1992 PLP 2148 (CLC)

2. The learned counsel for the petitioners contended that the impugned action of the respondents tantamount to monopoly which was violative of right of free trade and business. It operated in the shape of a prohibition thereby depriving the petitioners to continue their business in question. Reference was made to AIR 1950 S.C. 163, AIR 1967 Pb.32, AIR 1938 Patna 473, AIR 1934 Lahore 475 and PLD 1989 Karachi 404 (410). The learned counsel for the respondents argued that the petitioners were not the beef‑vendors as claimed by them. Petitioner No.5 participated in the auction by giving second highest bid. Thus, by conduct, the petitioners were estopped from assailing the impugned action of the respondents. It was explained that the petitioners committed misconduct by not coming with clean hands in the Court as they suppressed the action of their participation in the bidding. Reference was made to PLD 1980 Azad J&K 5, 1988 CLC 645, PLD 1972 Karachi 119, 1968 S.C.M.R. 1378 and 1988 S.C.M.R. 1996.

3. The proposition controverted in the petition falls under the purview of right of trade, business or profession, as laid down under section 4(8) of the Azad Jammu and Kashmir Interim Constitution. The provisions laid down under the Constitution are in para materia to the provisions of Article 18 of the Constitution of Islamic Republic of Pakistan.

4. It is postulated that every state‑subject duly qualified as prescribed by law in relation to his profession or occupation shall have the right to enter upon any lawful profession or occupation and to conduct any lawful trade or business. This right is subject to the restrictions:‑

(a) regulation of any trade or profession by a licensing system; or (b) regulation of trade, commerce or industry in the interest of free competition therein; or (c) carrying on, by Government or the Council, or by a Corporation controlled by the Government or Council, of any trade, business, industry or service, to the exclusion, complete or partial, or other persons.

5. The condition precedent to exercise the right of freedom in profession, business or trade, therefore, is that such profession, business or trade shall be subject to law enforced thereby. The other restrictions are enunciated in clauses (a),(b) and (c). Under clauses (a) and (b), the legislature is empowered to regulate trade, business or profession by licensing system or otherwise as it deems fit, to advance the purpose and objective of the aforesaid basic right. Clause (c) empowers the Government, Council or the Corporation controlled by Government or Council, to carry out any business or trade, to exclusion of other persons.

6. Barring the jurisdiction described under clause (c), the provisions described above, though empower the legislature to regulate the trade business in a lawful manner, yet it postulates that trade or commerce shall regulated in the interest of free competition therein. The provisions are, therefore, nugatory to the concept of monopoly. The provisions permit the monopoly only to the Government, Council or a Corporation controlled by them.

7. The scope of these provisions was construed by late Mr. Justice M. Munir, in his book, 'Constitution of Islamic Republic of Pakistan, at page 138 as:‑

"Monopolies and competition.‑The provision permits the Government or a Government controlled corporation to have a monopoly in any trade, business, industry or service, but it does not permit the State to confer any such privilege on a private person or a corporation, as any such measure would amount to an ouster of other citi7ens from the trade or industry. On the other hand, as would appear from proviso (b), the Government should, where a monopoly exists, regulate the trade or industry in the interests of free competition. The view taken in some case in India that where the State creates a private monopoly, the Court has to determine whether the restriction thus imposed on the right of others to trade is in the interests of the general public, is not relevant to the interpretation of the present provision. It seems that in Pakistan a private monopoly may be established by the grant of an exclusive licence, if such licence does not conflict with any other constitutional provision. In some cases the public welfare may require limits of the number of persons who may carry on a certain business or of the places where it may be carried on. In a well‑known case, the Supreme Court of the United States upheld a statute which had granted exclusive franchise to a slaughter house company and the legislature was held clearly to have had the power to select, in the interest of public welfare, a person who should carry on the business."

