Motor Accidents and Contributory Negligence

 

(V.A. Abdul Azeez, Advocate, Alleppey - Rtd. Additional Law Secretary)

 

Motor Accidents are on the increase in Kerala. Almost every day we read in papers that a crowded bus fell into a ditch resulting in the death of some passengers and injury to others or a bus and lorry collided resulting in the death of the bus driver and lorry driver and causing grievous injury to the remaining passengers. In fact all these accidents could be averted if the drivers concerned were careful and sober.

 

Is driving licence issued to/Tanker/Lorry/bus/drivers a permit to cause death or grievous injury to pedestrians and those using lighter vehicles?

 

Drivers of heavy vehicles are generally rash and indifferent in the matter of the safety of the pedestrians, Cyclists and people using lighter vehicles such as Scooters and small cars. There is an old saying “B\¸pd¯v khmcn sN¿p¶hÀ¡v ]«nsb t]Snt¡ItÃm.”(Those who ride on an elephant need not be afraid of dogs) The main reason for the increase in road accidents is that the drivers responsible for the accidents are given very light punishments - say a fine of thousand rupees or in default imprisonment for three to six months. There is a general notion that causing grievous hurt in motor accidents is not a serious crime because the punishment is not at all severe.

 

How can motor accidents be checked

 

Most of the accidents are caused by over speed and in attempts to over take other vehicles where the roads are not wide enough for such over taking. There must be some machinery to check over speed. If any motor vehicle is found running at a higher speed than is permissible, the driving licence of the person concerned should be suspended then and there. Afterwards there must be an enquiry and the offender should be given a punishment in keeping with the gravity of the offence. In such cases politicians should not interefere and try to save the delinquent drivers. But unfortunately the traffic department is not clean. Even small officials of the Department are sometimes found rolling in luxury and live like fabulously wealthy people, even though their salary is less than Rs.2000/- a month. How is this possible? The answer is very simple. They are corrupt. As a first step to reduce motor accidents the Dept. must be made clean by weeding out corrupt officials.

 

Cyclists

 

They use the road as if no traffic rules are applicable to them. The only offence for which they are caught by the Police is riding in the night without light. This is not enough. In fact cyclists create a lot of problems and contribute their mite for road accidents in a big way by their rash and negligent riding. These two wheelers are taken lightly as they do not come under the category of "automobiles". This attitude must change. Every one using the public road should become road conscious and comply with traffic regulations.

 

Contributory Negligence:

 

In M.AC.T. cases negligence on the part of petitioners materially contributing to the accidents is termed contributory negligence. In Sushma Mitra v. M.P.S.R.T.C. Corporation it was held that the failure by a person to use reasonable care for the safety of himself or his property becomes the author of his own wrong. In such a case the court has power to apportion the damage between parties who can be held guilty of negligence by any act or omission on their part as it deems just and equitable. (Union of India v. Hindustan Liver Ltd. AIR 1975 P. & H. 259). Contributory negligence of the passenger was held to be a good defence to an action for damages. In Chhote Lal v. G.I.P. Railway Co. the plaintiff was travelling in a Railway compartment with his elbow outside the window of the carriage and was severally injured by an open door of the compartment of another train. The plaintiff sued the Railway Co. for damages. The Court held that the accident could never have happened if the elbow had not been outside the carriage window that was the direct cause of the accident. The suit was dismissed. (AIR 1929 Nag. 209). According to the last opportunity rule the plaintiff can recover compensation notwithstanding his negligence if it is found that the defendant had the last opportunity to avoid the accident.

 

The rule of last opportunity obviously failed to give an equitable treatment to parties as it was based on an illogical postulate that in every case the person whose negligence came last in time was solely responsible for the damages. So the rule of constructive last opportunity was adopted as the basis for deciding such cases by courts in India. In Union of India v. Lalman, a truck was driven by a person who was not entitled to drive as he was a few months younger than was required for holding a driving licence. While crossing an unmanned railway crossing he met with an accident. The court held that he had acted illegally and was liable for contributory negligence.

 

In Lahari Ram Singh v. Mahendra Singh it was held:

 

"Though a code of conduct has been evolved for the safety of the people using the road, it is still the duty of every person who uses the road to be careful about one's own safety. Self preservation is the natural instinct and the law does not work against it. A duty is therefore cast on every person using the road to use it in such a way that he protects himself and simultaneously others."(1978 ACJ 282 Orissa).

 

In Tara Dibya v. General Manager, Orissa RTCO. Ltd. the facts were a bus was overtaking a cyclist at a slow speed and leaving sufficient space for the cyclist to pass. The cyclist suddenly sewered to his right and hit against the bus resulting in his death. The court held that the cyclist was liable for his own wrong. If the bus was "in normal speed and expected standard, the driver cannot be made liable for something which occurred due to an abnormal behavior or unexpected conduct of others on the road not capable of notice at the proper time by the driver". In 1973 ACJ 1 (MP)), it was held that a cyclist carrying heavy and bulky load on his pillion would naturally have an unsuitable equilibrium. The slightest impact could put the cyclist out of balance and so he was held guilty of contributory negligence.

 

In 1966 ACJ 57, the Supreme Court held:--

 

"In case of negligence it is true that the normal rule is that it is for the plaintiff to prove negligence and not for the defendant to disprove it. But there is an exception to this rule which applies where the circumstances surrounding the thing which causes the damage are at the material time exclusively under the control and management of the defendant or his servant and the happending is such as does not occur in the ordinary course of things without negligence on the defendant's part."

High Court v. C.A.T.

 

(K. Kanakachandran, Industrial Tribunal)

 

Many ripples are being created now on account of the conflicting versions given on the powers and jurisdiction of Central Administrative Tribunals. The latest decisions rendered by a learned Judge of the Kerala High Court in Mony v. Union of India (1990 (II) KLT 216) and Ernakulam Bench of the Central Administrative Tribunal reported as Case No. 1 in 1990 (II) KLT are in highly conflicting terms. The litigants and lawyers are equally in confusion now. My attempt here is to highlight some more issues which are of topical importance.

 

If we go through the provisions contained in the Administrative Tribunal Act 1985 (For short AT Act) it can be seen that statute makers had also contributed a bit for the creation of these types of controversies. It appears, the law makers failed to anticipate the possible misreading of the provision regarding the assumption of powers which were exercised by the High Court immediately before the coming into force of the AT Act in relation to matters specified in S. 14 and 15.

