Jawahar Motor Spares And Co. v. State Of Bihar — 1995 DIGILAW 102 (PAT)

Judgment 1. Both the aforesaid writ petitions, namely, CWJC No. 4088 of 1994 and CWJC No. 6774 of 1994 have been filed by the same petitioner against the same respondents for the same reliefs and have been heard analogous. In fact, one of the writ petition, that had been filed earlier, due to strike of the employees, could not be listed for admission, and in that situation the second writ petition is said to have been filed. This order will govern both the writ petitions. 2. Heard learned counsel for the petitioner, learned counsel for Respondent No. 4 representing Indian Oil Corporation Limited and learned counsel for Respondents Nos. 1, 2, 5 and 6, on whose behalf a counter-affidavit has been filed. 3. In these writ petitions, the petitioners have primarily assailed the order passed by the District Magistrate (vide Annexure-5) cancelling a No Objection Certificate granted to the Indian Oil Corporation Ltd. and also the order dated 2-41994(Annexure-8) passed by the Commissioner. Tirhut Division, whereby the learned Commissioner has dismissed the appeal and confirmed the order of the District Magistrate (Annexure-5). According to the petitioners, these orders are illegal, arbitrary and without jurisdiction and not sustainable in law, and they have made prayer for quashing those orders along with some consequential order and communication, namely, Annexure-6 made by the District Magistrate ordering stoppage by the petitioners of sale of petroleum products; an order passed by the Controller of Explosives, Calcutta, suspending the explosive licence of the petitioners; the order (Annexure-7) passed by the Indian Oil Corporation Ltd. suspending the supply of M.S./H.S.D. to the retail outlet of the petitioner and the order dated 12-1-1994 (Annexure- 10) passed by the Respondent No. 5 cancelling the licence granted to the petitioners. Obviously the order of the District Magistrate as contained in Annexure-5 is the basis on which subsequent orders/communications were issued and they were all consequential to the order(Annexure-5) passed by the District Magistrate. 4. The facts, necessary for the disposal of these writ petitions, may briefly be stated as follows. The Indian Oil Corporation Limited (to be referred to as the I.O.C.) had obtained an explosive licence (Annexure-1) for erecting of retail outlet in the premises in town of Muzaffarpur and the petitioners, who are firms, had been appointed as agents under an agreement with the I.O.C. for running the outlet for petroleum products. The Indian Oil Corporation Limited (to be referred to as the I.O.C.) had obtained an explosive licence (Annexure-1) for erecting of retail outlet in the premises in town of Muzaffarpur and the petitioners, who are firms, had been appointed as agents under an agreement with the I.O.C. for running the outlet for petroleum products. The licence was granted after the District Magistrate had issued a No Objection Certificate long back in June, 1970 vide Annexure-2. The petitioners were given a licence, that was renewed from time to time (vide Annexure-3) for dealing in motor spirit and High Speed Diesel by the licensing authority and he was dealing in petroleum products as agent of the I.O.C. The petitioners had taken the premises situated at Manipur in the town of Musaffarpur, wherefrom the business was conducted under two registered deeds of lease dated 21-1-1972 and 26-1-1972 (copies of which are Annexure-4 and 4/A). Though the leases were executed on the aforesaid dates, the period from which the lease period commenced was treated as to commence from 1-8-1970. The lease was valid for a period of 20 years but there was stipulation that it might be renewed at the option of the petitioners to be exercised within a period specified in the deeds of lease. "The No Objection Certificate" (Annexure-2) which had been granted long back by the District Magistrate was cancelled by an order contained in letter No. 859 dated 22-11-1992 (Annexure 5). The cancellation was done on the ground that the lessees had ceased to have any fight over the site on which the petitioners were dealing in petroleum products. Against the order of the District Magistrate as contained in Annexure-5, the I.O.C. preferred an appeal before the Commissioner, Tirhut Division, who passed the order dated 2-4-1994 as contained in Annexure 8, whereby he dismissed the appeal and confirmed the findings of the District Magistrate. The District Magistrate, in the meantime, had communicated the order regarding cancellation of No Objection Certificate (vide Annexure-4) to the petitioners requiring him to stop in dealing with petroleum products with immediate effect. The licence granted by the licensing authority to the petitioner for dealing in Motor Spirit and High Speed Diesel was also cancelled after the order of the District Magistrate (vide Annexure-10). 