N.K. Moitheen v. The Kottayam Municipality and Others

## **IN THE HIGH COURT OF KERALA AT ERNAKULAM** ## **PRESENT:** ## **THE HONOURABLE MR.JUSTICE K.VINOD CHANDRAN** **THURSDAY, THE 10TH DAY OF AUGUST 2017/19TH SRAVANA, 1939** ## **WP(C).No. 26225 of 2016 (C)** ## **----------------------------** ## **PETITIONER(S): -----------------------** ## **N.K.MOITHEEN,** **AGED 75 YEARS, S/O KUNJUMOITHEEN, ROOM NO XII/460, 461, VEGETABLE MERCHANT, M.L. ROAD, KOTTAYAM RESIDING AT KHALEEL MANZIL, PERUMBAIKADU VILLAGE, NATTASSERY S.H MOUNT, KOTTAYAM, KERALA 686 006.** ## **BY ADVS.SRI.LIJI.J.VADAKEDOM SMT.REXY ELIZABETH THOMAS SRI.RAJEEV JYOTHISH GEORGE** ## **RESPONDENT(S):** ## **-------------------------** **1. THE KOTTAYAM MUNICIPALITY REPRESENTED BY ITS SECRETARY, MUNICIPAL OFFICE, KOTTAYAM MUNICIPALITY, KOTTAYAM 686 001.** ## **2. THE SECRETARY,** **KOTTAYAM MUNICIPALITY, OFFICE OF THE KOTTAYAM MUNICIPALITY, KOTTAYAM 686 001.** ## **3. THE CHAIR PERSON,** **KOTTAYAM MUNICIPALITY, MUNICIPAL OFFICE, KOTTAYAM 686 001.** **4. HEALTH SUPERVISOR, OFFICE OF THE HEALTH INSPECTOR, KOTTAYAM MUNICIPALITY, KOTTAYAM 686 001.** **R1-R4 BY ADV. SRI.S.RANJIT (KOTTAYAM), SC,** **THIS WRIT PETITION (CIVIL) HAVING BEEN FINALLY HEARD ON 10-08-2017, ALONG WITH WPC. 26264/2016, AND CONNECTED CASES, THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING:** **TS** **WP(C).No. 26225 of 2016 (C)** **--------------------------------------** ## **APPENDIX** ## **PETITIONER(S)' EXHIBITS** **---------------------------------------EXHIBIT P1 TRUE COPY OF THE RECEIPT DATED 11-02-2015 SHOWING THE REMITTANCE OF LICENSE FEE FOR D/O LICENSE.** **EXHIBIT P2 THE TRUE COPY OF THE COMMUNICATION DATED 14-03-2016 ISSUED BY THE 4TH RESPONDENT TO THE PETITIONER.** **EXHIBIT P3 THE COPY OF THE JUDGMENT DATED 12-12-2014 IN W.A 1342/2014 IN WP(C) NO 4503/2014** **EXHIBIT P4 THE COPY OF THE DECISION NO 1 OF THE MEETING NO R6-A4-26226/14 DATED 03-09-2015 OF THE COMMITTEE HEADED BY THE 3RD RESPONDENT.** **EXHIBIT P5 THE COPY OF THE DECISION NO 32 DATED 11-02-2016 OF THE KOTTAYAM MUNICIPALITY (APPROVING EXHIBIT P4 DECISION OF THE MONITORING COMMITTEE). EXHIBIT P5(A) THE COPY OF THE REPORT NO H2/5027/16 DATED 09-03-2016 OF THE 4TH RESPONDENT (REFERRED TO AS REF NO 3 IN EXHIBIT P2). EXHIBIT P6 THE COPY OF THE COMMUNICATION NO H2/16848/16 DATED 20-07-2016 ISSUED BY THE 4TH RESPONDENT.** **RESPONDENT(S)' EXHIBITS- NIL** **------------------------------------------------** **/TRUE COPY/** ## **PS TO JUDGE** **TS** ## K. Vinod Chandran, J ------------------------------------------------------------------------- W.P.(C).Nos.26225 of 2016-C, 26264 of 2016-G, 26296 of 2016-J, 27717 of 2016-L, 40024 of 2016-C & 40034 of 2016-D -------------------------------------------------------------------------- Dated this the 10[th] day of August, 2017 ## **JUDGMENT** The petitioners herein are persons who are conducting small trades in vegetables, out of which 4 [four] persons are conducting their shops in the licensed premises of the Municipality. The other persons are conducting their business in their own premises or leased out premises, of private individuals. For ease of reference W.P.(C).No.26225 of 2016 is taken as the lead case. 2. The petitioners challenge the resolution of the Municipality at Exhibit P5. The resolution of the Municipality accepted the decisions of the Monitoring Committee appointed, as evident from Exhibit P4. A specific objection raised is against the decision of the Monitoring Committee at item No.1 in Exhibit P4, which is extracted herein: **“** 1. ÉÝÏ ÉºîAùß ÎÞVAxßçÈÞ¿í çºVK æµGß¿JßW ɺîAùß ÕcÞÉÞø¢ È¿JáK ÕcÞÉÞøß èÜØXØí ¥¿áJ ØÞOJßµ ÕV×¢ ÎáÄW ÉáÄáAß ÈWµøáÄí ®Ká¢, ÉáÄßÏ èÜØXØí ¥ÈáÕÆßAøáæÄKᢠæÙWJí ØâMVèÕØVAí ÈßVçgÖ¢ ÈWµß **”** . By the aforesaid resolution of the Municipality, the business carried on by the petitioners have been interdicted. They cannot carry on any WP(C) No.26225 of 2016 & - 2 - connected cases business in vegetables from the present premises, where they have been continuing for long, for reason of the Municipality refusing to renew their licenses thereafter. The refusal is also evidenced by Exhibit P2. 3. The learned Counsel for the petitioners submits that the decision taken is a complete restriction on the business carried on by the petitioners and is in violation of Article 19(1)(g) of the Constitution. The restriction cannot be said to be reasonable by any stretch of imagination. There can be no prohibition of the trades carried on by the petitioners as has been held in _**Rashid Ahmed v. Municipal Board, Kairana**_ **[AIR 1950 SC 163],** _**Tahir Hussin v. District Board, Muzaffarnagar**_ **[AIR 1954 SC 630]** and _**Nagar Rice and Flour Mills and Others v. N.Teekappa Gowda and Bros. and Others [AIR 1971 SC 246]**_ **.