. The Legislature has laid down no standard of policy by which the exercise of this arbitrary power can be guided or controlled. There has been, therefore, an improper delegation by the legislature of its legislative powers.
(5) That both Section 229 and the Rules are bad for discrimination as it gives to the Corporation and/or the Government, power to exempt any person or body of persons from payment of the license fees.
9. The Calcutta Municipal Act, 1951, is a State Law. The legislative items upon which it is based are the following:
(a) item 55 -- taxes and advertisements other than advertisements published in the newspapers;
(b) item 66 -- fees in respect of any of the matters in list 2, but not including fees taken in any Court;
(c) item 5 -- Local Government, that is to say, the constitution and powers of Municipal Corporation in list II of the 7th schedule annexed to the Constitution of India.
10. The points Nos. 1 and 2 may be conveniently dealt With together. The question as to what is a 'public place', is a question of some nicety and there are two divergent views on the subject. The first view is that a 'public place' is a place where members of the public may resort to, as a matter of legal right. The other view is that a 'public place' is a place where members of the public are permitted to go, and where they habitually resort to. A number of decisions have been cited before me supporting one view or the other. Most of the Indian cases arise in connection with the Gambling Acts, which declare gambling in public place to be an offence. It is not possible to consider all the cases on the subject, but I shall proceed to consider the more important ones. The first English case is Case v. Storey, (1869) 4 Ex. 319 (A). In this case the point arose whether a station premises belonging to the Great Northern Railway could be called a public street or a public place. It was held that the station-premises was private property, and although it is a place or public resort, the Railway Company might exclude members of the public therefrom and, therefore, it could not be called either a public street or a public place. The words used in the statute were, 'in any street or place'. The argument that 'place' should be taken 'ejusdem generis' with a 'street' was accepted.
11. The next case is, Turuball v. Appleton, (1876) 45 J. P. 469 (R). In this case, a field maintained for the benefit of a Colliery Company, to which strangers were admitted without any objection was held to be a public place. We next come to the case of R. v. Wellard, (1884) 14 QBD 63 (C). This was a decision under 14 and 15 Vict. c. 100 Section 29, dealing with indecent exposure of the person. Grove J., held that a public place was a place where the public go, no matter whether they have a right to go or not.
12. A similar view was expressed in Kitson v. Ashc, (1899) 1 QB 425 (D).
13. Lastly, we come to two recent decisions, both of Lord Coddard C. J., which are difficult to reconcile. The first case is Elkins v. Cartridge, (1947) 1 All ER 829 (E). The respondent in that case, was charged with being drunk when in charge of a motor vehicle in a public place, so as to be incapable of having proper control of the vehicle, in violation of Section 15 (1) of the Road Traffic Act, 1930. It was found that the respondent was under the influence of drink, and that he put his motor car in an enclosure at the rear of the Fox and Hound Inn. At the side of the Inn there was a well defined parking ground, from which an open gateway gave access to the said enclosure. Cars had access to the said enclosure and did actually park there without any hindrance. It was hold that the enclosure was a part of the car park because the licensee of the Inn invited people to go there, and people did go there and park their' cars. The learned Judge proceeded to say as follows:
'The section refers to 'a Road or other public place.' I emphasise the word 'other'. 'Road' is defined in Section 121 of the Act, and one must have regard to that definition when considering the meaning of the words 'public place' because the two things are treated 'ejusdem generis'. 'Road' means any highway or any road to which the public has access and so includes every road over which the public passes. Having regard to the definition of 'road', 'public place' for the purposes of this section must be read as meaning a place to which the public have access, i. e., have access in fact. In this case, it is expressly found that cars have access to the enclosure.'
14. Lord Goddard, C. J., referred to the case of R. v. Collinson, (1931) 75 S. J. 491 (F). There, a man who was charged with being in charge of a car while under the influence of drink happened to be in a car which was in a field to which at the relevant time the public were invited to watch some point-to-point races. It was a private field and could be closed at any time, and the propriefor could have objected to a particular person. going in. The public had no legal right which they could enforce, of access to the field, but at the relevant time the public were invited to use it and did in fact avail themselves of the invitation. It was held that the car park was a public place.
