A.N. Ray, J.
1. This application challenges the validity of the Oriental Gas Company Act being West Bengal Act XV of 1960. The Oriental Gas Company Limited was originally constituted by a Deed of Settlement dated April 25, 1853 by the name of the Oriental Gas Company. On April 27, 1853 the company obtained a certificate of complete registration in accordance with the provisions of the Statute 7 and 8, Vict. Cap. 110. The said company was subsequently registered in England with limited liability under the provisions of the English Joint Stock Companies Act, 1862.
2. In 1857, an Act being Act V of 1857 was passed by the Legislative Council of India. It was an Act to confer certain powers on the Oriental Gas Company Limited. The preamble of Act V of 1857 contains the recitals that the said Company has erected gas works on land granted for that purpose by Government in the vicinity of the town of Calcutta and is engaged in the preparation of apparatus and materials for the manufacture and supply of gas for lighting the said town; it is expedient that powers and facilities should be given to the said company to enable them to carry out their undertaking of lighting with gas the said town of Calcutta which powers and facilities may hereinafter he extended to the operation of the said company in other towns and places. With this preamble the Act conferred powers on the said company, inter alia, to lay pipes in Calcutta and other places and to excavate the streets ior the purpose.
3. The Articles of Association of the Oriental Gas Company Limited were altered by a special resolution passed on September 18, 1947. As a result of the said amendments the business of the said company was thereafter to be transacted in India, all general meetings of the company and all meetings of directors were to be held in India, all dividends were to be paid in and from India and no part of the profits of the said company were to be transmitted to the United Kingdom except as to payment of dividends to members whose address in the register was in the United Kingdom. In 1946 Messrs. Soorajmull Nagarmull purchased 98 per cent of the shares of the Oriental Gas Company Limited. Messrs. Soorajmull Nagarrmul floted a limited liability company named the Calcutta Gas Company (Proprietary) Limited and it was registered in India and has its registered office at Calcutta.
4. In the petition the Oriental Gas Company Limited has been described as the main company and the Calcutta Gas Company (Proprietary) Limited has been described as the managing company. I shall hereinafter for the sake of brevity adopt the said description. By an agreement made on July 24, 1948 between the main Company and the managing company the latter was appointed the Manager of the main Company in India and the general management of the affairs of the main Company in India was entrusted to the managing Company for a period of 20 years from July 5, 1948. Under the agreement the managing Company is to receive by way of remuneration for their services (a) office allowance of Rs. 3,000/- per mensem, (b) commission of 10 per cent on the net yearly profit of the Company, subject to a minimum of Rs. 60,000/- per year in the case of absence of or inadequacy of profits, and (c) commission of Re. 1/- per ton of all coal purchased and negotiated by the Managers. Under Clause 5 of the said agreement the Managers shall have the general management in India of the Company's business transactions and of the books, papers, effects, properly, affairs and concerns with full power to engage and dismiss assistants and all other officers and staff and all workmen and for that purpose the Company to purchase and obtain all necessary plants, machinery, stores, goods and materials of any kind whatsoever and to sell such plant, machinery, stores, materials and/or any of the bye-products manufactured or acquired by the company. The Oriental Gas Company Act of 1960 hereinafter referred to as the State Act of 1960 is impeached on two principal grounds. First, it is contended that the said Act is ultra vires the legislative competence of the State of West Bengal. Secondly, it is contended that the said Act is unconstitutional and confiscatory and violates the provisions contained in Articles 14, 19 and 31 of the Constitution of India.
5. Mr. P.R. Das, counsel for the petitioner, challenged the vires of the said Act of 1960 on these grounds. First, that the Oriental Gas Company Limited is a fuel industry engaged in the manufacture and production of gas, and the West Bengal Legislature has no legislative competence in regard to the said industry since it has been declared by Parliament by the Industries (Development and Regulation) Act of 1951, being Act 65 of 1951, hereinafter referred to as the Parliament Act of 1951, that it is expedient in the public interest that the Union should take under its control the industries specified in the First Schedule, and the fuel industry is one of the industries specified in the First Schedule to the said Parliament Act of 1951. Secondly, it was contended that inasmuch as by entry 52 of List I of the Seventh Schedule to the Constitution of India, Parliament has legislative competence is regard to industries, the control of which is declared to be expedient in the public interest to be with the Union, the State of West Bengal under Entry 24 of List 2 has legislative competence with regard to industries, subject to Entry 52 in List I. Therefore, Mr. Das contended that inasmuch as there is already a legislation by Parliament in respect of matters in Entry 52 of List I, Parliament has occupied the field and, therefore, the State Legislature has no competence to deal with any matter which is either within Entry 52 or which is the occupied field of Parliament. Thirdly, it is contended that since Parliament as entered and occupied the field of legislation under Entry 52 in list 1 in respect of Fuel industries engaged in the manufacture and production of fuel gases, Entry 25 in List 2 of the 7th Schedule to the Constitution of India which is Gas & Gas Works, is cut out from the legislative competence of West Bengal by virtue of Article 246 of the Constitution which declares that Parliament has exclusive powers to make laws in respect of any matter enumerated in List 1 of the 7th Schedule. Finally, Mr. Das contended that the pith and substance and the true nature and character of the impugned legislation is that it is a legislation seeking to acquire the management and control of an industry which is a scheduled industry in the Parliament Act of 1951 and, therefore, the enactment is unconstitutional.
6. On behalf of the respondents Mr. Advocate General and following him Dr. A.C. Gupta contended first that Entry 25 Gas and Gas Works in the State List was carved out as a separate exception to Entry 24 in State List and entry 52 in the Union List regarding Industries. In other words, the contention was that where the general enactment or general works were followed by particular enactment; or words the latter would over-rule the former and the result would be that entry 2-5 in State List under the heading Gas and Gas works was in express language an exception to Entry regarding Industries. Secondly, it was contended that the impugned legislation was in pith and substance and true character and purpose a legislation for requisition of property and was a valid legislation under Entry 42 in the concurrent List. Thirdly, it was contended that the entry Gas and Gas Works was a composite one and it could not be truncated into either an entry relating to Gas or to Gas Works but was to be treated as a composite entry of Gas and Gas Works. Fourthly it was contended that the impugned legislation was in pith and substance a legislation under entry Gas and Gas Works. Finally it was contended that the pith and substance of the impugned legislation was that it was not a legislation in relation to any industry within the meaning and field of the Parliament Act of 1951.
