Holding

The power to grant a licence under s.117 of the West Bengal Panchayat Act, 1973 necessarily includes the incidental power to specify the day on which a hat or fair shall be held, and the 1984 Rules do not diminish this substantive statutory authority.

Summary

The Khargram Panchayat Samiti, empowered under section 117 of the West Bengal Panchayat Act, 1973 to grant licences for cattle fairs, resolved to schedule two rival fairs on different days to prevent law‑and‑order problems. The High Court quashed this resolution, holding that the Samiti's power was limited to sanitation, health and hygiene under Rules 7‑9 of the 1984 Rules and that it could not specify the day of a fair. On appeal, the Supreme Court held that the statutory power to grant a licence inherently includes the incidental authority to fix the day of the event, and that the Rules do not curtail this substantive power. The Court emphasized that statutory powers must be read to include reasonable incidental powers and that the doctrine of ultra vires should not be applied narrowly. Consequently, the High Court's judgment was set aside and the writ petition dismissed.

Issues considered

The extent of the power conferred on a Panchayat Samiti under s.117 of the West Bengal Panchayat Act, 1973, specifically whether it includes the incidental authority to specify the day on which a hat or fair is to be held.
Whether the West Bengal Panchayat (Samiti Administration) Rules, 1984, particularly Rules 7, 8 and 9, limit the Samiti's power to matters of sanitation, health and hygiene, thereby excluding the power to fix the day of a fair.
Whether the doctrine of ultra vires should be applied narrowly or broadly in interpreting the statutory powers of local authorities.

Legislation cited

West Bengal Panchayat Act, 1973s. 117
West Bengal Panchayat (Samiti Administration) Rules, 1984s. 7, s. 8, s. 9

Subjects

administrative lawstatutory interpretationincidental powersultra vireslocal authoritylicensingpublic orderWest Bengal Panchayat Actrules of natural justice

Judgment

KHARGRAM PANCHAYAT SAMITY & ANR.
v. A
STATE OF WEST BENGAL & ORS.

APRIL :13, 1987

[A.P. SEN AND V. BALAKRJSHANA ERADI, JJ.] B

West Bengal PanchayatAct, 1973/West Bengal Panchayat (Samiti
Administration) Rules, 1984-s. 117/Rules 7, 8 and 9-Power to grant
licence for holding a hat/fair includes power to specify a day on which

-- such hat/fair shall lie held.

Administrative Law. c
Local authorities-Conferral of statutory power-Impliedly
authorises everything which could fairly and reasonably be regarded as
comequential and ifitldetttal to that power.

Ever since 1933, a cattle fair cailed Nagar Cattle Hat is being held D
on Saturday every week by the Nagar Quorania Junior High Madras-
sah. Since 1974, respondent No. 6, a club called Prabartak Parisbad set
up a parallel cattle fair at Sberpur, about two kilometres away from the
site of Nagar Cattle Hat on every Saturday, known as Sherpur Cattle
Hat. The holding of two rival cattle fairs on the same day gave rise to
feeling of rivalry couple with tension and this frequently led to violent E
conflicts and ski~mishes between the two rival groups.

Upon a representation made to him, the District Magistrate,
Murshidabad caused an inquiry to be held, and held that holding of the
two cattle fairs on the same day created serious law and order problem
and accordingly directed holding of the hats on two different days for F
preservation of public peace and tranquility.

On. a writ petition filed by the respondent No. 6 the High Court
struck down the order of the District Magistrate on the ground that no
such direction could be issued by him as the competent authority was
the Khargrar Panchayat Samiti.
G
In compliance with the directions made hy the Court, the
Panchayat Samiti passed a resolution that the Nagar Cattle Hat run hy
Nagar Quorania Junior High Madrassah would be held on Saturday and
the Sherpur Cattle Hat run by Prahartak Parishad would he held on
Friday.
H
1207
1208 SUPREME COURT REPORTS (1987] 2 S.C.R.

A Respondent No. 6 filed another writ petition challenging the said
resolution. A Single Judge quashed the resolution of the Panchayat
Samiti on the ground that it acted in breach of the rules of natural ,,,
justice while reserving liberty to the Panchayat Samiti to come to a ·
decision afresh after affording an opportunity to respondent No. 6.