15. The second case is Brannan v. Peek, (1947) 2 Ail EH 572 (G). The English Street Bet-ting Act, 1906, under Section 1 (1), prohibited a person from frequenting or loitering in any street or public place, on behalf of himself or of any other person, for the purpose of book-making or betting or wagering etc. Section 4 provided that the words 'public place' shall include any public park, garden, sea-beach and any enclosed ground to which the public for the time being had unrestricted access, and also included every enclosed place (not being a public park or garden), to which the public had a restricted right of access, whether on payment or otherwise, if at or near every public entrance there was conspicuously exhibited, by the owners or the persons having the control of the place, a notice prohibiting betting therein. The appellant was apprehended, while accepting bets in respect of races within the licensed premises known as Chesterfield Arms, Derby. Lord Goddard, C. J. stated as follows :--
'A public house, however, is only a place where a person holding a justices' licence is entitled to sell drink, and is no more a public place than a draper's shop. The public, it may be, are invited in enter but that docs not give them right of access, because the invitation can be withdrawn at any moment. As a rule, any person who desires refreshment is welcomed as a guest to the public house, He is invited to enter so long as the doors are open unless the publican refuses to have him in his house, as he has a perfect right to do. .... ..... There is no right of entry into a public house, restricted or otherwise. In any circumstances it could only be said that there was a restricted right of entry and if there was, then it is necessary, to bring the premises within the definition of 'public place', in Section 1 (4) of the Act of 1906, that a notice prohibiting the betting should be conspicuously exhibited at or near the public entrance which was not done in this case.'
16. It is perhaps possible to distinguish this case on the ground of the definition of a 'public place' in the statute concerned, because in order to make a place of restricted entry a public place it was necessary to exhibit a notice which in that particular case was never exhibited. Apart from this, I am unable to reconcile tin's case with the previous decision of Lord Goddard mentioned above. I fail to see why the inside of an Inn should not be a public place, while an enclosure at the back of it would be so, although in both cases members of the public were allowed entry and user but had no legal right of access.
17. I now come to the Indian cases. In Queen Empress v. Sri Lall. ILR 17 All 166 (H), it was held that a Chabutra which was private property, adjoining a public thoroughfare, was not a public place. Khudi Sheikh v. King Emperor, 6 Cal WN 33 (I), was a case under Section 11 of the Gambling Act II of 1867, which laid down that a police officer may apprehend without warrant, any person found laying bets for money or other valuable things, with cards, dice or other instruments of gambling, in any 'public market, fair, street, place or thoroughfare situate within the limits aforesaid'. The gambling took place within a Thakurbari surrounded by a high compound wall. Hindus were allowed to go in, but the owner was entitled to prevent any particular individual going in, if he objected to his presence. It was held that the word 'place' could not but be a public place within the meaning of this section and was evidently ejusdem generis with the other words in the section, and such a place must be of the same character as a public market, fair, street or thoroughfare and that a Thakurbari surrounded by a high compound wall, to which members of the public have no legal right of access, was not such a place. Hari Singh v. Jadu Nandan Singh, ILR 31 Cal 542 (J), was also a case under the Gambling Act. In this case, the gambling took place within the compound of the Sanjoy Press, consisting of an open space of land without any fence, situated one cubit from the Bazar. There was no evidence that the owner ever gave or refused permission to any one to come into his compound, or that any one asked his permission to do so, or that any one was prevented from doing so. It was held to be a public place. In Emperor v. Govindarajulu, ILR 39 Mad 886 : (AIR 1916 Mad 474) (K) the question was whether the accused was guilty of disorderly behaviour in a place of public resort, namely, the grounds of the Madras Harbour; it was held that it must be considered to be so. It was observed that a legal right of access by the public is not necessary to constitute a public place.
18. Emperor v. Hussain Noor Mohamad, ILR 30 Bom 348 (L) was a case under the Bombay Prevention of Gambling Act. Under that Act, gambling in a 'public street, place or thoroughfare' was prohibited and constituted an offence. The G. I. P. R. Co. used to run Racing Specials from Bombay to Poona. The train ran direct from Bombay to Poona and did not take any passengers in any intermediate station. The accused were travelling in the train and were gambling. It was held that the train was not a public place.
19. In Ram Janak Patwa v. Emperor, AIR 1937 Pat 276 (M), it was held that to constitute a public place it need not be public property; but if it was a private property, the public must have access to it. It is not sufficient that the place should be accessible to the public; it must be a place to which the public do in fact resort.
