Holding

A declaration under Section 3 of the U.P. Town Area Act is conditional legislative action, not a judicial function, so natural‑justice hearing is not required; the 1959 octroi notification, despite the omitted schedule, remains valid and is cured by the 1960 amendment, rendering the octroi levy lawful.

Summary

The Tulsipur Sugar Co. Ltd., whose factory lay in Shitlapur village, was brought within the jurisdiction of the Tulsipur Town Area Committee by a 1955 notification under Section 3 of the U.P. Town Area Act. Later, octroi was levied on goods entering the factory through a draft (Oct 1959) and final (Dec 1959) notification under Section 39, both of which omitted Schedule II containing the town‑area limits; the omission was later rectified by an amendment notification of April 1960. The company challenged the validity of the 1955 declaration on the ground that it violated natural‑justice principles (audi alteram partem) and contested the 1959 octroi notification as inchoate and uncurable. The Supreme Court held that the power under Section 3 is legislative/conditional legislation, not a judicial function, so the audi alteram partem rule does not apply; the declaration is therefore valid. It also held that the omission of Schedule II did not invalidate the 1959 notification and that the 1960 amendment cured any defect, making the octroi levy valid. The appeal was dismissed.

Issues considered

The declaration of a town area under Section 3 of the U.P. Town Area Act – does it require compliance with the audi alteram partem rule?
Is a declaration under Section 3 subordinate legislation subject to the procedural requirements of Section 39?
Does the omission of Schedule II in the December 15, 1959 octroi notification render it invalid, and can the April 14, 1960 amendment cure the defect?
Is the octroi levy imposed on the plaintiff’s factory lawful?

Legislation cited

U.P. Town Area Act, 1914s. 15B, s. 3, s. 39

Subjects

administrative lawnatural justiceaudi alteram partemconditional legislationsubordinate legislationoctroitown area declarationU.P. Town Area Actprocedural fairness

Judgment

1111

THE TULSIPUR SUGAR CO. LTD. A
v.
TIIE NOTIFJED AREA COMMITTEE, TULSIPUR
Febmary 27, 1980
(D. A. DESAI AND E. S. VENKATARAMIAH, JJ.] B
Ad1ninistrative law-Conditional legislmion-Subordinate /egislatio1i-Power
to extend the area of Municipal Co111111ittee whether' subordinate legislation-
Audi alteram partefn-When necessary.

The plaintiff (appellant) was a sugar n1anufa<:tur~r with its factory in a
suburb of Tulsipur Town. By a notification issued on August 22, 1955 under
section 3 of the U.P. Town Area Act, 1914 the limits of the Tulsipur Town
c
\\'ere extended bringing the factory area within the jurisdiction of the Town
Area Committee. In October, 1959 a draft notification was issued by which
objections and representa-tions to the levy of octroi on goods brought into the
limits of the Town Arca Comn1ittee for: the purposes of sale, use or consumption
1

were invited. Later a final -notification dated Decetnber 15, l 959 v. as issued
1

under section 39, In both the notifications however though reference \Vas D
rnade to two schedules to the notifications in neit·her \Vas the second schedule
which referred to the lin1its of the Town Area, added.

This defect was cured by notification dated A.pril 14, 1960 inc9rpor.ating
Schedule II in the Notification dated December 15, 1959. The plaintiff was
then cailed upon to pay octroi on some of the inatcrials and stores brought into
the factory. E
The plaintiff thereupon questioned the vslidity of the Notification dated
August 22, 1955 extending the limits of the Town Area Com1uittee bringing its
factory within the limits of the Town Area Committee and the subsequent
notifications on the grounds that (i) the first of them dated August 22, 1955
did not give an opportunity to all concerned to n1ake representa1ions regarding
the advisability of extending the limits of the Town Area Committee (ii) that
F
the notification dated December 15, 1959 \\'as inchoate because neither the draiit
notification nor the final notificMion contained the second .schedule and (iii)
that this defect could not oe cured by issue of the Notification dated April 14,
1960 in that it was issued without follo\ving the· procedure prescribed by section
39 of the Act.

The Trial Court held that the notification of August 22, 1955 was not open
to question, that there was no valid levy because the draft notification the final
G
notification and the amending notifica.tion were invalid and ineffective for the
reason that the omission of the second Schedule \\'as a 1uaterial illegality and
the subsequent notification could not validate an irregular notification.

On appeal by the defendoo.t the civil judge, and on furlhel' appeal the
High Court, disn1issed the plaintiff's suit.
H
In appeal to this court it \.vas contended that since the declaration of any
erea as a town area involved civil consequences, exercise of power by the State
1112 SUPREME COURT REPOHS [1980] 2 S.C.R.

A Government under section 3 by necessary implication imposed a duty on the
State Government to give publicity to its proposals and failure to comply with
!uch procedure invalidated a declaration made under section 3.
,
DismiMing the appeal,

HELD: 1. Where a function performed by the, State Governn1ent is judicial
or quasi-judicial involving adjudication of the rights of any person resulting in
B
ch·il consequences it becomes necessary to follow the maxim audi alteram partem
(hear the other side) before taking a decision. [1118E]