B The appeal preferred by the Panchayat Samiti was admitted, but
the Division Bench declined to grant stay and directed that the
Panchayat Samiti should comply with the order of the Single Judge.
Consequently, the Panchayat Samiti issued notices to the contending

-
parties requiring them to submit their claims for consideration. The
Panchayat Samiti after considering the claims of both parties and the
material record, passed a resolution that the Nagar Cattle Hat would be
C held on Saturday every week and the Sherpur Cattle Hat would be held
on Friday, and directed the Executive Officer to incorporate such a
condition in the licence granted to the two organisations for holding the
cattle fairs on these days.

Again, respondent No. 6 filed a writ petition challenging the reso·
D lotion dated April 12, 1985. A Single Judge dismissed the writ petition.
Respondent No. 6 then moved the Division Bench for restraining the
Panchayat Samiti from giving effect to the said resolution. The Division
Bench quashed the resolution dated April 12, 1985 holding that
although in terms of s. 117 of the Act, the Panchayat Samiti was vested
with the power of granting a licence for the holding of a hat or fair, by
E the framing of rr. 7, 8 and 9 of the West Bengal Panchayat (Samiti
Administration) Rules, 1984 the power of the Panchayat Samiti is con·
fined to making provision for maintenance of sanitation. health and in
the market area which is the essence of the power under s. 117, and further
-
that in the absence of a provision in the rules in that behalf it had no
power to specify a day on which such hat or fair should be held.
F
Allowing the Appeal,

HELD: 1. The view taken by the High Court that although the
Panchayat Samiti was vested with the power to grant a. licence for the
holding of a hat or fair under s. 117 of the West Bengal Panchayat Act,
1973, yet it had no consequential or incidental power to specify a day --
G for holding of such hat or fair, is manifestly erroneous. [1213C·Dl

2. The power to grant a licence for the holding of a hat or fair
-.. .ii'·
I

under s. 117 of the Act necessarily carries with it the power to specify a
day on which such hat or fair shall be held. Such power to specify a day
must be held to be a power incidental or consequential upon the princi·
· H pal power of issuing a licence under s. 117 of the Act for holding of a hat
or fair. [1214H; 1215A] ,
K.P. SAMITY v. STATE [SEN, J.I 1209

3, The rules or the absence of it do not detract from the substan-
tive power conferred by a statute, [I215A-B] A

4. The essence and content of the power of a Panchayat Samiti
under s. 117 of the Act is issuance of a licence for the holding of a hat or
fair and not mere maintenance of sanitation, health and hygiene as held
by the High Court. [1215B] B

5. It is well-accepted that the conferral of statutory powers on
local authorities must be construed as impliedly authorising everything

- which could fairly and reasonably be regarded as incidental or conse-
quentialto the power itself. [1213F·G]

6. The doctrine of ultra vires is not to be applied narrowly. [1214B-C] C

~
De Smith's Judicial Review of Administrative Action, 4th edn., p,
95; HWR Wade's Administrative Law, 5th edn., p. 217; Craies on
Statute Law, 6th edn., p. 276; Attorney General v. Great Eastern Rail-
way, LR (1880) 5 AC 473; Baroness Wenlock v. River Dee Co., LR
(1885) 10 AC 354; V. T. Khanzode & Ors. v. Reserve Bank of India, D
[1982] 2 SCC 7 and State of Uttar Pradesh v. Batuk Deo Pati Tripathi &
Anr., [1976] 2 SCC 102, relied upon.

CIVIL APPELLATE JURISDICTION: Civil Appeal No. 5675
-t of 1985. /
E
" From the Judgment and Order dated 2.8. 1985 of the Calcutta
High Court in Appeal from Original Order Tender No. 165 of 1985 .

.l-. S.N. Kaicker. Girish Chandra and Mrs". Sarnia Chandra for the
Appellants.
F
"1' Tapas Roy, Parijat Sinha, D.N. Mukherjee, Dalip Sinha and
J .K. Das for the Respondents.

The Judgment of the Court was delivered by

SEN J. This appeal by special leave is directed against the judg- G

(""' ment and order of the Calcutta High Court dated August 2, 1985
quashing a resolution passed by the Khargram Panchayat Sarni ti dated
April 12, 1985 specifying that the cattle fairs run by two rival organisa-
tions i.e. Nagar Cattle Hat run by Nagar Quorania Junior High
Madrassah would be held on Saturday every week and Sherpur Cattle
Hat run by Prabartak Parishad on Friday. By the judgment under H
1210 SUPREME COURT REPORTS [1987) 2 S.C.R.

appeal, a Division Bench of the High Court has held that even though
A
the Panchayat Samiti was vested with the power to grant licence for
holding of a hat or fair under s.117 of the West Bengal Panchayat Act,
1973, still in the absence of a rule framed under the Act it had no
power' to specify a day on which such hat or fair shall be held, The issue
involved is whether the Panchayat Samiti being vested with the autho-
B rity to grant a licence for the holding of a hat or fair under s, 117 of the
Act within the limits of its territorial jurisdiction, must necessarily be
held to have the consequential or incidental power to specify a day for
the holding of such hat or fair.