20. Considering all these cases, it appears to me impossible to draw any established principle. Apart from the question of ejusdem generis, the two view points appear to be equally tenable. The stricter view is that a public place must be a place to which members of the public have a legal right of access. On the other hand, it is equally plausible to say that a place where the public are permitted to go and habitually go, is also a public place. Where there is public ownership there is a right vested in the public to have access. Of course, this does not mean that there is an unlimited right. Such access may be conditional upon payment and subject to reasonable restrictions. For example, the Zoological gardens is a public place but there is no unrestricted entry to it. A public road is the most outstanding example of a public place. But even there, restrictions may be placed by the Municipality for purposes of effecting repairs and so on. So far as a Cinema-house is concerned, the ownership is private, but the public are invited to enter, upon making payment. The owner may prevent any person from entering, although this may entail the cancellation of his license. Indeed, most of the Cinema houses print this condition on their tickets, namely, that any person may be excluded therefrom without assigning reasons. How then are we to decide the question? It has been suggested that one way of doing it would be to look at the Act itself, its contents and the evil which this particular provision of law was intended to meet. It is conceded that the word 'public place' has not been defined in the Act. The word 'public street' has been defined. Under Section 5 (60) of the Act, 'public street' means any street, road, lane, gully, alley, passage, pathway, square or court, whether a thoroughfare or not, over which the public have a right of way. Schedule XV of the Act lays down rules as to the regulation, maintenance, protection and repair of 'streets and public places'. This schedule deals with public streets and things like regulating projections over public streets, the regulation of sky signs, posting of street names and numbers of premises etc. It, however, does not deal with anything in the nature of cinemas or theatres. Chapter XXI of the Act is also headed 'Streets and public places'. This chapter also deals with public streets or public squares but not with things like cinemas or theatres. It will be seen that the word 'street' has often been used in connection with the words 'public places'. The word 'street' has been defined in Section 5 (71) meaning a public or private street. There can be no doubt that a cinema-house, even if it is a public cinema house, is not in the same class as a street or a public street. It is next argued that the rule of ejusdem generis should be applied and the words 'other public places' must be in the nature of a public street. Emphasis is placed on the word 'other'. Support is certainly derived from some of the cases mentioned above, particularly. Case v. Storey (A) (supra) and Elkins v. Cartridge (E) (supra). In the last mentioned case, the words were 'a road or other public place'. It will be recollected, however, that although the rule of ejusdem generis was applied, the reasoning was that road means any highway to which the public had access and inasmuch as the public had access to the enclosure behind the Inn it was a public place. Of course, if a similar reasoning is adopted in this case, a cinema-house would be a public place because the members of the public have access to it, in the same way as they have access to a public street, But is it possible to derive any assistance from the contents of the Act or the rule of ejusdem generis? So far as the contents of the Act are concerned, I am unable to see how the expressions used in different parts of the Act can be said to throw any light on the subject. As regards the rule of ejusdern generis, the difficulty is that only one instance is given, and this does not fix a genus and unless a genus or a category is fixed, there is no room for the application of the doctrine of ejusdem generis (Maxwell on Interpretation of Statutes, 9th Edition, page 337). In United Towns Electric Co. Ltd. v. Attorney-General for Newfoundland, (1939) 1 All ER 423 (N), the Privy Council held that the mention of a single species did not constitute a genus. The United Towns Electrical Co. Act of Newfoundland provided that the Company shall be liable for water rates on lands and buildings owned by it in certain towns, but otherwise the Company shall be exempt from taxes. Lord Thankerton held that 'there is no room for the application of the principle of ejusdem generis in the absence of any mention of a genus, since the mention of a single species for example, water rates, -- does not constitute a genus.'
21. In Anil Kumar Nag v. The State, 59 Cal WN 303 (O), Chuuder J. had to construe Section 11 of the Bengal Public Gaming Act 1867 which speaks of 'any public market, fair, street, place or thoroughfare.' The learned Judge held that the word 'place' has got to be read ejusdem generis and must mean some such place as was like a public market or fair or street or thoroughfare where members of the public have an unrestricted right of entry and cannot be legally prevented from having access. It was held that a tea-shop was not such a public place. In that case, however, there were a number of places mentioned, namely, market fair, street or thoroughfare and so the rule of ejusdem generis could have been applied, but no assistance can be received from it in the present case, because here we have only one item mentioned, namely, 'public street'. In my opinion, since there is a mention of only one species, the rule of ejusdem generis cannot be availed of, although the word 'other' is there.