5. The licence granted by the licensing authority to the petitioner for dealing in Motor Spirit and High Speed Diesel was also cancelled after the order of the District Magistrate (vide Annexure-10). 5. The main contention of the learned counsel of the petitioners, which has also been supported by the learned counsel for the I.O.C. is that the cancellation of "No Objection Certificate" done by the District Magistrate is absolutely illegal, inasmuch as before cancelling the "No Objection Certificate" the licensee, that is the I.O.C. was not given a reasonable opportunity of being heard; secondly it has been contended that the petitioners have right to continue in occupation of the concerned premises even if it be assumed that the period of lease had expired, because they could be evicted therefrom only by a decree passed by a competent Civil Court under the Bihar Building (Lease, Rent and Eviction) Control Act, 1982; and so the reason which the District Magistrate has given for cancelling the No Objection Certificate is erroneous; thirdly it has been argued that the District Magistrate had not recorded any clear finding that the petitioners have ceased to use the premises in question and without giving a categorical finding in this regard No Objection Certificate could not have been cancelled. It has further been contended that the petitioners as lessees had the right to continue for a period of 25 years since the same was renewable at the option of the petitioners. It is also submitted that the option had been exercised and so there could be no justification for cancelling "No Objection Certificate" until the expiry of 25 years for the commencement of the lease which became effective from 1-8-1970. 6. On the other hand, it has been contended by the learned counsel for the Respondents Nos. 1, 2, 5 and 6, on whose behalf a counter-affidavit has been filed that the impugned order of the District Magistrate (Annexure-5) as well as the order of the Commissioner (Annexure-8) dated 2-4-1994 are perfectly legal and justified and in accordance with Rule 151 of the Petroleum Rules, 1976 which have been framed in pursuance of the Petroleum Act, 1934 . A further contention of the learned counsel for these respondents is that the writ petitions are not maintainable at the instance of the petitioners because No Objection Certificate of the explosive licence, that was granted to the I.O.C. has been cancelled, and the I.O.C. has not filed any of these writ petitions, though it was the I.O.C. which had filed the appeal before the Commissioner against the order of the District Magistrate (Annexure-5). It has also been contended on behalf of the respondents that the petitioners are agent of the I.O.C. and they had been given notice by the District Magistrate before he passed the impugned order (Annexure-5) and the petitioners had filed show cause in pursuance of the notice issued to them. The notice and the show cause have been brought on the record as Annexures A, B and C. It has been finally been submitted on behalf of the concerned respondents that the concurrent findings of fact regarding non-exercise of option of the petitioners for continuance of the lease, as given by the District Magistrate and the Commissioner, cannot be questioned by this Court in exercise of writ jurisdiction, and when the District Magistrate and the Commissioner were satisfied on the basis of the materials placed before them that the petitioners had not exercised the right of option which had been stipulated in the deeds of lease, this Court cannot examine the concurrent findings of facts arrived on the basis of the materials placed before the aforesaid authorities. 7. In course of submission the learned counsel for the petitioners have placed reliance on the decisions reported in 1986 PLJR 63, Madan Mohan Prasad Verma V/s. The State, AIR 1984 Bom 348 (sic), Brigadier K. K. Verma V/s. Union of India, while on behalf of the respondents reliance has been placed on the observations of the Apex Court in decision reported in AIR 1990 SC 2216 , Yogesh Kumar V/s. M/s. Bharat Petroleum Corporation Ltd. 8. The only point that arises for decision in these writ petitions is whether the impugned orders as contained in Annexures-5 and 8, on the basis of which some other assailed orders had been passed are fit to be quashed is the facts and circumstances and in view of the submissions made. 9. The only point that arises for decision in these writ petitions is whether the impugned orders as contained in Annexures-5 and 8, on the basis of which some other assailed orders had been passed are fit to be quashed is the facts and circumstances and in view of the submissions made. 9. Now on perusal of the order as contained in Annexure-5, I find that before the order was passed at least the petitioners