This blog is inscribed by Payal Golimar
Due to the adverse effect of Covid-19 and government restrictions and lockdowns, trade and business in all over the country have come to a halt. Indeed, the right to trade is the fundamental right granted to every citizen of India. However, this right is affected advertently or inadvertently due to the restrictions by states as well as the centre.
Right to Freedom Of Trade Under Indian Constitution
The Constitution of India under Article 19(1)(g)[i]grants every citizen the “to practice any profession, or to carry on any occupation, trade or business”. By closely examining this fundamental right, here it is pertinent to consider whether the above right allows us to carry on with our trade-in all circumstances? The framers of the Constitution have been very careful in drafting the provisions of the grundnorm. Article 19(6) provided that the states can impose reasonable restrictions over the right to trade of the citizens in two instances:
a)Where such trades hampers or affect the operation of any existing law
b) Where such trade prevents the state from making any law in the interest of the general public.
Any analysis can be, therefore, whether this right is construed within itself or can extend up to the absolute prohibition of such right. This issue came up before the Supreme Court soon after the commencement of the constitution.The Supreme Court in various judgments has laid down the precedents on the state’s power to absolutely deprive a person of his right to trade by imposing restrictions.
In Chintaman Rao v. the State of Madhya Pradesh[ii], the constitutionality of certain provisions of Central Provinces and Berar Regulation of Manufacture of Bidis Act was challenged. The issue before the court was whether the total prohibition on the manufacturing of the Bidis amounts to the reasonable restriction under Article 19(6)?The court analysed the nature of restriction and held that the restriction imposed goes beyond the test of reasonableness,and such a prohibition on the face of it is arbitrary in nature. As a result, the law was struck down and the restriction in the above case amounting to prohibition is not reasonable in nature.
Further, in Narendrakumar v. Union of India[iii],while considering the constitutional validity of the order named the “Non-Ferrous Metal Control Order, 1958” under the Essential Commodities Act,Justice Das Gupta stated that “it is reasonable to think that the makers of the constitution considered the word restriction to be sufficiently wide enough to save laws taking away Article 19(1) provided such restriction should be reasonable in the interests of different matters mentioned in the clause”. Consequently, it came up to the conclusion that restriction included a prohibition of the fundamental right to trade.So, while deriving the inference from the above but not limited to, it can be said that the state has the power to deprive a person of his right to trade provided that restrictions/prohibitions imposed should be reasonable and should pass the test of reasonableness provide in the clause (6) of Article 19 and should be in conformity with public policy. Therefore, in the present times, Covid-19 can be taken as a scenario for such restrictions.
Implied Prohibition under Article 19 (1) (g)
There are some activities which impliedly prohibits trade under 19(1) (g) i.e. against the public policy or in the interests of the general public. After the commencement of the constitution when the states started restricting certain activities as prohibitory in the light of moral ethics, even though when Article 19 (1) (g) does not provide for any exceptions. Thereafter, the ambiguity arises with regards to the kind of activities or trades permitted in Article 19 (1) (g) and as to what falls within the bracket in the interest of the general public. That is to say, do states have the power to decide the kind of activities that should or should not be prohibited or is it only upon the judicial intervention of courts based on the facts and circumstances?
In State of Bombay v. RMD Chamarbaugwala[iv], this question came before the Supreme Court where the Petitioner challenges the amendment act of 1952 to the Bombay Lotteries and Prize Competitions Control and Tax Act, 1948. Petitioner came up with the contentions that the present Amendment Act is violative of Article 19(1)(g). The court held that indeed, the right is given to every citizen to carry out trade and profession according to Article 19(1)(g) but the same shall be subjected to Article 19(6) which protects the laws which are in the interests of the general public. The court also stated that Article 301, the freedom to trade throughout the territory of India is subject to the provisions of Articles 302-305 which allows the Parliament and State Legislatures to impose reasonable restrictions. The issue which arises, in this case, is that does our Constitution-makers ever intended to include gambling within the meaning of trade under Article 19(1)(g) considering the purpose of the constitution is to make a welfare State.
The Res Extra Commercium Doctrine
Part IV of our Constitution vested the duty on the state governments to strive to promote the welfare of the people in the state in various manners. Considering the nature of Indian society towards certain activities form ancient timesto modern times, it was, inter alia,also stated by the courtthat it is abundantly clear that such activities are considered as “sinful” and “pernicious” or condemned in Indian society from the time onwards.
The above judgment (RMD Chamarbaugwala case) can be analysed to give a holistic perspective, whereby the court concluded that “the very essence of such activities are Res Extra Commercium in nature hence, they are not protected by article 19(1)(g) of Article 301 of our constitution”. In the above case, Justice SR Das introduced the doctrine called Res Extra Commercium in the Indian legal system, whereby he underlined that certain activities that are considered immoral in Indian society such as gambling, prostitution, and sale of alcohol do not come within the ambit of Right To Trade under Article 19(1)(g) of the constitution.
In the case of State of Bombay and Anr. v. F. N. Balsara[v] the court held that “the state has the exclusive right or privilege of manufacture, possession, sale of intoxicating liquor, and therefore the state grants such a right of privilege to persons in the shape of license or lease”. So, the state has the power to impose a prohibition on the consumption of the liquor in the interest of the public health under Article 47[vi].
Henceforth, the idea of prohibition is connected with public health and judicial interpretation. As held in Balsara’s case “absolute prohibition on the manufacturing and sale of liquor is permissible and the only exception is medicinal preparations“. As a result, the inherent right of the citizens to carry out trade in liquor is at the mercy of the state, whereas in the case of medicines it is not the case.
Analysis From Covid-19 Perspective
From the instances taken above, courts have interpreted Article 19(1)(g) read with clause (6) in various ways. Considering the current situation of the pandemic it is also the duty of the states under Article 47“to raise the level of nutrition and the standard of living and to improve public health”.The nationwide lockdown imposed from March 23 due to the novel coronavirus, barring citizens of their right to trade in the interest of public health. Later on, it raises many contentions, as to what restrictions the state can allow and what should be permitted to protect the interest of the general public. Due to the lockdowns and restrictions, the whole economy has been put on a halt. However, in the third phase of the lockdown, the government allows some relaxation in the economy, one of which allows the liquor shops to open up. As a result, people are seen in different parts of India coming out of their homes in a large crowd without following the social distancing norm for buying liquor while putting theirs as well as other’s lives in danger. Alcohol being one of the largest contributors to the tax revenue, states consider it as an opportunity to mitigate the effect of the pandemic on the economy. Even though when the right to trade in liquor is not the fundamental right but instead it’s a privilege granted by the states to its citizens, it’s a state matter that comes under Entry 8 of List II of the 7th Schedule[vii]. However, at the same time when the Indian citizens are been deprived of their right to trade due to the lockdown, the government allows liquor shops to open up in such a delicate situation.It can be contended that when due to the nationwide lockdown the government only permitted trading in essential services,alcohol being the luxurious good, the opening of liquor shopscreates a vacuum in the minds of the general public as to what kind of trade activities should be permitted in the interest of public health. As a result, it can be understood that restrictions lay under the mercy of the government.
[i]Article 19, The Constitution of India, 1949.
[ii]AIR 1951 SC 118.
[iii]AIR 1960 SC 430.
[iv]AIR 1957 SC 699.
[v]AIR 1951 SC 318.
[vi], The Constitution of India, 1949.
[vii]Entry 8, List-II, 7th Schedule, The Constitution of India, 1949.