22. Lastly, we come to consider the background of the Act and the evil which the section is intended to remedy. There is no doubt that the license fee is intended to raise money for the purposes of running the Corporation. Whether it is a tax or a license-fee is a matter which I shall presently consider, but there can he no doubt that the Corporation has been empowered to raise the money to contribute towards its expenditure. Advertisements of any description can be the subject-matter of legislation relating to taxation, the question is whether it was intended only to impose the burden where an advertisement is displayed in places of public ownership like roads streets and parks, or whether it was also intended to bring within the net of taxation, other places where the public habitually resort to. In my opinion, the intention of the legislature in this case was to impose a liability upon advertisers who advertise on public streets or public parks as also in places where a large number of people are usually permitted to gather, e.g. cinema-houses, theatre halls etc. In both cases, the advertiser gets the benefit of having the advertisements viewed by a large body of prospective customers, a benefit for which he can be called upon to make a payment. In other words, it appears to me that it is in the larger sense that the words have been used in Section 229 in I the Act. It was argued that if it is used in a larger sense, then even the offices of an attorney or the chambers of a doctor would become a public place. I do not think that this is a plausible argument. Firstly, nobody displays advertisements in an attorney's office or in the chambers of a doctor, and as the persons who visit these places are clients or intending clients, that is to say, a restricted body of persons, they cannot be describrd as places of public resort, not to speak of a public place. This point is, therefore, decided in favour of the respondents.
23. I now come to the third point. The learned Advocate-General is faced with the fact that the heading of Chapter XVI describes the levy as 'license fee for advertisement'. Sections 229 and 230 also speak about 'license fee.' He, however, argues that the imposition is really a tax and not a 'license fee'. In order to make an imposition, that can be described as a license fee, there are certain limitations, as pointed Out in my judgment in Netram Agarwalla v. Chairman, Raigunge Municipality, 59 Cal WN 872 (P). Firstly, a license fee can be imposed for the raising of funds for a particular purpose, namely, some kind of service to be rendered. Secondly, there must be a quid pro quo, which means that the Municipality must render a corresponding service for the payment made. In other words, such an imposition cannot be made for the purposes of raising general revenue. It must be raised for the purpose of rendering a particular service and the amount must be reasonable, and proportionate to the service rendered. In this particular case, an attempt has been made in the affidavits to show that there was a quid pro quo, but apart from mentioning that Inspectors are appointed to check the sanitation and safety measures adopted by different cinema-houses, nothing more has been established. The learned Advocate-General appearing on behalf of the State has frankly confessed that no quid pro quo can be established. He however says that it is a tax and not a license fee at all and has been imposed for the purposes of raising general revenue for the Corporation. There is no doubt that the State Legislature has the power to impose taxation for the purpose of raising such revenue. The question however, is whether I must treat this imposition as taxation and not license fee and whether the section is valid even if so considered. The learned Advocate-General has pointed out that the words 'tax' and 'license fee' have been used indiscriminately in the Act. For example, in the summary of contents, Part IV is entitled 'taxation' but while Chapter XI speaks of imposition of a consolidated rate, Chapter XIII also speaks of a tax on professions, trades and callings, which are considered as pure license fees. Equally, it must be observed that Chapter XVI which is in Part IV speaks of 'license fee for advertisement'. Although Chapter XIII is entitled 'Tax on professions, trades and callings', Section 218 which is under Chapter XIII speaks about 'licenses to be taken out annually'. The learned Advocate-General does not dispute the distinction that exists between taxation and the imposition of license fees, but he says that in this case the words 'license fee' must be taken as 'taxation', firstly because it was intended to be raised for purposes of general revenue, and secondly because it occurs under the general heading of Part IV, namely, 'taxation'. It is very unfortunate that in framing laws. particularly taxing statutes, the legislature should be so lax as to use words indiscriminately without any regard for their legal significance. But regard being had to the fact that Part IV of the Act is headed 'Taxation', it would be difficult to decide this case upon the footing that Chapter XV which is contained in Part IV does not deal with taxation. I must, therefore, accept the contention that although the word 'License fee' is mentioned in Chanter XVI, what is intended is to levy a tax, namely, an imposition for raising general revenue for the purpose of running the Corporation. Consequently, there does not arise a question of any quid pro quo.
24. But whether the payments are license fees proper or tax proper, there are several other aspects of the case which have next to be considered. This brings me to the consideration of points Nos. 4 and 5. It is not denied that the State legislature has the power of imposing a tax on advertisements. In this case., it was found necessary to impose a tax on advertisements for the purpose of raising revenue for meeting the finances of the Calcutta Corporation. This is done by Section 229 of the Act, followed by Section 230 to Section 233. The words used in the sections above-mentioned are 'license fee'. It is now said that it means a tax. But the legislature having authorised the imposition of the tax upon advertisements displayed in a certain manner at a certain place, has not proceeded further to fix the rate or the manner of imposition, but has delegated the power to the Corporation. What the Corporation, can do is as follows :--
(a) May prescribe rules with the approval of the State Government, as to the manner in which the tax shall be imposed.
(b) May prescribe by rules with the approval of the State Government, as to the rate at which such tax shall be calculated.
