Basant Lal v. District Magistrate Dehradun — 1964 DIGILAW 432 (ALL)

ORDER R.S. Pathak, J. - The Petitioner was granted a licence in Form 'B' under the U.P. Foodgrains Dealers Licensing Order, 1963. He alleges that he is in possession of premises No. 67, Karanpur Bazar, where he carries on business as a grain dealer. The Petitioner's brother Wazir Chand carries on 'parchun' business in the same premises. The stock of foodgrains is stored by the Petitioner in these premises and also in a building at No. 69, Karanpur Bazar. On August 5, 1964, a Sub-Divisional Magistrate accompanied by the police raided the premises No. 67, Karanpur Bazar, arrested Wazir Chand andrseized the stocks of grain kept there as well as the stocks in No. 69, Karanpur Bazar. The Petitioner, who was out of station on the day of the raid, returned two days later and applied to the City Magistrate for the return of the seized stocks stating that they belonged to him and not to Wazir Chand. He also complained that the amount of grain seized shown in the recovery list was short of the true quantity of grain which had been siezed. It is not clear whether arty order was passed' upon this application, but it seems that on August 10, 1964, the City Magistrate, Dehra Dun, directed that the Stocks should be placed at the disposal of the District Supply Officer who should auction them to licensed dealers and deposit the sale proceeds in court. Against this order a revision application was filed by the Petitioner before the Additional District Magistrate (Judicial), but without expressing any finding on the question whether the stocks belonged to the Petitioner, the Additional District Magistrate rejected the contention that the order impugned by the Petitioner was not covered by the Code of Criminal Procedure. He observed that a prosecution had been instituted against Wazir Chand u/s 7 of the Essential Commodities Act, the case being registered as No. III of 1964, and that as the grain had been seized u/s 550 of the Code of Criminal Procedure the Magistrate had ample powers u/s 523 of the Code to pass the" impugned order. The Additional District Magistrate noted the arival contentions of the parties as to the ownership of the stocks, the prosecution contending that they belonged to Wazir Chand who had hoarded them against the law while the Petitioner claiming that they belonged to him. The Additional District Magistrate noted the arival contentions of the parties as to the ownership of the stocks, the prosecution contending that they belonged to Wazir Chand who had hoarded them against the law while the Petitioner claiming that they belonged to him. As mentioned above, no decision was given on the question. The Petitioner continued to insist for the release of the stocks but the City Magistrate whom he approached in this connection pointed out to him that he could bid at the auction of the stocks which was to be held pursuant to the order dated August 10, 1964. Wazir Chand applied on August 24, 1964, to the City Magistrate for release of the stocks but that application was also rejected" The stocks were then auctioned on September 8, 1964, and while the stocks of rice and gram were sold to other licensed dealers the stocks of wheat were auctioned to the Petitioner. If appears that delivery of the stocks of wheat was not effected to the Petitioner and instead the Petitioner was directed by the District Supply Officer to hand over the stocks to the Consumer's Co-operative Society, Ltd., an order which received the approval of the City Magistrate. In the petition, it is alleged that the licence in Form of the Petitioner was cancelled subsequently after the auction of the stocks of wheat in his favour, that the cancellation was invalid and that the Wheat having been auctioned to the Petitioner could not be transferred to the Consumer's Co-operative Society, Ltd. 2. The Petitioner has, by this petition under Article 226 of the Constitution prayed for the quashing of the order canceling his licence and for a direction requiring the' Respondents to deliver the stocks to the Petitioner. 3. When the petition came on for consideration of the prayer for interim relief, a counter affidavit was filed on behalf of the Respondents Nos. 1 to 4, wherein it was stated that the Petitioner's licence had expired on December 31, 1963, and that an application for its renewal had been made by the Petitioner on December 9, 1963, after the period for making the application had expired, that the licence had not yet been renewed for the year 1964 and no valid licence was held by the Petitioner for that year. It was denied that the Petitioner's licence had been cancelled. It was denied that the Petitioner's licence had been cancelled. In the rejoinder affidavit the Petitioner admits that the licence expired on December 31, 1963, and that the renewal application was made on December 9, 1963. There is an allegation that the licence was renewed but that the renewed licence had been suppressed. The Petitioner Claims that because of the pendency of his renewal application he was entitled to carry on business as if the licence had been renewed. 