Bivekanand Singh v. State Of Bihar — 1997 DIGILAW 646 (PAT)

Judgment A.N.Trivedi, J. 1. The petitioner being aggrieved by the order dated 4,3.1997 (Annexure 5) passed by the Divisional Commissioner, Munger, Respondent No. 2 in Misc. (Supply Appeal) Case No. 5/96-97 filed by the respondent No. 4 under Clause 28(1)(b) of the Bihar Trade Articles (Licences Unification) Order, 1984 (hereinafter referred to as the Unification Order) cancelling the petitioners Licence No. 7/96 for wholesale dealer for distribution of levy sugar issued by the Collector, Munger has preferred this writ petition. 2. The case of the petitioner is that an application was made in prescribed form to the Collector, Munger who after making due enquiry granted licence No. 7/96 (Annexure 3) on 18.7.1996 under the Unification Order. Respondent No. 4, who had also been granted a licence and had been appointed by the State Government as a wholesale dealer for distribution of levy sugar in Tarapur Block preferred an application on 9.7.1996 before the Collector, Munger which was registered as Misc. Case No. 13 of 1996 making certain allegations and pointing out illegalities in the grant of licence to the petitioner, on the basis whereof allotment of levy sugar to the petitioner for distribution had been suspended by the order dated 1.10.1996. On 24.10.1996 a notice was issued by the Collector, Munger calng upon the petitioner to show cause as to why the licence granted to the petitioner be not cancelled on the grounds mentioned in the Notice to show cause (Annexure 1). The petitioner accordingly filed his reply and inter alia stated that there was no infirmity or illegality in the grant of licence to the petitioner whereupon the Collector by his order dated 29.1.1997 recalled the earlier order dated 1.10.1996 and directed the allotment of levy sugar to the petitioner for distribution as a wholesale dealer under the licence in question. Respondent No. 4 then preferred the appeal aforementioned before the Divisional Commissioner, Munger, respondent No. 2 who also issued directions for enquiry and after hearing the petitioner and the respondent No. 4 by the impugned order dated 4.3.1997 (Annexure 5) cancelled the licence of the petitioner. 3. No counter-affidavit has been filed on behalf of the respondent Nos. 1 to 3 but respondent No. 4 has filed the counter-affidavit and supplementary counter-affidavit. 4. 3. No counter-affidavit has been filed on behalf of the respondent Nos. 1 to 3 but respondent No. 4 has filed the counter-affidavit and supplementary counter-affidavit. 4. The stand taken in the counter-affidavit by the respondent No. 4 is that the wholesale Dealers Licence has been granted to the petitioner in utter disregard and violation of various directions issued by the Central Government and the State Government in respect of appointment of a wholesale dealer for distribution of levy sugar under the Public Distribution System Scheme inasmuch as a brother of the petitioner has been appointed as Retail Dealers of essential commodities which are being distributed by him to the residents of Tarapur Block from the Fair Price Shops and besides the respondent No. 4, who has been granted a licence and was appointed as an agent by the competent authority for distribution of levy sugar as a wholesale dealer, Dinesh Prasad Gupta has likewise been appointed for the same purpose in the Tarapur Block and on account of grant of licence to the petitioner, the quota of levy sugar available to the respondent No. 4 has been consequentially reduced resulting in monetary loss and inconvenience in transportation of levy sugar from the Food Corporation of India Godown at Munger. It has also been alleged that on account of forged and fabricated Memorandum of Partition and by misrepresentation the petitioner has succeeded in obtaining the licence in question. It has also been stated in the counter-affidavit as well as in the Supplementary Counter Affidavit along with which certain documents have been annexed that a criminal case is pending against the petitioner as regards the forged and fabricated documents, which has been lodged by the respondent No. 4 in the Court of the Chief Judicial Magistrate, Munger and which has been registered as case No. 597 of 1996. 5. Having considered the submissions made by Mr. N.K. Agrawal, learned Counsel for the petitioner, Mr. Ganga Prasad Roy, learned Additional Advocate General III and Mr. R.K. Agrawal, learned Counsel for the respondent No. 4 and the materials on record I am of the opinion that the impugned order dated 4.3.1997 (Annexure 5) cannot be sustained. 6. There is merit in the contention of Mr. N.K. Agrawal, learned Counsel for the petitioner, Mr. Ganga Prasad Roy, learned Additional Advocate General III and Mr. R.K. Agrawal, learned Counsel for the respondent No. 4 and the materials on record I am of the opinion that the impugned order dated 4.3.1997 (Annexure 5) cannot be sustained. 6. There is merit in the contention of Mr. N.K. Agrawal, learned Counsel for the petitioner that reasons assigned by the Divisional Commissioner, Munger, respondent No. 2 in the impugned order dated 4.3.1997 (Annexure 5) are not justified on the basis of which the petitioners licence (Annexure 3) could have been cancelled inasmuch as the licence granted under the unification order framed under the Essential Commodities Act, 1955 could be cancelled only on the grounds mentioned in Clauses 8 and 11 of the Unification Order and the instructions issued by the Central Government and the State Government being nonstatutory in character cannot supplant the provisions of Clauses 8 and 11 of the Unification Order. 