had been heard and reasons for passing of the order are also stated. It has been mentioned therein that the lease which was to be in force for 20 years with effect from 18-1970 had expired on 31-7-1990 and the lessee had neither renewed the lease nor was any other lease executed and so they had no right over the land to conduct the business of the petroleum products from that site. The District Magistrate also noticed that a Title suit had been filed heading Title Suit No. 155 of 1990 in the Court of the Munsif, Muzaffarpur, which had also been dismissed on 15-5-1993 and so the petitioners had no claim left over the premises that had been given on lease. The order mentions that both the parties had been heard. The counter-affidavit that has been filed shows that a notice, a copy of which is Annexure-A dated 20-10-1993 had been issued to the petitioners and Annexure-B had been issued to the land-owner from whom the petitioners had taken lease. Annexure-C shows that in pursuance of the notice, one Ramudar Jha claiming to be a partner of the petitioners firm filed a reply before the District Magistrate. The main stand taken in the Annexure-C was that since the matters were pending before the Civil Court, the District Magistrate should not decide the matter and it was beyond his jurisdiction to take action. 10. I may notice here that the petitioners had not made any averment with regard to AnnexuresA, B and C in the writ petitions and this may be considered to be suppression of fact. However, I do not think it proper to dismiss the writ petitions only on this sole ground. 11. 10. I may notice here that the petitioners had not made any averment with regard to AnnexuresA, B and C in the writ petitions and this may be considered to be suppression of fact. However, I do not think it proper to dismiss the writ petitions only on this sole ground. 11. Now coming to the provisions of Rule 151 of the Rules of the Petroleum Products under which impugned order (Annexure-5) seems to have passed, it appears from it that the District Magistrate has been given power to cancel "No Objection Certificate" if he is satisfied that the licensee had ceased to have any right to use the site for storing petroleum products. The provisions of Rule 151 of the Rules read as follows : "(1) A No Objection Certificate granted under Rule 144 shall be liable to be cancelled by the District Authority or the State Government if the District Authority or the State Government is satisfied that the licensee has ceased to have any right to the site for storing petroleum;Provided that before cancelling a No Objection Certificate on, the licensee shall be given a reasonable opportunity of being heard.(2) A district authority or a State Government cancelling a No Objection Certificate, shall record in writing the reasons for such cancellation and shall immediately furnish to the licensee and to the licensing authority concerned a copy of the order cancelling the No Objection Certificate." As regards the reasons which are required to be mentioned by sub-rule (2) of Rule 151 is concerned, there is no doubt that the District Magistrate has given reasons already noticed above. The main grievance which could be legitimately made is regarding notice/reasonable opportunity which was required to be given under proviso of sub-rule (1) of Rule 151 of the Rules. In this regard it may be noticed that it is for the licensee, i.e. I.O.C. to say whether any reasonable opportunity was given or not. Notice contemplated by the proviso is not to be given to the petitioners, but to the explosive licensee and the licensee was I.O.C. 12. It may be mentioned here that I.O.C. seems to have preferred the appeal against the order of the District Magistrate and the order of the Commissioner (Annexure-8) shows that the appeal was heard and the Commissioner has dismissed the appeal after considering all the issues raised before him in the appeal. It may be mentioned here that I.O.C. seems to have preferred the appeal against the order of the District Magistrate and the order of the Commissioner (Annexure-8) shows that the appeal was heard and the Commissioner has dismissed the appeal after considering all the issues raised before him in the appeal. In the appeal the petitioners were also a party. The relevant observations of the Commissioner disposing of the appeal is as follows :"I have perused the memo of appeal, written statement of arguments filed on behalf of the appellant (I.O.C.) as well as respondent-party 2nd and 3rd parties. I have also gone through the lower Courts record and all other relevant documents placed before me during hearing of the case. It is undisputed that the respondent No. 2 had executed a lease of deed for his land at Maripur to be used by the respondent 3rd party for a period of 20 years with the option of its renewal for a period of another