A.P. BANKERS AND PAWN BROKERS ASSOCIATION versus MUNICIPAL CORPORATION OF HYDERABAD

Citation: [2001] 2 S.C.R. 340 · Decided: 02-03-2001 · Supreme Court of India · Bench: AJAY PRAKASH MISRA · Disposal: Appeal(s) allowed

Judgment (excerpt)

A 
B 
c 
A.P. BANKERS AND PAWN BROKERS ASSOCIATION 
V. 
MUNICIPAL CORPORATION OF HYDERABAD 
MARCH 2, 2001 
[A.P. MISRA AND S.N. VARIAVA, JJ.] 
Municipalities: 
Hyderabad Municipal Corporation Act, 1955: Section 521( e)(ii). 
Licence fee-Levy of-Money lender.,- and pawn brokers-Allowed to 
carry on their business only on payment ~f licence fee-Validity of-Held: The 
pu1pose of S. 521 is to i-egu/ate trade or operation on ce11ain terms and 
conditions-If there are no lerms and conditions there is no question of issuing 
a licencP--No material to sholv that money lending and palvn /11vking business 
D 
is dangerous or likely to create nuisance-Hence, levy of licence fee illegal. 
E 
F 
G 
H 
The appellant carried on the husiness of money lending and pawn 
broking. The respondent-Corporation imported a licence fee under Sec-
tion 52l(e)(ii) of the Hyderabad Municipal Corporation Act, 1955 on the 
appellant to carry on the said business. The High Court dismissed the writ 
petition of the appellant on the ground that the said business was likely to 
create nuisance. Hence this appeal. 
Allo,.ing the appeal, the Court 
HELD : 1. The whole purpose of Section 521 of the Hyderabad 
Municipal Corporation Act, 1955 is to ensure that the Commissioner is in 
a position to regulate the trade or operation or to prevent things from 
being kept except on certain terms and conditions, which may be fixed by 
the licence. It, therefore, automatically follows that if there are no terms 
and conditions which can be imposed by a Commissioner or the Munici-
pality in respect of a particular trade or operation then even if the Com-
missioner is of the opinion that the trade or operation is dangerous to life 
or health or property or that it is likely to create a nuisance he would not 
be able to regulate or control that trade or operation. Insisience on getting 
a licence, in such a case, would be a useless formality and would not be 
~uthorised by Section 521. [346-A-C] 
340 
A.P. BANKERS AND PAWN BROKER ASSOCIATION 11. MUNICIPALCORPN. OF HYDERASAD 
341 
2.1. In the present case, no material has been placed to show on what 
A 
basis the Commissioner considers such businesses to be dangerous and is 
likely to cause nuisance. More importantly it has not been shown how the 
respondent regulates such trades and occupation. [347-F-G] 
2.2. It is not shown or averred that all the shops are in r!sidential 
areas inhabited by middle class and poor families or that all members of 
B 
the Appellant-Association issue advertisements or that all shops are in 
crowded areas. If one or two or some shops are set up in the thick of a 
residential locality inhabited by middle class or poor families or set up in a 
crowded place or issue an advertisement, the entire trade or occupation 
cannot be termed to be dangerous to life, health or property or likely to 
C 
create nuisance. The opening part of Section 521 talks of "trades and 
operations". Similarly, Section 521(e)(i) also talks of "trades and 
operations". However, Section 521(e)(ii) uses the word "trade or occupa-
tion". Thus if a shop or some shops are set up in crowded areas or require 
any regulation, then it would be a matter for regulating that particular 
shop or those particular shops by laying, down appropriate conditions. 
D 
Merely because a pawn broker or a money lender is likely to set up a shop 
in the thick of a residential locality or in a crowded place would be no 
ground for the Commissioner to come to a conclusion that the entire trade 
or occupation of money lending and pawn broking is dangerous or likely to 
create nuisance. It is clarified that this Court is not saying that the Com-
E 
missioner cannot under Section 521(e)(ii) notify a particular trade or 
operation, i.e. include all ptrson carrying on that particular trade or 
operation. [347-G-H; 348-A-D] 
M.A. Rasheed v. State of Kera/a, [1974] 2 SCC 687; Narayan Govind 
Gavate v. State of Maharashtrq, [1997] 1 SCC 133, referred to. 
F 
Chief Constable North Wales Police v. Evan;; (1962) All. E.R. 141 and 
R. V. Radio Authority, ex.-parte Bui~ (1997) All E.R. 561, referred to. 
CIVIL APPELLATE JURISDICTION: Civil Appeal No. 1691 of2001. 
From the Judgment and Order dated 27 .11.1995 of the High Court of 
A.P. at Hyderabad in W.A. No. 379/94. 
L. Nageshwar Rao, A. Subba Rao, Jayanth Muthraj and S. Udaya 
Kumar Sagar for the appearing parties. 
The Judgment of the Court was delivered by 
G 
H 
342 
SUPREME COURT REPORTS 
[2001] 2 

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