 

By the Forty Second Amendment to the Constitution, Articles 323-A and 323-B were incorporated making provisions for constitution of various Tribunals for adjudicating service matters and certain other matters. Article 323-Aof the Constitution empowers the Parliament to enact laws for giving exclusive jurisdiction to the Administrative Tribunals for adjudicating all disputes and complaints with respect to recruitment and conditions of service of person appointed to public services. Art.323(A)(2)(d) empowers the Parliament to make laws for excluding the jurisdiction of all courts except the Supreme Court. Strictly in terms of those objectives, AT Act was enacted by the Parliament in 1985. The S.14 of the AT Act says that all jurisdiction, powers and authority exercised by all courts except the Supreme Court shall be exercised by the Central Administrative Tribunals. The provision contained in S.28 specifically excludes the jurisdiction of all courts except Supreme Court, Industrial Tribunals and Labour Courts. On account of this specific exclusion clause, the powers exercised by the High Courts under Article 226 and 227 of the Constitution on the matters specified in S.14 and 15 of the AT Act are taken away. The change effected only means that High Court will not have any jurisdiction and power to deal with any of the matters specified in S.14 and S.15 of the AT Act even by exercising the constitutional powers vested in it under Articles 226 and 227 of the Constitution. But, it does not mean that the Central Administrative Tribunals constituted by the Central Government will automatically get constitutional powers also conferred exclusively on the High Court through Arts.226 and 227 of the constitution of India. It also does not mean the inherent powers vested in the High Court under S.115 of the Civil Procedure Code will be similarly vested in the Administrative Tribunal. The decision tendered by the Ernakulam Bench of the Administrative Tribunal is on the assumption that the extra ordinary jurisdiction conferred on the High Court under Article 226 of the Constitution is also transferred to the Central Administrative Tribunal by S.14 of the AT Act. This is the real issue leading to the present controversy.

 

By invoking Art.226 of the Constitution, the High Court can issue various writs in the nature of certiorari, mandamus, quo warranto etc. when there is error or illegality in the exercise of powers by an authority coming under the definition of 'State'. The powers vested in the High Court under Art.226 of the Constitution were rather undefined and unlimited till the 42nd Amendment to the Constitution. But, through Art.323(A) and 323(B) of the Constitution, the Parliament and State are empowered to make laws restricting the powers of all courts including the constitutional powers of High Court in respect of matters specified in such legislations. The bar imposed on the High Court is only that it shall not exercise any of the powers which are to be exclusively exercised by Administrative Tribunals. However if there is usurpation of powers, even against acts of Administrative Tribunals, writs in the nature of quo warranto or prohibition can be issued by the High Courts. Restrictions in the exercise of powers and jurisdiction by the High Courts are only confined to the matters specified in S. 14 and 15 of AT Act and not on other matters.

 

In the original AT Act, all the Courts except the Supreme Court were barred from adjudicating any of the matters coming within the jurisdiction of Administrative Tribunals. By the subsequent amendment to S.28 of the AT Act, the Industrial Tribunal, Labour Court or any authority constituted under the Industrial Dispute Act 1947 or any corresponding law for the time being in force are also empowered to exercise any jurisdiction, powers or authority on matters exclusively conferred to the Administrative Tribunals. Therefore the position is that any person who will come under the definition of 'workman' in the Industrial Dispute Act 1947 or any other corresponding law for the time being in force can approach not only the Industrial Tribunal or Labour Court but even the Administrative Tribunal also for the redressel of grievances it relation to service matters.

 

All the employees connected with the affairs of the Union or of any State or of any local or other authority will not come within the definition of 'workmen' in the Industrial Dispute Act. Only a few section of the employees will come under that definition. The intention of the amendment to S.28 might be that those employees who would come within the definition of 'workmen' could resort to remedies provided in the I.D. Act also instead of seeking remedies through the Administrative Tribunals. Thus it is purely the option of the employee concerned to choose any of the forums. That is why concurrent jurisdiction is conferred on Administrative Tribunals, Industrial Tribunals and labour Courts. What the legislature had intended can also only be like that. Nowhere in the AT Act it is stated that the Administrative Tribunal will have appellate or superintending powers over the Industrial Tribunals and Labour Courts. It does have only concurrent powers to exercise. So long as there is no confernment of constitutional power under Art. 227 to the Central Administrative Tribunal, such Tribunal cannot hold the view that it does have superintending powers over Industrial Tribunals and Labour Courts as in the manner the High Court has. It's source of power is only through the provision contained in AT Act and not through the Constitution of India. The Central Administrative Tribunal can exercise powers under Art. 227 only when there is specific provision in the Constitution itself.

 

Now, in terms of power conferred under Art.227, the High Court is exercising Superintending power on all Courts and Tribunals. So long as the Industrial Tribunals and Labour Courts are creation of Industrial Dispute Act, 1947 or other corresponding law for the time being in force, the Superintending power of the High Court under Art.227 will continue. This position will change only when the Industrial Tribunals are appointed in terms of the law which may be enacted by the concerned legislatures by invoking Art.323-B of the Constitution and provision is also made therein for the exclusion of jurisdiction of High Court as in the manner it is done in the AT Act. Thus the position emerges is that as the matters stand now, only the High Court will have power of judicial review on the awards and orders which will be passed by the Industrial Tribunals and Labour Courts. The Industrial Tribunals and Labour Courts are in no way authorities subordinate to or under the control of the Central Administrative Tribunal so long as there no specific provision for that in the AT Act. In the height of this controversy, it is up to the Apex court of this country to lay down the correct position in law. Till that comes, the present chaos will continue.

Advocate Commissioners

 

(By Prakash Ramanathan, Advocate, Manjeri)

 

Every civil lawyer at some point in his practice is sure to have experienced the crucial influence that an Advocate Commissioner appointed by Court has had on the progress and ultimate out-come of suits, especially in matters where emergent reliefs are sought or where very substantial property/easement rights are involved and where a correct plan is essential to judicious disposal of issues.

 

In actual practice however the fact is that young lawyers fresh out of Law Colleges are usually appointed as Advocate Commissioners even though they may not have any idea of what exactly their role is nor how to go about its effective execution.

 

It is therefore suggested that the syllabi of legal education (perhaps in the final year) be modified to include a capsule course on all aspects of Commission work including the rudiments of survey techniques and preparation of plans which would go a long way in furthering the rights and interests of genuine litigants.

