Ramnarain Prasad Sankar Prasad v. District Magistrate Of Saran
1977-05-20
K.B.N.SINGH, S.ALI AHMAD
body1977
DigiLaw.ai
Judgment S.ALI AHMED, J. 1. This is an application under Arts. 226 and 227 of the Constitution of India. The prayer is to quash Annexure 4, a letter dated the 24th Oct. 1975, addressed to the petitioner by the District Supply Officer, respondent No. 2, intimating ft that its licence under the Bihar Foodgrains Dealers (Licensing) Order (1967), (hereinafter to be referred to as the Order) has been cancelled under the order of the District Magistrate. In order to appreciate the argument advanced at the Bar some facts have to be mentioned. 2. The petitioner held a wholesale food-grains dealers licence under the order. Respondent No. 2, the District Supply Officer by a letter dated the 30th June, 1975, asked the petitioner to show cause as to why his licence should not be cancelled as he was not taking interest in the business of wheat as a result of which the levy paid by him was very little. A copy of the letter dated the 30th June, 1975, has been marked as Annexxure 1 to this application. The petitioner filed a show cause stating, inter alia, that it was taking interest in the business of wheat but was unable to deal in large stock as its availability was limited. A copy of the show cause has been marked as Annexure 2 to this writ application. No order seems to have been passed on the show cause filed by the petitioner but he was served with another notice dated the 23rd July, 1975, asking it to get into his stock 500 quintals of wheat by 4-8-1975 and should report compliance with the direction by that date failing which action would be taken for cancellation of his licence. A copy of the notice dated 23rd July, 1975, has been marked as Annexure 3. The petitioner, on receipt of the aforesaid notice, filed show cause stating, inter alia, that wheat was not available at any place outside the State due to restriction in movement and that the local wheat production was small and the local market arrival was also small which was purchased by retailers or by the consumers directly. It was also stated that the purchase of 500 quintals of wheat required a huge capital which the petitioner did not have and that it is doing the transaction in wheat according to its capacity and market requirement.
It was also stated that the purchase of 500 quintals of wheat required a huge capital which the petitioner did not have and that it is doing the transaction in wheat according to its capacity and market requirement. A copy of this show cause has also been filed and has been marked as Annexure 3 (a) to this writ application. Thereafter, it is said that on 24th Oct. 1975, the petitioner was intimated by the District Supply Officer, Chapra, about the cancellation of his licence vide Annexure 4. 3. A counter-affidavit has been filed on behalf of the respondents in which, inter alia, it has been stated that the petitioner has come to this Court without availing the alternative remedy of appeal under the order. It has also been stated that the petitioner was granted licence by the respondent on a clear understanding as laid down in the terms and conditions of the licence that he will carry on the trade as per instructions of the respondent to be issued from time to time in public interest. The assertion of the petitioner that wheat was not available in market has also been denied. Lastly it is said that licence of the petitioner was cancelled as there was gross contravention of the direction given by respondent No. 1, who was competent to issue directions. 4. It will be necessary to refer to condition No. 10 of the Licence (for carrying on business of wholesale dealers in foodgrains) several times while considering the different arguments advanced by learned counsel for the petitioner. It will, therefore, be useful to quote that condition hereunder : "10 The licencee shall comply with any direction that may be given to him by State Government or the licensing authority in regard to purchase, sale and storage for sale, of foodgrains and in regard to the language in which the register, returns, receipts or invoices mentioned in paragraphs 3, 4 or 8 shall be written and the authentication and maintenance of the register mentioned in para. 3". Mr. Sanyal, learned counsel for the petitioner first submitted that under Art. 19 (1) (g) of the Constitution of India, the petitioner has a right to practise any profession or carry on any occupation, trade or business. Mr.
3". Mr. Sanyal, learned counsel for the petitioner first submitted that under Art. 19 (1) (g) of the Constitution of India, the petitioner has a right to practise any profession or carry on any occupation, trade or business. Mr. Sanyal further submitted that the right granted under Art. 19 (1) (g) of the Constitution implies a right not to practise any profession or to carry on any occupation, trade or business. He, therefore, submitted that the direction to have a stock of 500 quintals of wheat by 4-8-1975 as contained in Annexure 3 was violative of the provision of Art. 19 (1) (g) of the Constitution. To support his argument, learned counsel first referred to a decision in the case of Indian M. and M. Corporation V/s. Industrial Tribunal (Madras), AIR 1953 Mad 98 . In this case, an award given by the Industrial Tribunal directing the Management of an industry to continue the business was held to be bad. In my opinion, the fact that the business of the management was undisputedly not a public utility service and was not such which had received any special consideration fron the Government, was the reason that weighed with their Lordships while holding that the direction to continue the business as contained in the award was bad. I say so because their Lordships have in course of discussion observed that undeniably, the State has got the right to regulate any business and this right need not be confined to the public utility business only. They also observed that such businesses which are likely to prove dangerous to public safety or public health may be subjected to severe restrictive regulation. It was, perhaps, on account of one of the most vital concerns of the Government that the petitioners were granted licence under the Order so that food-grains at a reasonable rate could be made available to the consumers. Therefore, even according to their Lordships of the Madras High Court, the business in foodgrains can be subjected to severe restrictive regulation. Further there is nothing to show that the petitioners before their Lordships of the Madras High Court were carrying on their business on the strength of a licence which contained any condition similar to condition No. 10 of the licence under the order.