2. In order to establish that a duty to act judicially applies to the perform-
ance of a pa!rl:icular function it is no longer ne~essa ry to show that the function
is analytically of a judicial character or involves the determination of a lis inter
partes, though the presumption that natural justice must be observed will arise
c more readily \Vhere there is an express duty to decide· only after conducting a
hearing or inquiry or \Vhere the decision is. one entailing the determination of
disputed questions of la\v and fact. Prima-facie a duty io act judicially will
arise in the exercise of a power to deprive a person of his livelihood or of his
legal status where the statuS is not merely terminable at pleasure or to deprive
a person of liberty or property rights or other legitimate interest or expect'ation
or to impose a penalty on him; though the conferment of a wide discretionary
D
power exercisable in the public interest may be indicative of the absence of an
obligation to act judicially. \V'here a discretionaory power to encroach upon
individual rights is exercised, the factors pointing to whether it must be exercised
judicially include the nature of the interests to be effected, the circumstances in
which the power falls to be exercised and the. nature of the sanctions if any
inYolved. Exceptionally a duty to act judicially may a.rise in the course of
E exercising a function not culn1inating in: a binding decision if the \\'Ording of
the grant of power or the context indicate that a fair hearing ought to be
extended to persons llkelv to be prejudicially affected by an investigation or
recommendation. [ll 18F-H, 1119A-C]

Hal~bury's La\YS of England Vol. I, 4th Edition page 77 refe1Ted to.
3. Where an administrative decision affects the rights of persons, it beco1nes
F the duty of the authority concerned to give' notice of the proposed action to
the persons to be affected and to take a decision after giving a fair opportunity
to the person concerned to make his representation in that regard. [l 119C-
D]
A. K. Kraipak & Ors. Etc. v. Union of India & Ors. [1970] 1 S.C.R. 457;
Mohinder Singh Gill & Anr. v. The Chief Election Conimissioner, Neli' Deihl
G & Ors,,[1978] 2 S.C.R. 272; Maneka Gandhi v. Union of India [1978] 2 S.C.R.
621 referred to.
4. Where a public officer has power to deprive a person of his liberty or
his property, the general principle. is tho.t it has not to be done without his
being given an opportunity of being heard and of making representations on his
own behalf. [ll 19E]
H S(a) The power of the· Sta-te Government to make a declaration under
section 3 of the Act is legislative in character becnnse1 the application of the
rest of the provisions of the Act tn the geographical area, which is declared as
TULSIPUR SUGAR CO. V. NOTIFIED AREA COMMITTEE 1113 ·
(Venkataramiah, !.)
a town area, is dependent upon such declaration. Section 3 of the Act is in A
' the nature of a conditional legislation. [1119H, 1120A]
In the instant case the rnaxint audi alteram parte1n does not become appli-
cable by necessary implication. [I 121G]
(b) The contention that the declaration to be made undeir section 3 of the
ACt is in the nature of subordinate legislation is not tena-ble. It is not possible
to equate a declaration to be made under section 3 of the Act with rules made B-.
under section 39. [1122A, Bl
Sub-section 3 of section 39 does not in terms apply to a declaration to be
made under se<:tion 3 of the Act. [1122B1
(c) The contention of the plaintiff that the declaration made by the Sta.te
Government under section 3 of the Act declaring the area in \vhich the sugar
factory of the plaintiff is situated as a part of the Tulsipur Town Area is
c
invalid is not tenable. A notification il'.sued under section 3 of the. Act which
ha6 the effect of making the _A.ct applicable to a geographical area( is in the
nature of conditional legislation. It cannot be characterised as a piece of
subordinate legislation. [l 126B-C]

(d) The notification dated December 15, 1959 by which octroi was sought D·
to be levied "'as valid. In the instant case the omission to men~
tion the boundaries of Tulsipur Town in the draft notification and in
the final notification did not make the final notification ineffective as there
cculd be no roon1 for doubt about the local area within whose limits the
said irnpost would be effective. The procedure prescribed for the imposition of
octroi was valid because representations a-nd objections to the proposed levy were
invited and a valid notificaition was issued. A notification so published is E.
conclusive proof that the tax had been imposed in accordance with the provisions
of the Act. [l 128G-H, 1129A-C]

CIVIL APPELATE JURISDICTION: Civil Appeal No. 577 of 1970.
From the Judgment and Order dated 17-1-1968 of the Allahabad
High Court in Second Civil Appeal No. 462 of 1964.
Mr. Anil B. Diwan,!. S. Sinha and K. !. John for the Appellant.
Mr. J.P. Goyal, S. K. Jain and S. M. Jain for the Respondent.
The Judgment of the Court was delivered by
VENKATARAMIAH, J.-This appeal by certificate arises ont of Suit
G.
No. 416 of 1960 on the file of the Munsif, Utraula at Gonda instituted
by the Tulsipur Sugar Company (hereinafter referred to as 'the plain-
tiff') against the Town Area Committee, Tulsipur (hereinafter referred
lo as 'the defendant') for a permanent injunction restraining the defen-
dant from levying octroi on goods brought into the premises of th<J
sugar factory belonging to the plaintiff pursuant to the Notification
.
bearing No. 540/XXIII-102 (58-59)-7 dated December 15 , 1959
issued by the Commissioner of Faizabad Division in exercise of the
1114 SUPREME COURT REPORTS [1980] 2 S.C.R.