(c) May prescribe by rules with the approval of the State Government as to who shall be exempted from payment of the tax.
Thus, wide powers have been delegated by the legislature to the Corporation and the Government. The question is whether this delegation is within the permissible limits. The question of delegation of powers by the Legislature has been exhaustively dealt with in Article 143, Constitution of India and Delhi Laws Act (1912) etc. In re, AIR 1951 SC 332 (Q). Speaking about delegated legislation, Fazl Ali, J. says as follows : --
'This form of legislation has become a present-day necessity, and it has come to stay. It is both inevitable and indispensable. The legislature bas now to make so many laws that it has no time to devote to all the legislative details, and sometimes the subject on which it has to legislate is of such a technical nature that all it can do is to state the broad principles and leave the details to be worked out by those who are more familiar with the subject. Again, when complex schemes of reform are to be the subject of legislation, it is difficult to bring out a self-contained and complete Act straightway, since it is not possible to foresee all the contingencies and envisage all the local requirements for which provision is to be made. Thus, some degree of flexibility becomes necessary so as to permit constant adaptation to unknown future conditions without the necessity of having to amend the law again and again. The advantage of such a course is that it enables the delegate authority to consul interests likely to be affected by a particular law, make actual experiments when necessary, and utilize the results of its investigations and experiments in the best way possible. There may also arise emergencies and urgent situations requiring prompt action and the entrustment of large powers to authorities who have to deal with the various situations as they arise. .............. But while emphasizing that delegation is in these days inevitable, one should not omit to refer to the dangers attendant upon the injudicious exercise of the power of delegation by the legislature. The dangers involved in defining the delegated power so loosely that the area it is intended to cover cannot be clearly ascertained and in giving wide delegated powers to executive authorities and tit the same time depriving a citizen of protection by the Courts against harsh and unreasonable exercise of powers arc too obvious to require elaborate discussion.'
25. In Gopal Chandra v. B. C. Das Gupta, 93 Cal LJ 304 (R), I have summarised the findings of the learned Judges in the abovementioned case. The principles such as are applicable to the present case are enumerated below : --
'(1) The power to delegate legislative functions generally is not warranted under the Constitution of India at any stage.
(2) The whole scheme of the Constitution is based on the concept that the legislative functions of the Union will be discharged by the Parliament and no other body. The essentials of legislative functions viz., the determination of the legislative policy and its formulation as a rule of conduct are in Parliament, or the State Legislature, as the case may be and nowhere else.
(3) In exercising the power of delegation a legislative body cannot abdicate or efface itself. The true test is --
(i) whether in conferring the power the legislature retains its control;
(ii) does the act of the delegate derive sanction from itself or what the legislature has indicated.
(4) A legislature as a part of its legislative functions can confer powers upon an executive authority or administrative body to make rules and regulations for carrying an enactment into operation can effect. It can further provide that the executive authority or administrative body, upon certain data or facts being found and ascertained might bring into operation, the enactment or extend the same to certain areas. This is described as 'conditional legislation'.
(5) If owing to unusual circumstances and exigencies the legislature does not choose to lay down detailed rules or regulations that work may be left to another body which is then deemed to have subordinate legislative powers. This is described as 'subordinate legislation.'
(6) The legislature may utilise any outside agency to any extent it finds necessary for doing things which it is unable to do itself or finds it inconvenient to do. In other words, it can do everything which is ancillary to, and necessary for, the full and effective exercise of its powers of legislation.
(7) It cannot however abdicate its legislative functions, and therefore, while entrusting power to an outside agency it must see that such agency acts as a subordinate authority and docs not become a parallel legislature.
(8) The work of law-making should be done primarily by the authority to which that duty is entrusted although such authority could employ an outside agency or machinery for the purpose of enabling it to discharge its duties properly and effectively; but it can on no account throw the responsibility which the Constitution imposes upon it on the shoulders of the agent or delegate and thereby practically abdicate its own powers.
(9) The limits of subordinate legislation, where admittedly a portion of the law-making of the legislature is conferred or bestowed upon a subordinate authority, and the rules and regulations which are to be framed by the latter, constitute an integral portion of the statute itself, are as follows : --
(i) Subordinate legislation must operate under the control of the legislature from which it derives its authority and on the continuing operation of which its capacity to function rests.
(ii) A subordinate legislation cannot have the independent and unqualified authority which is in absolute or true legislative power.