Further there is nothing to show that the petitioners before their Lordships of the Madras High Court were carrying on their business on the strength of a licence which contained any condition similar to condition No. 10 of the licence under the order. A similar argument was advanced in the case M/s. Ranglal Sah Mukhlal Sah V/s. District Magistrate, Saran, AIR 1977 Pat 122 wherein it was held that although the petitioners could not be compelled to do any business against their will but if the licence on the strength of which they were doing the business contained a condition to that effect, the petitioners were not competent to make a grievance of that. In this case also the petitioner is carrying on business on the strength of licence granted under the order. The direction to stock 500 quintals of wheat by a particular date has been given under condition No. 10 which forms part of the licence. This point, therefore, has no substance. 5. Mr. Sanyal next contended that condition No. 10 of the licence empowering the State and the licensing authority to issue directions in regard to purchase, sale and storage for sale of foodgrains is violative of Art. 19 (1) (g) of the Constitution of India. It is now well settled that the right under Art. 19 (1) (g) of the Constitution is not an absolute right. It is controlled by Cl. (6) of the same Article which confers power on the State to impose restriction on this right. These restrictions have to be reasonable and in the interest of the general public. Food-grains unquestionably are the most important essential commodities, Regulations, therefore, have to be made to make them available to the common people at reasonable price. It is not unknown that at times a few persons artificially create scarcity in foodgrains. Scarcity results in unjustifiable high prices for the commodities causing tremendous problem for the common people and for the Government. Perhaps, it was on account of this concern of the Government that condition No. 10 was incorporated in the licence which empowered the State Government or the licensing authority to issue directions in regard to purchase, sale and storage for sale of foodgrains.
Perhaps, it was on account of this concern of the Government that condition No. 10 was incorporated in the licence which empowered the State Government or the licensing authority to issue directions in regard to purchase, sale and storage for sale of foodgrains. The Government or the licensing authority at the time of scarcity may issue directions under condition No. 10 of the licence to meet the situation and to have a buffer stock in foodgrains to check rise in prices. The reasonableness of condition No. 10 of the licence, in my opinion, has to be examined in this background. 6. In the case of Cooverjee B. Bharucha V/s. Excise Commr., AIR 1954 SC 220 , the Supreme Court has laid down certain guidelines to determine the reasonableness of restriction. Mahajan, C. J. (as he then was) observed as follows (at p. 223) :- "It was not disputed that in order to determine the reasonableness of the restriction regard must be had to the nature of the business and the conditions prevailing in that trade. It is obvious that these factors must differ from trade to trade and no hard and fast rule concerning all trades can be laid down." On the basis of the guideline given by this case, I have no hesitation in holding that condition No. 10 of the licence is not unreasonable and is in the interest of the general public. In case the State Government or the Licensing Authority have no power to direct the licensee to have a buffer stock in foodgrains, then they will be mere helpless spectators at the time of scarcity which undoubtedly will create hardship to the common man. Condition No. 10 of the licence in the circumstance is quite reasonable and is in the interest of general public. That being so, it cannot be said that condition No. 10 of the licence violates Art. 19 (1) (g) of the Constitution of India. 7. Mr. Sanyal, learned counsel for the Petitioner also urged that on the facts and in the circumstances, the direction to have a stock of 500 quintals of wheat by a particular date was unreasonable and, as such, the order contained in Annexure 4 to the writ application for non-compliance with the direction was bad. As to whether a particular direction given at a particular time is reasonable or not is a pure question of fact.