A powers conferred on him by sub-section (2) of section 39 of the
U.P. Town Area Act, 1914 (U.P. No. II of 1914) (hereinafter
,
referred to as 'the Act') read with the Notification bearing No.
1375(1)/XXIII-102(58-59)-24 dated April 14, 1960. The name
of the defendant was altered into tbe Notified Area Committee of
Tulsipur by virtue of an order made by the Munsif on August 18,
1962 since the defendant which was originally a Town Area Com-
mittee had been re-constituted as a Notified Arca Committee with
effect from March 15, 1962. The plaintiff is a company carrying '
on the business of manufacturing sugar in its factory which was
cstablisl1ed in the year 1936 in Shitlapur village which was situated in
c the suburb of Tulsipur Town. By the Notification bearing No. 1853-
IX-86 T-51 dated December 22, 1955 issued by the Gov~rnor of
Uttar Pradesh under section 3 of the Act, the limits of the Tulsipur
Town Area were extended so as to bring within its limits the village
of Shitlapur. Thus the sugar factory of the plaint'ff was brought
within the jurisdiction of the Tulsipur Town Area Committee. In the
year 1959, it was proposed to levy octroi on certain goods which were
brought into the limits of the Tuls.ipur Town Area Committee for pur-
poses of sale, use or consumption and for that purpose a draft noti-
fication was publi.shed on October 28, 1959 notifying the proposed
rules which would govern the levy of octroi and inviting cbjections
and representations thereto. The final Notification was published by
E the Commissioner on December 15, 1959 under section 39 of the
Act notifying the rules governing the levy of octroi in the Town Area
of Tulsipur. In both these notifications, there was a reference to two
Schedules-Schedule No. 1 and Schedule No. 2 but in fact neither of
the two notifications contained the second schedule. The first
schedule referred to the rates of octroi leviable on the good:; specified
therein and the second schedule referred to the limits of the Town
Area. When the Commissioner noticed that the Notification dated
December 15, 1959 by which the octroi rules were promulgated dia
•
not contain the second schedule, he published a notification dated
April 14, 1960 in the U.P. Gazette dated April 23, 1960 setting out
·~ the octroi limits of the Town Area of Tulsipur by way of amendment
to the Notification dated December 15, 1959 incorporating the second
schedule containing the limits of the Town Area of Tulsipur in the
latter notification. By the said notification dated April 14. 1960, item
No. 29 in the first schedule of the Notification dated December 15,
1959 was also directed to be omitted. After the publication of the
Notification dated December 15, 1959, the plaintiff was called upon to
pay octroi on some of the materials, articles and stores brought into
its sugar factory which was situated within the limits of the Tulsipur ...
• TULSIPUR SUGAR CO. V. NOTIFIED AREA COMMITTEE j j j 5
(Venkataramiah, J.)
Town Area for being used in the manufacture and sale of sngar.
Aggrieved by the said levy, the plaintiff instituted the above suit 011
November 18, 1960 for permanent injunction as stated above question-
ing the validity of the Notification dated August 22, 1955 issued by
the Governor of Uttar Pradesh extending the limits of the Tulsipur
Town Area so as to include the area in which the factory of the plain-
tiff was situated and also the Notification dated December 15, 1959 B·
and the amendment of the said Notification by Notification dated April
14, 1960 issued by the Commissioner of Faizabad.

The contention of the plaintiff with. regard to the Notification dated
August 22, 1955 was that since it had been promulgated without giving
a prior opportunity to all those concerned to make representation c
regarding the advisability of extending the limits of the Tulsipur Town
Area Committee so as to include the village of Shitlapur within whose
limits the factory of the plaintiff was situated, it was liable to be dec-
fared as void. In so far as the Notification dated December 15, 1959
w:.s concerned, it was urged by the plaintiff that it was liable to be
struck down on the ground that it was inchoate as the second schedule
defining the limits of the Tulsipur Town, Area had not been incorpo-
rated either in the draft notification dated October 28, 1959 or in

. the final Notification dated December 15, 1959. It was also urged
that the above defect could not be cured by the issue of the Noti-
fication dated April 14, 1960 by which the Notification dated Decem- E
ber 15, 1959 was amended without following all the pm;edure pres-
cribed for promulgating rules under section 39 of the Act. The defen-
daat pleaded that neither of the two contentions urged by the plaintiff
was tenable. The defendant pleaded that since all the legal formalities
required for the extension of its limits and for the imposition of the
ociroi had been followed, it was not open to the plaintiff to question
any of the above notifications. The trial court held that the validity
of the Notification dated August 22, 1955 was not open to question
before the civil coilft but it however declared the draft Notification
issued on October 28, 1959, the final Notification issued on December

-
lS, 1959 and the amending Notification dated April 14, 1960 "'invalid
G
and ineffective on the ground that the omission tp include the second
schedule containing the octroi limits in the draft Notificulio:; and the
Notification dated December 15, 1959 w~s a material illegality and
the Notification dated April 14, 1960 which had been issued without
following all the formalities could not have the effect of validatinae the
Notification dated December 15, 1959. In view of the above .findim H
the :rial court held that there was no valid levy of octroi by the defe;'.
da:"tt. Accordingly, the trial court passed a decree restraining the

I
1116 SUPREME COURT REPORTS [1980] 2 S.C.R. •
A deftndant from levying octroi on goods brought by the plaintiff into
its factory. The defendant filed an app~l against the S(!id decree ,
before the District Judge, Gonda in Civil Appeal No. 2 of 1963. The
plaintiff filed cross objections in that appeal. That appeal was heard
,by Civil Judge, Gonda who allowed the same and dismissed the cross
objections. The suit instituted by the plaintiff was consequently dis-
missed. The plaintiff thereafter filed a second appeal before the High
Court of Allahabad (Lucknow Bench) in Second Civil Appeal No.
462 of 1964 questioning the decree passed by the first appellate court.
By its judgment dated !anuary 17, 1968, t!J.e High Court diimissed
the second appeal. On the ~asis of a certificate issued by the High
Court under Article 133 (1) (b) of the Constitution, the plaintiff has
·C
come up in appeal to this Court.
We shall first examine the correctness of the contention advanced
on behalf of the plaintiff relating to the validity of the Notification
dated August 22, 1955 declaring the ar~ in which the sug3r factory
of the plaintiff is situated as a town area. The said Notification reads
iD as follows : -
" 22nd August, 1955
No. 1853A-IX 86 T-51-In exercise of the powers con-
ferred by clause (a) of sub-section (1) of section 3 of tae
U.P. Town Area Act, 1914 (U.P. Act No. II of 1914), the
Governor of Uttar Pradesh is pleased to declare the town of
Tulsipur in Gonda district to be a town area for the purpose
of the said Act and under clause (b) of sub-section (1) of
section 3 of the said Act to define the limits of the said town
area as shown in the schedule hereto.
SCHEDULE BOUNDARIES OF TULSIPUR TOWN AREA
·F
DISTRICT GONDA
North: Jaoakpur forest road crossing at Nakti Nala to
station road upto Public Works Department inspection
house railway crossing.
West: From the terminating point of Northern
·G
Jloundary of Public Works Department Inspection House
railway crossing towards south upto plot No. 223 of village
Tulsipur on Tulsipur Chaudhari Dih Road.
South: From plot No. 2418 of village Tulsipur to the
3rd furlong pillar of 18th mile on Balrampur Road and
II t~erefrom upto plot No. 359 on Tulsipur Chaudharidih
p•1cca Road aod from there to plot No. 223, of village
Tulsipur. ..
TULSIPUR SUGAR CO. v. NOTIFIED AREA COMMITTEE 1117
(Venkataramiah, J.)
., East: From the terminating point of southem Boundary
at plot No. 2418 tow.ards north parallel to Nakti Nala upto
A

