Lakshman and ors. Vs. State of Madhya Pradesh - Court Judgment

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constitution - discrimination - articles 14, 19 and 301 of constitution of india, rule 7 of madhya pradesh grazing rules, 1979 and sections 2, 32 and 76 of forest act, 1927 - madhya pradesh cattle not less destructive than cattle belonging to persons of other states in case of so-called foreign cattle - citizen has right under constitution to move freely throughout territory of india to reside and settle in any part of territory of india and to practice any profession or to carry on any occupation, trade or business - graziers have right to repass through state of madhya pradesh with their cattle in pursuit of their occupation - right is subject to reasonable restrictions in interest of general public - no reasonable basis for classifying graziers into those belonging to madhya pradesh and those belonging to other states - no justification for charging higher grazing rates for cattle belonging to persons of other states - object was to prevent cattle straying and cause indiscriminate damage to forests - nothing wrong in regard to prescription of route along which cattle have to be taken while in transit - unable to justify ceiling of 45 days in which cattle pass through state of madhya pradesh - in case of cattle belonging to residents of madhya pradesh grazing rate levied for period of one year - no reason why charge should be levied for 45 days - cattle if allowed to graze in same place for long time may destroy pasture and foliage altogether taken care of by other rules which prescribe cattle may not graze in same grazing unit for more than a month - levy of higher grazing rates in case of cattle belonging to persons of states other than madhya pradesh quashed - respondents directed to levy same rates as they do in case of cattle belonging to residents of madhya pradesh - limit of stay of 45 days unconstitutional. - [j.r. mudholkar,; k. subba rao,; r.s.bachawat,; raghuvar dayal and; v. ramasw, jj.] a firm doing business in bombay entrusted goods worth rs. 35,500 the railway for delivery in delhi. the goods were consigned to "self" and the firm endorsed the railway receipts to a bank against an advance of rs. 20,000 made by the bank to the firm. the firm also executed a promissory note in favour of the bank for that amount. when the goods reached the destination, the bank refused to take delivery, on the ground that they were not the goods consigned by the firm. the bank, thereafter filed a suit for the recovery of the value of the goods. the trial court dismissed the suit. on appeal by the bank, the high court allowed the appeal and decreed the claim for rs. 20,000 on the ground that as pledgee of the goods, the bank suffered loss only to the extent of the loss of its security. both the bank and the railway appealed to this court, and it was contended on behalf of the railway that the endorsement of the railway receipt in favour of the bank, did not constitute a pledge of the goods covered by the receipt and that the bank had no right to sue for compensation. held: (per subba rao, raghubar dayal and bachawat, j j): the firm by endorsing the railway receipts in favour of the bank, for consideration. pledged the goods covered by the said receipts, to the bank, and the bank being the pledgee could maintain the suit for the recovery of the full value of consignment amounting to rs. 35,500. [264 h; 265 d-e] on a reasonable construction of s. 178 of the contract act, 1872, ss. 4 and 137 of the transfer of property act, 1882, and ss. 30 and 53 of the indian sale of goods act, 1930, an owner of goods, can make a valid pledge of them by transferring the railway receipt representing the said goods. to the general rule expressed by the maxim nemo dat quod non habet (no one can convey a better title than what he had), to facilitate mercantile transactions. the indian law has grafted some exceptions, in favour of bonafide pledgees by transfer of documents of title from persons. whether owners of goods who do not possess the full bundle of rights of ownership at the time the pledges are made, or their mercantile agents. to confer a right to effect a valid pledge by transfer of document of title relating to goods on persons with defects in their title to the goods. and on mercantile agents, and to deny it to the full owners thereof, is to introduce an incongruity into the act. on the other hand, the real intention of the legislature will be carried out if the said right is conceded to the full owner of goods and extended by construction to persons with defects in their title to the goods or to mercantile agents. a pledge being a bailment of goods under s. 172 of the contract act, the pledgee, as a bailee. will have the same remedies as the owner of the goods would have against a third person