7. Learned Counsel for the petitioner placed reliance on the Division Bench decision of this Court in Lal Babu Prasad V/s. The State of Bihar and another, 1989 PLJR 125, in which it was observed that: "....The reasons for cancelling the licence, as would appear from Annexure 4, however, is that in view of large scale educated unemployed, two licences to the different members of the family is not permissible. This has nowhere been provided for either in the Essential Commodities Act or in the Unification Order in the matter of grant or for cancellation of the licence. Nor this can be so. Every citizen of India has a fundamental right to carry on trade or business of his choice subject to reasonable restriction as provided under Article 10(1)(g) of the Constitution of India. Debarring a member of the family to cany on a particular trade because another member of the family carries on the same trade, cannot be a reasonable restriction. Law which purports to be a restrictive of fundamental right of a citizen has necessarily to be construed in the manner which will not restrict the right to any great extent than is necessary. The words reasonable restriction imply intelligent care and deliberation and not an arbitrary invasion of the right. It must strike a balance between the freedom guaranteed and social control permitted. The words reasonable restriction imply intelligent care and deliberation and not an arbitrary invasion of the right. It must strike a balance between the freedom guaranteed and social control permitted. Several sub-clauses of Clause 4 of the Unification Order, or for that matter, serial 7 of Form A strike a balance in this regard. It is common knowledge that the members of the family like to carry on in a particular trade or family trade because of the experience gained in the said trade. This practice also obtains in the family of the professionists. Can there be law prohibiting or restricting Government employment only to one member of the family to provide employment opportunity to educated unemployed ? I have tried to illustrate it only to demonstrate the voidness of the reason assigned in cancelling the licence of the petitioner. If any such law is promulgated, it would be unreasonable restriction, thus ultra vires Article 19(1)(g) of the Constitution of India." 8. Learned Counsel further submitted that the validity of the impugned Appellate Order dated 4.3.1997 (Annexure 5) has to be tested on the basis of the reasons assigned for cancellation of the licence and not on the basis of objections raised by the respondent No. 4 in his counter-affidavit and in support of his contention placed reliance on the decision of the Apex Court in Mohinder Singh Gill and another V/s. The Chief Election Commissioner, New Delhi and others, (1978) 1 SCC 405 , in which their Lordships observed that: "The second equally relevant matter is that when a statutory functionary makes an order based on certain grounds, its validity must be judged by the reasons so mentioned and cannot be supplemented by fresh reasons in the shape of affidavit or otherwise. Otherwise, an order bad in the beginning may, by the time it comes to Court on account of challenge, get validated by additional grounds later brought out. We may here draw attention to the observations of Bose, J., in Gordhandas Bhanji : Public orders, publicly made, in exercise of a statutory authority cannot be construed in the light of explanations subsequently given by the officer making the order of what he meant, or of what was in his mind, or what he intended to do. We may here draw attention to the observations of Bose, J., in Gordhandas Bhanji : Public orders, publicly made, in exercise of a statutory authority cannot be construed in the light of explanations subsequently given by the officer making the order of what he meant, or of what was in his mind, or what he intended to do. Public orders made by public authorities are means to have public effect and are intended to affect the actings and conduct of those to whom they are addressed and must be construed objectively with reference to the language used in the order itself. Orders are not like old wine becoming better as they grow older." 9. Mr. Ganga Prasad Roy, learned Additional Advocate General III submitted that even assuming without conceding that the appellate order is illegal, the restoration of the licence granted to the petitioner would not conifer any right to the petitioner to claim to be appointed as wholesale dealer for distribution of levy sugar by the State Government or the Competent Authority under the Public Distribution System Scheme. He submitted that there was no infirmity or illegality in the impugned order (Annexure 5) as cogent reasons for cancellation of the petitioners licence have been recorded by the Appellate authority. 