five years. The option was left to the lessee for taking initiative and exercising the same. Admittedly the said option has not been exercised by the lessee, i.e. respondent 3rd party Jawahar Motor Spares and Company and thereby they have lost the opportunity for the right of the land as the lease had already expired after the stipulated 20 years from 1-8-1970, respondent 3rd party M/s. Jawahar Motor Spares and Company have not produced any evidence/ documentary support to establish that they had exercised option for their right of use of the land or the lessor, i.e. respondent 2nd party for an extended period of 5 years. . . . . ." "On careful consideration of the facts of the case and the points advanced before me, it is clear that the basic issue is the expiry of the lease of land between respondent 2nd party and respondent 3rd party M/s. Jawahar Motor Spares and Company, having neglected the right of exercise of the option at the appropriate time, cannot claim any right of use of the land for the purpose of his business agency with the I.O.C. The appellant is trying to promote the case of the respondent 3rd party M/s. Jawahar Motor Spares and Company and to make up for their lost opportunity. It was the responsibility of the respondent 3rd party and certainly not the responsibility of the appellant, to take steps as per the stipulation of the deed of lease, executed between the respondent 2nd party and respondent 3rd party to renew the lease well in time. Thereafter I do not find any merit in the case to interfere with the order of the learned District Magistrate who has removed the N.O.C. on this basic issue that the lease of land between party Nos. 2 and 3 has already expired. Therefore, the appeal of the O.I.C. (I.O.C.) is not admitted. It is dismissed." 13. It appears from the observations quoted above that the Commissioner was also satisfied that the lease had expired and the option which could renew the lease for a further period of five years had not been exercised by the petitioners. To be sure, learned counsel for the petitioners has assailed the observations of the learned Commissioner to the effect that admittedly the said option had not been exercised by the lessee, and it has been submitted that this observation is incorrect and an error of record, because ground in this had been taken by I.O.C. in the memo of appeal contrary to the aforesaid observation of the Commissioner. Learned counsel for the petitioners has submitted that if some glaring mistake is committed or absolutely perverse view is taken, this Court in the interest of justice, can go into question of facts also even if there is concurrent finding of the Commissioner and the District Magistrate. However, I do not think that the finding can be said to be in any way perverse or based on no material or any glaring impropriety has been committed. 14. Since this aspect has been emphasised during the course of hearing, I may make observation in this regard in some details, but mentioning first in this regard that whatever is being said in this matter may not cause any prejudice to the petitioners in the Title Suit which is said to be pending in the Civil Court which shall decide the issues raised on the basis of the evidence placed before it ignoring the observation which is being made in the light of the submission made. The relevant terms of the lessee as contained in Annexure-4 and 4/A read as follows :- "(1) The lease shall be deemed to have commenced on abd from the first of August, 1970 when the land was occupied.(2) The lease shall be for a fixed period of 20 (twenty) years renewable for a further period of 5 (five) years at the option of the lessee; (3) The lessee shall spare three months before the expiry of the period give notice in writing of his intention to renew the lease according to clause (2) above and in absence of the same the option shall be deemed to have been waived and lease terminated and the lessor shall be at liberty to take steps for taking lease possession of the lease property without any notice to the lessee. (4) In case the option is not exercised and the lessee pay rent and the lessor accepts the rent even after the expiry of the period it shall be deemed that the option for the further renewal of the period of five years has been exercised by the lessee and accepted by the lessor without going into the formalities aforesaid on the same terms and conditions. In case of renewal of the lease already as per paras 2 and 3 above or indirectly by payment of rent stated above the lessor is entitled to realise the rent for the extended period according to the market rate prevailing at that time." 15. It appears from these stipulations in the lease deed that some detailed terms were mentioned about exercise of option and it was also stipulated that if payment of rent is accepted them the option may