the point where Pachperwa Road meets and therefrom upto
Sugar Factory railway crossing, Sugar Factory railway line
to the eastem side of the Sugar Factory upto the terminat-
.. ing po_int of the Northem Boundary at Nakti Nala."
B
Section 3 of the Act reads:
"3. Declaratiou and definition of town areas:-
(1) The State Government may, by notification in the
Official Gazette--
(a) declare any town, village, snburb, bazar or iilhabited c
placed to be a town area for the purpose of this
Act, and may unite, for the purpose of declaring the
area constituted by such union to be a town area,
the whole or a portion of town, village, suburb,
'
bazar or inhabited place with the whole or a portion
of any other town, village, suburb, bazar or in- D
, habited place;
(b) define the limits of any town area for the like
purposes;
( c) include or exclude any area in or from any town
E
area so declared or defined; and

(d) at any time cancel any notification under this
section;

Provided that an agricultural village shall not be declar-
'ed, or included within the limits of a town area. F
~2) The decision of the State Government that any
inhabited area is not an agricultural village within the
meaning of the proviso to sub-section (1) of this section
shall be final and conclusive and the publication in the
Official Gazette of a notification declaring such area to be G
a town area or within the limits of •a town area shall be
conclnsive proof of such decision."

The ·Act does not provide that the State Government should
give previous publicity to its proposal to declare any area as a town
area and should make such declaration after taking into consider- H
ation any representation or objection filed in that behalf by the
members of the public. It is not in dispute that no such previons
1118 SUPREME COURT REPORT~ fl980] 2 S.C.tl.

A publication was made in the instant case. The contention o.f the ,.
plaintiff is that even though the statute does not expressly require
such previous publication and consideration of rcpre§entations and
objections made to the proposal to declare any area as a town area
since a declaration of any area as a town area involves certain civil
consequences such as the obligations arising from the implementa-
B
tion of the provisions of the Act in that area, we ;hculd hold that
the exercise of the power of the State Government under section 3
of the Act by necessary implication imposes a duly on the State
Government to follow the principles of natural justice i.e. to give
publicity to its proposal to declare any area as a town area and to
c decide the question whether any declaration under section 3 of the Act
should be made or not after taking into consideration the representations
or objections submitted by the members of the public in that regard
and failure to comply with such procedure would invalidate any decla-
ration made under section 3. The above contention is based on the
assumption that the duty imposed on the State Government is in the
D nature of an administrative power in the exercise of which the State
Government should follow the principles of natural justice.

· The solution to the qu"-stion raised before us principally depends
upon the nature of the function that is performed by the State Gov-
E ernment under section 3 of the Act. If that function is judicial or
quasi-judicial involving adjudication of the rights of any person
resulting in c·vil consequences, it no doubt becomes necessary to
follow the maxim audi alteram partem (hear the other side) before
taking. a decision. It is also true that in order to establish that a duty
to act judicially applies to the performance of a particular function, it
F
is no longer necessary to show that the function is analytically of
a judicial character or involves the determination of a /is inter partes;
thongh a presumption that natural justice must be observed will arise •
more readily where there is an express duty to decide only after
conducting a hearing or inquiry or where the decision is one entail-
G ing the determination of disputed questions of law and fact. Prima
facie, moreover, a duty to act judicially will arise in the exercise of
a power to deprive a person of his livelihood or of his legal status
where the status is not merdy terminable at pleasure, or to deprive
a person of liberty or property rights or another legitimate interest
or expectation, or to impose a penalty on him; though the confer-
H ment of a wide discretionary power exercisable in the public interest
may be indicative of the absence of an obligation to act judicially.
Where a discretionary power to encroach upon individual rights is

,\
TULSIPUR SUGAR CO. v. NOTIFIED AREA COMMITTEE 1119
· ( Venkataramiah, J.)
exercised, the factors pointing to whether it must be exercised judi' A'
ciaUy include the nature o~ the interests to be affected, the circum-
stances in which the power falls to be exercised and the nature of
the sanctions, if any, involved. Exceptionally, a duty to act jud'-
cially may arise in the course of exercising a; function not culminating
in a binding decision, if the wording of the grant of powers or the
context indicates that a fair hearing ought to be extended to persons B
I
( likely to be prejudicially affected by an investigation or reconur.enda-
\ tion'. (Halsbury's Laws of England, Vol. I, Fourth Edition, Para
~· 65 at p. 77).