Freedom of Trade in Liquor -A Fundamental Right?

 

(By Romy Chacko, Advocate, Ernakulam)

 

Courts in India, have from the inception of the Constitution considered the scope of fundamental right to trade in liquor. The scope of this right has to be analysed in the light of constitutional obligation to bring about prohibition [1]. The question whether the nature of a transaction can affect the quality of trade also has to be pondered over in a discussion on the subject.

 

Restriction on the Right to trade under the Constitution

 

The Supreme Court did not maintain a consistent view on the question of fundamental right to trade in liquor. The question assumes more significance in the context of the specific directive for the State to introduce pieces of legislation known as temperance laws.

 

The Constitution confers on every citizen the fundamental right to carry on any occupation, trade or business [2]. The same is subject to reasonable restrictions in the interest of the general public [3]. The State may even totally deny it by creating a monopoly in its favour or in any corporation owned or controlled by it [4].

 

A scrutiny of the debates in the Constituent Assembly on Article 19(1)(g) [5] regards the right to trade in general goes to show that there was reconciliation of two opposing views, one for retaining that right and the other for not having such a provision [6]. The scope of the restriction which could be imposed on the said right was also subjected to a lot of criticism [7].The nature of the restriction to be imposed on the right was finally resolved by substituting the word 'reasonable' before the word restriction and importing the word 'general public' for 'morality or health'.

 

The concept of restrictions on fundamental rights has been subjected to serious debates by the judiciary. The main problem was whether restriction will amount to prohibition. In other words, the question was whether the state can totally deprive a person of his fundamental right on the grounds detailed in various provisions relating to imposing reasonable restrictions.

 

The earlier decisions were to the effect that restriction did not mean deprivation. [8] The question whether restriction included prohibition though raised in some other cases, the same was left open. [9] The court held in some other cases that the law would be valid or invalid according as the interference with fundamental rights was reasonable or not in the interests of general public. [10] In all these cases prohibition was treated as only a kind of restriction.

 

Finally the Supreme Court answered the question in the affirmative in Narendrakumar v. Union. [11] Here the petitioners were dealers in imported copper. They entered into contracts of purchase of copper with importers from other states. Before they could take delivery of copper Government of India issued an order called the "Non Ferrous Metal Control Order, 1958" under the Essential Commodities Act. As per this order the sale and purchase of non-ferrous metal was controlled as per the price fixed by the Government. The petitioners challenged the same under Article 14, Article 19(1)(f), Article 19(1)(g). The government sought to justify the Non-ferrous metal Control Order as per the reasonable restriction clause provided under Article 19(6). Justice Das Gupta held that the word 'restriction' included prohibition. According to him constitution makers must have considered the word 'restriction' to be wide enough to save laws taking away Article 19(1) provided the same was reasonable in the interest of different matters mentioned in the clause. [12]

 

Power of the State Government to prohibit trade in liquor

 

In a discussion on Fundamental Right to trade in liquor the power of the state government in imposing prohibition deserve consideration. Apart from the legislative competence to enact a prohibition law the Directive Principles of State Policy also throw light on the topic.

 

The power of the state government to impose prohibition can be traced to entry 8 of List II of the Vllth Schedule of the Constitution. [13] The Kerala High Court has held in Moni Sevan v. State of Kerala [14]that the Kerala Abkari Act and the Rules made there under is in truth and substance within the legislative competence of the state failing under entry 8 of List II of the Vllth Schedule of the Constitution.

 

Article 47 of the Constitution speaks about the obligation to bring about prohibition of the consumption except for medicinal purposes, of intoxicating drinks and of drugs which are injurious to health. When this Article was debated in the Constituent Assembly [15] reference was made to the teaching of Mahatma Gandhi and the religious instruction against drinking in every community. A feeble opinion was also expressed that it was premature and that prohibition was against the religious practice of the tribal peoples. However, Dr. Ambedkar interfered and said that whether to action the principle and when to do so and in what stages to do so are questions left to the state and to public opinion. [16] Prohibition found a place in the Constitution because of the puritanical thinking which predominated the Constituent Assembly, drawing inspirations from the teachings of Mahatma Gandhi. It is submitted that a socio-economic problem however should find a pragmatic solution only; it cannot be resolved by preconceived notions and beliefs.

 

In State of Bombay v. F.N. Balsara [17] the constitutional validity of Bombay Prohibition Act, 1949 was challenged on the ground that it is violative of certain Fundamental Rights. Here the Supreme Court observed that though Art.47 has no direct bearing on the Act which was passed in 1949, a reference to it supports to some extend the inference that the idea of prohibition is connected with public health, and to enforce prohibition effectively the wider definition of the word "liquor" will have to be adopted so as to include all alcoholic liquids which may be used as substitute for intoxicating drinks, to the detriment of health." [18]

 

An attempt was also made to validate the law based on the entry relating to public order. Justice Fazal Ali remarked: 'At first sight it may appear to be farfetched. to bring the subject of intoxicating liquor under 'public order'. He went on to observe that there was a tendency in Europe and America to regard alcoholism as a menace to publicorder. [19] He relied on the famous decision of the Privy Council in Russel v. Queen. [20] In this case, a Canadian temperance law was challenged, but was found valid as it was a law relating to 'peace, order and good government' of Canada. A passage in Encyclopaedia Britannica was also referred in order lo Justify the temperance law under the head 'public order'. [21] This passage was quoted lo lend support to the contention of the state government that the Prohibition Act fell within the subject of public order but the matter was not pursued further as the particular entry had a remote bearing on the object and scope of the Act.

 

Art.37 of the Constitution says that Part IV of the Constitution shall not be enforceable by any court. [22] It only means the government cannot be compelled to achieve every objective set out in the preamble and to implement every directive principle. This does not mean that the preamble and directive principles are pious platitudes which can be ignored while making slate policy either by legislation or by administrative action.

 

Commenting on Art.47, Jusiice V.R. Krishna Iyer has said; [23]

 

"We, the people of India" have enacted Art.47 and "we, the Justices of India" cannot lure it back to cancel half a life" or "wash out a word of it", especially when progressive implementation of the policy of prohibition is, by Arts. 38 and 47 made fundamental to country's governance. The Constitution is the property of the people and the courts know how to apply the Constitution, not to assess it. In the process of interpretation, Part IV or the Constitution must enter the soul of Part III and the laws".