The facts of the case are as follows. Ever since 1933, a cattle fair
C called Nagar Cattle Hat is being held on Saturday every week by the
Nagar Quorania Junior High Madrassah, a charitable educaiional
institution which runs a school and is also engaged in other social
acti,vities, which attracts a large gathering of buyers and sellers of
cattle dealers within the district of Murshidabad and even beyond the
district. Since 1974, respondent no. 6 a club called Prabartak Parishad,
D set up a parallel cattle fair at a place called Sherpur, about two
kilollletres away (as the crow flies) from the site of Nagar Cattle Hat
on every Saturday, known as Sherpur Cattle Hat. The holding of two
rival cattle fairs on the same day gave rise to a feeling of rivalry couple
with tension amongst the local population as also the large number of
cattle dealers and peasantry attending 'the cattle fairs and this fre-
E quently led to violent conflicts and skirmishes between the two rival
groups. Upon a representation made to him in 1980, the District
Magistrate, Kurshidabad caused an inquiry to be held and by his order
dated April 2, 1980 held that holding of the two cattle fairs on the same
day created serious law and order problem and accordingly directed
holding of the hats on two different days for preservation of public
F peace and tranquility, On a writ petition filed by respondent no. 6
Prabartak Parishad, a Division Bench of the High Court by its order
dated June 2, 1982 struck down the impugned order of the District
Magistrate on the ground that no such direction could be issued by him

-.,
as the competent authority was the Khargram Panchayat Samiti. It was
observed:
G
"The only authority which is competent to give any direc-,
tion in this regard is the authority under the West Bengal II
Panchayat Act, 1973, No such direction has been given by
the authority under the said Act. In the circumstances, we
set aside the impugned order of the District Magistrate and
H the judgment of the learned Judge. Appeal is allowed.
K.P. SAMITY v. STATE (SEN, J.) 1211

, There will be no order as to costs. It is made clear that this
order is without prejudice to any steps that may be taken in
accordance with law by the authority under the said Act."

In compliance with the direction made by the High Court. the
District Magistrate obviously actuated by consideration of mainte-
.A

..
---,,. ..
nance of law and order requested the Chairman of the Khargram
Panchayat Samiti to take necessary steps as the holding of rival hats in
contiguous areas could not be allowed to continue as it gave rise to
serious law and order problem. A meeting of the Panchayat Samiti was
accordingly held on June 20, 1984 and a resolution was passed by a
majority of the members that the Nagar Cattle Hat run by Nagar
B

Quorania Junior High Madrassah would be held on Saturday as before
and the Sherpur Cattle Hat run by Prabartak Parishad being of recent
c
origin would be held on Friday. Thereupon, respondent no. 6 filed
..... another writ petition in the High Court challenged the impugned reso-
lution of the Panchayat Samiti. A learned Single Judge by his judment
and order dated January 14, 1985 quashed the impugned resolution of
the Panchayat Samiti on the ground that it acted in breach of the rules D
of natural justice while reserving liberty to the Panchayat Samiti to
come to a decision afresh after affording an opportunity to respondent
no. 6 Prabartak Parishad to have its say before it. Aggrieved, the
appellant preferred an appeal and applied for stay. A Division Bench
... of the High Court by its order dated March 19, 1985 admitted the

- appeal but declined to grant stay and directed that the Panchayat Samiti
should in the meanwhile comply with the order of the learned Single
Judge. As a consequence, Khargram Panchayat Samiti was constrained
to give effect to the direction inade by the learned Single Judge. It
E