7. The Parliament Act of 1951 is an Act to provide for the development and regulation of certain Industries. Section 2 of the State (sic) Act. of 1951 declares that it is expedient in the public interest that the Union should take under its control the Industries specified in the first schedule. The first schedule underwent some change. It is not necessary to go into the amendments. The schedule as it stands now reads as follows:
'Any industry engaged in the manufacture or production of any of the articles mentioned under each of the following headings or sub-headings namely ...... (2) fuels: (1) coal etc.; (2) Mineral Oil etc. (3) Fuel Gas (Coal Gas) natural gas and the like'.
Mr. P.R. Das contended that Parliament in the 1951 Act by Section 2 thereof read with the first schedule clothed the Union Government with statutory control of Industries mentioned in the first schedule to the Act, and therefore Fuel Industry engaged in the manufacture or production of gas. was -a controlled Industry and the West. Bengal Legislature has no power to pass any legislation in regard to such Industries. Mr. Das further contended that apart from Section 2 there was in the Act neither any section vesting control of the, Industries in the Union nor did the Act contemplate any order vesting control of the Industries by Union. Mr. Das referred to Section 10 of the Act of 1951 which enabled the Government by Notification in the Official Gazette to fix a time within which the owner of an Industrial undertaking would be required to obtain the registration of the undertaking in the prescribed manner. If there was no control by the Union it was contended that it could not require registration of Industrial undertaking. Mr. Das referred to Sections 15 and 16 of the Union Act of 1951 which conferred powers on the Central Government to cause investigation to be made into scheduled Industrial undertakings as also powers to issue directions to Industrial undertakings and contended that unless the Union was vested with control it could not cause investigation into or issue directions to the Industries.
8. The Parliament Act of 3951 consists of four Chapters. Chap. 2 deals with the Centra) Advisory Council and Development Council. Chap. 3 deals with Regulation of scheduled Industries. Chap. 3-A deals with direct management or control of Industrial undertaking by Central Government in certain eases. Chap. 3-B deals with control, supply, distribution etc. of certain articles. An 'existing Industrial undertaking' has been defined in the Parliament Act of 1951 to mean in the case of an Industrial undertaking appertaining to any of the Industries in the first schedule as originally enacted, an Industrial undertaking which was in existence on the commencement of this Act For the establishment of which effective steps had been taken before such commencement. The same definition applies to industrial undertakings pertaining to any of the Industries added to the First Schedule by an amendment thereof. 'Industrial undertaking' has been defined in the Act to mean
'Any undertaking appertaining to a scheduled industry carried! on in one or more factories by any person or authority including Government.'
'Owner'' has been defined in the Act to mean in relation to an Industrial undertaking the person who or the authority which had the ultimate control over the affairs of the undertaking and where the said affairs are entrusted to a Manager, Managing Director or Managing Agent, such Manager, Managing Director or Managing Agent shall be deemed to be the owner of the undertaking. With the aid of these definitions Mr. Das contended that Oriental Gas Company Limited was an Industrial undertaking and the petitioners were deemed to be the owner of the undertaking.
9. Sections 5 and 6 of the Act of 1951 deal with establishment and constitution of Central Advisory Council and Development Council and their functions. Mr. Das contended that between Sections 2 and 5 of the 1951 Act there is no section which empowers the Union by notified order to take over control of the scheduled Industries and if Government had not yet under the Act taken over control of the scheduled Industries there could be no Central Advisory of Development Council for no question of advising would arise unless the Central Government had assumed control. On that basis Mr. Das contended that Sections 5 and 6 of the Act of 1951 were understandable only if it were held that statutory control had already passed to the Government under Section 2 of the Act of 1951. Mr. Das further contended that if the interpretation of Section 2 were that it merely gave a discretion to the Union to take control of a scheduled Industry if and when it liked there would be some provision somewhere in the Act which would enable the Union by some Notification to assume control before it had power to establish an Advisory and Development Council in regard to the same or before it had power to investigate or to issue directions, under Sections 15 and 16 of the Union Act of 1951 in regard to the scheduled Industries.
10. Mr. Das contended that Section 18A of the Union Act of 1951 conferred power on the Central Government to take over management and made a distinction between control and management. His contention was that control had already been taken over by Section 2 of the Act and management was one of the functions of control. The other functions of control, Mr. Das illustrated with reference to Sections 15 and 16, were regulation of production or taking steps to stimulate the development of the industry or control of price.
