Healthways Dairy Products Co. , (Regd. ) v. Licensing Authority/Milk Commissioner, U. P. , Jawahar Bhawan, Lucknow
1986-04-29
D.S.BAJPAI, S.K.DHAWAN
body1986
DigiLaw.ai
JUDGMENT S. K. Dhawan, J. 1. The renewal of a licence issued to the petitioner under the provisions of the U. P. Milk Act, 1976 (hereinafter referred to as the Act) and the U. P. Milk Rules, 1976 (hereinafter referred to as the Rules) has given rise to this petition under Article 226 of the Constitution. 2. The petitioner ran a dairy prior to the enforcement of the Act. Under Section 11 (2) of the Act it was granted a licence to carry on the business of dairy. In particular, this included the conversion of milk into milk products. The normal period of a licence is one year. The licence was renewed for the period beginning from 16th February, 1981 and ending on 16th August, 1981. However, while renewing the licence a condition was appended to the effect that the licence was being renewed merely for conducting business in liquid milk. The petitioner challenged the legality of this condition by means of an appeal which was dismissed as not maintainable. It has, therefore, approached this Court. 3. It has been stated at the bar that the licence of the petitioner has been renewed year after year during the pendency of this writ petition with the condition that on its basis the petitioner can carry on business in liquid milk alone. It is, therefore, urged that the petitioner's grievance is very much alive as he has a recurring cause of action. We find force in this submission and we are, therefore, proceeding to dispose of this petition on merits on the footing that this petition has not been rendered infructuous by efflux of time. 4. The sheet anchor of the submission made on behalf of the petitioner is Rule 19(1) which reads : "Every licence may, at its expiration and subject to the same conditions as to the grant thereof be renewed by the Licensing Authority, (underlining by us). It is contended that the Licensing Authority had no jurisdiction to impose the impugned condition at the time of the renewal of the licence and it was under an obligation to renew the licence in the same form as it was originally issued. For appreciating argument certain provision of the Act should be read. 5.
It is contended that the Licensing Authority had no jurisdiction to impose the impugned condition at the time of the renewal of the licence and it was under an obligation to renew the licence in the same form as it was originally issued. For appreciating argument certain provision of the Act should be read. 5. The preamble to the Act is that provisions are being made for the regulation and control of production, supply and distribution of milk and its conversion into milk products with a view to development of dairy industry in the State, and for matters connected therewith. Section 11 (2) provides that no person shall carry on business of dairy or as processor or manufacturer, handling or having installed capacity for handling milk products in quantities exceeding the limits specified by the Board by notification in this behalf except under a licence in that behalf. The expressions "dairy", "manufacturer'", "processor" and "milk product*" are defined in Section 2, We are directly concerned with "dairy55 which is defined in subsection (c) of Section 2 to mean : "any premises where machinery is used for cooling, heating or any other treatment of milk or for converting milk into milk products or packaging of or milk products." We have seen that subsection (2) of Section 11 is a regulatory provision as it enjoins that no person can carry on business of dairy except under a licence. Therefore, the condition precedent for the carrying on of this commercial activity is the obtainment of a licence. It is not compulsory that holder of a licence, to carry on the business of dairy, must carry on the business of cooling, heating or any other treatment of milk and for converting milk into milk products and packaging of or milk products simultaneously. In the definition of "dairy' different situations are provided and that is why the Legislature has designedly used the word "or after each situation. It is open to a person to apply for a licence for the purposes of subsection (2) of Section 11 only for cooling, heating or any other treatment of milk or converting milk into milk products, or packaging of or milk products. The choice is left to the particular person.
It is open to a person to apply for a licence for the purposes of subsection (2) of Section 11 only for cooling, heating or any other treatment of milk or converting milk into milk products, or packaging of or milk products. The choice is left to the particular person. From this, it follows that whenever a person is granted a licence for running a dairy it is implicit that the licence entitles him to carry on the different activities enumerated in the definition of this particular term. Therefore, it is apparent that the various activities enumerated in the expression "dairy" are not conditions of a licence. On the contrary, they are the purpose for which a licence is necessary. 6. We shall now examine the other relevant provisions to fortify our view point. Section 14(1) provides that a licence under the provisions of the Act shall be granted or renewed by the Licensing Authority in the prescribed manner, subject to the prescribed conditions and furnishing of such security and payment of such fee as may be prescribed. Subsection(2) of this provision provides that if any licensee contravenes any of the provisions of the Act or the Rules made thereunder or any condition of the licence, then without prejudice to this liability for punishment under Section 20 the Licensing Authority, after giving him an opportunity of an explanation, cancel his licence. Section 20 contains the penal provisions. Section 27 confers the usual rule making power on the State Government. Rule 16 provides the manner of the making of applications for licence. Form "B" Schedule I, is the form prescribed for obtaining licences for the purposes of subsection (2) of Section 11. Rule 17 prescribed the conditions for the issue of licence. In other words, this Rule prescribes the matters to be considered or the criteria to be observed while considering an application for the grant of a licence. Rule 18 prescribes the various forms for the grant of a licence. The terms and conditions for the issue of a licence are also contained in the Rules. Condition no.