4. Two contentions have been raised by learned Counsel for the Petitioner before me. The first contention is that inasmuch as the application for renewal of the licence had been made on December 9, 1963, the Petitioner was entitled to the benefit of the proviso to Clause 5 of the U.P. Foodgrains Dealers Licensing Order, 1963 and his licence must, therefore, be considered to be valid as if renewed so long as no order refusing to renew it was passed. The contention for the Respondents is that the benefit of the proviso would have been available to the Petitioner only if the application for renewal, had been made not less than 30 days before the expiry of the period of the licence and that as admittedly the application was made some time later, the proviso could not be invoked by the Petitioner. The U.P. Fuodgraiqs dealers Licensing Order, 1963, has been promulgated by the State Government in exercise of the powers u/s 3 of the Essential Commodities Act, 1955. It is an order intended to control the sale and distribution of the foodgrains and provides for the licensing of dealers carrying on this business. Clauses 3, 4 and 5, which are relevant to the decision of this case, are set out hereunder: 3. Licensing of dealers-(1) No person shall carry on business as a dealer except under and in accordance with the terms and conditions of a licence issued in this behalf by the licensing authority. (2) For the purpose of this clause, any person who stores any foodgrains in quantity of ten quintals or more at any one time shall, unless the contrary is proved, be deemed to store the foodgrains for the purpose of sale. 5. Issue of licence-(1) Every application for, a licence or renewal thereof shall be made to the licensing authority in Form 'A'. 5. Issue of licence-(1) Every application for, a licence or renewal thereof shall be made to the licensing authority in Form 'A'. (2) An application for renewal, of a licence shall be so made as to reach the licensing authority not less than 30 days before the expiry of the period of the licence. (3) Every licence issued or renewed under this Order shall be in Form 'B'. 6. Period of licence and fees chargeable--(1) Every licence granted under this Order shall be valid for a period ending the 31st day of December of the year in which it is issued and may be renewed for a period of one year at a time: Provided that where an application for renewal of licence made in accordance with Sub-clause (1) of Clause 4 has not been disposed of until the 31st day of December, the licence shall continue to be valid as if renewed until its renewal is refused. (2) The fees specified below shall be chargeable in respect of each licence, namely- Rs. For issue of a licence, ... 3 For renewal of a licence ... 2 For issue of duplicate licence, ... 10 (3) A separate licence shall be obtained by a dealer for each place of business. 7. It will be noticed that under the aforesaid provisions every person; carrying on the business of a dealer in foodgrains. must obtained a licence, that the application for the licence or foe its renewal shall be made to the licensing authority in Form 'A', and that the application for renewal must be so made as to reach the licensing" authority, not less than 30 days before the expiry of the period of the licence. The period of every licence expires op the 31st day of December of the year in which it, is issued and the period of renewal is fixed at one year at a time. The proviso to Clause 5 expressly states that if an application for renewal made in accordance with Clause 4(1) has not been disposed of until the 31st day of December the licence shall continue to be valid as if renewed until its renewal is refused. 8. The proviso to Clause 5 expressly states that if an application for renewal made in accordance with Clause 4(1) has not been disposed of until the 31st day of December the licence shall continue to be valid as if renewed until its renewal is refused. 8. The question which arises for consideration is whether the provision requiring an application for rental to be made not less than 30 days before the expiry of the period of licence is mandatory so that, in case that condition is not complied with it cannot be said that an application for renewal has beep made set as to entitle the Petitioner to the benefit of the proviso to Clause 5. Whether a provision is mandatory or directory has been the subject of repeated decisions and Maxwell on Interpretation of Statutes (10th Edn. P. 376). states: It has been said that no rule can be laid down for determining whether the command is to be considered as a mere direction or instruction involving no invalidating consequence in its discharge, or as imperative, with an implied nullification for disobedience, beyond the fundamental one that it depends on the scope and object of the enactment. It may perhaps be found generally correct to say that notification is the natural and usual consequence of disobedience, but the question is in the main governed by considerations of convenience and justice, and when that result would Intervolve general provenience or Injustice to innocent persons, or advantage to those guilty of the neglect, without promoting the real air rand object pt the enactment, such an intention is not to be attributed to the legislature. The whole scope and purpose of the statute under consideration must be regarded. 9. The whole scope of the statute must be examined, as was observed by Lord Campbell in Liverpool Borough Bank V. Turner (2) [(1860) 30 LJ Ch. 379]. The whole scope and purpose of the statute under consideration must be regarded. 