** It is also submitted that the Municipality could not have adopted a resolution on the dictate of a Monitoring Committee, that too without any reference to the petitioners and without addressing their grievances. Reliance is placed on the Division Bench decision of this Court in _**K.G.A.Hotels & Resorts Pvt. Ltd. v. State of Kerala and Others**_ **[2015(2) KLT 683].** The Monitoring Committee being one WP(C) No.26225 of 2016 & - 3 - connected cases constituted to decide upon the grievances of those persons who were shifted from the old market, who were also vegetable traders, cannot dictate terms as to how the Municipality should issue licenses and in that process restrict the petitioners from totally carrying on their business. On an identical situation when there was a restriction of sale of fish and meat, a learned Single Judge of this Court has interfered with the same in _**Azeez v. Pulpally Grama Panchayat**_ **[2002 (1) KLT 529]** . 4. The learned Standing Counsel for the Municipality submits that the shifting of the vegetable market from the old market to the new market was a decision taken by the Municipality and those continued in the old market cannot claim any right to conduct business there. Specific reference is made to the definition clauses; being sub-sections (23) and (33) of Section 2, as also Section 30 of the Kerala Municipality Act, 1994 [for brevity “Municipality Act”] to urge that the Municipality has sufficient authority to decide on the activities carried on within a market as established by the Municipality. _**Boban Thomas and Another v. Kottayam Municipality and Others**_ **[2010** WP(C) No.26225 of 2016 & - 4 - connected cases **(1) KLT 954]** is relied upon to point out that the existence of private buildings within a specified market area would not in any manner curtail the powers of the Municipality to make such regulations as may be required in a public market so specifically designated. It is also contended that there are different areas earmarked for the sale of different articles, viz., vegetables, fruits, fish, meat and so on and so forth. Such an earmarking is made only keeping in mind the responsibility of the Municipality to maintain the market place, for which the Municipality is also entitled to collect fees. It is in the larger interest of the public that the vegetable market was transferred and a new building constructed to that end. The persons who are continuing in the old market area cannot claim any absolute right to continue with their vegetable business when the Municipality has shifted the site to another place. 5. At first this Court would have to look into whether the Council of the Municipality has the power; to restrict the trades carried on by the petitioner, by a decision to refuse licenses for carrying on trade in vegetables. Sub-section (23) of Section 2 defines a “market” to be any place set apart for the assembling of persons for the sale of WP(C) No.26225 of 2016 & - 5 - connected cases purchase of grain, fruit, vegetables, meat, fish or other perishable articles of food or for sale or purchase of live-stock or poultry, or of any agricultural or industrial produce which are required as daily amenities for the convenience of life. Sub-section (33) of the definition clause defines “public market” as any market owned, constructed, repaired or maintained by a Municipality. Section 30 details the powers, functions and responsibilities of the Municipality in the administration of an area within its jurisdiction in respect of matters enumerated in the First Schedule, which Schedule includes public markets. The management of public markets hence, is a mandatory function of the Municipality. 