11. Mr. Advocate-General contended that Section 18A of the Parliament Act of 1951 showed that if the Central Government wanted to take over a management it could be done only by notified order in the Official Gazette and unless and until there was such a notified order the Central Government did not or could not take over the management of the undertaking. There is no definition of control in the Act of 1951 and Mr. Advocate-General contended that the Central Government had not taken control of Orienta.1 Gas Company Limited. Mr. Advocate-General further contended that the power to investigate was under the Parliament Act of 1951 and similarly the power to issue directions was under Section 16 of the Act of 1951. If directions given by Central Government under Section 16 had not been complied with the Central Government might by notified order take over the management. Similarly, if an investigation under. Section 15 of the Act showed that an Industrial undertaking was being managed in a manner detrimental to the scheduled Industry or to public interest the Central Government might take over the management by notified order. Mr. Advocate-General referred to Section 30 of the Act of 1951 which conferred power on the Central Government to make rules, inter alia, for the procedure to be followed in making any investigation under the Act. In my opinion the contentions of Mr. Advocate-General are correct. The Central Government has under the Act power to investigate as also power to issue directions. Such powers of investigation and/or issue of directions are not taking over control or management of an Industrial undertaking. The Central Government in my opinion does not take over the management or control of an Industrial undertaking without a notified order. Mr. Advocate-General further contended that if by Section 2 of the Act of 1951 control of the scheduled Industries had vested in the Central Government all Industries engaged in the manufacture or production of Iron and Steel metal and Iron and Steel Pipes had already vested under the control of the Union. Such an interpretation, he contended, would be illogical and absurd. The powers under Sec-' tions 15 and 16 of the Act are in my opinion meant to regulate and develop industries. Direct management or control of industrial undertaking is an entirely different matter, and is dealt with under Chapter 3A. It was contended on behalf of the petitioner that Oriental Gas Company Limited was registered in September 21, 1952 under the Act of 1951 and the registration number was R/3/8 and therefore by registration it became a controlled industry. In my opinion registration is totally different to taking over management. Mr. Advocate-General contended that the language of Section 2 of the Act of 1951 was that it is expedient that the Union should take under its control the industries and not that the Union was by that section clothed with control of the Industries. If and when the Central Government was of opinion under Section 18A of the Act of 1951 that an industrial undertaking had failed to comply with the directions or that it was being managed in a manner detrimental to the public interest the Central Government might by notified order take over the management or control and exercise such functions as might be specified in the order. The other powers contemplated in Chap. 2 or in Chap. 3 are powers under the Act, not for taking over the management and control of the undertaking. I therefore hold that in the absence of a notified order under Section 18A of the Parliament Act of 1951 the Central Government does not take over the management of an industrial undertaking and no control of a particular undertaking is acquired in the absence of a notified order.
12. Mr. Das next contended that the field of legislation was already occupied by Parliament Act of 1951 and so far as the State legislature was concerned it was a forbidden field. He also contended that it was impossible to reconcile the impugned legislation with the Parliament Act of 1951. The impugned legislation was for the purpose of taking over management and control of Oriental Gas Company Ltd. a fuel industry engaged in the production of gas and the same purpose according to Mr. Das could have been achieved under Parliament Act of 1951. Mr. Das contended that there is general power with regard to Industries under Entry 24 in the State List but this power is subject to Entry 52 in List 1. Therefore Mr. Das contended that particular Industries dealt with by Parliament Act of 1951 are cut out from the field of State legislation. Mr. Das invoked the doctrine of generalia specialibus non derogant in support of his contention that general language would yield to particular expressions. The particular Industries In the schedule to the Parliament Act of 1951 were according to Mr. Das a forbidden field of the State legislature. Mr, Das relied on Article 246 of the Constitution to show that Parliament has exclusive powers to legislate in regard to matters enumerated in List 1 and the power of the State legislature to legislate in matters under List 2 is subject to the exclusive powers of Parliament in matters within List 1 inasmuch as Entry 52 in List 1 deals with particular classes of Industries. Entry 24 in List 2, he contended, must give way to Entry 52 in List 1. Mr. Das went on to read Article 246 in the following manner: 'Notwithstanding anything an Entry 24, List 2 (Industries), Entry 25, List 2: 'Gas and Gas Works' or any other Entry or Entries in List 2 or 3, Parliament has exclusive powers to make laws with respect to Entry 52 in List 1 namely Industries the control of which by the Union is declared by Parliament to be expedient in public interest'. Mr. Das laid emphasis on the opening words of clause 1 of Article 246(1) of the Constitution : 'Notwithstanding anything in clauses 2 and 3' and the opening words of clause 3 of Article 248 'subject to Clauses 1 and 2' and contended that the words indicated that the power of the State legislature was subject to the exclusive power of Parliament with respect to matters enumerated in List 1 and the power of the State legislature with respect to matters in List 2 was subject to the powers of Parliament. Thus Mr. Das contended that since by Parliament Act of 1951 Parliament had exclusive powers to make laws with respect to Entry 52 of List 1 and since the fuel industry was included in the 1951 Act the power of the 'State legislature to make any legislation with regard to fuel industry engaged in the manufacture or production of gas was subject to the exclusive power of Parliament. Mr. Das relied on the decision reported in Subrahmanyan Chettiar v. Muthuswami Goimdan. , Madras Agriculturist Relief Act case and in particular on the observations appearing at p. 218 and at p. 236 of the report (FCR) : (at pp. 58 and 65 of AIR). It was held by the Federal Court on the construction of Section 100 of the Constitution Act of 1935, which corresponds to Article 246 of the Constitution of India, that in its fullest scope Section 100 would mean that if it happens that there is any subject in List 2 and it also falls in List 1 or List 3 then it must be taken as cut out from List 2.
13. It is therefore necessary to see if the impugned legislation is within the subject matter of List 2 or List 1. That involves going into the pith and substance or the true character and purpose of the impeached legislation. In Gallagher v. Lynn, 1937 AC 863, Lord Atkin said:
'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 affects matters which are outside the authorised field. The legislation must not under the guise of dealing with one matter in fact encroach upon the forbidden field. Nor are you to look only at the object of the legislature. An Act may have a perfectly lawful object, e.g., to promote the health of the inhabitants, but may seek to achieve that object by invalid methods e.g., a direct prohibition of any trade with a foreign country. In other words, you may certainly consider the clauses of an Act to' see whether they are passed in respect of the forbidden subject.'
In examining the pith and substance of the legislation the question will arise as to whether a legislation deals with a subject in one list or deals with or touches a subject in another list. Gwyer, C. J. said in the Central Provinces and Berar Sales of Motor Spirit and Lubricants Act, 1938, In the matter of , that:
'it is a fundamental assumption that the legislative powers of the Centre and Provinces could not have been intended to be in conflict with one another, and therefore we must read them together and interpret or modify the language in which one is expressed by the language of the other.'
The following principles have been held to govern the interpretation of legislative lists. First, a Constitution is not to be construed in a narrow and pedantic sense and the rules which apply to the interpretation of other statute apply equally to the interpretation of Constitutional enactment. . Secondly, none of the items in each list is to be read in a narrow or restricted sense. Thirdly, where there is a seeming conflict between an entry in List 2 and an entry in List 1 an attempt should be made to see whether the two entries cannot be reconciled so as to avoid a conflict of jurisdiction. State of Bombay v. F.N. Balsara, 1951 SCR 682 at p. 693 : (AIR 1951 SC 318 at p. 322). Gwyer, C. J. in the Madras Agriculturist Relief Act case said:
'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 intertwined 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.'
