Municipal Corporation of Delhi v. Laxmi Narain Tandon (1975)

This is the module's working example of the mischief rule applied by a modern Bench to an ordinary regulatory statute, and it is valuable because the Court moves in both directions in the same judgment. The mischief of the Act is the supply of adulterated food as part of a business activity. Measured against that mischief, one word is read widely — sale is given an amplitude wider even than its dictionary sense — and another is read narrowly — store is confined to storing for sale, because storage for any other purpose is not the evil the section was passed to suppress.

That pairing is the answer to the commonest misconception about Heydon's case: that the mischief rule is a rule of enlargement. It is not. It is a rule that fixes the reach of the words, in whichever direction the mischief points.

A Food Inspector took samples of ice-cream, milk, curd and butter from the manager of a hotel run by Associated Hotels of India Ltd. The Public Analyst found them sub-standard and therefore adulterated within s. 2(i)(1). Complaints were filed under s. 7 read with s. 16, alleging that the articles had been stored for sale in the hotel.

The defence was that no food was sold in the hotel to non-resident visitors or to the public generally; that residential accommodation, services and other amenities including meals were provided only to resident customers against a composite charge; and that no rebate was allowed for food if a resident customer chose not to eat it. The Magistrate acquitted. On the Corporation's appeal the High Court referred two questions to a Full Bench, which answered that there was no sale of food to such a customer and that store in ss. 7 and 16 means storage for sale.

Section 7 prohibits a person from manufacturing for sale, storing, selling or distributing any adulterated food; contravention is punishable under s. 16(1)(a). Section 10 empowers the Food Inspector to take samples from a person selling such an article, from a person conveying, delivering or preparing to deliver it to a purchaser or consignee, and from a consignee after delivery; sub-s. (2) permits entry and sampling where food is manufactured, stored or exposed for sale.

Reading those provisions together, the Court found the broad scheme of the Act to be the prohibition and penalising of sale, import, manufacture, storage or distribution for sale.

The Full Bench's answer on the second question was upheld. The Court held that the terms store and distribute "take their colour from the context and the collocation of words in which they occur in ss. 7 and 16." Storage or distribution of an adulterated article of food for a purpose other than for sale, it said, "does not fall within the mischief of this section."

The confirmation came from s. 10. The Food Inspector, to whom the Act assigns a pivotal position, may take samples only from particular persons engaged in a specified course of business activity whose immediate or ultimate end is the sale of an article of food. He has no blanket power. It follows that where food is not intended for sale and is in the possession of a person who is not a seller, conveyer, deliverer, consignee, manufacturer or storer for sale, the Inspector cannot competently take a sample or found a prosecution on it. Hence the expression store in s. 7 means storing for sale, and storing an adulterated article for other purposes is no offence under s. 16(1)(a).

On the first question the High Court was reversed. It had used the tests developed for sales tax — no passing of property until the food is eaten, and a transaction predominantly one of work or service. The Court held that both criteria were out of place under the Food Act.

The definitions differ. Under the Sales Tax Act transfer of property is essential; under the Food Act sale includes an agreement for sale, an offer for sale, exposing for sale and having in possession for sale, and is wider even than the dictionary meaning. The purposes differ too: the Sales Tax Act taxes a sale as a distinct taxable event, whereas "The primary object of the Food Act is to prevent, in the interest of the health of the community, the supply of adulterated foodstuffs by a person as a part of his business activity."

From that object the Court drew the construction. The extensive meaning given to sale exists "to bring within the ambit of the Food Act all commercial transactions whereunder an adulterated article of food is supplied for consumption by one person to another", and in that context the term falls to be construed according to the mischief rule enunciated in Heydon's case. Adopting what had been said in Municipal Corporation of Delhi v. Shri Kacheroo Mal, the Court directed that wherever possible, "without unreasonable stretching or straining, the language of this statute should be construed in a manner which would suppress the mischief, advance the remedy, promote its object, prevent its subtle evasion and foil its artful circumvention."

Both definitions being expressly subject to the context of their own Acts, "due regard must be had to the purpose, scheme and context of the particular Act under which the question arises." The broad test for the Food Act was therefore whether the food was offered to the resident customer for a money consideration, and it was immaterial that the consideration was an inseparable element of a consolidated charge. That the property does not pass before the food is eaten does not matter; an unconsumed meal offered is still a sale within s. 2(xiii). The argument from the dominant object of the transaction failed on its own terms, since that dominant object was to provide wholesome food against payment besides accommodation and services.

The expression store in s. 7 means storing for sale, so storage for a purpose other than sale is outside s. 16(1)(a); but the supply or offer of food by a hotelier to a resident customer against a consolidated charge for accommodation, amenities and food amounts to a sale of an article of food for the purposes of the Food Act. The appeals were allowed, the High Court's judgment set aside, and the cases remitted for disposal on the merits with expedition, all contentions being left open to the respondents.