be deemed to have been exercised in the whole of the writ petitions it is not categorically and clearly specified as to when the petitioners had exercised the option. No doubt in the supplementary affidavit filed (in one of these two writ petitions hearing No. 6774 of 1994) it is stated that the option had been exercised and two annexures, namely, Annexures 13 and 13/A have been filed in support of this. There is no assertion in the writ petitions that as to when and in what manner copy of Annexures 13 and 13/A, had been sent to the landlords. Landlords have not been impleaded as party in any of these writ petitions. There is no assertion in the writ petitions that as to when and in what manner copy of Annexures 13 and 13/A, had been sent to the landlords. Landlords have not been impleaded as party in any of these writ petitions. The notice (Annexure-13) sent through lawyer makes reference about exercise of option by the petitioners in November, 1989 and sending of registered letter on 11-1-1990Annexures-13/A however, is dated 14-3-1990 and although the notice (Annexure-13) is of subsequent date, there is no mention in the lawyers notice (Annexure-13) about Annexurel 3/A. So in absence of any categorical averments about time of dispatching of the notice exercising option and in view of the inconsistency in the contents of Annexures 13 and 13/A, it is difficult to accept the contention that the finding of the District Magistrate or the Commissioner that option had not been exercised can be said to be absolutely perverse, requiring interference by this Court, even though there is concurrent finding of fact by the two authorities. So contention in this regard in my opinion is absolutely devoid of merit. 16. Now coming to the contention as regards natural justice or denial of opportunity, it appears to me that when the I.O.C. which was entitled to notice under the proviso to Rule 151 has not come before this Court even when an adverse order had been passed by the Commissioner (Annexure-8) before whom the I.O.C. had preferred in the appeal, I do not think that at the instance of the petitioners who were not entitled to notice under the law, but were given (vide Annexure-A) or even on principle of natural justice can legitimately contend that the impugned orders are bad for denial of opportunity to the I.O.C. It is not quite understandable why the I.O.C. which had filed the appeal before the Commissioner, and who is the principal, the petitioner being the agent in the matter of retail outlet to the petroleum products, is feeling shy in coming to this Court and the petitioners have been upon them the burden of showing that I.O.C. was not given opportunity. The I.O.C. who preferred the appeal before the Commissioner seems to have been heard at great length by the Commissioner and then in such a situation the argument about non-compliance of proviso to clause (1) of Rule 151 seems to be too technical to be convincing. 17. The I.O.C. who preferred the appeal before the Commissioner seems to have been heard at great length by the Commissioner and then in such a situation the argument about non-compliance of proviso to clause (1) of Rule 151 seems to be too technical to be convincing. 17. Now coming to the contentions of the learned counsel for the petitioners that the petitioners had right to continue over the premises in question unless a decree of eviction would have been passed by a Civil Court, it may be noticed that question of possession does not seem to be of any consequence when the District Magistrate is exercising his discretion given to him under Rule 151 of the Rules. The rule has already been quoted above and in terms of it the District Magistrate has only to satisfy itself whether the licensee has or has not ceased to have any right to use this site for storing petroleum products. The licensee, i.e. I.O.C. which had obtained a licence under the Explosive Substances Act had no right to use the site because of expiry of the period of the lease deed executed between his agent i.e. the petitioners and the land owner. The period of lease had undoubtedly expired before the impugned order had been passed by the District Magistrate. On question of extension of the period of lease on exercise of option it definitely appears that the petitioners could not bring the materials before the District Magistrate of the Commissioner to show that they had exercised option in time in terms of the lease. I have already referred to this aspect of the matter. It may also be noticed that even the petitioners had some doubt about continuance of their right over the land because they seem to have filed title suit bearing Title Suit No. 155 of 1994. The reliefs which had been sought in the said title suit is quoted in the memorandum of appeal, that had been preferred before the Commissioner by the I.O.C. a copy of which had