J A. K. Kraipak & Ors. etc. v. Union of India & Ors.,(') Mo/tin-
der Si11g/1 Gill & Anr. v. The Chief Election Commis.1ioner, New Delhi
& Ors.(') and Maneka Gandhi v. Union of· India(') which were
de<eidt:d in the light of the ever widening and exp::.nding horizons of
natural justice also lay down that it is only where an administrative
decision affects the rights of persons, it becomes the duty of the
au!hority concerned to give notice of the proposed action to the
penon to be affected and to take a decision after gIVing a fair oppor-
tllllity to the person concerned to make his representation in tbat
regard. Ttc decision in Schmidt v. Secretary of ~·:ate for Home
Affairs(') which was followed by this Cour~ in Maneka Gandfu's case
(supra) summarises the above principle as follows: 'Where a public
oilie<:r !;as power to deprive a person Of his liberty or his property,
the general principle is that it has not to be donG without his being
given an opportunity of being heard and of making representations
on his own behalf'. In all these cases one significant common factor
is ~t the administrative action is directed against a p.:rson. None
of them. however, is a case wh·~re the question whether in th.:
absence of an expres§ provision requiring it lo do so, an authority F'
which has to exercise a legislative function should fol'ow the priu-
ciples CJ( natural justice before discharging such fuioction arose for
consideration.
We are concerned in the present case with the power oi the State
Government to make a declaration constituting a geographical area G
into a town .area under section 3 of the Act whicl1 does not require
the State Government to make snch declaration after giving notice
of ks mtention so to do to the members of the public and invitin~
their rep1esentations regarding such action. The power of the Stat~
(I) 119101 1 s.c.R.457.
(2) [l978) 2 S.C.R. 272. II
(3) (1978] 2 S.C.R.62!.
(4) [1969) 2 Chancery Division 149.
17-138 SC!/80
1120 SUPREME COURT RS!'I •RTS [J 980] 2 S C.R.

Governmeiit to make a declaration under section 3 of the Act is
legislative in character because the application of the rest of the pro-
i
vi~io!l5 o[ the Act to the geographical area which is dccl~red as a
town area is dependent upon such declaration. Section 3 of the Act
is in the nature of a conditional legislation. Dealing with the
nature of functions of a non-judicial authority, Prof. S. A. De Smith
B in Judicial Review of Administrative Action (Third Edition) observes
at page 163 :--
"However, the analytical classification of a function
may be a conclusive factor in excluding the operation of
the audi alteram partem rule. It· is generally assumed that
c in English law the making of a subordinate legislative
instrument need not be preceded by notic0 or hearing
unless the parent Act so provides".
In Bates v. Lord Hailsham of St. Marylebone & Ors.(') the facts
were these : In 1964, the British Legal Association was formed. Out
D C•f about 2.6,000 practising solicitors some 2,900 were members of
the association. The Lord Chancellor anonnced Oil May 1, 1972,
that the scale of fees under Schedule I to the SoEcitcrs' Remunera-
tion Order, 1883 were proposed to be abolished and that for all
conve:J.!ncing transactions the system of quantum meruit was to be
aµplicd. On June 6, pursuant to section 56 (3) of the Solicitors
E Act 1957, the Law Society was sent by the commtttee. set up under
section 56 (1) a draft of the order propo,sed to be made under
<ection St (2). The draft order was published m 1bc Law S-Ociety's
Uaz.::-.c 011 June 21. The association set out two circulars about the
proposed order, the first at the end of May, to all solicitors, and the
second on July 17, making a series of accusations against the Lord
F Chancellor and the Law Society. On July 11, the association sent
printed submissions to the statutory committee, requesting that the
order should not be approved at this juncture and that the Lord
Chancellor should seek further consultations with the profession and
professional organisations. On July 14, the association wrote to
G each member of the committee asking for further time and a defer-
ment .of the decision for two months. The Lord Chancellor's reply
dated July 18, was that he saw no reason for postponing the meeting
or for refraining from making the order in such terms as the com-
mittee approved. On July 18, the plaintiff as a member Of the
nat;onal executive committee of the association, took out a writ
n a2ainst Ail members of the statutory committee, see\cing a declaration
and an iujnnction, and on July 19, at 2 P.M. hav:ng previously
(1) (1972] 1 W.LR.1373.
TULSIPUR SUGAR CO. v. NOTIFIED AREA COMMITTP.!\ 1121
(Venkataramiah, J.)
notified the Treasury Solicitor of the intention, he moved the court A
-ex parte, seeking to restrain the committee from holding the meeting
wJ,ich wa. to be held at 4.30 P.M. on that day. The motion was
dismissul by Megarry, J. and we feel rightly with the following
(lbS<'rvations:
( . "In the present case, the committee in que~•ion has an B
' entirely different function : It is legislative rather than adminis-

~.
frotivc or executive. The function of the comwjttee ;s to
make or refuse to make a legislative instrument under
d~legated powers. The order, when made, will lay d<iwn
the remuneration for s_cilicitors generally; <tn<I the terms of
the order will have to be considered and construed and c
appiied in numberless cases in the future. Let me accept
that in the sphere of the so-called quasi-judicial the rules
of natural justice run, and that in the administrative or
executive field there is a general duty of fairness. Never-
theless, these considerations do not seem to me to affect
D
the process of legislation, whether primary or delegated.
Many of those affected by delegated legislation, and effected
very substantially, are never consulted in the process cf
·enacting that legislation, and yet they have no remedy.
·or course the informal consultation of reprcscr,tative bodies
by tne legislative authority is a commonQ)ace, but ~]though E
& few statutes have specifically provided for a general
·process of publishing draft delegated legislation and con-
sidering objections (see for example, the Factories Act
1961, Schedule 4 ), I do not know of any implied right to
'be consulted or make objections, or any principle upon
which the courts may enjoin the legislative pruccss at the F
suit of those who contend that insufficient lime for consul-
.talion and consideration has been given. I accept that the
fa.:~ that the order will take the form of a statatory instru-
ment does not per se make it immune from attact, whether
by injunction or otherwise; but what is important is not its
form but its nature, whlch is plainly legislahVe". G

We are, therefore, of the view that the maxim 'audi a/leram
·partem' does not become applicable to the case by necessary impli-
_cation.