~- accordingly issued notices to the contending parties i.e. both Nagar
Quorania Junior High Madrassah and Prabartak Parishad requiring
them to submit their claims for consideration, and also fixed a date F
.....,. being April 12, 1985 for hearing. On that date, the Panchayat Samiti at
its open meeting heard the representatives of the parties and scruti-
nised the documents placed before it. After considering the claims of
both the parties and the material record, it passed a resolution that the
Nagar Cattle Hat would be held as before on Saturday every week and
the Sherpur Cattle Hat would be held on Friday, and directed the G
,,,... Executive Officer to incorporate such a condition in the licence
granted to the two organisations for holding the cattle fairs on these
days. Again, respondent no. 6 filed a writ petition before the High
Court challenging the aforesaid resolution dated April 12, 1985. A
learned Single Judge by his judgment dated June 19, 1985 dismissed
the writ petition in view of the penc)ency of the appeal before.·· the H
1212 SUPREME COURT REPORTS [1987] 2 S.C.R.

A Division Bench, pursuant to whose direction the aforesaid resolution
had been passed. Respondent no. 5 then moved the Division Bench
for restraining Khargram Panchayat Samiti from giving effect to the
said resolution. The Division Bench by its judgment under appeal
quashed the impugned resolution dated April 12, 1985 of Khargram
Panchayat Samiti. It held that although in terms of s. 117 of the Act the
B Panchayat Samiti was vested with the power of granting a licence for the
holding of a hat or fai'r, by the framing of rr. 7, 8 and 9 of the West Bengal
Panchayat (Samiti Administration) Rules, 1984 the power of the
Panchayat Samiti is confined to making provision for maintenance of ----,
sanitation, health and hygiene in the market area which is the essence
of the power under s. 117, and further that in the absence of a prtlvi-
sion in the rules in that behalf it had no power to specify a day tJh
C which such hat or fair should be held. It accepts that when a power i8
conferred on a statutory authority, it necessarily carries with the oiher
incidental or ancillary powers and holds that the Panchayat Samit! bcltlg
vesied with the power to grant a licence under s. 117 of the Act had
been conferred the power under rr. 7, 8 and 9 to making provlsltJn for
D sanitation. health and hygiene in the market area which is the essence
of the power and therefore the Panchayat Samit! had the power to see
that sanitation, health and hygiene are properly maintained and
looked after, and nothing more. In repelling the contention that the
specification of a day for the holding of a hat or fair was consequential
to the power to grant a licence under s. 117 of the Act, it observed:
E
"there can be no doubt that when a power is conferred on a
statutory authority such power will also include other inci-
dental or ancillary powers without the exerdse of which the
-
main power cannot be exercised. In the instant case how-
ever, Panchayat Samiti has been conferred with a power to
F see that sanitation, health and hygiene are ·properly
maintained and looked after. The provisions of Rule 9 of
the Rules, as stated already, imposed certain terms and
conditions on the grant of license for holding a market or
hat, but all these terms and conditions relate to mainte-
nance or sanitation, health and hygiene or supply of water
G or making proper lighting arrangement. The essence of
power is, therefore, the maintenance of sanitation, health
and hygiene. Many incidental powers may be exercised by
the Panchayat Samiti which are directly related to the exer-
cise of the maintenance of, sanitation, health and hygiene.
Such powers are not provided for under Rule 9, yet they
H could be exercised by the Panchayat Samiti in exercise of

....
K.P. SAMITY v. STATE [SEN, J.J 1213

its power under Rule 9 incidentally. But, in our opinion. A
the Panchayat Samiti cannot exercise a power which has no
) connection whatsoever with sanitation, health and hygiene.
The reason for fixing different days, viz., Fridays and
Saturdays for the holding of the two hats, viz., apprehen-
ded breach of peace, has no connection whatsoever with
the question of sanitation, health and hygiene. Exercise of B
such assumed power cannot be said to be incidental or
t ancillary to the main power for the imposition of terms and