been annexed as Annexure-11 to the supplementary affidavit. The reliefs which had been sought in the said title suit is quoted in the memorandum of appeal, that had been preferred before the Commissioner by the I.O.C. a copy of which had been annexed as Annexure-11 to the supplementary affidavit. The main relief claimed is that the Court be pleased to hold and declare that the plaintiffs are entitled to remain in occupation of the premises mentioned in Schedules I and II of the plaint for a further period of five years as lessor under the defendants; and the Court be also pleased to direct the defendants to renew the period of lease for a further period of five years after 31-7-1990 directing them to execute fresh lease in that connection in favour of the petitioners. It may also be noticed that landlords have also filed a title suit for eviction against the petitioners and a copy of the plaint had been brought as Annexurel 5 to the supplementary petition. Paragraph 6 of the Annexure-15 indicates that the landlord has asserted that the defendants (petitioners in these writ petitions) had to give notice before expiry of the period of the lease but they did not exercise the option within the prescribed limited period. So all these facts and circumstances of the case directly goes against the petitioner who contended that the impugned order of the District Magistrate or the Commissioner (Annexures 5 and 8) are illegal and improper in holding i hat the licensees had no right to use the site. The petitioners may have right against the land owners to possess even after termination of the period of lease until evicted in accordance with the procedure of the Bihar Buildings (Lease, Rent and Eviction) Control Act, 1982 but that right has to be determined inter se between the landlord and the tenant. The District Magistrate, in my opinion can exercise his power under Rule 151 of the Rules on different considerations, and the rule enjoins upon him to cancel No Objection Certificate if the licensee had ceased to have right to possess the site. 18. I do not think that the decision reported in AIR 1954 Bom 358 which seems to be a case covered by the Transfer of Property Act can be of any avail to the petitioners in this case. 18. I do not think that the decision reported in AIR 1954 Bom 358 which seems to be a case covered by the Transfer of Property Act can be of any avail to the petitioners in this case. The other decision reported in 1986 PLJR 63 is also of no avail because in that case the question for consideration was as to whether the period for which licence was granted under Rule 8 of the Bihar Cinema (Regulation) Rules, 1974 could be limited, when there was period of renewal clause in the lease itself. The consideration for granting licence under the Bihar Cinema (Regulation) Rules, 1974 seems to be different from that which is required for cancellation of No Objection Certificate from the Rule 151 of the Petroleum Rules. Moreover in that case it was not denied that the option for renewing the lease had been exercised. That fact was very crucial and in that circumstances it was held that the period of licence could not be curtailed. 19. Some observations of the Supreme Court in the case of AIR 1990 SC 2216 clarify the position regarding Rule 151 of the Rules, and Orders passed by the District Magistrate as well as the Commissioner seem to be in tune of the interpretation of the Apex Court which read as follows : "4. The High Court has rightly observed that the District Authority under Rule 151 can cancel the No Objection Certificate only when the licensee ceases to have any right to use the site for storing petrol. However, there are certain subsequent observations made by the High Court in the impugned judgment which might lead to an inference that so long as the licensee continues to have lease-hold rights on the site, the No Objection Certificate cannot be cancelled at all. That does not appear to be the correct position in law. On a reading of sub-rule (1) of Rule 151 it clear that a No Objection Certificate granted under Rule 144 can be cancel led wherever the licensee ceases to have any right to use the site for storing petrol and that right could be first by a licensee either by his tenancy or right to the use of the site coming to an end or for any other reason whereby, in law, the right to use the site for storing petrol ceases. 20. 20. So in the light of the reasons indicate and discussions made above, I am of the opinion that the impugned orders (Annexures 5 and 8) passed by the District Magistrate and the Commissioner respectively and the consequential orders passed thereafter cannot be said to be bad in law in any way, and both the writ petitions, in my opinion, must fail. Accordingly, I dismiss both the writ petitions at the admission stage itself, but without costs.Petitions dismissed.