for deprivation of the said goods or injury to them under s. 180 of the act. [264 a-c, h] ramdas vithaldas durbar v.s. amarchand and co., (1916) l.r. 43 i.a. 164 and the official assignee of madras v. the mercantile bank of india, ltd. (1934) l.r. 61 i.a. 416, referred to. per mudholkar and ramaswami jj. (dissenting): there was no valid pledge of the consignments of goods represented by the railway receipt in favour of the bank and the bank was not entitled to sue the railway for compensation for the loss of goods, relying upon the endorsements of the railway receipts in its favour. [272 g-h] after the passing of the indian contract (amendment) act, 1930, the legal position with regard to the pledge of railway receipts, is exactly the same in indian law as it is in english law, and consequently, the owner of the goods cannot pledge the goods represented by a railway receipt, by endorsing the railway receipt, unless the railway authorities were notified of the transfer, and they agreed to hold the goods as bailee of the pledgee. under the amended law a valid pledge can no longer be made by ever.v person "in possession" of goods. it can only be made by a mercantile agent as provided in s. 178 of the contract act (after amendment in 2930) or by a person who has obtained possession of goods under a contract voidable under s. 19 or s. 19a of the contract act, as provided by s. 178 0 the act. or by a seller or buyer in possession of goods, after sale. as provided in s. 30 of the indian sale of goods act. [271 f-g; 272 c-d] further, though a railway receipt and all other documents enumerated in s. 2(4) of the sale of goods act are assimilated to bills of lading for the purpose of the right to stoppage in transit and a pledge under s. 178 of the contract act, its legal position is the same as in english law, so that, no rights are created, merely by reason of the endorsement of a railway receipt by the consignee between the endorses and the railway company which had issued the receipt to the consignee the only remedy of the endorsee being against the endorser. the negotiation of the receipt may pass the property m the goods, but it does not transfer the contract contained in the receipt or the statutory contract under s. 74e of the indian railways act. negotiability is a creature of a statute or mercantile usage, not of judicial decisions apart from either. so, in the absence of any usage of trade or any statutory provision to that effect, a railway receipt cannot be accorded the benefits which flow from negotiability under the negotiable instruments act, so as to entitle the endorsee, as the holder for the time being of the document of title, to sue the carrier --the railway authority--in his own name. if the claim of the bank was as an ordinary assignee of the contract of carriage, then it had to prove the assignment. in the absence of proof of such assignment, or of the existence of any practice of merchants treating a railway receipt as a symbol of goods making a pledge of the receipt a pledge of goods, and in view of cl. (3) of the notice printed at the back of the receipt that an endorsement made on the face of the receipt by the consignee was only meant to indicate the person to whom the consignee wished delivery of goods to be made if he himself did not attend to take delivery, the bank had no right to sue the railway. [273 e-g; 274 d-g] since the language of s. 178 of the contract act is clear and explicit, if any hardship and inconvenience is felt because such a practice of treating the receipt as a symbol of goods were not recognised. it is for parliament to take appropriate steps to amend the law and it is not for courts to legislate under the guise of interpretation. [275 g] - state from its revenues may be well justified. even in the case of the so-called foreign cattle, cattle belonging to owners who are rich, may yet have their cattle graze in the madhya pradesh forests but not cattle belonging to poorer graziers.o. chinnappa reddy, j.1. the petitioners are nomad graziers of guiarat and rajasthan, who wander from place to place with their sheen goats and cattle in search of pasture and foliage. boundaries of states present no barriers to them. after all, to them and to their livestock, it is a question of survival. in their wanderings they often pass through the state of madhya pradesh en route some tunes to uttar pradesh and some times to maharashtra. this happens particularly in times of drought in gujarat and rajasthan. the powers that be in the state of madhya pradesh became apprehensive sat uninhibited passage of large herds of these an.mals through madhya pradesh may lead to large scale devastation of their forest wealth so they hit upon a plan to prevent 'foreign cattle from browsing in madhya pradesh forests. for the moment, it was forgotten that india is one country and no