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2003 DIGILAW 48 (AP)

NARASIMHA OIL SUPPLIES, IOC, NIDADAVOLU, WEST GODAVARI DISTRICT v. JOINT COLLECTOR, WEST GODAVARI

2003-01-09

V.V.S.RAO

body2003
V. V. S. RAO, J. ( 1 ) AS the common question of law arises in these writ petitions, it is expedient to dispose of these three writ petitions by a common order. In all the writ petitions, the petitioners are wholesale kerosene dealers and licensees under the Andhra Pradesh Petroleum products (Licensing and Regulation of supplies) Order, 1980 (hereinafter called "the Control Order" ). ( 2 ) IN the first two writ petitions, the respondent passed orders purporting it to be under Clause 28 (2) of the Control Order on 10. 4. 1997. In the third case, the respondent passed orders on 18. 5. 1997. In these impugned orders, based on the report of the deputy Superintendent of Police (VCO), civil Supplies Department, Eluru/lnspector of Police, Vigilance Cell, Civil Supplies department, the respondent suspended b form licence of the petitioners temporarily pending finalization of the case. For the sake of better appreciation, the relevant portion of the impugned order dated 10. 4. 1997 suspending the licence of the petitioner in W. P. No. 10512 of 1997 may be extracted as under: "the Deputy Superintendent of Police (VCO, c,s Dep[.) Eluru, along with his staff conducted surprise check over M/s. Narasimha Oil Supplies, Nidadavole on 1. 4. 1997 and found certain irregularities in the business and filed a case in Cr. No. 24/ vc/w. G/97 under Clause 3 (2), 4 (1) Clauses 4 (2) and 6 of the Kerosene (Restriction on use and Fixation of Ceiling Price) Order, 1993, Clauses 3 (1), 2 (1), 2, 23 and 28 and condition 5 of Licence and condition 6 (1) of the Licence 1980 read with Sections 7 and 10 of the E. C. Act, 1955. The case is under investigation. In the circumstances reported by Deputy superintendent of Police, (VCO-C. S Dept.) eluru and in pursuance of Clause 28 (2) of a. P. Petroleum Act, 1980, the b Form licence No. 20/81 of M/s. Narasimha Oil supplies Wholesale K. Oil Dealer, Indian oil Corporation Dealer is hereby suspended temporarily pending finalisation of the case. " ( 3 ) IN other writ petitions also, similar orders are passed. Learned Counsel, Sri N. Siva Reddy appearing for the petitioners would contend that the order passed by the respondent is contrary to law and illegal. He would contend that there are. " ( 3 ) IN other writ petitions also, similar orders are passed. Learned Counsel, Sri N. Siva Reddy appearing for the petitioners would contend that the order passed by the respondent is contrary to law and illegal. He would contend that there are. no circumstances warranting the suspension of the licence and that no action is pending against the petitioners. He would also contend that the impugned order is bad for nondisclosure of reasons. He placed reliance on the Commissioner of C. S. , Hyderabad and others v. Radha Automobiles, Hyderabad, 1990 (2) LS 30 = 1990 (2) ALT 20, Filmore service Station v. Joint Collector, Krishna and others, 1995 (1) ALT 191 , and manikeshwari Agencies v. Joint Collector, r. R. Dist, 2001 (2) ALT 552 , and an unreported judgment of the Division Bench to which I was a member in W. A. No. 614 of 2001 dated 19. 6. 2001 which reversed the judgment in Manikeshwari Agencies case (supra ). ( 4 ) THE learned Government Pleader Ms. Nanda, however, opposed the writ petitions contending that even before the joint Collector could take action for issuing a notice and initiate proceedings for cancellation/suspension of the licence under Clause 28 (1) of the Control Order, this Court was approached and interim order was obtained. She contends that the order passed is sustainable. ( 5 ) A plain reading of the impugned order would show that on receipt of a report from the concerned officer of the Vigilance cell reporting that a case has been registered under Clauses 3 (2), 4 (1), 4 (2) and 6 of the kerosene (Restriction on Use and Fixation of Ceiling Price) Order, 1993 and Clauses 3 (1), 2 (1), 2, 23 and 28 read with Clause 3 (28) of the Control Order, the respondent temporarily suspended the licence. In effect, the Joint Collector passed orders of suspension based on the reportof the Deputy superintendent of Police/inspector of Police. In effect, the Joint Collector passed orders of suspension based on the reportof the Deputy superintendent of Police/inspector of Police. ( 6 ) CLAUSE 28 of the Control Order reads as under: "contravention of conditions of licence registration Certificate/supply Card/ provisions of this Order : (1) No holder of a licence or registration certificate or supply card issued under this order or his agent or servant or any other person, acting on his behalf shall contravene, attempt or abet the contravention of any of the provisions of this order or any of the conditions of the licence, registration certificate or any directions issued thereunder if any such holder or his agent or the servant or any person acting on his behalf contravenes any of the said terms