The second limb of the argument in support of the above .:ou1cn- H
tion is that the declaration made under section 3 of the l\ct being in
:the \Jature of subordinate legislation, it was the duty of the State
1122 SUPREME COURT REPORTS [1980] 2 S.C.R- '

A Governmrnt to follow the same procedure whi~h was ~pplicable to;
the promulgation of rules under section 39 of the Act. Our,
attention was drawn in this connection to sub-section (3) of section
39 of lbe Act which provided that the power to mal:e rules under
the said secuon was subject to the condition of the rules being made
after previous publication. We are of the view that it is not possible
B to equate a declaration to be made under sectlc'n 3 of the Act with
rules made under section 39. Sub-section (3) of section 39 of the
Act C:oes nut in terms apply to a declaration to be made under section~
3 of th•o Act. The contention that the declaration to be made under
section 3 of the Act is in the nature of a subordinate legislation is
c also not tenable. We may refer at this stage to the decision of the ,,
Judicial Committee of the Privy Council in The Queen v. Burah.(') ·'
Section 9 of Act No. XXII of 1869 of the Indian Legislature which
came up for consideration in that case conferred upon the Lieutenant-
Governor of Bengal the power to determine whether that Act or
any part of it should be applied to a certain area within his jurisdic-
D tion. It read as under:--
"9. The said Lieutenant-Governor may from time to
time, by notification in the Calcutta Gazette, extend mutatis
nwtandis all or any of the provisions contained in the other
sections of this Act to the Jaintia Hills, the Naga Hills,
and to such portion of the Khasi Hills as for the time being
E forms part of British India.
Every such notification shall specify the boundaries of the terri-
tories to which it applies."

Repelling the contention urged against the validity of the afore-
F said section 9, Lord Selborne observed at page 193 thu.s:
"Legislation which does not directly fix the period for
its own commencement, but leaves that to be done by au
external authority, may with quite as much reason be
called incomplete, as that which does not itself imme- •
diately determine the whole area to which it is to be
G applied, but leaves this to be done by the same external
authority. If it is an act of legislation OJ! the part of the
external authority so trusted to enalrge the area within
which a law act~y in operation is to be applied, it would'
seem a fortiori to be an act of legislation to bring the law
H originally into operation by fixing the time for its com-
mencement".
(1) 5 !. A. 178.
.TULSIPUR SUGAR CO. l'. NOTIFIED AREA COMMITTEE 112 3
( V enkataramiah, J.)
.Proceeding further, the learned Lord observed at page 195: A
Their Lordships think that it is a fallacy to speak oi the
powers thus conferred upon the Lieutenant-Governor
(large as they undoubtedly are) as if, when they were
exercised, the efficacy of the acts done under them would
-be due to any other legislative authority than that of the B
Governor-General in Council. Their whole operation is,
directly and immediately, under and by virtne of this Act
(XXII of 1869) itself. The proper Legislature bas
exercised its judgment as to place, person, laws, powers;
and the result of that judgment has been to legislate condi-
tionally as to all these things. The oonditions having been c
.fulfilled, the legislation is now absolute. Where plenary
powers of legislation exist as to particular subjects, whether
in an imperial or in a provincial legislature, they may (in
their Lordships' judgment) be well exercised, either
absolutely or conditionally. Legislation, oonditional on the
use .of particular powers, or on the exercise of a limited D
• discretion, entrusted by the Legislature to persons in whom
it places confidence, is no uncommon thing; and, in many
circumstances, it may be highly convenient. The British
Statute Book abounds with examples of it; and it cannot
be supposed that the Imperial Parliament did not, when E
constituting the Indian Legislature, contemplate this kind of
conditional legislation as within the scope of the legislative
powers which it from time to time conferred".
Following the decision in The Queen v. Burak (supra) the High
'"):_ Court of Australia held in Haxter v. Ah Way(') that sub-section (g)
of section 52 of the Customs Act, 1901 which provided that all goods
the importation of which was prohibited by a proclamation should
be considered as prohibited imports was not a delegation of legislative
power but conditional legislation and was within the power conferred
-On Parliament by sub-sections (i) and (ii) of section 51 of the

. Australian Constitution.
J;he essential distinction between conditional legislation and dele-
gated legislation was considered for the first time by this Court in In
G

re The Delhi laws Act, 1912.(2) After considering the decision in
The Queen v. Burah (supra), Mukherjea, J. observe<l at page 980:
'The same principle was applied by the Judicial Com-
mittee in King v. Benoari Lal Sharma (72 I.A. 57). In H
(I) 8 C. L. R. 626.
~- (2) [1951] S.C.R. 747.
1124 SUPREME COllRT REPORTS [1980] 2 S.C.R~

A that case, the validity of an emergency ordinance by the
Governor-General of India was Challenged inter alia on the
ground that it provided for setting up of special criminal
courts for particular kinds of offences, but the actual
setting up of the courts was left to the Provincial Govern-
ments which were authorised to set them up at such time
B
and place as they considered proper. The Judicial Com- I
mittee held that "this is not delegated legislation at all. )
/