 

Even if it is admitted that there is a fundamental right to trade in liquor, prohibition is only a reasonable restriction which can be justified under Art.19(6) in the interests of general public. Moreover the stale has a constitutional obligation under Art.47 to bring about prohibition of the consumption of liquor. In State of Bombay v. F.N. Balsara [24] the Supreme Court held that absolute prohibition of manufacture or sale of liquor is permissible and the only exception can be for medicinal preparation. So there is no legal impediment in enacting a prohibition law.

 

Does the nature of a deal affect the quality of the trade?

 

The question of fundamental right to trade in liquor depends on whether the nature of a deal can affect the quality of the trade. In this respect what has to be considered is whether trade in liquor can be treated on par with other illegal activities like gambling, trafficking in women etc.

 

The court had the occasion to consider if prize competition was gambling and for that matter did gambling fall within the ambit of Art.19(1)(g) to be protected as a fundamental right. [25] The respondent contended that even a criminal or immoral activity, if it yielded a profit or income must be looked upon as trade or business and was therefore protected by Art.19(1)(g) . Chief Justice Das after referring to a number of Australian and American cases concluded that prize competition being a gambling nature could not be regarded as trade or commerce. Gambling activities from their very nature and in essence are extra commercium although the external forms, formalities and instruments of trade may be employed and they are not protected by either Art.19(1)(g) or Art.301. [26] Referring to the ideal of welfare state in Part IV of the Constitution he observed, that 'activities which lead to the loss of hard earned money of the common man by lot or chance and which disrupt the peace and happiness of his humble home could not have been intended by our Constitution makers to be raised to the status of trade, commerce or intercourse and to be made a subject of fundamental right guaranteed under Art.l9(l)(g). [27].

 

Here the court thus gave a restricted meaning to the word 'trade' and kept out extra commercial activities from the purview of the word 'trade' in holding that gambling is not trade or business coming under Art.19(1)(g) and Art.301. ,A Constitution Bench of the Supreme Court struck a different note in Krishnakumar Narula v. State of J. & K.[28] in holding that dealing in liquor was morally a business and a citizen had a right to do business in that commodity subject to reasonable restrictions by the state. Here the Court rejected the contention of the state that dealing in liquor was not a business or trade, as the dealing in noxious and dangerous goods like liquor was dangerous to the community and subversive of its morals. Chief Justice Subba Rao observed that acceptance of this broad argument would make the meaning of the expression trade or business depend upon and vary with the general acceptance of the standards of morality obtaining at a particular point of time. According to him standards of morality can afford a guidance to impose restrictions but cannot limit the scope of the right. [29] He went on to say that the morality or illegality of a deal does not affect the quality of the activity though it may be a ground for imposing restriction on the said activity. He finally concluded that dealing in liquor is business and a citizen has a right to do business in that commodity; but the state can make a law, imposing reasonable restriction on the said right in public interest.

 

In Krishnakumar Narula, [30] Chief Justice Subba Rao distinguished the observation of Chief Justice Das in State of Bombay v. R.M.D. Chamarbaugwalla [31] as limited to gambling.

 

Eminent Jurist Shri H.M. Seervai has vehemently criticised the observation of Chief Justice Subba Rao cited above in the following words. [32]

 

"It is submitted that the observation that the quality of a deal does not affect the quality of an activity as business proceeds on-a total misconception of the decision in Chamarbaugwalla Case ......The definition of business there suggested was all activities carried on with a view to earning profit. Das, C.J. rightly rejected this approach and his judgment far from leading to "incoherence in thought and expression" with which Subba Rao, C.J. apparently characterised it, focussed attention on the real issue. Subba Rao, CJ. asked, if dealing in ghee is business, why not dealing in liquor? He would have got the answer if he had asked: if dealing in ghee is business why not dealing in slaves or trafficking in women or dealing in currency notes or counterfeit coins?"

 

According to Seervai, Chief Justice Das was right in holding that activities which are criminal as also dealing in articles or goods which are criminal as also dealing in articles or goods which are res extra commercium, could not have been intended to be permitted in the first instance by Art.19(1)(f) and (g) relating to fundamental rights to property, trade or business, or by Art.301 relating to the freedom of trade and commerce, with permission to state to restrict or prohibit them. [33]

 

It may be submitted that the answer suggested by Seervai in the above passage [34] would not have been correct. Dealing in slaves 01 trafficking in women or dealing in currency notes or counterfeit coins are dealings expressly prohibited by the Constitution of India [35] and the Indian Penal Code [36] unlike dealing in liquor which is expressly permitted under the statute. [37]

 

The writer is of the view that the reasoning of Chief Justice Subba Rao in Krishnakumar Narula [38] appears to be more sound and logical. There is no reason why trade in liquor should cease to be a fundamental right as long as Constitution permits reasonable restriction on any trade in the interest of general public.

 

Nature of the Right to trade in liquor

 

What is the nature of the right to trade In liquor? Can it be treated as a fundamental right? It is felt that the conferment of the status of fundamental right to trade in liquor will not give rise to any problem in as much as the same is subject to reasonable restriction which includes prohibition. In this context Chief Justice Subba Rao has rightly said that the morality or illegality of a deal does not affect the quality of the activity though it may be a ground for imposing restriction on the said activity.

 

In Coovergee B Bharucha v. Excise Commissioner, [39] the Supreme Court considered whether the grant of lease either by public auction or for a sum is a regulation pertaining to liquor. Here the Supreme Court concurred with the following observations in an American case, Crowley v. Chistensen. [40]

 

"There is no inherent right in a citizen to sell intoxicating liquors by retail, it is not a privilege of a citizen of the state or of a citizen of the United States. As it is a business attended with danger to the community, it may has already said, be entirely prohibited, or be permitted under such conditions as will limit to the utmost its evil. The manner and extend of regulation rest in the discretion of the governing authority".

 

Relying on the above observations the Supreme Court negatived the contention of inherent right of citizen to carry on trade in intoxicating liquors. In Coovergee case the Supreme Court laid down three propositions. First, there is no inherent right of citizens to carry on trade in intoxicating liquor. Second, the auction sale of liquor shop is a method by which carrying on particular trade in liquor is regulated and one of the purposes of regulation is to raise revenue. Third, there can be a monopoly only when a trade which could be carried on by all persons is entrusted to one or more persons to the exclusion of general public.