6. Going by the definitions and the powers, functions and responsibilities of the Municipality, this Court is not inclined to accept the contention of the Municipality that there is an absolute power conferred on the Municipality to decide on the activities to be carried on, confined to a particular area within a public market. The same could have been done if, on a composite planning, in the establishment of a new market specific areas are earmarked for different trades. In the present case, the background facts which led to the aforesaid impugned decision and the challenge has to be noticed. WP(C) No.26225 of 2016 & - 6 - connected cases Admittedly the petitioners were persons who were carrying on their trade in and around the old Municipal building. The old Municipal building had several rooms leased out to individuals who were carrying on trade of vegetables. The Municipality took a decision to demolish the building and shift the business in that building to a more convenient place. The same was not as a part of shifting of the market to another site. Even now the contention taken is that the place where the petitioners carry on their business is also a part of the public market but there can be no vegetable business carried on there. 7. A site was identified about 1 km. away, wherein a new building was constructed and the persons who were earlier occupying the old building were rehabilitated along with induction of new licensees. It is an admitted fact that in the new building there are other trades, along with trade in vegetables. The petitioners, however, were not a part of the rehabilitation package, since they were not licensees of the building which was demolished. The licensees of the Municipality around the market and those continuing their trades in private buildings were allowed to continue the same. The rehabilitation was prior to 2014. The persons who were occupying the shop rooms in WP(C) No.26225 of 2016 & - 7 - connected cases the old building were shifted pursuant to a meeting held on 07.03.2013. The shop owners so rehabilitated were liable to pay security deposit as well as rent. When a demand was made by the Municipality for arrears of rent and security deposit, the rehabilitated persons objected to the same on the ground that the rehabilitation package _inter alia_ included denial of permission to the petty merchants in the old market place from carrying on business in vegetables. There were other objections with respect to absence of infrastructural facilities in the new market. 8. A writ petition was filed, wherein a learned Single Judge rejected the prayers. An appeal was filed, wherein the Division Bench, noticing Clause (9) of the decision entered into on 17.03.2013, found that there was a provision for constitution of a Monitoring Committee with the Chairman of the Municipality as its Chairperson including the representatives of the rehabilitated traders. This Court directed that the Monitoring Committee would be constituted and a decision taken. It is consequent to the decision of this Court at Exhibit P3 that the Monitoring Committee took a decision at Exhibit P4, which were accepted by the Municipality as per Exhibit P5. WP(C) No.26225 of 2016 & - 8 - connected cases 9. Merely because the Monitoring Committee was directed to be constituted by a Division Bench of this Court, that alone would not give, a decision taken, the stamp of approval of this Court. It has to independently stand the test of law, if it is challenged. The Division Bench categorically found that the decision taken earlier indicates that the Municipality had agreed to consider shifting of petty vegetable merchants in the M.L.Road to a suitable place in Kodimatha market. This has reference to the petitioners herein, which attempt has not been made so far. The decision taken by the Monitoring Committee, presumably on the pressure exerted by the rehabilitated traders, was to deny license to the traders carrying on sale of vegetables in the buildings, adjacent to the old market. This, according to the petitioners, is inconceivable and this Court is inclined to agree with the petitioners. 10. _**Boban Thomas**_ is a case in which the Municipality attempted to levy fees on the traders within an area specified as public market; but who were carrying on their independent trades in privately owned buildings. This Court found that when privately owned buildings exist within the area designated as market by the Municipality, then the levy of fees would be possible. There can be no quarrel to the said WP(C) No.26225 of 2016 & - 9 - connected cases proposition, but it has no applicability here. In the present case the petitioners, who are stated to be carrying on their businesses within the designated market, do not challenge any such levy. Herein there is a total embargo created for a particular business in a particular area. 11. The decisions as relied upon by the petitioners squarely apply. In _**Rashid Ahmed**_ a wholesale business in vegetables was denied license on the ground of a bye-law framed by the Municipality, by