(iii) The essential legislative function consists in the determination or choosing of the legislative policy and of formula enacting that policy into a binding rule of conduct. It is open to the legislature to formulate the policy as broadly and with as little or as much detail as it thinks proper and it may delegate the rest of the legislative work to a subordinate authority who will work out the detail within the framework of that policy. So long as a policy is laid down and a standard established by statute, no constitutional delegation of legislative power is involved in leaving to selected instrumentalities the making of subordinate rules within prescribed limits and the determination of facts to which the legislation is to apply :'
26. Let us try to apply the principles adumbrated above to the facts of this case. Section 229 of the Act enables a license fee to be levied on advertisements. It is said that it is a form of taxation. In other words, money has to be raised for purposes of the Corporation and the Legislature has enabled a tax to be levied. So far, it is unexceptionable. But such an imposition cannot be done at once because there are certain conditions to be observed. Firstly, rules have to be drawn up and approval obtained of the State Government. The power to make rules for purposes of carrying out the objects of an Act or even as supplementing the provisions of the Statute is constantly delegated, and no objection can be advanced because such power has been delegated. What however are the terms of the delegation? It is left to the Corporation to levy the license fee, that is to say, to levy a tax in such manner and at such rate as it likes. But this is not all. It can exempt any person or body of persons that it thinks fit. As a necessary corollary, it follows that it can levy a tax on any person or body of persons it likes, and leave out others similarly situated. In my opinion, these expressions are so wide that it cannot be said to remain within the permissible limits of subordinate legislation. What is the significance of delegating the power to fix the 'manner' of taxation? Taxation is a compulsory levy by a sovereign power, and the most important aspect of this is as to how or in what manner it should be levied, and the rate at which it is to be imposed. When the Government frames its annual budget, the most important part thereof is the manner in which taxes are to be imposed, that is to say, upon what headings and upon whom the tax should be imposed and in what manner it is to be calculated and realised. A very important thing is the amount or the rate. Those are the things that are canvassed in the legislatures and are the subject-matter of its deliberations. It is clear, therefore, that in deciding the manner in which a tax should be levied and the rate at which it tax to be levied and the persons or classes of persons upon whom it should be imposed, what is involved is principally a matter of policy. The subject of taxation is not purely abstract but consists of important questions of policy, namely, as to who should be taxed, in what manner the tax should be imposed and at what rate. The operation of levying a tax without a consideration of such matter is meaningless. In any event, to delegate the power of imposing a tax without laying down the policy upon which such matters shall be decided, is to delegate the power of legislation without a formulation of the policy to be followed, and thus in fringes the tests laid down above. The results of such delegation might take curious forms. For example, the Corporation may levy a tax calculated upon the income of the advertiser, which would thus become a new species of income-tax. It may charge tax at the rate of, say, 15 annas in the rupee. Then, again, there is no indication given by the Legislature as to who should be exempted, the matter being left completely to the will of the Corporation and the Government. There is nothing to prevent the Corporation from taxing all Cinema Houses in Northern Calcutta leaving out the Cinema Houses in Southern Calcutta, for no reason whatsoever. It is no good saying that the Corporation and Government are not likely to act arbitrarily. The test of constitutionality is not whether a matter is capable of being acted upon within the limits of constitutionality. It would be bad so long as the possibility of its being applied for purposes not sanctioned by the Constitution cannot be ruled out. Romesh Thapper v. State of Madras, : 1950CriLJ1514 . The learned Advocate-General has argued that such power of delegation is not bad, and he points out that in several parts of the Act itself such an unlimited power has been granted, for example, under Section 281 power has been given to the Commissioner to sell water for purposes other than domestic purposes. Under Sub-section (2) of Section 281 payment is to be made 'at such rate as may be prescribed by the Corporation.' Under Section 294, water may be supplied to adjacent Municipalities and cantonment at such rates not being less than the cost to the Corporation., which may from time to time be determined by the Corporation. Section 295 contains similar provisions with regard to the supply of water to persons residing out of Calcutta. He further points out that with regard to license fees on professions and callings or trade licenses, a ceiling has been fixed, but under Section 532 the State Government may alter it. In this connection it will be appropriate to consider a Bombay decision Hira Bhai Asha Bhai v. State of Bombay (S) : AIR1955Bom185 . The petitioners in that case were the owners of a building situated on the Marine Drive, Bombay. Their grievance was that the Municipality of Bombay instead of levying a water tax upon the building was charging them for water according to measurement, and their contention was that Section 169 of the City of Bombay Municipal Act, 1888 was invalid. That provision of law is similar to the provision of law we are considering in this case, and no limit was laid down as regards the manner or rate of taxation. It was inter alia argued that the legislature in delegating this power to the Standing Committee or the Commissioners had given no indication of its policy as to the ceiling