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1997 DIGILAW 4 (PAT)

Niranjan Mahto v. State Of Bihar

1997-01-03

P.K.DEB

body1997
Judgment P.K.Deb, J. 1. The petitioner is a dealer of fair price shop having Licence No. 36/1984 and the shop is situated at Kanke Block, Ranchi. While he was running his fair price shop, he received a notice on 2.4.1996 issued by the respondent No. 3, wherein allegation has been brought that some consumers/villagers have raised voice for cancellation of the licence on the ground that distribution of foodgrains is not being done properly as the petitioner keeps his shop closed for a considerable period every month. The said notice is contained in Annexure-1. On receipt of the notice, the petitioner sought for time as he was then bed ridden due to ailment for filing reply to the show cause, which is contained in Annexures-2 and 2/a. But without considering the aforesaid time petition filed by the petitioner and without giving any reasonable opportunity of hearing, the respondent No. 3 has cancelled the agreement vide order dated 13.4.1996 as contained in Annexure-3. This has been challenged and a prayer has been made for quashing the same. 2. According to the petitioner, when a reasonable opportunity of hearing has not been given, his agreement cannot be cancelled and practically cancellation of agreement means closure of fair price shop and thus it amounts to cancellation of licence. 3. Mr. A-K. Sinha, appearing on behalf of the petitioner submitted that the petitioner was running his business in proper way without any hindrance or any objection from any customer, but a vague notice has been issued by the respondent No. 3 stating that some villagers have raised objection that the shop remains closed for a considerable period of time and as such the Card holders do not get the essential commodities from the fair price shop. But, when the petitioner due to ailment could not file his show cause and prayed for time then the authority i.e. respondent No. 3 ought to have granted time and after giving an opportunity of hearing, orders ought to have been passed, but without doing that the agreement has been cancelled, which amounts to cancellation of licence and thus principle of natural justice has been violated. 4. On the question of alternative remedy for filing an appeal, Mr. 4. On the question of alternative remedy for filing an appeal, Mr. Sinhas submission is that when the order itself is violative of principle of natural justice without giving any opportunity of hearing to the petitioner, the writ jurisdiction can be invoked to quash the same. 5. Mr. P.D. Agrawal, appearing on behalf of the respondents submits that cancellation of agreement by Annexure-3 does not mean the cancellation of licence and as such there is no question of invoking of writ jurisdiction and the matter can be raised before any, other appropriate forum. Hi submission is that cancellation of agreement does not mean the cancellation of licence as issued under Bihar Trade Articles (Licences Unification) Order, 1984 . He has referred to a decision of a Division Bench of this Court as reported in 1989 PLJR, page- 709, Akhtar Ali V/s. State of Bihar and Ors. wherein their Lordships had held that if there is violation of the agreement or conditions thereof or the conduct of the fair price shop-keeper is not in consonance with the terms and conditions of the agreement or his acting and dealing do not inspire confidence, by adopting a fair procedure, the government may terminate the agreement and refuse to allot any food-stuffs to the dealer in future. But this procedure or action will not affect the licence of the petitioner to carry on trade and business in food-stuffs on his own since for cancellation of the licence issued under the order certain statutory procedures have to be followed. 6. According to Mr. Agrawal, cancellation of agreement does not mean cancellation of licence and hence invoking of writ jurisdiction is not attracted and the question of following of procedure for cancellation of licence does not apply wherein agreement between the licensing authority and the fair price shop dealer is an individual agreement and cancellation of the same cannot come within the purview of writ jurisdiction. 7. But, Mr. A.K. Sinha has referred to a judgment of Supreme Court as contained in -- , Mahabir Auto Stores and Ors. V/s. Indian Oil Corporation and Ors. 7. But, Mr. A.K. Sinha has referred to a judgment of Supreme Court as contained in -- , Mahabir Auto Stores and Ors. V/s. Indian Oil Corporation and Ors. and submitted that when there is agreement by a State with an individual which had got the monopoly in the matter then such agreement and cancellation can come within the Article 238 of the Constitution and even if it is an administrative decision, the same can be impeached on the ground that the decision is arbitrary or violative of Article 14 of the Constitution of India. The same judgment has been referred to by another Division Bench of this Court in 1991 (1) BLJ 638 , Sachindra Kumar V/s. State of Bihar and Ors. although, the circumstances and case was different. There in that case, licence was being suspended. 8. Mr. Sinha with reference to the Supreme Court judgment submits that cancellation of agreement, which amounts to stoppage of the business of the petitioner, can definitely be construed within the purview of Article 238 of the Constitution of India and any administrative decision of cancellation of the same without giving opportunity of show cause or hearing, can invoke Article 14 of the Constitution of India and hence a writ under Article 226 of the Constitution is definitely maintainable. 9. It further appears that agreement is arrived at regarding the quota of food-stuffs and other essential commodities to be fixed to the individual fair price shop holder and this via-media becomes a condition within the licence itself, Until and unless a person has got licence, he cannot have such agreement with the Sate and if the agreement is cancelled then practically licence also becomes inoperative as per Clause 10 of the condition of licence. 10. In that view of the matter, cancellation of agreement is nothing but cancellation of licence. This also follows from the analogy that by Annexure-1 show cause notice was issued although vaguely in respect of cancellation of licence but by order in Annexure-3, only agreement has been cancelled for which there was no notice to show cause. Even if we accept the analogy of Mr. Agrawal that agreement is separate and are not depended on the conditions of the licence then also the impugned order is definitely violative of Article 14, when there was no show cause issued for cancellation of the agreement to the petitioner. Even if we accept the analogy of Mr. Agrawal that agreement is separate and are not depended on the conditions of the licence then also the impugned order is definitely violative of Article 14, when there was no show cause issued for cancellation of the agreement to the petitioner. But, in my view, the agreement cannot be construed as of separate entity then that of the licence issued under the Unification Order, rather under Clause 10 of the licence, the agreement comes in. 11. On a similarly situated person, one Manoj Kumar came up before this Court in CWJC No. 1415 of 1996 (R) and vide order dated 10.7.1996, the order of cancellation of agreement/licence was quashed on the ground that the show cause notice was vague one and when there is no specific instance shown as to the violation of terms and conditions of the licence, then such show cause notice is inoperative in the eye of law and action on the basis of such show cause notice is also illegal and inoperative. 12. When there was no show cause regarding cancellation of agreement and when that agreement is not an agreement between the two individuals but an agreement by the State, which has got monopoly over the storage of essential commodities and grant of licence and quota to the individuals then such agreement cannot be construed as only an individualistic one as observed earlier and hence this cancellation without following proper procedure and giving any notice to show cause or opportunity of hearing is violative of Article 14 of the Constitution of India and hence the action of cancellation is illegal in the eye of law. Again when show cause has been issued for the purpose of cancellation of licence then on that basis cancellation of agreement is again illegal. On the other hand,if show cause for cancellation of licence is to be construed as cancellation of agreement also then the show cause notice being a vague one without giving any instance as to violation of conditions, the same is bad in the eye of law. 13. In that view of the matter, Annexure-3 cannot be sustained and hence the same is quashed, including show cause notice as contained in Annexure-1. 13. In that view of the matter, Annexure-3 cannot be sustained and hence the same is quashed, including show cause notice as contained in Annexure-1. However, the respondents shall be at liberty to proceed in the matter, if desire/so after giving specific instance and allegation in the show cause notice to the petitioner and pass appropriate order after giving a proper opportunity of hearing to the petitioner. 14. The writ petition is thus allowed and disposed of with the above observation and direction.