indian is a foreigner in any of the constituent states of india. the plan was this: the indian forest act 1927 enabled the state government to make rules to regulate the cutting of grass and pasturing of cattle in protected forests (section 32(i) and, generally, to carry out the provisions of the act (section 76). we may note here'cattle' as defined by section 2(i) includes buffaloes, sheep, goats and many other specie of browsing animals. we may also note that we are concerned in this case with protected forests only and not reserved forests. rules had been made earlier by the madhya pradesh government 1974 called the madhya pradesh grazing rates rules, 1974 by which provision was made for grazing licences, transit grazing licences, grazing rates and other subjects. rule 4 prohibited grazing in closed coupes, plantation areas and such other areas as were declared as closed for grazing by the divisional forest officer. rule 3 provided for the issuance of licences for grazing in particular grazing units, each forest range being treated as a grazing unit till the constitution of such grazing units. rule 5 provided for the issuance of transit licences for transit of cattle through government forests in the state of madhya pradesh, so that cattle in transit may not graze continuously for more than a month in a particular grazing unit. rule 6 prescribed grazing rates, commercial and transit. for buffaloes it was rs. 6 per head per year, while for goats and sheep, it was re. 1 per head per year whether it was for commercial or transit purposes. rule 7 prescribed grazing rates for 'foreign cattle of adjoining states'. whether the cattle grazed in the forest or passed through the forest, grazing was permitted at the rate of rs. 10 per head per year in the case of buffaloes and rs. 2 per head per year in the case of goats and sheep. in 1979, the rules made in 1974 were superseded and fresh rules were made. they are the rules now in force. rule 2(5) bans grazing in reserved forests. rule 3 provides for the issue of grazing licences in grazing units so constituted. until grazing units are constituted, each forest range is to be treated as a separate grazing unit. rule 3(2) provides for the levy of grazing charges at rates to be notified from time to time. rule 4 prohibits grazing in closed coupes, plantation areas and other areas which are declared as closed for grazing by the divisional forest officer. rule 5 provides for transit grazing licences, on payment of grazing charges, for the transit of cattle through government forests where the owners of the cattle are residents of madhya pradesh. cattle in transit, however, are not allowed to graze continuously in the same grazing unit for more than 30 days. rule 6 enables the government to notify from time to time the rates of grazing charges and transit grazing charges payable by residents of madhya pradesh. rule 7 provides for the levy of grazing rates for 'foreign cattle of adjoining states'. the rule enables the state government to prohibit, restrict, or in their discretion to grant owners of cattle residing outside the state of madhya pradesh grazing or transit grazing facilities for their cattle on payment of charges to be notified from time to time. rule 7(2) further empowers the government to specify the specific grazing areas, the points of entry and exit of the route to be followed by the cattle, the period during which grazing or transit grazing should be completed etc. on june 28, 1979, two notifications one, under rule 6 and the other, under rule 7 were issued notifying the rates of charges for the issue of grazing and transit grazing licences. in respect of cattle belonging to residents of madhya pradesh, the grazing rate is re 1 per year for each animal in the case of goats and sheep. nothing is to be charged in the case of buffaloes. the notification issued under rule 7 prescribes the routes to be followed by the cattle of raiasthan and gujarat while in transit through the state of madhya pradesh. it also stipulates that the owners of cattle must take the cattle through the state of madhya pradesh within a period of 45 days after the issue of licences. the prescribed grazing rates are are rs. 10 per animal in the case of buffaloes and rs. 5 per animal in the case of sheep and goats.2. apparently the government of madhya pradesh wants to inhibit the influx of cattle of other states (described in the rules as 'foreign cattle') by the method of charging higher grazing rates in their case than in the case of cattle belonging to the residents of madhya pradesh, this levy of higher rates, the prescription of the route to be followed by foreign cattle while in transit through madhya pradesh and the stipulation that the cattle must leave madhya pradesh in 45 days are questioned in these writ petitions. it is con-tended that the petitioner's