of the rate which could be charged for the supply of water and as the section stood, the Standing Committee or the Commissioners might charge at any rate, it being entirely left to their absolute and unfettered discretion. Upon consideration of the Bombay Act, Chugla, C. J. held that although the Act did not expressly lay down the coiling as t' the rates which wore chargeable for water lax. it must be implied that the Legislature intended that there should be a relationship between the rate charged and the cost of providing the water supply. In other words, the matter was not left unspecified because such relationship would be a matter of calculation. The learned Chief Justice pointed out that in the year 1888 the Legislature could not possibly decide what it would cost the Municipality to provide water supply for an increasing city like Bombay upon a given data in the future. The learned Chief Justice did not uphold the proposition that the delegation of power which was unfettered and absolute would be valid, but upheld the particular Statute because the policy of the Legislature could be found by implication. This answers the point raised by the learned Advocate-General with regard to the power given in the Act for water supply to outsiders. The amount would have to be calculated upon the cost of supply. T'here is no analogy however so far as this case is concerned, because no policy can be spelt out in this case even by implication. If the taxation is for general revenues of the Corporation, the amount cannot be considered to be a specified amount. The total needs of the Corporation are formidable.At the time of making the imposition, the Corporation cannot know what the yield would be in a given year and, therefore, there is no basis upon which any rate can be fixed prospectively. Even if we take the analogy of income tax, we have to bear in mind that although the rates are fixed by calculating the needs of the State and the expect-ed yield, it is not a matter which i.s left by the Legislature to outside bodies. The rate is annually fixed by the Finance Acts, and the manner of imposition is governed by elaborate provisions made in the Income-tax Act itself. Supposing the Legislature said that income tax would be levied in such manner and at such rates or from such persons as the Commissioner of Income-tax prescribes, in consultation with the Government, the law would be at once declared as void. I cannot see any difference in principle in the present case. To sum up, it appears to me that the process of taxation involves certain fundamental things which may be described as matters of policy, such as the manner of imposing the tax, the rate, and the determination of the class of tax-payers. These are not mere ancillary matters, but fundamental. It is not open to the Legislature to delegate the power of taxation without laying down the policy. Otherwise, it would be the delegate who would be laying down the policy and the act of the delegate would derive sanction from itself and not what the Legislature had indicated. This, in my view, is beyond the scope of permissive delegation. The power of levying taxation as long as it is within the competence of the Legislature is indeed without limit. It is never a valid objection to state that a tax is harsh or unconscionable. But this is not what we are considering in the present case. It is true that in the affidavits an attempt has been made to show that the amount of tax which is to be realised is very high, but that is on the point as to whether the imposition is a tax or a license fee. The real challenge is upon the validity of the delegation contained in the section. While such powers in the Legislature, which is the accredited representative of the people, cannot be challenged, what can be challenged is the delegation of such power into non-legislative hands. Next we come to the question of discrimination. As I have already said, the point about discrimination that has been raised, turns round the power granted to the Corporation with the approval of Government to exempt any person it likes from the mischief of the taxation envisaged by Section 229. Put briefly, the power resolves itself into the naked and arbitrary power of taxing whomever the Corporation wishes and leaving others similarly situate outside the mischief of the sections. No policy has been laid down. Under the Rules the power of exemption has been delegated to the Commissioner. It is true that certain limits have been imposed, that is to say, public and charitable bodies have been exempted. To my mind, however, this does not improve matters. According to Rule 4. the Commissioner may, for reasons to be recorded by him and which he considers to be sufficient, exempt from the payment of fees, advertisements which relate to public charitably institutions etc. I do rot see how or under what power the Corporation can delegate its power of exemption under Section 229, to the Commissioner. But here again no policy has been laid down even by the Corporation to guide the Commissioner, leaving it to him to be guided by reasons which are left to his subjective satisfaction. He may not extend the exemption to public charitable institutions at all or he may exempt one public charitable institution but not another. While an appeal has been provided against an assessment order, there is no appeal provided for against the action of the Commissioner in acting under Rule 4. In State of West Bengal v. Anwarali, : 1952CriLJ510 the provisions of the West Bengal Special Courts Act X of 1950 was under challenge. This Act constituted Special Courts which were to try 'such offences or classes of offences or cases or classes of cases as the State Government may by general or special-order in writing direct.' Fazl Ali, J. said as follows : --
'In the course of arguments it was suggested that the Act is open to criticism on two different and distinct grounds, these being (i) that it involves excessive delegation of legislative authority amounting to its abdication so far as it gives unfettered discretion to the executive without laying down any standard or rules of guidance to make use of the procedure laid down by it; and (ii) that it infringes Article 14 of the Constitution.'