As to whether a particular direction given at a particular time is reasonable or not is a pure question of fact. In some cases, the direction to have a stock of 500 quintals of wheat may be a reasonable direction but may not be a reasonable direction in certain other cases. No hard and fast rule can be laid down as to in what cases the direction will be reasonable and in what circumstance the direction will be unreasonable. The petitioner in this case has alleged that it was not possible for it to have a stock of 500 quintals of wheat on account of the fact that wheat was not available in the local market and that its finance did not permit to have a stock of 500 quintals of wheat. These facts have been denied by the respondents in the counter-affidavit. The petitioner had a remedy by way of appeal under Cl. (9) of the order, but it did not prefer any appeal and came direct to this Court. Had the petitioner preferred an appeal, the appellate authority would have looked into the matter as to whether it was possible for the petitioner in the circumstance alleged by it to have a stock of 500 quintals of wheat and if the authority was satisfied, it would have set aside the order cancelling the licence of the petitioner. But for this Court in exercise of powers under Art. 226 of the Constitution of India, it is difficult to go into these questions of facts particularly when in the counter-affidavit it has been said that it was possible for the petitioner to have 500 quintals of wheat and there is no rejoinder to the counter affidavit in my opinion, the direction to have a stock of 500 quintals of wheat by a particular date per se cannot be said to be unreasonable. This argument also, therefore, fails. 8. Learned counsel for the petitioner has also urged that under S. 5 of the Essential Commodities Act, the Central Government delegated its power to make order under S. 3 of the Essential Commodities Act to the State Government only and, as such, the State Government had no authority to sub-delegate the power of issuing direction as contained in condition No. 10 of the licence to the licensing authority, as it will amount to double delegation.
It appears that the Central Government by a notified order delegated its power under S. 3 of the Essential Commodities Act in respect of foodgrains to the State Government and the State Government in its turn framed the order under S. 8 of the Essential Commodities Act, 1855. The order provides for regulating the business of wholesale dealers in foodgrains by a licence in Form B contained in the order. Condition No. 10 of the licence, which I have quoted above is a part of the licence in Form B. The power to the State Government or to the licensing authority under this condition is not legislative in character. It only authorises the State Government or the licensing authority to issue directions, executive in character, to meet the contingency of the situation. The power to issue directions has been given to the licensing authority also because the licensing authority under the order is the District Magistrate of the district, who is well aware of the condition prevalent in the district. He may, therefore, promptly issue direction to meet the situation. The direction as contemplated in condition No. 10 is only executive in character and can be passed only to enforce the terms and conditions of the licence. I do not find anything in this condition to suggest that the licensing authority has been given any legislative power. This contention, therefore, also fails. 9. Lastly Mr. Sanyal submitted that according to the respondents, the petitioner was not carrying on business in wheat only but also in other foodgrains. He, therefore, urged that the respondents should not have cancelled its licence with regard to food-grains other than wheat The petitioner could have raised this point in appeal and the appellate authority could have considered this matter. So far as this Court is concerned, in my opinion, the order cannot be quashed on this ground also. According to the conditions of the licence, condition No. 10 forms part of the licence. A licensee is obliged to comply with the directions and in case of non-compliance with the direction, his licence is liable to be cancelled. The petitioner did not comply with the direction issued under condition No. 10 of the licence. Its licence was, therefore, liable to be cancelled. The licensing authority has cancelled its license and I see no illegality on this account. 10.
The petitioner did not comply with the direction issued under condition No. 10 of the licence. Its licence was, therefore, liable to be cancelled. The licensing authority has cancelled its license and I see no illegality on this account. 10. Although I have rejected the arguments advanced by Mr. Sanyal still the application has to be allowed on the simple ground that the petitioner was not given a reasonable opportunity of stating his case against the proposed cancellation as required under proviso to Cl. 7 of the Order. While stating the case of the parties, I have mentioned that the petitioner was directed to have in stock 500 quintals of wheat by 4-8-1975 and to report compliance by that date failing which action had to be taken for cancellation of his licence. The petitioner did not comply with the direction. Steps, therefore, had to be taken for cancellation of licence as contained in Cl. 7 of the Order which reads as follows : "No holder of a licence issued under this Order or his agent or servant or any other persons acting on his behalf shall contravene any of the terms and conditions of the licence and if any such holder or his agent or servant or any other person acting on his behalf contravenes any of the said terms or conditions, then without prejudice to any other, action that may be taken against him, his licence may be cancelled or suspended by order in writing of his licensing authority. Provided that no order shall be made under this clause unless the licensee has been given a reasonable opportunity of stating his case against the proposed cancellation or suspension". The facts stated above make it abundantly clear that the petitioner was not given any opportunity to explain the circumstance under which it could not comply with the order. It is well settled that no order prejudicial to a person can be passed without giving him an opportunity to show cause even in cases where there is no specific provision to that effect The proviso to Cl. 7 of the Order which I have just quoted above imposes a duty on the licensing authority to afford a reasonable opportunity to the licence-holder against the proposed cancellation of his licence. No such opportunity admittedly was given to the petitioner.
7 of the Order which I have just quoted above imposes a duty on the licensing authority to afford a reasonable opportunity to the licence-holder against the proposed cancellation of his licence. No such opportunity admittedly was given to the petitioner. The order of cancellation of the licence which was communicated to the petitioner, therefore, cannot be sustained. 11 The result, therefore, is that the order as communicated to the petitioner by Annexure 4 is quashed and the application is allowed. In the circumstances of the case there will be no order as to costs. K.B.N.SINGH, J. 12 I agree.