 

After considering all the authorities cited above Supreme Court has finally concluded, in Harshankar v. Dy. Excise and Taxation Commissioner, [41] that "there is no fundamental right to do trade or business in intoxicants." Justice Chandrachud held that the state under its regulatory, powers has the right to prohibit absolutely every form of activity in relation to intoxicants, its manufacture, storage, export, import, sale and possession. He observed: [42]

 

"While engaging in liquor traffic is not inherently unlawful, nevertheless it is a privilege and not a right, subject to governmental control. This power of control is an incident of society's right to self protection and it rests upon? he right of the state to care for the health, morals and welfare of the people. Liquor traffic is a source of pauperism and crime".

 

After considering its earlier decisions in this area, [43] the Court continued to observe: [44]

 

"These unanimous decisions of five Constitution Benches, uniformly emphasised after a careful consideration of the problem involved that the state has the power to prohibit trade which are injurious to health and welfare of the public that elimination and exclusion from business is inherent in the nature of liquor business, that no person has an absolute right to deal in liquor and that all forms of dealing in liquor have, from their inherent nature, been treated as a class by themselves by all civilised communities. The contention that the citizen had cither a natural or fundamental right to carry on trade or business in liquor thus stood rejected".

 

In Nashirwar v. State of M.P. [45] it was held that the state had the exclusive right or privilege of manufacturing and selling liquor and l ha lit had the power to hold a public auction for granting the right or privilege to sell liquor also. It was also reiterated that there was no fundamental right for a citizen to carry on trade or business in liquor. Ray, C.J. Stated three principal reasons for holding the opinion that there was no fundamental right to carry on trade in liquor. First, the police power of the state to enforce public morality to prohibit trade in noxious or dangerous goods; secondly, the power of the state to enforce an absolute prohibition of manufacture or sale of intoxicating liquor; and thirdly, the history of excise law showed that the state had the exclusive right or privilege of manufacture or sale of goods. [46]

 

Recently in Synthetics and Chemicals Ltd. v. State of U.P. [47] the Supreme Court considered the constitutional validity of levies imposed by the states on industrial alcohol. In a separate and concurring judgment in the very same case Justice Oza has made a bold attempt to reopen the question of fundamental right to trade in liquor:

 

"It sounds contradictory for a slate which is duly bound to protect human life which is duty bound to improve public health and for that purpose expected to move towards prohibition claims that it has the privilege of manufacture and sale of alcoholic beverages which are expected to be dangerous to human life and injurious to human health.....In view of Articles 21 and 47 with a respect to the learned Judges who so far accepted the privilege doctrine it is not possible to accept any privilege of the state having the right to trade in goods obnoxious and injurious to health [48].

 

Referring to Art.21 [49] Justice Oza says that it casts a duly on the state lo protect the life of every citizen and if the same is compared with the scheme of privilege it would mean that the state has a privilege lo endanger human life and such a privilege runs contrary to Art.21.

 

Thus it can be seen that Justice Oza has given a new dimension to the question of fundamental right to trade in liquor in holding that the doctrine of privilege in respect of trade in liquor cannot be reconciled within that context of Art.21 and Article 47 of the Constitution. It has been rightly indicated by Justice Oza that the doctrine of police powers does not apply under the scheme of Indian Constitution. H.M. Seervai is of the view that the statement that government is the owner of these privileges is not accurate. According to him the privilege of selling liquor belongs not to government but to the party who pays licence fee for that privilege and the right conferred on the government under the Excise Act to raise revenue by charging a licence fee cannot be called a privilege. Nor can the right be accurately called the property of government. [50]

 

Doctrine of police power has been invoked by the Indian Supreme Court in most of its decisions in holding that there is no fundamental right to trade in liquor. [51] It is submitted that the doctrine of police power as evolved by the U.S. Supreme Court does not apply in the Indian context. According to Seervai, the doctrines evolved by the U.S. Supreme Court in the context of U.S. Constitution require severe scrutiny before the same can be imported into our Constitution. [52] Our Constitution has deliberately rejected the due process clause of U.S. Constitution as a result of which it is not necessary in India to evolve a doctrine of police power in order to mitigate the rigour of the due process clause. Also the distribution of legislative power between the Union and the States as per Lists I, II and III of the Vllth Schedule and the Constitution and the limitation on fundamental rights provided in Part III of the Constitution clearly indicate that theories evolved in the context of the U.S. Constitution cannot be read into the Indian Constitution. In this respect it is worthwhile to quote the principle laid down by Justice Bose in interpreting Indian Constitution. [53]

 

"I deprecate the use of doubtful words like 'police power', 'social control', 'eminent domain’ and the like, I say doubtful not because they are devoid of meaning but because they have different shades of meaning in different countries and because they represent powers which spring from widely different sources. In my opinion, it is wrong to assume that these powers are inherent in the state in India and then to say how far the Constitution regulates and fits in with them. We have to interpret the plain provisions of the Constitution and it is fur jurists and students of law, not for judges, to see whether our Constitution also provides for these powers and it is for them to determine whether the shape which they take in India resemble any of the varying forms which they assume in other countries".

 

Conclusion

 

Footnotes

1.     Article 47 of the Constitution speaks about the obligation of the state to bring about prohibition of the consumption except for medicinal purposes, of intoxicating drinks and of drugs which are injurious to health.

2.     Article 19(1)(g) of the Constitution of India speaks. "All citizens shall have the right to practice any profession or to carry on any occupation, trade or business".

3.     Article 19(6) provides;

"Nothing in sub clause (g) of the said clause shall affect the operation of any law in so far as it imposes, or prevent, the state from making any law, imposing in the interest of general public, reasonable restrictions on the exercise of the right conferred by the said sub clause, and, in particular, nothing in the said sub clause shall affect the operation of any existing law in so far as it relates to or prevent the state from making any law relating to;

      i)       the professional or technical qualifications necessary for practicing any profession or carrying on any occupation, trade or business, or

      ii)       the carrying by State, or by a Corporation owned or controlled by the State, of any trade, business, industry or service, whether to the exclusion, complete or partial of citizens or otherwise".

4.     Art.19(6)(ii). Originally this power was not there in the Constitution. Later the same was introduced by the Constitution (First Amendment) Act, 1951, S.3.

