MOHAMMAD YASIN vs. THE TOWN AREA COMMITTEE, JALALABAD AND ANOTHER

Case Analysis

MOHAMMAD YASIN vs. THE TOWN AREA COMMITTEE, JALALABAD AND ANOTHER

April 14, 2025

A) ABSTRACT / HEADNOTE

The landmark case of Mohammad Yasin v. The Town Area Committee, Jalalabad and Another, reported in 1952 SCR 572, marks a vital evolution in Indian constitutional jurisprudence. It reiterates that the fundamental right under Article 19(1)(g)—the right to practice any profession or to carry on any occupation, trade, or business—is sacrosanct unless restricted by a valid law satisfying the test of Article 19(6). The Supreme Court struck down municipal bye-laws that imposed licensing fees and granted a monopoly for wholesale trading in vegetables and fruits within the municipal area without proper statutory backing. The Court held that these by-laws resulted in an illegal restraint on trade, amounting to an unreasonable restriction. The judgment serves as a significant precedent on the invalidity of unauthorized fiscal impositions masquerading as regulatory fees and clarifies the constitutional protection of business rights against arbitrary administrative action. It distinctly delineates the boundary between permissible licensing and illegal taxation. Moreover, it establishes that a writ under Article 32 is maintainable in cases involving violations of Article 19(1)(g) caused by unauthorized regulatory schemes.

Keywords: Article 19(1)(g), Fundamental Rights, Bye-laws, Licensing Fees, Monopoly, Town Area Committee, Illegal Tax, Article 32, Constitution of India

B) CASE DETAILS

i) Judgement Cause Title
Mohammad Yasin v. The Town Area Committee, Jalalabad and Another

ii) Case Number
Petition No. 132 of 1951

iii) Judgement Date
27 February 1952

iv) Court
Supreme Court of India

v) Quorum
Patnajali Sastri C.J., Mehr Chand Mahajan, B.K. Mukherjea, Sudhi Ranjan Das, and Chandrasekhara Aiyar, JJ.

vi) Author
Justice Sudhi Ranjan Das

vii) Citation
1952 SCR 572

viii) Legal Provisions Involved

Article 19(1)(g) of the Constitution of India
Article 32 of the Constitution of India
Section 293(1) of the U.P. Municipalities Act, 1916
Section 298(2)(j)(d) of the U.P. Municipalities Act, 1916
Section 38 of the U.P. Town Areas Act, 1914

ix) Judgments Overruled by the Case
None explicitly overruled; however, the judgment distinguishes earlier rulings such as Ramjilal v. Income-Tax Officer, Mohindargarh (1951 SCR 127).

x) Case is Related to which Law Subjects
Constitutional Law, Municipal Law, Taxation Law, Administrative Law, Commercial Law

C) INTRODUCTION AND BACKGROUND OF JUDGEMENT

This constitutional challenge was initiated by Mohammad Yasin, a wholesale fruit and vegetable merchant operating in the town of Jalalabad, U.P., under the jurisdiction of the Town Area Committee. The genesis of this dispute was a set of bye-laws passed by the Committee in 1942, which required wholesale traders to pay a fee to a licensee authorized by the municipality. The bye-laws created an exclusive commercial licensee by auction, conferring monopoly powers and placing onerous conditions on existing traders without offering them a chance to participate in public trading unless they paid the fee. This indirectly extinguished wholesale trade by independent merchants and restricted them from conducting business in their own premises. Yasin invoked Article 32 alleging that these bye-laws violated his fundamental right under Article 19(1)(g). This case tests the limits of delegated municipal authority and its consistency with constitutional guarantees of free trade and profession.

D) FACTS OF THE CASE

Mohammad Yasin, a wholesale dealer in fruits and vegetables, had been operating his business independently for seven years in his own shop. Farmers brought produce to Jalalabad and selected dealers like Yasin to auction their goods for a commission. In 1942, the Town Area Committee, Jalalabad introduced bye-laws requiring all wholesale trade to be routed through a licensee, appointed by auction, who would collect fees. The fee was set at one anna per rupee of transaction. The committee awarded this license to one Bishamber, a person with no prior trade experience. Consequently, no one except Bishamber could legally collect the commission from growers or conduct wholesale trade without paying him. Yasin was compelled to either abandon his business or pay fees to Bishamber, which nullified any profit margins and indirectly prohibited him from trading. The petitioner argued that the bye-laws lacked statutory backing and imposed an unauthorized tax under the guise of a fee. He claimed this was unconstitutional and sought relief under Article 32.