'The first criticism which is by no means an unsubstantial one, may possibly be met by relying on the decision of the Court in : 2SCR747 , but the second criticism cannot be so easily met, since an Act which gives uncontrolled authority to discriminate cannot but be hit by Article 14, and it will be no answer simply to say that the Legislature having more or less the unlimited power to delegate has merely exercised that power. Curiously enough, what I regard as the weakest point of the Act, (viz., its being drafted in such general terms) is said to be its main strength and merit, but I really cannot see how the generality of language which gives unlimited authority to discriminate can save that.'
27. In Dwarka Prosad Laxminarain v. State of U. P., : 1SCR803 the provisions of the Uttar Pradesh Coal Control Order, 1953 came under challenge. This order was promulgated by the State of Uttar Pradesh, purporting to act in exercise of the powers conferred upon it by Section 3 (2) of the Essential Supplies Act, 1956. Under the order, no person could stock, sell, store or otherwise dispose of, coal, within the State of Uttar Pradesh without a license granted by the licensing Authority. The licensing authority could grant, refuse to grant, or cancel a license at its absolute and unfettered discretion provided only that reasons were recorded. The State Coal Controller could exempt any person he liked from the operation of the order. Mukherjea, J. said as follows :--
'A law or order which confers arbitrary or uncontrolled power upon the executive in the matter of regulating trade or business in normally available commodities cannot but be held to be unreasonable. . ........ Legislation which arbitrarily or excessively invades the right cannot be said to contain the quality of reasonableness. The second exception which is embodied in Sub-clause (2) (b) has been objected to by the learned Counsel appearing for the petitioner. This exception provides that nothing in Clause (3) (i) shall apply to any person or class of persons exempted from any provision of the above sub-clause by the State Coal Controller to the extent of such exemption. It will be seen that the Coal Control Order nowhere indicates what the grounds for exemption are, nor have any rules been framed on this point. An unrestricted power has been given to the State Coal Controller to make exemptions and even if he acts arbitrarily or from improper motives, there is no check over it and no way of obtaining redress. Clause (3) (ii)(b) of the Control Order seems to us, therefore, prima facie, to be unreasonable.'
28. In Kathi Raning Rawat v. State of Saura-shtra. : 1952CriLJ805 , Mukherjea, J. said as follows :
'A Statute will not necessarily be condemned as discriminatory, because it does not make the classification itself but as an effective way of carrying out its policy, vests the authority to do it in certain officers or administrative bodies. ....... In such cases the power given to the executive body would import a duty on it to classify the subject matter of legislation in accordance with the objective indicated in the Statute. The discretion that is conferred on official agencies in such circumstances is not an unguided discretion; it has to be exercised in conformity with the policy, to effectuate which the discretion is given and it is in relation to that objective that the propriety of the classification would have to be tested. If the administrative body proceeds to classify persons or things on a basis which has no rational relation to the objective of the Legislature, its action can certainly be annulled as offending against the equal protection clause. On the other hand, if the Statute itself does not disclose a definite policy or objective and it confers authority on another to make selection at its pleasure, the Statute would be held on the face of it to be discriminatory irrespective of the way in which it is applied. This it seems to me is a true principle underlying the decision of the Supreme Court of America in Yick Wo v. Hopkins, (1886) 118 US 356 (X).'
29. In the Saurashtra case, the particular law was held to be necessary because there was a tremendous influx of dacoits with resulting lawlessness Thus it was held that power to proceed in a summary manner was necessary and the classification had necessarily to be left in the hands of Government. In the present case, however, I cannot see what policy or objective has been laid down by the Act so far as Section 229 is concerned. The object of the Act is to consolidate the law relating to Municipal affairs, and Chapter XVI is intended to raise license fees on advertisements, that is to say, levy taxation for raising funds for the purpose of the Corporation. There is thus no policy laid down or any that can be implied as to who should be exempted from payment of any part of the taxes levied under the Act.
30. The points Nos. 4 and 5 must therefore be decided in favour of the petitioners in this and the allied applications. The provisions of Section 229 of the Act and the rules made thereunder are unconstitutional and void for the reasons stated above.
31. The rule must accordingly be made absolute. There will be a writ in the nature of Mandamus directing the respondents to forbear from demanding or realising from the petitioners any license fees under Section 229 of the Act read with the rules, in respect of advertisements displayed on Cinema Screens.
32. There will be no order as to costs.