- ,.-
conditions of a licence. In case, any bn~ach of peace takes
place, it will be a concern of the District Magistrate to take
steps for the same.;,
c
In our judgment, the view taken by the High Court that although
the Panchayat Samiti was vested with the power to grant a licence for
~
the holding of a hat or fair. under s. i 17 of the Act, yet it had no conse-
quential or incidental power to specify a day for holding of such hat or
fair, is manifestly erroneous and cannot be supported. It failed to
appreciate that under the Act the power of general administration of D
the local area vests in the Panchayat Samiti only to grant a licence to
hold a hat or fair under s. 117 of the Act, but such power of general
administration necessarily carries with it the power to supervise, con-
trol and manage such hat or fair within its territorial jurisdiction. The
-+- conferment of the power to grant a licence for the holding of a hat or
fair under s. 117 of the Act includes the power to make incidental or E
consequential orders for specification'of a day on which such hat or fair
shall be held. The decision of the High Court runs counter to the
well-accepted principles. It overlooks that the statutory bodies like the
+. Panchayat Samiti enjoy a wide 'incidental power' i.e. they may do
every thing which is 'calculated to facilitate, or is conductive or inci-
dental to, the discharge of any of their functions' and. the doctrine of F
~
ultra vires is not to be applied narrowly. It is well-accepted that the
conferral of statutory powers on these local authorities must be
construed as impliedly authorising everything which could fairly and
reasonably be regarded as incidental or consequential to the power
itself. See: de Smith's Judicial Review of Administrative Action, 4th
edn .. p. 95, HWR Wade's Administrative Law, 5th edn., p. 217. G
~ Craies on Statute Law, 6th edn .. p. 276. Attorney General v. Great
Eastern Railway, LR ( 1880) 5 AC 473; Baroness Wenlock v. River Dee
Co., LR ( 1885) IO AC 354. De Smith in his celebrated work Judicial
Review of Administrative Action, 5th edn. at p. 95 puts the law tersely
in these words: •
H
1214 SUPREME COURT REPORTS [19871 2 S.C.R.

The House of Lords has laid down the principle that
A
"whatever may fairly be regarded as inddentai to, or con-
sequent upon, those things which the Legislature has
authorised, ought not (unless expressly prohibited) Ill be
r
held, by judicial construction, to be ultra vires."

B This principle was enunciated by Lord Selborne in Attorney General v.
Great Eastern Railway, supra, in these words: "The doctrine of ultfli ·\-
vires ought to be reasonably. and not unreasonably, understood ai\tl
applied and whatever may be fairly regnrded as indderttal to, or eonse-
quential upon, those things which the legislature has authorised ought
nof (unless expressly prohibited) to be held, by judicial construction,
-f -·
C to be ultra vires." These words have been quoted by Professor Wad@ in
his monumental work Administrative Law, Sth ~tlil. at p. 217 and also
by Craies on Statute Law, 6th edtL p. 276, Crales also refers to the :J
observations of Lord Watson in Baroness 'Wenlock v. River Lee Co.,
supra, to the effect:

D "Whenever a corporation is treated by Act of Parliament
with reference to the purposes of the Act, and solely with a
view to carrying these purposes into execution, I am of
opinion not only that the object> which the corporation
may legitimately pursue must be ascertained from the Act +
itself, but that the powers which the corporation may law-
.E fully use in furtherance of these objects must either be .-
expressly conferred or derived by reasonable implication
from its porvisions,"
....
This Court in V. T. Khanzode & Ors. v. Reserve Bank of India,
[1982] 2 SCC 7 has followed the dictum of Lord Selbo~ne in Great
F Eastern Railway's case and reaffirmed the principle that the doctrine
of ultra vires in relation to the powers of a statutory corporation have
to be understood reasonable and so understood, whatever may fairly
be regarded as incidental to, or consequential upon, those things
which the legislature has authorised ought not (unless expressly pro-
hibited) to be held by judicial construction, to be ultra vires. It had
G earlier been laid down by a Constitution Bench of the case of State of
Uttar Pradesh v. Batuk Deo Pati Tripathi & Anr., [ 1973] 2 SCC 102 that
a power to do a thing necessarily carries with it the power to regulate
the manner in which the thing may be done. The High Court failed to
• apreciate that the power to grant a Iicer,ce for the holding of a hat or
fair under s. 117 ,of the Act necessarily carries with it the power to
H specify a day on which such hat or fair shall be held. Such power to
K.P. SAMITY v. STATE [SEN, J.] 1215

specify a day must be held to be a power incidental to or consequential A
upon the principal power of issuing a licence under s. 117 of the Act for
l holding of a ha\ or fair. The rules or the absence of it do not detract
from \he substantive power conferred by a statute. The essence and
cqntent of the power of a Panchayat Samiti under s. 117 of the Act is
issuance of a licence for the holding of a hat or fair and not mere
waintenance of sanitation, health and hygiene as held by the High B
Court.

For these reasons, we have no hesitation in reversing the judg-
ment of the High Court. The appeal must accordingly succeed and is
allowed. The judgment and order passed by the High Court are set
aside and the writ petition is dismissed. No. costs. c
A.P.J. Appeal allowed.