•
It is merely an example of the not uncommon legislative
power by which the local application of the provisions of
a statute is determined by the judgment of a local adminis-
c trative body as to its necessity.
Thus, conditional legislation has all along been treated
in judicial pronouncements not to be a species of delegated
legislation at all. It comes under a separate category, and,
if in a particular case all the elements of a conditional legis-
lation exist, the question does not arise as to whether in
D
leaving the task of determining the condition to an outside
authority, the legislature acted beyond the scope of its
powers."
In Basant Kumar Sarkar & Ors. v. Eagle Rolling Mills Ltd. &
Ors.(') this Court was required to consider the question whether
·s section 1 ( 3) of the Employees' State Insurance Act, 1948 was valid.
One of the conditions urged by the appellants rn that cas·~ was that
the said provision suffered from the vice of excessive delegation on
the ground that the power given to the Central Government to apply
the provisions of that Act by notificatiop, conferred on the Central_.f ·
F Government absolute discretion, the exercise of which was not ·
guided by any legislative provision and was, therefore, invalid.
Gajendragadkar, C.J. rejected the above contention with the follow-
ing observations:- ...
"We are not impressed by this argument. Section 1 (3)
is really not an ilJustration of delegated legislation at
G
all; it is what can be properly described as conditional
legislation. The Act has prescribed a self-contained code
in regard to the insurance of the employees covered by it;
several remedial measures which the Legislature thought it
•
necessary to enforce in regard to snch workmen_ have been
H specifically dealt with and appropriate provisions have
been made to carry out the policy of the Act as laid down·
(1) [1964] 6 S.C.R. 913.
TULS!PUR SUGAR CO. V. NOTIFIED AREA COMMITTEE 112 5
(Venkataramiah, J.)
in its relevant sections. Seeton 3 (1) of the Act A
purports to authorise the Central Government to estab-
lish a Corpmation for the administration of the scheme of
Umployees' State J;nsurance by a notification. In other
words, when the notification should be issued and in res-
pect of what factories it should be issued, has been left to B
the discretion of the Central Government and that is pre-
cisely what is usually done by conditional legislation.
What Lord Selborne said about \he powers c<inferred on
the Lieutenant-Governor by virtue of the relevant provi-
sions of Act 22 of 1869 in Queen v. Burah (5 I.A. 178 at
p. 195), can be said with equal justification about the C
powers conferred on the Central Government by s. 1 ( 3)."

Following the decision in Baxter v. Ah Way (supra) this Court in
Bangalore Woollen, Cotton and Silk Mills Co. Ltd., Bangalore v. The
Corporation of the City of Bangalore by its Commissioner, Bangalore
City(') upheld the validity of section 97(e) of the City of Bangalore D
Municipal Corporation Act, 1949 by which the Bangalore Municipality
had been authorised by the State Legislature to levy certain taxes.

.. In tire course of the said decision, Kapur, J. observed thus:
"In the present case, the Legislature has laid down the
E
powers of the Municipality to tax various goods. It has
enumerated certain articles and animals and Clause VIII
read with s, 97(e) of the Act has authorised the Munici-
pality to impose tax on other articles and goods. This
power is more in the nature of conditional delegation as
was held in Baxter v. Ah Way [1909] 8 C.L.R. 626 where F
it was held that under s. 52(g) of the (Australian)
Customs Act, 1901, a power given to prohibit by proclama-
tion the importation of cert_ain articles was not a dele-
gation of legislative power but coni:jitional legislation
because the prohibition of importation was a legislative act
of Parlian1ent itself and the effect of sub-s. (g) of s. 52 G
was only to confer upon the Governor-General in Council
the discretion to determine to which class of goods other
than those specified in the section and under what condi-
tions the prohibition should apply. All that the legislature
has done in the present case is that it has specified certain
H1
, articles on which octroi duty can be imposed and it has also
(I) [1961] 3 S.CR. 698.
·1126 SUPREME COURT REPORTS (1980] 2 S.C.R.

A given to the Municipal Corporation the discretion to deter-
mine on what other goods and under what conditions tlie
tax should be levied.''
We arc, therefore, of the view that a notification issued under
sccfon 3 of the Act which has the effect of making the Act appJicable
•
B to a geographical area is in the nature of a conditional legislatioa and
that it cannot he characterised as a piece of subordinate legislation. In
view of the foregoing, we hold that the contention of the plaintiff
that tk declaration made by the State Government m1dcr sectivu 3
of the Act declaring the area in which the sugar factory of the plain-
tiff is situated as a part of the Tulsipur town area is iiwalid js not
c tenable.
The other submission made in this connection that the area in
which the factory of the plaintiff was situated was a part of an agricnl-
tnral village which could not be included within the limits of a town
area committee has also got to be rejected in view of sub-section (2)
D of section 3 of the Act which provides that the decision of the State
Government that any inhabited area is not an agricultural village
within the meaning of the proviso to sub-section (1) of section 3
shall be final and conclusive and the publication in the Official Gazette
of a notification declaring such area to be a town area or within the
• E limits of a town area shall be conclusive proof of such decision, since· it
is not disputed that the notification had been duly published in the
Official Gazette.
Th,, next question relates to the validity of the notification dated
December 15, 1959 by which octroi was sought to be levied by the
Town Arca Committee of Tulsipur. There is no dispute that the
' F procedure prescribed for the imposition of octroi was followed in the
instant case. A draft of the octroi rules containing the. schedule of
octroi rates which were proposed to be levied on different kinds of
goods was published inviting representations and objectionr lo the
proposed levy and that a final notification dated December 15, 1959
G was published in the Official Gazette as required by the Act. Sub-
section ( 4) of section 15B of the Act provides that the notification so
published shall be conclusive proof that the tax has been imposed
in accordance with the provisions of the Act. What is, however,
argued before us is tbat the Notification dated December 15, 1959
which did not contain the second schedule specifying the octroi limits
e could not be read as levying octroi as the omission to specify the
octroi limits was not curable in the circumstances of the case and that
the suhscquent notification issued on April 14, 1960 could not cure
TULSIPUR SUGAR CO. V. NOTIFIED AREA COMMITTEE I 12 7
(Venkataramiah, J.)
'lhe said defect. In order .to appreciate the contention, it is necessary A
·•o set out the relevant par:ts of the Notification dated December 15,
1959:
" December 15, 1959