In other words, this Rule prescribes the matters to be considered or the criteria to be observed while considering an application for the grant of a licence. Rule 18 prescribes the various forms for the grant of a licence. The terms and conditions for the issue of a licence are also contained in the Rules. Condition no. 3 is that the Licensing Authority may refuse to sanction or to renew a licence if he is satisfied that it will not be in the public interest to grant or renew the licence, having regard to the relevant factors prevailing in a particular area such as availability, quantity and price of milk. A reading of Section 14 coupled with the relevant Rules just referred to indicates that a distinction has been maintained between the manner of granting or renewing a licence and the imposition of conditions therein. Subsection (2) of Section 11 maintains a distinction between the provisions of the Act or the Rules or any condition of the licence. We have already seen that the Rules have laid down certain conditions of a licence. We have already emphasised that subsection (2) of Section 11 enjoins that no person can carry on any commercial activity by converting milk into milk products without obtaining a licence. It is, therefore, apparent that the activity of converting milk into milk products cannot be the condition of a licence. The very premise of the submission, therefore, falls to the ground. 7. We have already seen that it is one of the conditions of the licence that in certain situations the licensing Authority may refuse to grant or renew a licence altogether. It has already been seen that notionally and in the eye of law the petitioner had been granted licence for carrying on the business activity for the various things contained in the definition of the term "dairy". In substance, therefore, the Licensing Authority refused to renew the licence of the petitioner for all the activities contained in the expression "dairy", but it confined it (the licence) to the activity in liquid milk. In other words, the Licensing Authority refused to renew the licence of the petitioner for converting milk into milk products. 8. Rule 19, even if read in isolation of the other provisions, does not advance the case of the petitioner. We have already extracted the Rule above.
In other words, the Licensing Authority refused to renew the licence of the petitioner for converting milk into milk products. 8. Rule 19, even if read in isolation of the other provisions, does not advance the case of the petitioner. We have already extracted the Rule above. It merely enables the renewal of a licence after the expiry of its life. The words as underlined by us in Rule 19 merely mean that if the renewal of a licence is made it shall be subject to the same conditions as to those imposed at the time of the original grant. In the present statute, we have already pointed out, there are certain statutory conditions laid down by the Rules. The effect of subrule (1) of Rule 19 is that if a renewal is made, the conditions attached to the licence as originally granted will ipso facto be attached to the licence as renewed. It has been seen that the activity of converting milk into milk product is not a condition of the licence. We are, therefore, satisfied that the Licensing Authority had full jurisdiction to confine the renewal of the licence of the petitioner to the conduct of business in liquild milk alone. 9. The question still remains whether the impugned order is sustainable. No reason has been given as to why the licence has been renewed for a truncated purpose. A counteraffidavit has been filed by and on behalf of the respondents by an Inspector. In this affidavit an attempt has been made to assign some reasons. These reasons cannot be looked into while adjudicating upon the legality of the impugned action of the Licensing Authority. It is well settled that an order passed by a statutory authority has to be examined objectively by considering its contents alone and the terms thereof cannot be supplemented by any evidence aliunde. (See Mohinder Singh Gill and another v. The Chief Election Commissioner, New Delhi and others, (AIR 1978 SG 851). A valuable right of the petitioner had been taken away. The Licensing authority should have given reasons in support of its order. Its order is, therefore, liable to be set aside on this short ground. 10. The Licensing Authority shall afford an opportunity to the petitioner to show cause as to why the licence should not be renewed in its original form.
The Licensing authority should have given reasons in support of its order. Its order is, therefore, liable to be set aside on this short ground. 10. The Licensing Authority shall afford an opportunity to the petitioner to show cause as to why the licence should not be renewed in its original form. It goes without saying that the Licensing Authority shall focuss its attention to the terms and conditions for the issue of a licence as prescribed by the Rules. If the Authority accepts the contention of the petitioner, it shall renew the licence in its original form. However, if it is not satisfied by the explanation offered by the petitioner and if it is satisfied that the conditions as laid down in the Rules for refusing to renew the licence are fulfilled, it shall pass an order to that effect after giving reasons in support of its conclusions. 11 This petition has not been formally admitted. Affidavits have been exchanged between the parties. However, with the consent of the parties we are proceeding to dispose of the same finally. 12. We direct the representative of the petitioner to present himself before the Licensing Authority on 24th June, 1986. On that day the Licensing Authority may hear the petitioner's representative or may fix some other date for that purpose. With these observations, this petition is disposed of finally. 13. A copy of this order may be given to the learned counsel for the parties on or before 20th May, 1986, on payment of usual charges if urgent applications are made for the issue of such copies.