10. Mr. R.K. Agrawal, learned Counsel for the respondent No. 4 contended that in view of the instructions contained in Annexures 8 and 9 issued by the Central Government and the State Government respectively, no licence could have been granted to the petitioner unless it was established that a new licence is necessary, if the existing licensees i.e. wholesale dealers for distribution of levy sugar are not serving the locality in question properly or it is necessary to grant licence for the backward areas. Learned Counsel contended that under the Public Distribution System Scheme, as wholesale dealer for distribution of levy sugar through the Fair Price Shops has to be appointed keeping in view the relevant instructions issued by the Central Government and the State Government from time to time and admittedly there being two wholesale dealers in levy sugar appointed on behalf of the State Government for distribution of levy sugar in Tarapur Block and that a brother of the petitioner has already been appointed as agent and is operating a Retail Fair price Shop in Tarapur Block, the petitioner is not eligible for being granted a licence under the Unification Order for distribution of levy sugar as a Wholesale Dealer. Learned Counsel submitted that by the appointment of the petitioner as a licensee, the business of the respondent No. 4 has been adversely affected inasmuch as prior to the appointment of the petitioner the allotment of quota of levy sugar was 209 quintals for respondent No. 4 and 213 quintals for respondent No. 4 and 213 quintals for Dinesh Prasad Gupta, other wholesale dealer in Tarapur Block and after appointment of the petitioner, the allotment has been reduced which has resulted in loss of monetary benefit and inconvenience in transportation of levy sugar from the Godown of Food Corporation of India at Munger. Learned Council further submitted that the petitioner is not entitled to any relief in view of the pendency of the criminal case with regard to fabrication and forgery in the documents relating to partition between the members of the family of the petitioner and in support of his contention placed reliance on the Division Bench decision of this Court in Akhtar Ali V/s. The State of Bihar and others, 1989 PLJR 709, in which it was observed that: "....A person in order to deal in foodstuffs must obtain a licence under the Unification Order but he has no right to be appointed under the public distribution system as fair price shopkeeper. Apart from being a licencee he has to act according to the terms and conditions of the agreement to continue as fair price shopkeeper. It is the discretion of the Government either to appoint a person as fair price shopkeeper or not to do so. Apart from being a licencee he has to act according to the terms and conditions of the agreement to continue as fair price shopkeeper. It is the discretion of the Government either to appoint a person as fair price shopkeeper or not to do so. If the Government appoints a person as a fair price shopkeeper, an agreement has to be executed therefor and as per the agreement the fair price shopkeeper has to act. If there is violation of the agreement or conditions thereof or the conduct, of the fair price shopkeeper 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. The Unification Order provides modality as well as grounds when such order for cancellation can be made. From a perusal of the instant show cause it seems that the consumers were highly dissatisfied with the conduct of the petitioner with which was spot verified in presence of the petitioner where some consumers were also examined. Therefore, the authorities fairly arrived at the conclusions that the petitioner is not fit to further act as a fair price shopkeeper." 11. The Divisional Commissioner, Munger, respondent No. 2 while rejecting the petitioners licence and allowing the appeal filed by the respondent No. 4 has observed that in view of the instruction issued by the Central Government in the Circular dated 8.8.1990 (Annexure 8) and the Circular dated 11.9.1990 which require that the distribution of levy sugar should be broad based and new licences be granted if it is found that the local population is being poorly served by the existing licencees. It has been further observed that the place of business of the petitioner and that of the respondent No. 4 in Tarapur Block is at a distance of merely 50 yards and besides this petitioners brother Ashok Kumar Singh is a Retail Fair Price Shop Dealer which has been attached to the petitioners wholesale business in respect of which the licence in question had been granted and the same is administratively objectionable and consequently licence of the petitioner was cancelled. 12. Clause 4 of the Unification Order is reproduced hereunder : "4. Issue of licence. (1) (a) Every application for the grant of licence (wholesale or retail) shall be made to the Licensing Authority in Form A along with the fee prescribed in Schedule IV. (b) Every licence issued under this Order shall be in Form C and subject to the terms and conditions mentioned therein; (c) The licence shall be valid up to 31st December next; and (d) If a licence granted under this Order is defaced, lost or destroyed, the licensee shall forthwith inform the Licensing Authority who may, on application and on the payment of fee prescribed in Schedule IV by the licensee, issue a duplicate licence. (2) A dealer may obtain a licence for any one or more trade articles mentioned in Schedule I. (3) A separate licence shall be necessary for each place of business. (4) Wholesale and retail licences of the same trade article shall not be obtained for the same place of business. (5) More than one licence for the same trade article at one place of business in the same or different names shall not be obtained." 13. It is not in dispute that the petitioner had made the application for grant of licence in Form A and the licence has been issued in Form C by the Competent Authority i.e. the Collector and therefore, there was compliance of the provisions of Clause 4 of the Unification Order. 