14. In the case of Governor-General iu Council v. Province of Madras , a question arose as to whether Madras General Sales Tax Act which imposed an annual tax on every dealer in respect of his turn over was in its general scope and in its detailed provision in pith and substance an Act imposing a tax on the sale of goods and was intra vires the provincial legislature under Entry 48 of the provincial legislative list or whether it was a legislation within entry No. 45 of the Federal List. Entry 45 was duties of excise on tobacco and other goods manufactured or produced in India. Entry 48 was taxes on the sale of goods and on advertisements. Lord Simonds said that it was right first to consider whether a lair reconciliation could not be effected by giving to the language of the Federal Legislative List a meaning which, if less wide than it might in another context bear, was yet one that could properly be given to it and equally giving to the language of the provincial legislative list a meaning which it could properly bear. In that particular case the Act was examined and its real nature was found to be a tax on the sale of goods. The term 'duty of excise' covers a tax on first, and perhaps, on other sales, A duty of excise would primarily be. a duty levied on a manufacturer or producer. It is a tax on goods, not on sales or proceeds of sales. St was thus held that the Madras Act was not a duty of excise in the cloak of a tax on sales. It was also held that the State could impose a tax on sale of goods when manufactured. In the case of Prafulla Kumar v. Bank of Commerce Ltd., Khulna, 74 Ind App 23 : (AIR 1947 PC 60), a question arose as to whether Bengal Money Lenders Act was a subject matter within the legislative competence of the Provincial Legislature under Entry 27 of List 2 or whether it was a legislation on promissory notes and banking being the subject-matter reserved for the Federal Legislature under Entries 28 and 38 of List 1. It was contended that item 28 of List 1 should be reconciled with item 27 of List 2 and so read item 27 would be a particular exception from the general provision of item 28 of List 1. Secondly, that the impugned Act was In pith and substance an Act with respect to money-lending and money-lenders and was not void because it incidentally trenched on matters outside the authorised field. Lord Porter said that it was not possible to make so clean a cut between the powers of various legislatures and they were bound to overlap from time to time. If subjects overlap the question had to be asked what in pith and substance is the effect of the enactment of which complaint was made. Lord Porter said :
'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.'
As to conflict between the legislative lists it was said:
'Does the priority of the Federal legislature prevent the provincial legislature from dealing with any matter which may incidentally affect any item in its list, or in each case has one to consider what the substance of an Act is and, whatever its ancillary effect, attribute it to the appropriate list according to its true character. In their Lordships' view the latter is the true view.'
It therefore appears that the extent of invasion by the provincial legislature into subject enumerated in the Federal list is material for the purpose of determining what is the pith and substance of the impugned Act. If the pith and substance of the impugned Act is within the appropriate legislative list, then it will be attributed to the appropriate list according to its true character in spite of ancillary effect on any other list.
15. The application of the pith and substance doctrine is illustrated in the decisions of State of Bombay v. Narottamdas Jethabhai, : 2SCR51 (Bombay City Civil Court Act case), 1951 SCR 682 : (AIR 1951 SC 318), (Bombay Prohibition Act case) and State of Rajasthan v. G. Chowla, : 1959CriLJ660 , (Thy Ajmere Sound Amplifiers Control Act case) and Jnan Prasanna v. Province of West Bengal, ILR (1949) 2 Cal 94 at p. 131 : (AIR 1949 Cal 1 at p. 9) (FB). In the Bombay City Civil Court Act case, : 2SCR51 , the question arose as to whether the Bombay City Civil Court Act was valid. It was contended that the Provincial legislature had no power to make laws with respect to jurisdiction of Courts in regard to suits on promissory notes which was a matter covered by item 53 of list 1 and that Bombay City Civil Court Act was therefore ultra vires. It was held by the Supreme Court that inasmuch as the impugned Act was in pith and substance a law in respect to a matter covered by list 2, the fact that it incidentally affected suits relating to promissory notes on subject falling within items 28 and 53 of list 1 would not affect its. validity. In the Bombay Prohibition Act case, 1951 SCR 682 : (AIR 1951 SC 318), the question arose as to whether the legislation was valid under the said list being entry 31 of list 2 or whether the legislation transgressed entry 19 of list 1. Entry 31 of list 2 read as intoxicating and narcotic drugs, entry 19 of list 1 read as import and export across the customs frontier, as defined by the Dominion Government. It was held that the validity of an Act was not affected for it incidentally trenched on matters outside the authorised field and therefore-it was necessary to enquire in each case what was the pith and substance of the Act impugned. If the Act when so viewed substantially fell within the powers expressly conferred upon the legislature which enacted it, then it could not be held to be invalid merely because it encroached on matters which had been assigned to another legislation. With these observations it was held that if the true nature and character of the legislation or its pith and substance was not import and export of intoxicating liquor but sale and possession then it would be difficult to declare the Act to be invalid. It was contended in that case that prohibition of purchase, use, possession, transport and sale of liquor would affect its import. That contention was repelled by holding that even assuming that such a result might follow, the encroachment, if any, was only incidental and could not affect competence of the provincial legislature to enact the law in question. In the Ajmere Sound and Amplifiers case, : 1959CriLJ660 , the contention was that the Ajmere Acf was valid under entry 1 of the State list and the other contention was that the legislation came within entry 31 of the Union list. The Union list entry dealt with telephone, wireless, broadcasting and other like forms of communication. Entry 1 of the State list deals with public order and entry 6 in the State list deals with public health, sanitation etc. The State of Rajasthan relied on entry 1 or in combination with entry No. 6 of the State list. The contention of the State was upheld with the observations :
'Legislators in our country possess plenary powers of legislation. This is so even after the division of the legislative powers, subject to this that the supremacy of the legislatures is confined to the topics mentioned as entries in the list conferring respective powers on them. These entries, it has been ruled on many an occasion, though meant to be mutually exclusive are sometimes not really so. They occasionally overlap and are to be regarded as enumeratio simplex of broad categories. Where in an organic instrument such enumerated powers of legislation exist and there is a conflict between them it is necessary to examine the impugned legislation in its pith and substance, and only if that pith and substance falls substantially within the entry or entries conferring legislative power, is the legislation valid, a slight transgression upon a rival list notwithstanding'.