which the monopoly right to do wholesale business in vegetables was granted by way of auction to one another. Reading the bye-law the Hon'ble Supreme Court found that the embargo was only in establishing the business at any place other than that fixed by the Municipal Board. This conferred a power on the local authority to fix a place for carrying on such business which was done by the Board, by a notification. It was also found that in that case, there was no bye-law requiring a license; which ground however is not available here. All the same, the abrogation of the power conferred on the Municipality to grant licenses to run trades, by a notification permitting auction of monopoly rights in a business was held to be not a reasonable restriction as permitted in Article 19(1) and found to be void under WP(C) No.26225 of 2016 & - 10 - connected cases Article 13(1). There is not even a bye-law in the present case and no development scheme requiring the area to be cleared of a particular trade. 12. _**Tahir Hussain**_ was a case in which a District Board issued a notification under a bye-law prohibiting establishment maintenance and running of any cattle market within the jurisdiction of the Board. Reading the powers of the District Boards as conferred by the statute, it was held that the power of the Board is to make bye-laws for the purpose of promoting or maintaining the health, safety and convenience of the inhabitants of the area, within its jurisdiction and this power includes the power to regulate markets but not altogether prohibit their establishment or maintenance, which would would run contrary to the freedom guaranteed under Article 19 (1). 13. The land in which _**Nagar Rice and Flour Mills**_ was operating stood acquired and the Tahsildar concerned with rehabilitation, permitted the shifting of the mill, which was sanctioned by the Director of Food and Civil Supplies, acting on behalf of the Government. Another mill existing near the new location, challenged the shifting, on the ground that their business will be adversely WP(C) No.26225 of 2016 & - 11 - connected cases affected. The Hon'ble Supreme Court while affirming the shifting, drew a distinction between new, defunct and existing mills. The mill which challenged the shifting, was held to have no _locus standi_ . It was held: _“Competition in the trade or business may be subject to such restrictions as are permissible and are imposed by the State by a law enacted in the interests of the general public under Article 19 (6), but a person cannot claim independently of such restriction that another person shall not carry on business or trade so as to affect his trade or business adversely” (sic- para-10)._ In the absence of a law restricting the grant of license the Municipality by the resolution could not have shackled the statutory powers of the Secretary which could be exercised only in accordance within the bounds of the power delineated in the provision. 14. _**Azeez**_ is also on almost identical facts. A ban to trade in fish and meat, within 3 km of a private market, allowed to be established by the Panchayat, was found to be not a proper exercise of power conferred, to impose conditions for the sale of meat and fish in public interest. The ban did not subserve any public interest. This Court is also inclined to accept the contention of the petitioners that in WP(C) No.26225 of 2016 & - 12 - connected cases the present case the decision of the Council of the Municipality is on the dictate of the Monitoring Committee and the same was also without any reference to the petitioners who were prejudicially affected by the decision. The petitioners were also not heard before such a decision was taken by the Municipality. As has been held in _**K.G.A.Hotels & Resorts Pvt. Ltd.**_ , it amounts to an extra statutory intervention and dictation, as has been found in the said decision. 15. The Municipality vehemently contended that the earmarking inside the public market was part of a larger design for development. But the records does not indicate any such larger design for public interest having been framed by the Municipality. The decision is also not prompted by any concern for public hygiene or health or even convenience. What can be noticed is only a decision to shift the vegetable traders from the old market building to the new market building. While taking a decision on rehabilitation, to appease the persons rehabilitated; there was a decision taken to shift those persons occupying the nearby buildings in the old market. No such attempt was made and bowing to the pressure of the rehabilitated traders the trade carried on by the petitioners at the old site was WP(C) No.26225 of 2016 & - 13 - connected cases sought to be prohibited, that too by a decision not to renew the existing licenses; which is arbitrary and discriminatory. 