8. In the present case, the Corporation has granted a contract to respondent No.3, in a public auction, on account of his highest bidding in the sum of Rs.6,50,000, with effect from July 1, 1992 till June 30, 1993. The respondent has been authorised to exclusively carry on the business of beef- selling as required by Corporation, to meet the need and demand of citizens of Muzaffarabad 'city. He has to sell the beef by opening different shops in the city, in the light of the provisions of the agreement. By virtue of the agreement, the petitioners or any other citizen who is carrying on the business of beef and mutton, is thereby clearly deprived of his business. The conditions laid down in the agreement, therefore, patently lead to the conclusion that the action of the Corporation is in the shape of the monopoly exercisable by respondent No.3, as an individual.

9. The Corporation is exercising its authority under the provisions of Azad Jammu and Kashmir Local Government Act, 1990. Section 89 of the Act postulates that the Government may make rules to carry out the purpose of the Act. Section 90 pertains to framing of bye‑laws by the Council, with the approval of the Government. Section 91 provides that the Council may make regulations to regulate the procedure in respect of all or any of the matters mentioned in Schedule VIII. It is accepted to the learned counsel for the respondents that by this time, no rules, bye‑laws and regulations as required under the Act, have been framed. This suggests that the Corporation is carrying out its business, including the impugned action, without the assistance of its rules, bye‑laws and regulations. It is, therefore safe to conclude that the Municipal Corporation is not carrying out its functions to regulate trade or business, within the area of its jurisdiction in lawful manner.

10. Apart from the fact that the provisions of the Constitution do not conceive the scope of creation of monopoly in trade and business, yet in order to exercise an authority in the light of proviso (b), postulated under Article 4(8) it is enjoined that the trade, commerce or industry has to be regulated in lawful manner, in the interest of free competition therein and not otherwise. Thus, the impugned action was not protected even by the proviso referred to above.

11. An identical proposition was raised before the Supremc Court of India, in Rashid Ahmed's case (AIR 1950 S.C. 163). The Municipal Committee of Krishna City in U.P., by virtue of its bye‑laws, empowered itself to grant monopoly to a contractor to deal in wholesale transactions at the place fixed as a market. In the light of the afore‑said bye‑law, it granted wholesale business to the contractor. The action of the Committee was challenged and was set aside in exercise of writ jurisdiction invoked by the petitioner who was carrying out business in vegetables, within the municipal limits in the Town. It was observed that by virtue of bye‑law referred to above, the Board became powerless to grant licence to the petitioner to carry on his business within the municipal limits, as it had refused to grant the licence. Thus, the petitioner was completely prohibited from carrying on his business. The relevant observation is reproduced:‑

"Held, that the prohibition in bye‑law 2, in the absence of any provision for issuing licence, became absolute and further the restrictions placed on the petitioner by bye‑law 4 were more than reasonable restrictions as arc contemplated by Article 19(6) and, therefore, the bye‑laws would be void under Article 13(l) of the Constitution." In the present case, no such bye‑law has so far been framed by the Municipal Corporation which may empower it to refuse licence to the individuals to sell beef and mutton in the city and to embark upon creating monopoly in an open auction, as it has been done in the present case. Therefore, the case of the Corporation is on much weaker footing as compared to the aforesaid case. An identical view wag held in Malerkotla Municipality's case (AIR 1967 Punjab 32).

12. Mr. Nazir Ahmed Qadri, the learned counsel for the respondents raised preliminary objection and invited attention of the Court to the fact that the, petitioners were not aggrieved to invoke the jurisdiction of this Court. Reference was made to omission on the part of the petitioners to furnish the licences for selling beef and meat, as claimed by them in Muzaffarabad city. The contention of the learned counsel for the respondents partly finds support from the record. It is evident from the record appended with the written statement that Abdul Rashid, petitioner No.3, and Muhammad Sadiq, petitioner No.6, are listed among the meat‑sellers, holding valid licences from respondent No.1 Petitioners Nos.1, 2, 4 and 5 were not included among the persons carrying on the business of beef and mutton in the city. These petitioners are, therefore, not covered by the term "aggrieved person" as contemplated under section 44 of the Azad Jammu and Kashmir Interim Constitution.