It was further held that the power to legislate on a topic of legislation carries with it the powers to legislate on an ancillary matter which can be said to be reasonably included in the power given. Reference was made in that case to the observation of Latham, C.J. in Bank of New South Wales v. The Commonwealth, (1948) 76 CLR 1 at p. 186 :
'that a power to make laws with respect to a subject-matter is a power to make laws which in reality and substance are laws upon the subject-matter. It is not enough that a law should refer to the subfect-matter or apply to the subject-matter, for example income-tax laws, apply to Clergymen and Hotel keepers but no one would describe an income law as being for that reason a law with respect to Clergymen or Hotel keepers.'
In the Supreme Court case the Ajmere Act was held to be valid on the ground that the power of legislation in relation to public health included the power to regulate the use of amplifiers. It was submitted that amplifiers were instruments of broadcasting and even of communication and In that view of the matter fell within entry 31 of the Union list. The manufacture or the license of amplifiers or the control of ownership was held to be one matter but the control and the use of such apparatus to the detriment or tranquillity of others was quite another. On a view of the Ajmere Act as a whole it was held that the substance of the legislation was within the powers conferred by entry 6 and it did not purport to encroach upon the field of the Union list entry though it incidentally touched upon a matter provided there.
16. In the present case the impugned legislation is entitled as an Act to provide for taking over for a limited period of the management and control and the subsequent acquisition of the Oriental Gas Company Limited, It is stated in the preamble that whereas it is expedient to provide for increasing the production of gas and improving the quality thereof for supply to Industrial undertakings, hospitals and other welfare institutions, to local authorities, for street lighting and to the public in general for domestic consumption and for that purpose to provide for the taking over for a limited period of the management and control or the subsequent acquisition of the undertaking of the Oriental Gas Company Ltd. and for certain other matters incidental and ancillary thereto the Act has been enacted. In the Act the undertaking of the company has been defined to mean the properties of the company movable or immovable, other than cash balances and reserve fund, including workshop, plants, machineries, posts, pipe lines, appliances, apparatus, accessories, furniture, equipments and stores and lands appertaining thereto actually in use immediately before the commencement of the Act or intended to be used in connection with the production of gas or supply thereof in Calcutta and its environs. Under Section 3 the State Government may by notification in the Official Gazette take over for the period of 5 years the management and control of the undertaking of the company for the purposes and in accordance with the provisions of the Act. Such notification has been made in the Official Gazette.
17. Under Section 4 the undertaking of the company, with effect from the appointed day shall stand transferred to the State Government for the purpose of management and control. The company and its agents including managing agents, if any, and servants shall cease to exercise the management or control in relation to the undertaking of the company. All contracts, excluding any contract or contracts in respect of agency or managing agency, subsisting immediately before the appointed day and affecting the undertaking of the company shall cease to have effect or to be enforceable against the company and shall be of as full force and effect against or in favour of the State of West Bengal. Under Section 5 on the transfer of the undertaking of the company to the State Government for the purpose of management and control, every person in whose possession, custody or control the undertaking of the company or any part may be shall forthwith deliver possession of the undertaking of the company to the State Government Under Section 6 the undertaking of the company shall be run by the State Government and shall be used and utilised by the State Government for the purpose of production of gas and supply thereof to industrial undertaking, hospitals and other welfare institutions, to local authorities, for street lighting and for other purposes, if auy, and to the public in general for domestic consumption and for this purpose the State Government shall have all the powers of the company under Act V of 1857. The State Government may for effectively carrying out the purpose of this Act add, at its own cost, to the undertaking of the company such new works, workshops, plants, machineries, posts, pipes, pipe line, apparatus, accessories, furniture, equipment, stores, lands, buildings, erections or fixtures as it may consider necessary. Section 7 states that the State Government may if it so thinks fit at any time within the period of five years acquire the undertaking of the company by notification in the official gazette. If the undertaking be not acquired the State Government shall on the expiry of the period of five years by order transfer the management and control of the undertaking to the company. Section 8 deals with compensation and Section 9 with the manner of payment of compensation.
18. Mr. Advocate-General contended that the impugned legislation was in pith and substance or in true nature and character a legislation for requisition of property and as such fell into entry 42 of concurrent list 3. Mr. P.R. Das Contended first that the legislature nowhere used the word 'requisition' and the legislature did not think it was legislating with reference to requisition and secondly that the Government was requisitioning the property for needs of itself and its nominees. Mr. Das also contended that there was never any allegation of mismanagement or inefficiency against the company and thus the Act was a colourable legislation. Mr. Advocate-General relied on the statement of objects and reasons of the impugned legislation. Mr. Das objected to the same being placed. In the case of State of West Bengal v. Subodh Gopal, : 1SCR587 there is an observation at p 627 (of SCR) : (at p. 104 of AIR) that in that particular case the statement of objects and reasons appended to the bill which eventually became the Act had not been placed before the High Court. Mr, Advocate-General relied on that observation to show that the statement of objects and reasons could be and should be placed before the Court. In the case of M.K. Ranganathan v. Government of Madras. : 2SCR374 of the report (of SCR) : (at p. 608 of AIR) it is stated that statement of objects and reasons is 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 ab the time which actuated the sponsor of the Bill to introduce the same and the extent and ureencv of the evil which he sought to remedy. Thus Mr. Advocate-General .rightly contended that the statement of objects and reasons was admissible not for the purpose of construction of the statute but for ascertaining conditions prevailing at the time of the legislation. The statement of objects and reasons shows that consequent upon the receipt of numerous complaints from various industrial concerns, hospitals, municipal bodiesand the public in general about the unsatisfactory condition of supply of gas in Calcutta the State Government set up a Committee in 1958 to enquire into the affairs of Oriental Gas Company Ltd. Secondly it says that the Committee with the help of Technical Experts enquired into the matter of Oriental Gas Company Ltd. and found that the present gas works including the distribution system was in a bad state of disrepair and recommended that the gas works and the distribution system should be taken over immediately under the management of the State Government. Thirdly the Committee certified that this vitally essential service should be permanently tender the administrative control of the State Government and for that purpose it should acquire the undertaking of said company. The statements of objects and reasons concludes by stating that the Bill is accordingly designed to provide for taking over the management of the undertaking of Oriental Gas Company Ltd. for a period of five years on payment of suitable compensation by the State with provision for subsequent acquisition of the undertaking at the option of the State Government if and when found necessary. There are so many reasons for the legislation, The Gas works and the distribution system are found to be in a bad state and therefore the legislation is taking over and requisitioning the Oriental Gas Company for the public purpose.