16. Presumably the decision, is for reason of the residents of the locality frequenting the old market place and thus affecting the business of the persons who have been rehabilitated. Definitely there was an immediate cause of concern at the time of shifting. The petitioners have been permitted to continue, despite the refusal of license by the Municipality, as per the interim orders issued by this Court. At this stage after about four years from shifting, the vegetable trade, should be thriving; both in the new and old premises, and there need be no concern for any competition from one another. 17. Be that as it may, the decision of the Municipality cannot be supported going by the definition clauses of “market” and “public market” under sub-sections (23) and (33) of Section 2 or Section 30 of the Municipality Act. Further reference is made to Sections 457, 458 and 459 of the Act. Section 457 refers to those markets which are acquired, constructed, repaired or maintained out of the Municipal fund. There is no room for doubt that even the area which is occupied by the petitioners are maintained by the Municipality WP(C) No.26225 of 2016 & - 14 - connected cases and comes within the definition of “public market”. Section 458 enables the Municipality to provide places for use as public markets and levy fees for the various businesses carried on there and the services offered therein. The power under sub-section (3) of Section 458 is to close down any public market or part thereof, which is not the exercise now carried on by the Municipality. It is to be noticed that such closure is to be effected only with the prior sanction of the Government. Section 459 again is a regulatory measure bringing the activities in the public markets under the control of the Secretary. This also would not enable denial of license to a particular trade in a particular place unless there is framed a Town Planning Scheme for the area, again with the approval of the Government. The power to prohibit or regulate the sale of articles in public streets as found in Section 470 of the Act cannot also enable the Municipality to take a decision as impugned herein, for reason of such power being possible of invocation only with respect to public streets. Power to grant licenses to trades has to be traced to Section 447 of the Municipality Act; which does not speak of any such prohibition being employed or a refusal being possible on the decision of the Council of the Municipality. The power conferred is WP(C) No.26225 of 2016 & - 15 - connected cases on the Secretary. The restriction arising from the decision does not serve any public interest or address any concern regarding public health or hygiene. The decision is not one competently taken by the Panchayath. 18. On the conspectus of the facts as seen above and the law discussed, this Court is of the opinion that the decision of the Municipality at Exhibit P5 has to be set aside. The petitioners are allowed to continue their business in the premises. 19. Before leaving the matter, it has to be mentioned that the learned Standing Counsel for the Municipality submitted that there cannot be any total restriction against the shifting of the various businesses if the Municipality decides on a development plan for the area concerned. It has already been observed that in such circumstances if the Municipality's decision is statutorily permitted, the same can be proceeded with. In the present context, the decision of the Municipality is found to be illegal, arbitrary and discriminatory and in violation of Article 19 (1) of the Constitution of India. The impugned decision hence stands set aside. The petitioners would be allowed to continue their businesses in vegetables and the Municipality will also WP(C) No.26225 of 2016 & - 16 - connected cases be obliged to issue D&O license in accordance with law, subject, however, to the right conferred on the Municipality to levy taxes and collect fees as prescribed. Their continuance also would be subject to any other action statutorily taken by the Municipality. The writ petitions are disposed of as above. No costs. Sd/K.Vinod Chandran Judge. vku/- [ true copy ]