• No. 540/XXIII-102 (58-59)-7-In continuation of
notification No. 190/XXIII-102 (58-59)-5 dated B
October 28, 1959, and in exercise of the powers conferred
by sub-section (2) of section 39 of the U.P. Town Area
Act, 1914 (U.P. Act No. II of 1914), the Commissioner,
Faizabad Division, is pleased to make the following rules
for the assessment and collection of octroi in the Town
Area, Tulsipur, District Gonda, after their previous publi- c
cation in the aforesaid notification as required by sub-
section (3) of section 39 of the said Act.
Rules
1. Octroi shall be levied according to the rates and des-
cription given in Schedule I on goods and animals bronght D
within the octroi limits of Town Area Tulsipur (hereinafter
called the town area) as specified in Schedule II for con-
snmption, use or sale therein.

• 2. No person shall bring within the limits of tbe Town
Area any laden vehicles or laden animal in respect of which
octroi is lcviable under these rules until the octroi due in
respect of the commodities has been paid to snch persons
{bereinafter called tbe Moharrirs) and at such barriers as
the Town Area Committee (hereinafter called the Com-
mittee) may appaint from time to time.
F
3. No laden coolie from whom octroi is leviable in
respect of commodities under his charge, shall enter the
limits of the Town Area m1til he has paid the octroi for such
commodities in the manner aforesaid.

Schedule of Oetroi rates in Town Arca, Tulsipur G

"S. No. Name of goods Rates Remarks

"
The opening part of the above notification dated December 15,
1959 clearly states that the rules mentioned therein haJ been made H
for the assessment and collection of octroi in the Town Area, Tulsi-
;pur, District Gonda after their previous publication. The rates at
1128 SUPREME COURT REPORTS [1980] 2 S.C.R.

A which the octroi was leviable on ilifferent commodities are stated iru
the schedule. After inviting our attention to Rule 1 of the Rules
which provides that octroi shall be levied according to the rates and
description given in the first schedule on goods and animals brought
within the octroi limits of the Town Area, Tulsipur (hereinafter called.
the tov.n area) as specified in the second schedule for consumption, •
B
use or sale therein, learned counsel for the plaintiff contends that
Rule 1 postulates the incorporatio11 in the notification of the second:
schedule containing octroi limits of the Town Area of Tulsipur and '
by the omission of the second schedule, the levy of octroi has become
ineffective. It is argued that the expression 'octroi limits of the
•
~
-'\

c town area' should be construed as different from the expression 'town ·
area' aRpearing in the opening ~ of the Notification dated Decem·
ber 15, 1959 and hence the omission to set out the octroi limits in the
second schedule was fatal to the Notification. It is further contended
that the amendment of the above notification made by the notificatioll'
dated April 14, 1960 also could not validate the levy of octroi by the·
D notification dated December 15, 1959 as the said amending notifica-
tion had not been made after previous publication. It is true that
Rule 1 refers to the second schedule in which the octroi limits of
town area were proposed to be set out but we are of opinion that such·
omission is not fatal to the notification dated Decelllber 15, 1959.
It is not disputed that the opening part of the notification dated
E October 28, 1959 containing the draft of the octroi rules also stated
that it was proposed to make provision for the assessment and collec-·
tion of octroL in the Town Area, Tulsipur. Iri that notification also,
there was no specific reference to the octroi limits as such. The
octroi being a tax on the entry of goods into a local area for con-
sumption, use or sale therein, it cannot be said that the members of
F
the public who were interested in opposing the levy of octroi by way
of making any representation in that behalf were misled as to the
local area in which octroi would be levied. On a fair reading of Rule
1 we feel that the authority which promulgated the rules only intended
to set out in the second schedule the limits of the Town Area which
G had already been published it1 the notification dated August 22, 1955
under section 3 of the Act declaring the geographical area situated'
within the boundaries set out therein as the Town Area of Tulsipur.
By the notification dated April 14, 1960, the notification dated
December 15, 1959 was amended by incorporation of the second
schedule with the very same boundaries of the Town Area found in
the notification dated Au~ust 22. 1955. Since the intention of the
" authority imposing octroi in the Town Arca of Tulsipur is made
explicit in the opening: part of the notifiction dated December 15,,
,
TULSlPUR SUGAR CO. V. NOTIFIED AREA COMMITTEE 1129
( Venkataramiah, J.)
1959, we do not think that the omission to set out the boundaries of A
Tu!sipur Town in that notification can make the levy of octroi in-
effective as there could be no room for any doubt about the local
area within whose limits the said impost would be effective. The
declaration made on August 22, 1955 under section 3 of the Act
• specifies the said limits. In the circumstances, it has to be held that
the notification dated December 15, 1959 was neit.her incomplete B
nor ineffective. The omission to incorporate the second schedule
was only an inconsequential mistake which was rectified by the sub-
sequent notification dated April 14, 1960. We do not, therefore, !ind
an:y substance in this contention also.
For the foregoing reasons, we do not find any error in the judg- C
ment of the High Court. Jn the result, the appeal fails and is
hereb;,< dismissed but in the circumstances of the case without any
order as to costs.
N.K.A Appeal dismissed.

<
'