19. Mr. Advocate-General further contended first that the petitioner had no right of access to any copy of the speech delivered by Dr. B.C. Roy the Chief Minister and secondly if the petitioner relied on any extract of the speech the entire speech should be read. Mr. Advocate-General relied on the decision reported in Administrator General of Bengal v. Prem Lal, 22 Ind App 107 at p. 118 (PC) and Assam Railway and Trading Co. v. Inland Revenue Commissioners, 1935 AC 445 at p. 458 for the proposition that reference could be made to speeches to show the surrounding circumstances of the legislation and not as an aid to the construction of the statute. The Court was informed by Mr. Banerjee that it was possible for any member of the public to get a copy of the speech. I do not know whether there is any such procedure. In fact none was shown to me. The speeches were not placed before me save and except that Mr. Advocate-General stated that the speeches would show that there was an enquiry and report on the affairs of Oriental Gas Company Ltd. The statement of objects and reasons shows that. It is therefore not necessary to go into the speeches to substantiate that point.
20. It is true that the impugned legislation does not use the word 'requisition' but it does use the word 'take over'. In the legislative entries the words used in entry 42 list 3 are 'acquisition and requisition of property.' In the case of State of Bombay v. Bhanji Munji, : 1SCR777 , it was held relying on the Darbhanga case, State of Bihar v. Kameshwar Singh, manu/sc/0019/1952 that it is unnecessary to state in express terms in the statute itself the precise purpose for which the property is being taken provided from the whole tenor and intendment of the Act it could be gathered that the property was being acquired either for purposes of the State or for purposes of the public and that the intention was to benefit the community at large. In the present case the tenor and intendment of the Act is in my opinion that it is for the purpose of requisition. The purpose of requisition can be gathered from the Act namely that they are for the purpose of supply of gas to industrial undertakings, hospitals, welfare institutions, local authorities and to the public in general. The definition of the undertaking of the company in the impugned legislation shows that the undertaking inclusive of land is being requisitioned by the State Act of 1960.
21. Mr. Das contended that the impugned legislation was colourable legislation inasmuch as inpith and substance the legislation was with regardto an industry engaged in the production of gas and Sections 3 and 4 of the impugned legislation could beconstrued to mean that the legislation was with regard to an industry within the meaning of the Parliament Act of 1951 and was thus a colourablelegislation. Mr. Advocate-General relied on the case ofGajapati Narayan Deo v. State of Orissa, : 1SCR1 for the proposition that the doctrine of colourablelegislation resolves into the question of competency of a particular impugned legislature to enact aparticular law and if the legislature is competent topass a particular law, the motives which impelled itto, act are really irrelevant. Similarly if the legislature lacks competency the question of motivedoes not arise at all. Therefore whether the statute is constitutional or not is always a question ofpower. The term 'colourable legislation' has beenapplied to disguised, covert and indirect method of transgression of powers. In effect 'colourable legislation' is that although apparently a legislaturein passing a statute purported to act within thelimits of its powers, yet in substance and in realityit transgressed these powers, the transgression being veiled by what appears, on proper examination,to be a mere pretence or disguise. As far as theimpugned legislation is concerned there is no disguise or pretence as to what the legislation is. Intrue character and purpose the legislation is totake over the management of the undertaking forvarious public purposes. The true nature andcharacter of the impugned legislation is requisitionof property and the legislation is not under anydisguise.
22. Mr. P.R. Das contended that in paragraph 10 of the petition it was stated that the main company is the owner of an industrial undertaking for the manufacture, supply, distribution and sale of fuel gas and by virtue of the Parliament Act oi 1951 the Managing Company is deemed to be the owner of the undertaking. In paragraph 14(a) of the petition it is further stated that the industry in which the main company or the Managing Company were and are engaged was and is the manufacture and production of fuel gas mentioned in the first schedule to the Parliament Act of 1951 and in the circumstances it was and is a scheduled Industry as defined in 1951 Act.
23. Mr. Das contended that these allegations were not denied in the affidavit in opposition. These allegations are not artistically denied in the affidavit in opposition. I am unable to accept the contention of Mr. Das that there is any, admission in the affidavit. The affidavit has to be read in its entirety and when so done it would appear that the respondents are challenging the contentions of the petitioners.
24. The next question is whether the impugned legislation can be supported under entry 25 in State List 2. Mr. Advocate-General and Dr. Gupta both contended that the entry 'Gas and Gas Works' was carved out as an exception to Industries inasmuch as entry 25 in State List 2 came immediately after Entry 24 in State List 2 dealing with Industries. In other words, the question is whether Oriental Gas Company is an industrial undertaking engaged in the manufacture or production of gas.