fundamental rights under article 14 and article 19(e)(f) and (g) and the right under article 301 are contravened. on the other hand, it is contended on behalf of state of madhya pradesh that the rules prescribing grazing rates for 'foreign cattle; the route to be followed by 'foreign cattle' while in transit through madhya pradesh and the period for which 'foreign cattle' may remain within the boundaries of the state of madhya pradesh are made to regulate the influx and passage of 'foreign cattle' into and through madhya pradesh with a view to prevent devastation and to protect the forest wealth of state.3. we are unable to see any rational basis for the distinction made between owners of cattle belonging to madhya pradesh and owners of cattle belonging to other states (described as owners of 'foreign cattle') and the levy of prohibited grazing rates on owners of the so-called 'foreign cattle'. forests of madhya pradesh are not grazing grounds reserved for cattle belonging to residents of madhya pradesh only even as the towns and villages of madhya pradesh cannot be reserved for the residents of the original residents; of madhya pradesh only. accidents of birth and geography cannot furnish the credentials for such discrimination and authorise prejudicial treatment in matters of this nature. we do not say that geographical classification is never permissible. for example, a preference given by a state to its residents a the matter of admission to educational institutions maintained by the. state from its revenues may be well justified. but we are unable to see any such justification for the levy of virtually penal grazing charges in the case of owners of cattle belonging to other states. the only attempt at justification is that the influx of 'foreign cattle'is resulting in the destruction of the forest wealth of the state. it is difficult to understand this justification. if cattle belonging to residents of madhya pradesh are allowed to graze, will it not lead to the same damage as by the cattle belonging to persons of other states surely, it cannot be that the madhya pradesh cattle are less destructive than the cattle belonging to persons of other states. further if the object was to prevent all cattle from grazing in protected forests, such grazing could have been banned as in the case of reserved forests. even in the case of the so-called foreign cattle, cattle belonging to owners who are rich, may yet have their cattle graze in the madhya pradesh forests but not cattle belonging to poorer graziers. further, subject to reasonable restrictions which may be imposed in the interests of the general public, a citizen has the right under our constitution to move freely throughout the territory of india, to reside and settle in any part of the territory of india and to practise any profession, or to carry on any occupation, trade or business. graziers, be they of madhya pradesh, gujarat or rajashthau, therefore, have the right to pass and repass through the state of madhya pradesh with their cattle in the pursuit of their occupation. the right is, of course, subject to reasonable restrictions in the interests of the general public. we are enable to discover any reasonable basis for classifying graziers into those belonging to madhya pradesh and those belonging to other states; nor are we able to discover any acceptable reason behind the restriction imposed on graziers of other states by the heavier charge made on them. we are convinced that their is no justification whatsoever for charging higher grazing rates for cattle belonging to persons of other states. in regard to the prescription of the route along which the cattle have to be taken while in transit, however we find nothing wrong with it, since the object is obviously to prevent cattle straying and causing indiscriminate damage to forests. we are, however, unable to justify the ceiling of 45 days in which cattle must pass through the state of madhya pradesh. in the case of cattle belonging to residents of madhya pradesh, the grazing rate is levied for a period of one year. there is no reason why the charge should be levied for 45 days in the case of persons belonging to other states. the apprehension that cattle, if allowed to graze in the same place for a longtime, may destroy the pasture and foliage altogether is taken care of by the other rules which prescribe that the cattle may not graze in the same grazing unit for more than a month. in the circumstances, we quash the levy of higher grazing rates in the case of cattle belonging to persons of states other than madhya pradesh and direct the respondents to levy the same rates as they do in the case of cattle belonging to residents of madhya pradesh. the limit of stay of 45 days is also declared unconstitutional. the writ petitions are allowed accordingly. the petitioners will get their costs.