5.     See Constituent Assembly Debates (CAD), Vol.7, p.712.

6.     Id., at p. 755.

Shri. K. Hanumanthaiya vehemently attacked this provision. He was of the view that the three sub clauses providing the right to reside and settle in any part of the country; to acquire, hold and dispose of property; and to practice any profession and to carry on any occupation, trade or business - do not partake the character of fundamental rights. They are matters incidental to legislation, that can be passed either by the Parliament or the legislature of the units.....He continued the men who did the work of shaping these constitutional proposals, a majority of them, have come from the uppermost strata of society. After all, they can think of what suits their psychology, and their class or their strata of society.....these are rather not rights but liabilities that are sought to be imposed on the people of the village.

7.     See C.A.D., Vol.7, pp. 766-767,733.

Sardar Hukkum Singh advocated the deletion of this clause. He said, "The very object of Bill of Rights is to place these rights out of the influence of the ordinary legislature, and if as under Clauses (2) to (6) of Article 13 we leave it to this very body which in a democracy, is nothing beyond one political party to finally judge when these rights, so sacred on paper and glorified as fundamental rights are to be extinguished, we are certainly making these freedoms illusory".

8.     A.K. Gopalan v. State, AIR 1950 SC 27.

9.     Sagir Ahamed v. U.P., AIR 1954 SC 699.

10.   Coovergee B. Bharucha v. Excise Commissioner, Ajmer, AlR 1954 SC 220. M.S. Cotton Association Ltd. v. Union, AIR 1954 SC 634.

11.   (1960) 2 S.C.R. 375.

12.   Id. at p. 387.

13.   Entry 8 of List II of the Vllth Schedule of the Constitution deals with intoxicating liquors, that is to say the production, manufacture, transport, purchase and sale of intoxicating liquors.

14.   1984 KLT 1060 at p. 1067.

15.   C.A.D. Vol. 7, pp. 496 et Seq.

16.   Id. at pp. 563-564.

17.   AIR 1951 S.C. 318.

18.   Id. at p. 325.

19.   Id. at p. 325.

20.   1882 7 AC. 829.

21.   Encyclopaedia Britannica (14th Edn.), Vol.14, p. 191.

The passage reads: "the dominant motive everywhere, however, has been a social one, to combat a menace to public order and the increasing evils of alcoholism in the interests of health and social welfare. The evils vary greatly from one country to another according to differences in climate, diet, economic condition and even within the same country according lo difference in habits, social customs and standards of public morality. A new factor of growing importance since the middle of the 19th century has been the rapid urbanisation, industrialisation and mechanisation of our modern everyday life in the leading nations of the world, and the consequent wider recognition of the advantage of sobriety in safeguarding public order and physical efficiency.

22.  Article 37 speaks: "The provisions contained in this part shall not be enforceable by any court, but the principles therein laid down are nevertheless fundamental in the governance of the country and it shall be the duty of the state to apply these principles in making laws".

23.   P.N. Kaushal v. Union of India (1978) 3 S.C.C. 558 at p.573.

24.   Supra n.17.

25.   State of Bombay v. R.M.D. Chamarbaugwalla, AIR 1957 S.C. 699.

Here Bombay Lotteries and Prize Corporation Control and Tax Act 1948 was challenged as imposing restriction on the right to carry on the activity of prize competition.

26.   Id. at p. 720 -- Article 301 provides. "Subject to the other provisions of this part, trade, commerce and intercourse throughout the territory of India shall be free".

27.   Id. at p. 720.

28.  AIR 1967 S.C. 1368.

In this case the appellant who was doing business in liquor in a hotel, under annual licence issued under the Jammu & Kashmir Excise Act, 1958 challenged an order of the Excise and Taxation Commissioner asking him to shift the licensed premises to some other approved locality.

29.Id. at p. 1371.

30.  Supra n. 28.

31.  Supra n. 25 at p. 720.

32.  H.m. Seervai, Constitutional Law of India (3rd edn.) Vol.1, p.475.

33.  Ibid.

34.   Supra n. 29.

35.  Art.23(1) of the Constitution of India says 'Traffic in human beings and begar and other similar forms of forced labour are prohibited and any controvention of this provision shall be an offence punishable in accordance with law".

36.As per Ss. 231 and 232 of the Indian Penal Code counterfeiting coin is made punishable as an offence.

37.S.18A of the Kerala Abkari Act confers power on the State Government to part with the exclusive privilege of manufacture and sale of any liquor or intoxicating drugs to any person after obtaining some amount as rental in consideration of the grant of such privilege. Similar enactments are in force in other states.

38.   Supra nn. 28, 29.

39.Supra n. 10.

40.(1890) 34 L.Ed. 620 at p. 624.

 

41.1975 (1) SCC 737.

42.Id. at p. 758.

43.Eg. see, State of Bombay v. F.N. Balsam, supra n. 17; State of Assam v. A.N. Kichwal, Commissioner of Hills Division and Appeals, Shillong, AIR 1957 S.C. 414; Cooverjee Bharucha v. Excise Commissioner, Ajmeer, supra n. 10; Nagondranalli Bora v. Commissioner of Hills Division and Appeals, Assam, AIR 1958 S.C. 398; Amar Chandrachakroborty v. Collector of Excise, Government of Tripura, (1972) 2 S.C.C. 442.

44.   Supra n. 41 at p. 755.

45.   A.I.R. 1975 S.C. 360.

46.   Id. at p. 365.

47.   1990 (1) S.C.C. 109.

48.Id. at p. 165.

49.Art. 21 speaks:

"No person shall be deprived of his life or personal liberty except according to procedui established by law".

50.   H.M. Seervai, Constitutional I ;iw of India (3rd Edn.), Vol.1, p. 678.

51.   See for eg. Coovergee v. Excise Commissiner, Ajmeer, supra n. 10; Harshankar v. Dy. Excise and Taxation, Supra n. 41; Nashirwar v. State of M.P., Supra n. 45.

52.   H.M. Seervai, Constitutional Law of India (3rd edn.) Vol. I, p. 107.

53.   Dwarkadas Shrinivas v. Sholapur Sp. Wg. Co. AIR 1954 S.C. 119

A Fresh Look on Certain Points in the Law of Contract

 

(Philip K. Thayil, Advocate, Ernakulam)

 

I. Some authors on the Law of Contract maintain that the term "Void Contract" is a contradiction in terms. If a contract is void, they maintain, it cannot be contract, if it is a contract, according to them it cannot be void:

 

But on a rethinking it can be found that there is no contradiction in terms. Void contract is a contract which was at its inception a valid contract and subsequently became void, e.g., a contract to marry between X and Y. Subsequent to the contract but before actual marriage one of them dies. Then it is an example of void contract. There is no contradiction of terms here. But a void agreement is ab initio void e.g. Couturier v. Hastie, here unknown to both the seller and the buyer, the subject matter of sale and purchase had already ceased to exist previous to the contract - (1856) 5 H.L.C. 673.