25. Dr. Gupta relied on Act V of 1857 for the purpose of showing that the company was formed for the purpose of introducing Gas work into India and the company erected Gas Works on land granted for that purpose and that Oriental Gas Company was engaged in the preparation of apparatus and materials for the manufacture and supply of Gas. Dr. Gupta contended that the framers of the Constitution thought of the entry as Gas and Gas works and the same entry occurred in the Constitution Act of 1935 and that no different sense should be attached to Gas and Gas Works in the Constitution. He also referred to Gas Works Clauses Act of 1847--10 and 11 Victoria Chap. 15 to show that one of the principal objects of Gas Works is supply at gas. Dr. Gupta referred to the English Act only for the limited purpose of showing the meaning which had been given to Gas Works and of which meaning the legislators and the framers of the Constitution had been well aware. The preamble of the Act of 1857 shows that the company erected Gas works on land granted for the purpose of introducing Gas Works into India. Mr. Das contended that if Oriental Gas Company was engaged in the production of gas it would be an industry within the meaning of Act 65 of 1951. To that Dr. Gupta's answer is that even if Oriental Gas Company produced any gas such production was for the sole purpose of supply of gas to the town. Mr. Das's contention was that the production of gas and the supply thereof was so inextricably bound up that the one could not be dissociated from the other and therefore Oriental Gas Company which was engaged in the production of gas would become an industry for the production of gas within the meaning of the Union Act 65 of 1951. Mr. Das further contended that production of gas means the industry itself and since the impugned legislation provides for utilisation of the undertaking for both the purposes of production and supply of gas and for running the industry, supply of gas could not be separated from production. If the undertaking produces gas, it is an industry within the Act of 1951. Dr. Gupta furnished the answer by invoking the doctrine de minimis non curst lex. In ascertaining the true nature or true character and purpose one has to find out the real significance of the business or undertaking. The question here is whether Oriental Gas Company Act of 1960 is a legislation with regard to an industry of fuel gas or whether the impeached legislation is with respect to gas and gas works. Dr. Gupta referrerd to the decision of the Judicial Committee in the case of Corporation of Calcutta v. Mod Chand in support of his contention that where a business or undertaking would assume a hybrid character it had to be ascertained as to what its true character was. In the Privy Council case the question was what would be the character of a building if a building as to one half were ordinarily let and as to another half were not ordinarily let. There were two principles of valuation namely, of a building ordinarily let and of a building not ordinarily let. How was the building to be valued?
26. The test, it was held, was to be applied to the building as a whole and one or other methods of valuation was to be applied to the building as a whole. There may be cases where the portion ordinarily let or portion not ordinarily let is so negligible in proportion to the whoe of the building that the building might on the principle of de minimis be reasonably held as a matter of fact to be not ordinarily let or ordinarily let as the case may be. Judged by this test Dr. Gupta contended that production of Gas here was so small that by the doctrine of de minimis it was to be held that production was negligible in proportion to the whole business of supply of gas. The entry gas and gas works is to be considered as a composite entry. The recitals in the Act of 1857 that the Gas Company erected Gas Works and secondly that the Gas Company was given land for the purpose of supply of gas to the town would show that the object of the company was not production of gas but erection of gas works for supply of gas. The real and principal object is that it is not a company for production of gas but for supply of gas.
27. The meaning of an entry in the legislative list is to be ascertained with reference to the context in which it has been used. The language of the entries should be given the widest scope of which their meaning is fairly capable. Overlapping should be avoided. Entries are to be reconciled that there is no conflict. Therefore, the entry, 'Gas and Gas Works', should not have any meaning which conflicts with the entry 'Industries'. The two entries should be harmonised to avoid any construction which will render any entry nugatory or ineffective. The entries in the legislative list are not powers or legislation but are fields of legislation. As Chief Justice Spens said in the case reported in Manikasundara Bhattar v. R.S. Nayudu, 1946 FCR 67: (AIR 1947 FC 1) that additional words and phrases in the legislative entries are added for the purpose of removing doubts as to the wide scope of the meaning of the opening term and phrase. The subsequent words and phrases do not limit but rather illustrate the scope and objects of the legislation envisaged as comprised in the opening term or phrase. It is here that the meaning attributed to Gas and Gas Works by Dr. Gupta becomes very important. Gas and Gas Works is a composite entry and it is incapable of severability. The legislation should be tested as to whether it is in relation to gas and gas works in entirety. If judged by that test it falls within the entry of gas and gas works and if that be the true nature and character of the legislation then the question will arise as to whether any trenching on the aspect of production will affect the vires of the legislation.
28. Mr. Advocate-General laid considerable emphasis on the meaning of Gas and Gas Works as having been completely carved out from entry 52 List 1 and entry 24 list 2 in respect of Industries.
29. It now remains to be seen as to whether this legislation in 'pith and substance' is an entry under Gas and Gas Works or is within the mischiei of entry 52. It is well settled that the constitutionality of an enactment is presumed. Mr. Advocate-General contended on the authority of Pretty v. Solly (1859) 26 Beay 606 that the rule is that whenever there is a particular enactment and a general enactment in the same Statute, and the latter, taken in its most comprehensive sense, would Overrule the former, the particular enactment must be operative, and the general enactment must be taken to affect only the other parts of the Statute to which it may properly apply. Mr. Advocate-General relied on Craies 'Statute Law' 5th Edn. p. 205, Maxwell on the 'Interpretation of Statutes 10th Edn. p. 160 in support of the proposition that Gas and Gas Works were first to be treated as an exception to industry and secondly, the entry was to be given effect to by reconciling the entry with entry 24 in list 2 and entry 52 in list 1 and thirdly, attempt should be made to modify or mould the meaning of the entries. In the decision reported in it has been held that it is only when a reconciliation proves impossible then and then only the non-obstante clause operates, and the Federal power prevails; for the non-obstante clause ought to be regarded as a last resource. The underlying principle is that a general power ought not to be so construed as to make a nullity of a particular power conferred by the same Act when by reading the former in a more restricted sense effect can be given to the latter in its ordinary and natural meaning. Thus Mr. Advocate-General contended that if the entry Gas and Gas Works were read as Mr. P.R. Das contended that by reason of operation of Article 246 the State of West Bengal Legislature had no longer any jurisdiction or competence to deal with Gas and Gas Works, the entry would be a dead letter in the Constitution. I am bound to give meaning and effect to the entry and it will be against all canons of construction to hold that by reason of the 1951 Act the entry Gas and Gas Works is either effaced or is non-existent as far as the legislative competence and field of the West Bengal Legislature is concerned. I am unable to hold as Mr. Das contended that the entry Gas and Gas Works is to be read as being within the entry 52. The entry Gas and Gas Works stands by itself independent of the entry of 'Industry'. The entry Gas and Gas Works as I have already indicated is a composite entry. To hold that a legislation in respect of Gas and Gas Works would be a legislation in respect of 'industries' within the meaning of Act 65 of 1951 would be to hold that one of the heads of legislation, one of the fields of legislation is wiped out from the Constitution. I am unable to accept such reasoning or construction.