9. The whole scope of the statute must be examined, as was observed by Lord Campbell in Liverpool Borough Bank V. Turner (2) [(1860) 30 LJ Ch. 379]. This Statement of the law has received the approval of the Supreme Court in Bhikraj V. Union of India (3) (AIR 1962 SC 112) where the law laid down in this behalf is as follows: Where a statute requires that a thing shall be done in the prescribed manner or form but does not set out the consequences of non compliance, the question whether the provision was mandatory or directory has to be adjudged in the light of the intention of the legislature as disclosed by the object, purpose and scope of the statute. It the statute is mandatory, the thing done not in the manner or form prescribed can have no effect or validity: if it is directory, penalty may be incurred for non-compliance, but the act or thing done is regarded as good. 10. Clause 4 of the order prescribe the procedure for renewal of a licence. The application for renewal must be made as provided in Sub-clause (1), and Sub-clause (2) requires that it should be made so as to reach the licensing authority at least 30 days before the period of the licence expires. The object of prescribing this period for making the renewal application is to provide an adequate period to enable the licensing authority to determine before the period of the licence expires, whether the licence should be renewed, in order to maintain a continuity in the operation of the business carried on under the licence. The Licensing Order contemplates that the licensing authority requires at least 30 days in order to determine whether the licence should be renewed. The order has been passed as a measure of delegated legislation, in exercise of the powers u/s 3 of the Essential Commodities Act, and it has been left to the discretion of the State Government while making the order to determine what should be the appropriate period of adequate for the licensing authority to dispose of a renewal application.. Therefore, an application for renewal must be made at least. 30 days before the licence expires. Therefore, an application for renewal must be made at least. 30 days before the licence expires. If it is not so made it will not be possible, in the contemplation "of the State Government, for the licensing authority to dispose of the application. That is the period which the State Government considered was adequate in ordinary cases. In cases out of the ordinary, however, it may be necessary for the licensing authority to require more than 30 days to dispose of the application, and in such cases provision is made by the proviso to Clause 5 that in case the renewal application, is not disposed of until the 31st day of December, when the licence expires, the licence shall continue to be valid as if it has been renewed until an order refusing to renew it is passed. In this view of the matter, in my judgment, the provisions of Sub-clause (2) of Clause 4 are mandatory. It is not possible to accept the contention that the provision is merely directory. If that were so, it would always be open to a licensee to apply even one or two days before the 31st day of December, when His licence expires, and as the disposal of the application would necessarily require a period of time, he would thus put himself in a position where he could take advantage of the delayed filing of his renewal application by continuing to ply his business under the expired licence, which by the proviso to Clause 5 would continue to be valid as if renewed until the renewal application was rejected. This advantage was clearly never contemplated for the licensee. The application for renewal not having been made not less than 30 days before the expiry of the period of the licence, the benefit of the proviso to Clause 5 was not available to the Petitioner and, therefore, the Respondents were fully justified in requiring him to hand over the stocks of wheat, for which he had bid at the auction, to the Consumer's Co-operative Society, Ltd. He was not entitled to the stocks of wheat because his licence had expired on December 31, 1963. It is urged that because the Petitioner was allowed to bid at the auction and that the stocks of wheat were knocked down in his favour it must be taken that he was a licence-holder. The contention has no force. It is urged that because the Petitioner was allowed to bid at the auction and that the stocks of wheat were knocked down in his favour it must be taken that he was a licence-holder. The contention has no force. Mersey because he was allowed to participate in the auction proceedings and the stocks of wheat were knocked down in his favour as the highest bidder does not mean that he held a valid licence on that date. 11. The second contention of learned Counsel is that the stocks seized by the Respondents Nos. 1 to 4 belonged to him and could not be seized because there was nothing to show that he was contravening the provisions of the Licensing Order or of the licence issued to him and, therefore, there was no power of seizure under Clause 9 of the Order. The question cannot be decided unless I first determine whether the seizure was effected in proceedings taken against the Petitioner or Wazir Chand. From the material before me it is clear that action was taken in this behalf against Wazir Chand. The Respondents Nos. 1 to 4 came to the conclusion rightly or wrongly that the stocks were maintained by Wazir Chand. The Petitioner attempted to raise the question as to the ownership of the stocks and have the question decided by the Respondents Nos. 1 to 4 but it does not appear that it was ever decided that the stocks belonged to the Petitioner. It is not possible upon the material before me to decide whether the stocks in fact belonged to the Petitioner or to Wazir Chand. That being so, this contention of the Petitioner must also fail. 12. There is, therefore, no force in this petition. It is dismissed with costs.