14. Clause 8 of the Unification Order confers powers on the Licensing Authority to refuse a licence. Clause 8 is reproduced hereunder : "8. Power to refuse licence. (1) The Licensing Authority may, after giving the person affected an opportunity of being heard, and for reasons to be recorded by him in writing, refuse to grant or renew a licence. 14. Clause 8 of the Unification Order confers powers on the Licensing Authority to refuse a licence. Clause 8 is reproduced hereunder : "8. Power to refuse licence. (1) The Licensing Authority may, after giving the person affected an opportunity of being heard, and for reasons to be recorded by him in writing, refuse to grant or renew a licence. (2) The Licensing Authority shall refuse to grant or renew a licence if, (a) the applicant is a minor or a lunatic or is of unsound mind; or (b) the applicant is an undischarged insolvent; or (c) three years period has not expired from the date of conviction of the applicant under the Essential Commodities Act, 1955 (Central Act 10 of 1955). (3) The Licensing Authority shall also refuse to grant a licence for a particular trade article if, (a) a licence has already been issued to another dealer at the same place of business for the trade articles for which the applicant has applied for; or (b) the applicant has applied for both wholesale and retail licence for the same trade article." 15. It is not the case of the respondents that the grounds mentioned in subclause (2) of Clause 8 are attracted moreover it has not been so held by the Appellate Authority nor has the Appellate Authority held that the grounds mentioned in subclause (3) of Clause 8 are attracted to the case of the petitioner and, therefore, there was no occasion to exercise the power to refuse the licence to the petitioner. 16. Clause 11 which has been reproduced hereunder provides for suspension and cancellation of the licence : "11. Suspension and cancellation of licence. (1) If any licensee or his agent or servant or any other person acting on his behalf contravenes any of the terms and conditions of the licence, then without prejudice to any other action that may be taken against him under the Essential Commodities Act, 1955 (Central Act 10 of 1955) his licence may be cancelled or suspended with regard to one or more trade articles by an order in writing of the Licencing Authority and an entry will be made in his licence relating to such suspension or cancellation. (2) No order of cancellation shall be made under this clause unless the licensee has been given a reasonable opportunity stating his case against the proposed cancellation but during the pendency or in contemplation of proceedings of cancellation of licence, the licence can be suspended for a period not exceeding 90 days without giving any opportunity to the licensee of stating his case. Such suspension shall be limited only to those trade articles regarding which contravention has been made by the licensee." 17. The Appellate Authority has not held that any of the grounds mentioned in sub-clauses (1) and (2) of Clause 11 of the Unification Order are attracted to the case of the petitioner. The Appellate Authority was influenced by the instructions issued by the Central Government and the State Government which are in relation to the appointment of a wholesale dealer for distribution of levy sugar but these instructions do not in any manner curtail or restrict the power of the Licensing Authority under the Unification Order to grant a licence to a person for distribution of levy sugar. However, even if a licence is granted to a person as a wholesale dealer of levy sugar that in itself would not entitle such a licensee to insist and compel the State Government or its Officers to permit the licensee to lift the quota of levy sugar or to function as a wholesale dearer for distribution of levy sugar through the Public Distribution System unless the State Government or the Authority Competent to do so enters into an Agreement with such a licensee in accordance with the relevant instructions and guidelines issued from time to time by the Central Government and the State Government. 18. Since it has been found that none of the grounds mentioned in Clauses 8 and 11 are attracted to the case of the petitioner and the reasons assigned for cancellation of the licence of the petitioner are illegal, the impugned order dated 4.3.1997 (Annexure 5) is liable to be set aside. 19. Accordingly the impugned order dated 4.3.1997 (Annexure 5) passed by the Divisional Commissioner, Munger, respondent No. 2 is quashed and the petitioners Licence No. 7 of 1996 (Annexure 3) is restored. It is however, clarified that restoration of the licence granted to the petitioner as a consequence of this order would not entitle the petitioner to compel. 19. Accordingly the impugned order dated 4.3.1997 (Annexure 5) passed by the Divisional Commissioner, Munger, respondent No. 2 is quashed and the petitioners Licence No. 7 of 1996 (Annexure 3) is restored. It is however, clarified that restoration of the licence granted to the petitioner as a consequence of this order would not entitle the petitioner to compel. Respondent Nos, 1 to 3 to allot quota of levy sugar for distribution through Public Distribution System in Tarapur Block unless the State Government or the Competent Authority decides to enter into an Agreement with the petitioner keeping in view the relevant instruction issued from time to time by the Central Government and the State Government in this behalf. 20. The writ petition is allowed in the manner indicated above.