13. The writ petition was originally moved by Muhammad Aslam and Abdul Rashid, on June, 2‑3,1992. The written statement was filed by the respondents against th6ir petition in which the aforesaid objection was taken. The petitioners, apprehending their weakness, thereafter brought-forth Abdul Rashid and Muhammad Sadiq when they moved this Court for including them among the petitioners as aggrieved persons. Therefore, it was at the late stage when petitioners Nos.3 and 6 who in fact were dealing in meat as their business, were joined among the petitioners. Be that as it may, the fact remains that in presence of Abdul Rashid and Muhammad Sadiq, who arc admittedly in the business, in Muzaffarabad city, the petition is entertainable to the extent of these persons.

14. It was explained further that the petitioners participated in the public open auction. Thus by virtue of their conduct, they were estopped from assailing the impugned auction. It is also on record that Maqsud, petitioner No.5, openly participated in the auction and his was the second highest bid in securing the contract in question. His participation in the name and style of 'Maqsud and Co' is well established from the record. It was not elaborated as to whether the other petitioners were members or shareholders of the Company of 'Maqsud and Co' or not, as such the objection is sustainable to the extent of Maqsud, petitioner No.5.

15. Mr. Nazir Ahmed Qadri, the learned counsel for the respondents, invited the attention of the Court to sections 75 and 80 of the Act and contended that the petitioners were vested with a right to seek remedy before the Government. Thus, in view of the learned counsel, in presence of adequate and efficacious remedy, the writ jurisdiction could not be invoked.

16. Section 75 relates to control over the activities of the Council. It postulates that if in view of the Government, anything done or intended to be done by or on behalf of a Council, is not in conformity with law or is against public interest, the Government may, by order:‑‑ (i) quash the proceedings; (ii) suspend the execution of any resolution or order; (iii) prohibit the doing or anything proposed to be done; and (iv) require the Council to take such action as directed by it. Section 86 provided forum of appeal, to an aggrieved person, against the order passed by a. Council or its Chairman in pursuance of the Act & the rules or bye‑laws, before the concerned authority, as prescribed by law.

17. It is accepted that no rules or bye‑laws have been framed thereby to appoint an appellate authority to redress the grievance of the aggrieved persons by the order passed by a Council or its Chairman, under the provisions of the Act or the Rules. However, the Government which is empowered to control the actions of the Council under the provisions of section 75, provided the forum for the redress of grievance of the petitioners. But it is yet to be seen as to whether such a forum was efficacious or not. Unless it is satisfied that the forum of the Government was, in fact, efficacious, in such situation, it was not expedient to refuse the desired relief to the petitioners, in exercise of writ jurisdiction. There is no force in the objection. It is, therefore, repelled.

18. It was rightly pointed out that the petitioners very well knew that respondent No.3 acquired interest by virtue of an agreement, to sell meat in Muzaffarabad city. The interest was acquired by giving bid in the open public auction. Maqsud and Co. also participated in the auction by giving second highest bid. Thus, it was in the knowledge of the petitioners that the impugned agreement was already complete in all respects. This fact was suppressed in the unamended petition. Thus, petitioners Nos.1 and 2 were guilty of suppression of this material fact. They were obviously shown not to have come in the Court with clean hands. The authority cited by the learned counsel for the respondents was applicable to that extent.

19. The aforesaid analysis leads to the conclusion that respondent No.3 has entered into the shoes of Corporation which is empowered by the provisions of the Act to maintain its slaughter house within its territorial jurisdiction. Thus, the act of the Corporation to grant contract for the use of slaughterhouse to respondent No.3, is not hit by the rule of monopoly. Respondent No.3 has to exercise his authority in this manner and fashion as the Corporation acted in the past.

20. The second aspect of the impugned agreements that respondent No.3 is given right of monopoly to exclusively supply the meat in the city, by excluding the other meat-vendors. This pat of the transaction is hit by the right of free trade and business. It does not advance the cause of free competition and healthy trade. It is therefore directed that respondents Nos.1 and 2 shall modify the terms of the agreement to enable such citizens who carried the meat business in Muzaffarabad city under a valid licence . so that they were not prohibited from carrying out their business . The agreement is, therefore, modifiable in the aforesaid manner. The desired writ is therefore issued accordingly. The petition is disposed of in the aforesaid manner. No order as to costs. A.A./524/H.C.A. Order accordingly,