 

II. In India many authors of Law Books state in their books that past consideration is good consideration in India. For brevity's sake only a very few may be mentioned: (1) Prof V.N. Subromoniya Iyyer's book page 150, (ii) Mulla's (students edn.) Indian Contract Act 10th edition P. 10. (iii) N.D. Kapoor's Elements Mercantile Law 15th edn. page 28, (iv) H.K. Saharay & K.N. 'Sha's Business & Economic laws 1984 edn. p. 41, (v) M.C. Shukla's [A] Manual of Mercantile Law, 1970edn. p. 30. But the correct law, it is submitted is the contrary.

 

In past consideration, according to Anson the "promise is subsequent to the act and independent of it" Anson 23rd Edn. p. 85. Such consideration as it is past is invalid in India also. If A saves B from drowning and B later promises A a reward, A cannot rely on his action as consideration for B's promise, for it is past in point of time. But in India such promise can come under S. 25(2) of the Indian Contract Act as the second exception to the general law that "a promise without consideration is not enforceable". If a past voluntary act independent of the promise and anterior to the promise, as in the drowning example above, is taken as valid consideration past consideration will be valid consideration. But that it is wrong is clear, from S.25 sub-section (2) of the Indian Contract Act which reads:-"An agreement made without consideration is void" unless it is a promise to compensate, a person who has already voluntarily done something for the promisor, or something which the promisor was legally compellable to do.............". This is an exception because there is no consideration in this and this is an example of past consideration. This S. 25(2) is an example of a promise enforceable without consideration. In the above exception S.25(2) the word "voluntarily" means not at the desire of the promissor and the word "already" means the doing of the act is previous to the promise i.e. the promise is subsequent to the act done without the desire of the promisor. This act cannot be consideration for the subsequent promise.

 

Even as per the definition of consideration in the Indian Contract Act, a mere past act or abstinence or promise cannot be consideration unless it is preceded by desire of the promisor. See, the very first part of the definition i.e.. "When, at the desire of the promisor" A past act, abstinence or promise without the desire of the promisor is past consideration and not a valid consideration. Consideration is furnished by the promisee (or in India even by a stranger) only in any of these three forms: namely, an act, or abstinence or promise. It is called a past act, past abstinence or past promise because it is previous or anterior or earlier to the promise of the promisor. Such past act or past abstinence or past promise being past consideration is not valid in India also as it is clear from the definition of consideration in the S. 2(d) of the Indian Contract Act and S.25(2) of the same Act. A voluntary act (i.e. act not at the desire of the promisor) anterior to the promise and independent of the promise cannot be consideration under the Indian Contract Act as per the definition of consideration in S. 2(d) and, as per the S. 25(2).

 

According to Cheshire & Fifoot, the Law of Contract 7th edition, page 61: "if the defendant makes a further promise subsequent to and independent of the transaction, it must be regarded as a mere expression of gratitude for the past favours or as a designated gift and no contract will arise" Two illustrations are: (I) Roscorba v. Thomas (1842) 3 QB 234 (II) In Mc Ardle (1951) Ch. 669. These decisions have made it clear that past consideration is no consideration in England.

 

In India the words "has done or has abstained from doing" in the definition of consideration in S.2(d) of the Indian Contract Act, 1872' do not make past consideration valid consideration. Those words are a part of the definition of, consideration and not part of a definition of past consideration. It is lobe noted that the 1 words at the desire of the promisor" precedes the words "has done or has abstained from doing" in the definition of consideration. S. 2(d) meaning thereby that the act or abstinence or promise which constitute consideration is subsequent to the expression of desire as in the English case of Lampleigh v. Brathwait 1615.80 E.R. 255. A voluntary courtesy cannot have the consideration to uphold an assumpsit. An act done without the desire of the promisor and previous lo the promise of the promisor is no consideration both in England and in India. To say that past consideration is good consideration in India is to ignore the very first part of the definition of consideration in India and to render meaningless the exception in clearer S. 25(2) of the Indian Contract Act which provides for enforcement of promise without consideration. This point will be made clearer in "guarantee" contract in the next article.

 

III. The law of privity in contract. Lord Haldane in Dunlop Pneumatic Tyre Co. Ltd. v. Selfriage & Co. Ltd. (915) A.C. 847 at page 853 states the rule of privity thus: "In the law of England certain principles are fundamental. One is that only a person who is a party to the contract can sue on it. Our law knows nothing of Jus quaesitum tertio arising by way of contract". In India there is the main principle that a stranger to contract cannot enforce the contract. To this main principle, certain exceptions are very well recognized. Pollock & Mulla, Indian Contract and Specific Relief Acts 10th edn. at p. 40footnote 41; after mentioning estoppel and trust as its exceptions state that "two other exceptions are mentioned in lswaran Pillai v. Sonni Veveru(1913)38 Mad. 753; i) the creation of a charge on immovable property by promisor"..........This exception seems to be an illegitemate inference derived from the original parentage of Kwajce Muhamed v. Hussaini Beegam (1910) 37 I.A. 152. Here, the father of the bridegroom had contracted with the father of the bride to make the daughter an allowance if she married the son. After the marriage, the daughter sued her father-in-law to recover arrears of the allowance. The Privy Council held that though she was no party she was entitled to proceed in equity to enforce her claim. In this case she was entitled to enforce the contract made between two other parties on two grounds: (i) This is a case of "marriage settlement" under S. 15 clause (c) of the Specific Relief Act, 1963 and (ii) principle of equity. The creation of a charge on immovable property was also there in this case. But it is respectfully submitted that this does not mean that the Privy Council has laid it down that wherever a charge is created, the charge holder even though stranger to contract can enforce the contract solely on the ground that a charge has been created in his favour. If that were the case the later Privy Council decision, Jamna Das v. Ram Autar (1911) 39. LA. 152, that a purchaser's contract with the seller to pay the mortgage debt could not be enforced by the mortgagee who was not a party to the contract should be deemed to have overruled it. So if a mortgagee cannot enforce the contract made between the purchaser and the seller on the ground that the mortgagee is a stranger to the contract, how can a mere charge holder enforce such a contract to which he is not a party? So the legitimate inference seems to be that a mere charge holder, if he is a stranger to the contract cannot sue to enforce the contract made between two others although the charge in that contract is in his favour. How can a charge holder have a better right than the mortgagee when both arc strangers to contract?