30. The aspect doctrine o legislation was enunciated by their lordships of the Judicial Committee in the case of Hodge v. R., (1883) 9 AC 117 where Sir Barnes Peacock said that subjects which in one aspect and for one purpose fell within Section 92 of the British North America Act might in another aspect and for another purpose fall within Section 91 of the Act. In the case of Citizens Insurance Co., Canada v. Parsons, (1881) 7 AC 98 it was said that a legislation affecting marriage and divorce' which was contained in the enumeration of subjects in Section 91 of the British North America Act would be embraced with the subject of 'solemnisation of marriage in the province' which was enumerated as one of the classes of subjects under Section 92 of the Act. In spite of the general language of Section 91 of that Act it could not be doubted that the province had exclusive authority to legislate on the subject. Sir Montague Smith said:
'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 could 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 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 the interpretation of the statute than Is necessary for the decision of the particular question, in hand'.
31. It is the true nature and character of the legislation and not its ultimate economic results that matters. It is well settled that there can be a domain in which provincial and dominion legislation may overlap in which case neither legislation will be ultra vires if the field is clear but if the field is not clear and the two legislations meet, the dominion legislation must prevail. See Fish Canneries case, Attorney General for Canada v. Attorney General for British Columbia, 1930 AC 111. There must be a real conflict between the two Acts, that is, the two enactments must come into collision or come into a conflict over a field of jurisdiction common to both so that while dealing with similar transactions on subject matters they yield a different result. The doctrine of paramountcy or exclusive power does not operate merely because Parliament has legislated on the same subject matter. In the Citizens Insurance Co. Case, (1860) 7 A C 96 it was held that the authority to legislate for the regulation of trade and commerce did not comprehend the power to regulate by legislation the contracts of a particular business or trade such as the business of fire insurance in a province and therefore there was no conflict or competition between the Federal 'Trade and Commerce' power, and the Provincial 'Property and Civil Rights' power. Therefore the doctrine of occupied field applies only when there is a clash between Dominion and Provincial legislation within an area common to both. There is no conflict if both the legislations may co-exist and be enforced without clash. In the present case the taking over of Oriental Gas Co., is within the field of requisition under Entry 42 in List III. It is within the field of legislation under Entry 'Gas and Gas Works', because it is requisition of Oriental Gas Co., which is an undertaking of gas works for the supply of gas. The Parliament Act of 1951 and the State Act of 1960 do not come into any conflict. The 1951 Act is for development and regulation of industries and the State Act of 1960 is for taking over the management and control of the Oriental Gas Company, a gas works for supply of gas to various undertakings, hospitals, local authorities and the public. The field of legislation here under the entry gas and gas works is clear. In my opinion, the impugned legislation is under entry 25 (List II) and is not a legislation under industry. I have already indicated that as far a* the field of legislation is concerned, the impugned legislation is valid and competent within entry 42 of list 3. I am also of opinion that entry 25 in list 2 --Gas and Gas Works --is a field of legislation which confers sufficient authority and power on the State legislature to make laws affecting Gas and Gas Works. Even if it bo assumed that the impugned legislation be one which incidentally trenches on any production aspect, it will be sufficiently justified and valid by reason' of the pith and substance doctrine that the legislation is in trus character and purpose with regard to gas and gas works and the trenching, if any, is merely ancillary to effective legislation in gas and gas works.
32. Mr. P.R. Das contended that management and control of Orinental Gas Co., could be obtained by the Union Act of 1951 and that the effect of the State Act of 1960 was acquisition of management and control of the Company by a colourable legislation. Lord Simonds observed in Attorney General of Saskatchewan v. Attorney General of Canada, 1949 AC 110: (AIR 1949 PC 190), that consequential effects are not the same thing as legislative subject-matter. The test in the present case is: Is production incidental or does it lie at the heart of the matter? The answer is, in my opinion, that the present impugned legislation is requisition of gas and gas works for public purpose and the control and management of the company is taken in that behalf. Dr. A.C. Gupta contended that the true significance of the Oriental Gas Co. was that it was a gas work for supply of gas. Production of gas as was necessary for the main purpose of supply was obvious but that could not impart to the company the character of industry engaged in the manufacture or production of gas. Dr. Gupta further contended that an industry would be considered by the greatness in the volume of manufacture or of importance of manufacture. Secondly, he contended that industry must be for the purpose o producing those articles. He illustrated that if a timber saw mill generated or produced electricity foi the purpose of timber saw mill, a question would arise as to whether the timber saw mill manufactured or produced electricity or was the production at electricity ancillary or incidental to the timber saw mill business. I agree with Dr. Gupta's answer that it could not be said of the timber saw mill that it was engaged in the manufacture or production oJ electricity but the production, of whatever quantity it was, was only necessary to, the obvious and dominant purpose of saw mill. Judged by that test and also by the doctrine of de minimis which I have already discussed, I am of opinion that Oriental Gas Go. is an undertaking the true significance of which is supply of gas and not production of gas.
33. Mr. Advocate-General contended that the doctrine of repugnancy did not arise in the present case and secondly that if it did arise it was answered by Article 254 of the Constitution. The true meaning of the doctrine of repugnancy was given in the decision of Tika Ramji v. State of Uttar Pardesh, : 1SCR393 :
'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 b