E) LEGAL ISSUES RAISED

i) Whether the imposition of fees through municipal bye-laws without any actual use or occupation of municipal property violates Article 19(1)(g)?

ii) Whether the municipal committee’s action in creating an exclusive licensee and compelling payment for trade is within the powers conferred under the U.P. Town Areas Act, 1914 and Municipalities Act, 1916?

iii) Whether a writ under Article 32 is maintainable for violation of a fundamental right by illegal municipal bye-laws?

iv) Whether the imposition was a regulatory license fee or an unconstitutional tax?

F) PETITIONER/ APPELLANT’S ARGUMENTS

i) The counsels for Petitioner / Appellant submitted that the impugned bye-laws were unconstitutional. The petitioner’s counsel argued that the right to carry on a trade or business in one’s own premises was a fundamental right under Article 19(1)(g), and that the municipality’s requirement to pay a fee to a third-party contractor interfered with this right. They contended that the Town Area Committee granted an unlawful monopoly to an individual contractor, Bishamber, who had no expertise or legal capacity to regulate trade. They further argued that the fee lacked the character of a legitimate licensing regulation and instead amounted to a tax, which the Committee had no power to impose in absence of a specific statutory provision. They referred to the Kairana Case [1950 SCR 566], which invalidated similar bye-laws. The petitioner emphasized that there was no nexus between the fee and any use of public property, which was a statutory prerequisite under Section 293(1) and 298(2)(j)(d) of the Municipalities Act. Thus, it was argued that the imposition lacked legal sanction, rendering it an unreasonable restriction and attracting constitutional scrutiny under Article 32.

G) RESPONDENT’S ARGUMENTS

i) The counsels for Respondent submitted that the Committee merely auctioned the right to collect a tax, which was legally permissible under the bye-laws. They contended that there was no prohibition on anyone wishing to buy or sell fruits or vegetables; all that was required was payment of a small fee to the appointed licensee. They stated that this was not a restraint but a mechanism of revenue collection, and the market was accessible to all. The respondent denied any violation of Article 19(1)(g), arguing that the petitioner was free to operate provided he paid the requisite charge. They further invoked Section 38 of the U.P. Town Areas Act, asserting that Section 293 and 298 of the U.P. Municipalities Act had been extended to town areas via government notification. Thus, they claimed the Committee had the necessary legal competence to levy such fees and appoint agents to collect them.

H) RELATED LEGAL PROVISIONS

i) Article 19(1)(g) – Guarantees the right to practice any profession or carry on any trade or business.

ii) Article 32 – Provides a constitutional remedy for enforcement of fundamental rights.

iii) Section 293(1) of the U.P. Municipalities Act, 1916 – Authorizes imposition of fees for use or occupation of municipal property.

iv) Section 298(2)(j)(d) of the U.P. Municipalities Act, 1916 – Permits framing of bye-laws fixing fees for use of property.

v) Section 38 of the U.P. Town Areas Act, 1914 – Permits extension of provisions of the Municipalities Act to town areas.

I) JUDGEMENT

a. RATIO DECIDENDI

i) The Court ruled that the impugned bye-laws were ultra vires. The municipal authority could not impose fees unless the trader used or occupied municipal property. Since Yasin carried out trade on his private premises and the growers merely approached from public streets, no use of municipal property occurred. The Court observed that a licensing fee could only be valid if it corresponded to a regulatory function. In the absence of such, it was equivalent to a tax without authority. The monopoly given to Bishamber created an indirect prohibition on trade, which resulted in unreasonable restriction of Yasin’s fundamental rights. Therefore, the Court allowed the petition under Article 32.

b. OBITER DICTA

i) The Court noted that the difference between a licence fee and a tax was critical. While a tax takes away property, a licence fee also restricts rights, hence requiring stricter scrutiny. The Court differentiated the present case from Ramjilal v. Income Tax Officer, stating that unlike income tax, a trade licence fee directly inhibits business activity.

c. GUIDELINES

Fees must correspond to actual use or occupation of municipal property.

Delegated authorities cannot impose taxes without clear statutory backing.
Trade or business cannot be restricted by indirect monopolies without satisfying Article 19(6).
Any restraint not backed by valid law becomes an unconstitutional prohibition.
Courts can entertain Article 32 petitions where regulatory action violates Article 19(1)(g).

J) CONCLUSION & COMMENTS

This decision is a foundational authority affirming the supremacy of constitutional protections over unauthorized administrative actions. It underscores that even local self-government institutions must function within legal constraints. The judgment crystallizes the principle that economic liberty under Article 19(1)(g) is not merely formal but actionable, and any administrative or legislative interference must conform to the touchstone of reasonableness and valid legal authority. By holding the municipal bye-laws invalid, the Court shielded small traders from monopolistic and arbitrary practices. It also clarified the fine distinction between a tax and a regulatory fee, a concept relevant even in contemporary GST and municipal governance debates.

K) REFERENCES

a. Important Cases Referred