or conditions may be cancelled or suspended for such period as may be specified by an order in writing by the licensing authority: provided that no order shall be made under this clause unless the licensee or the holder of registration certificate has been given a reasonable opportunity for representing his case on writing and also having heard in person against the proposed cancellation. (2) Pending action as in sub-clause (1) above, the licensing authority for reasons to be recorded in writing order an interim suspension of the licence, registration certificate or supply card". ( 7 ) SUB-CLAUSE (1) of Clause 28 empowers the authority to cancel or suspend the licence or registration certificate of a dealer of petroleum products, if he contravenes the provisions of the Control order. No order of cancellation/suspension can however be passed unless licensee or the holder of registration certificate has been given a reasonable opportunity of representing his case in writing and also giving a personal hearing to the licensee or dealer. Clause 28 (2) empowers the authority to pass an order of interim suspension if (i) there is action pending under sub-clause (1) and (ii) if for reasons to be recorded in writing the authority decides that licence or certificate of registration is required to be cancelled/suspended. This is not disputed. Clause 28 (2) empowers the authority to pass an order of interim suspension if (i) there is action pending under sub-clause (1) and (ii) if for reasons to be recorded in writing the authority decides that licence or certificate of registration is required to be cancelled/suspended. This is not disputed. In Radha Automobiles case (supra), a division Bench of this Court after having noticed sub-clause (2) of Clause 28 held that the power to pass an order of interim suspension can be resorted to only pending action as contemplated under Clause 28 (1) and when no action is contemplated or initiated against the dealer or licensee under sub-clause (1) of Clause 28, the power of passing an order under sub-clause (2) of clause 28 cannot be resorted to. In Filmore service Station s case (supra), similar view was expressed by this Court. In manikeshwari s case (supra), the learned single Judge came to the conclusion that as a show cause notice under sub-clause (1) of clause 28 was issued subsequent to passing of an order of interim suspension, it was bad and not in accordance with law. However, the learned Single Judge refused to exercise discretion to set aside the impugned order in view of the fact that by that date action under Clause 28 (1) was initiated. The judgment of the learned single Judge was reversed in W. A No, 614 of 2001 and the Division Bench held that there cannot be any doubt whatsoever that suspension of licence has civil consequences and therefore, the authority before passing any order of suspension suspending the licence should comply with the mandatory requirements contained in Clause 28 of the control Order. ( 8 ) IN view of the settled legal position in relation to Clause 28 of the Control order, the short question is whether the mandatory requirements of Clause 28 (2) have been complied with? ( 9 ) A reading of the impugned order would show that the Deputy Superintendent of Police submitted a report on 5. 4. 1997 to the Joint Collector. Immediately thereafter on 10. 4. 1997, the suspension order was passed. In W. P. No. 10517 of 1997, a report was submitted by the Inspector of Police on 3. 4. 1997 and suspension order was passed on 10. 4. 1997. Whereas, in W. P. No. 11946 of 1997, the Inspector submitted a report on 15. 5. Immediately thereafter on 10. 4. 1997, the suspension order was passed. In W. P. No. 10517 of 1997, a report was submitted by the Inspector of Police on 3. 4. 1997 and suspension order was passed on 10. 4. 1997. Whereas, in W. P. No. 11946 of 1997, the Inspector submitted a report on 15. 5. 1997 and the Joint Collector passed orders on 18. 5. 1997 suspending the licence under Clause 28 (2) of the Control Order. After receipt of the report of the Deputy superintendent of Police/or Inspector of police and before passing the order under clause 28 (2), no action was initiated or pending under Clause 28 (1 ). In a given case issue of a show cause notice as per proviso to Clause 28 (1) could be sufficient to show that action was initiated and pending under clause 28 (1 ). The same is not done and not even a show cause notice was issued. Straightaway, the impugned order was passed ignoring the mandatory requirement of clause 28 (2 ). Further, the authority is required to record reasons in writing. A reading of the impugned orders would show that no reasons are recorded by the Joint collector except saying that in the circumstances reported by the Deputy superintendent of Police/inspector of police. . . . , the impugned orders of suspension is being passed. On that score also, the impugned ordres cannot be sustained. ( 10 ) IN the result, for the above reasons, the Writ Petitions are allowed with costs quantified at Rs. 1,000/- in each case.