 

IV. S. 10 of the Indian Contract Act, 1872 enumerates the essentials of a valid contract. Only five elements are mentioned there. Several other essentials like animus contrahende (desire to make a contract) certainly of the terms, possibility etc. are left out in this section probably for brevity's sake.

 

V. The law relating to remedy for a contract caused by minor's fraud, in India does not seem to be well settled. In R. Leslie Ltd. v. Sheill (1914) 3 K.B. 607, the Court of Appeal held that "where an infant obtained a loan by falsely representing his age, he cannot be made to pay the amount of the loan as damages for fraud nor can he be compelled in equity to repay the money. As to the extent to which the aid of equity can be involved in cases of fraudulent misrepresentation as to age Lord Summer said: "I think the whole of current decisions down to 1913, apart from dicta which are inconclusive, went to show that when infant obtained an advantage by falsely representing himself of full age, equity required him to restore his illgo.li en gains or to release the party deceived from obligations or acts in law induced by the fraud, but scrupulously stopped short of enforcing against him a contractual obligation entered into while he was an infant even by means of fraud. Restitution stopped where repayment began." His Lordship further proceeded: "The money was paid over in order to be used as the defendant's own and he has so used it and spent it. There is no question of tracing it, no possibility of restoring the very thing got by fraud, nothing but compulsion through a personal judgment to pay an equivalent sum out of his present or future resources, in a word, nothing but a judgment in debt to repay the loan, I think this would be nothing but enforcing a void contract." So the only remedy for a minor's contract caused by his fraudulent misrepresentation as to his age is only restitution and not repayment in English Law.

 

But in India the Lahore High Court has held that the power to give equitable relief is more extensive in India than in England and ordered a money compensation in a case where the infant has misrepresented his age Khan Gul v. Lakhasing (1928) 9 Lah.701). Pollock & Mulla 10th edn. P. 124 opine that court may impose terms on a minor if he seeks its aid as a plaintiff and may refuse to exercise in jurisdiction if he happens to be a defendant.

 

In a later Full Bench case of Allahabad High Court: Ajudhia Prasad v. Chandan Lal (1937) All. 860, the Indian and English decisions were exhaustively reviewed and it was held that where money has been borrowed by two minors under a mortgage deed, with a fraudulent concealment of their age, the mortgagee was not entitled to a mortgage decree, nor was he entitled to a decree for the principal money under any equitable principle other than those recognized in England. This is also the view taken by the Nagpur High Court: Tikkilal v. Kowal Chand (1940) Nag. 632.

 

But Pollock & Muilla 10th edn. page 125 submit that the judgment of Shadi Lal, C.J. in the Lahore High Court: Khan Gul v. Lakhasingh (mentioned above) to give compensation is more correct. The basis for this submission is reliance on the statutory enactment, Specific Relief Act, 1963 which they say is expressed in the widest terms and ' the word used is, they say, compensation and not restitution and they give in Footnote at p.125 Ss.20 and 33 of the Specific Relief Act, 1963. But strangely enough the word compensation is not found anywhere in S.20 nor in the only sub clause in S.33 dealing with S.11 of the Indian Contract Act, 1872,namely minor's contract. Only S.33 clause (b) of sub-section (2) of the Specific Relief Act, 1963 deals with the question relevant here, that is S.11of the Indian Contract Act, 1872. Sub-section (2) of S.33 clause (b) deals with S.11 of the Indian Contract Act. This is the most relevant section so far as minors contract are concerned. As for S.33 of the Specific Relief Act, 1963 the word compensation is absent in the only sub-clause (b) of sub-section (2) which deal with minor's contract, the questions relevant here. The word used in that most relevant sub-clause in this connection is "restore" as far as may be the benefit to the other party and not compensate. Most probably the word compensation is designedly or purposely omitted in sub-section (2) sub clause (b) of S.33 of the Specific Relief Act, 1963. Hence, the submission of Pollock & Mulla mentioned above lack credibility. The word fraud also is absent in the section. As for India, the law on this point awaits an authoritative judicial pronouncement.

 

However it may be noted that it has been held that if a mortgage of his property by a minor is set aside by the court, the court may order compensation to the lender if the loan was obtained by the minor by his fraudulent misrepresentation that he was of full age: Kempta Prasad v. Sheo Gopal, (1904) 26 All. 342. So also it has been held in Jagar Narth v. Lalto Prasad (1908) 31 All. 21).

 

Buty is it fair and proper that a minor will have to pay compensation merely because he has misrepresented his age at the time of the contract? Suppose a minor purchases a motor cycle on credit misrepresenting that he is a major. After the purchase the motorcycle was lost in the ocean by an accident for no fault of his. He is a poor minor for whom a motor cycle is not necessary. Should he be asked to pay compensation to the seller of the motor cycle? Should he be made personally liable to pay the price of the motor cycle he purchased on credit but subsequently lost for no fault of his? If so what is the difference between a minor's contract and the contract of a major. Merely because he has misrepresented his age he does not become a major, nor does he cease to be a minor. Moreover law allows him to misrepresent his age the time of contract and later when he issued on the contract he is not estopped, i.e., he is allowed to say the lie that he is a major at the time of the contract and later when sued state the truth that he is a minor see R. Leslie v. Sheill (1914) 3 K.B. 605 and Sadick Ali Khan v. Jai Kishore 1928 A.P.C. 152 according to which 'minor' contract is a nullity and is incapable of founding a plea of estopped. A null and void contract may a null and void agreement does not become a valid contract merely because of misrepresentation of his age by a minor whom the law permits to misrepresent his age.

 

Any conclusion that a minor's contract which is a nullity (void agreement) becomes valid contract on the sole ground that minor misrepresented his age at the time of the contract recoils from reason and surpasses comprehension.

__________________________________________________________________

Footnotes:

 

(A) Mr. M.C. Shukla was the Chairman of I. A.S. exam. (Mercantile Law") when this writer was an examiner of I.A.S. Exam, in 1970.