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2007 DIGILAW 568 (PAT)

Taleshwar Jha Rahi v. State Of Bihar

2007-03-20

NAVIN SINHA

body2007
Judgment 1. Heard learned counsel for the petitioner and learned counsel appearing for the State. 2. The petitioners are aggrieved by the order dated 3.4.2004, upholding the cancellation of their dealership agreements, under the Public Distribution System. 3. The petitioners are Public Distribution System dealers appointed by the Respondent State Government on various dates in 1992, 1993 and 1994 as mentioned in paragraph 5 of the application. It is their specific case that they have not, violated any provisions of the Bihar Trade Articles (Licences Unification) order, 1984, neither have they violated the terms and conditions of the licence or any conditions of the dealership agreement. A policy decision was taken by the State Government in 1992 reserving 14% shops under the Public Distribution System for Scheduled castes and 10% for Scheduled tribes. In pursuance thereof directions have been issued on 11.6.2003 of a general nature, not specific to the petitioners, that in the district of Darbhanga there has been violation of the aforesaid instructions and, therefore, the agreements for licence as Public Distribution System dealers of such persons be cancelled in accordance with law. This was followed by order dated 8.7.2003 cancelling their dealership agreements. The petitioners came to this Court in C.W.J.C. No. 7838 of 2003 challenging the order dated 8.7.2003. This Court by an order dated 5.4.2004 held that an opportunity of hearing ought to have been given to the petitioner. Undisputedly, this was not done and that vitiated the order. The order of cancellation dated 8.7.2003 was quashed. The Sub-divisional Officer was directed to take a fresh decision after grant of opportunity to the petitioners. The impugned order dated 3.7.2004 then came to be passed. 4. Mr. Verma, appearing on behalf of the petitioners submitted that the petitioners are valid licence holders till the year 2007. Their licence has not been cancelled and no proceedings for cancellation were taken. Without cancelling their licence, the dealership agreement entered into between the petitioners and the Respondents has been cancelled, resulting in non-supply of the food items to the petitioners. Verma, appearing on behalf of the petitioners submitted that the petitioners are valid licence holders till the year 2007. Their licence has not been cancelled and no proceedings for cancellation were taken. Without cancelling their licence, the dealership agreement entered into between the petitioners and the Respondents has been cancelled, resulting in non-supply of the food items to the petitioners. He further relies upon an order of this Court in C.W.J.C. No. 3362 of 2002 and analogous cases setting aside the cancellation of the licence on similar grounds noticing that the provisions of clause 11 of the Bihar Trade Articles (Licences Unification) Order, 1984 under which the licence had been granted had not been complied with before the cancellation orders were passed. 5. Mr. Alam, appearing on behalf of the State submitted that notwithstanding the policy decision of the State of 13.4.1992 the licences were granted to the petitioners contrary to the same based on the census figures of the district of Darbhanga that there is requirement of reservation of 14% shops in respect of Scheduled castes and 10% in respect of Scheduled tribes. The order presently impugned dated 3.7.2004 came to be passed in pursuance to the directions of this Court in C.W.J.C. No. 7838 of 2003. If the petitioners were aggrieved by the order, the remedy for them lay in the alternative forum of appeal under the Bihar Trade Articles (Licences Unification) Order. 6. This Court has considered the respective submissions of the counsels for the parties. The short questions for consideration are: if the petitioners licence has been cancelled or not; can the statutory licence issued to them under the Bihar Trade Articles (Licences Unification) Order be interfered with in the manner it has been done; can the Respondents do indirectly what they cannot do directly by cancelling the agreement without interfering with the statutory licence of the petitioners; lastly, if the impugned order dated 3.7.2004 contains relevant materials in support of the controversy between the parties that there had been violation of the guidelines for reservation as provided in the policy dated 13.4.1992 for the district of Darbhanga so as to annul the agreement of the petitioners. 7. It is not in controversy that the licence of the petitioners has not been cancelled. It is also not in controversy that they have not violated any terms and conditions of the licence or of the dealership agreement. 7. It is not in controversy that the licence of the petitioners has not been cancelled. It is also not in controversy that they have not violated any terms and conditions of the licence or of the dealership agreement. What the Respondents essentially seek to do is to interfere with the statutory licence granted to the petitioners de hors the statutory provisions by an executive order. It is not the case of the Respondents that the licences were obtained by the petitioners fraudulently or by deceit, or that they did not fulfil the conditions of eligibility under the statutory provisions. 8. In State of U.P. & Ors. V/s. Daulat Ram Gupta, AIR 2002 SC 1633 the Supreme Court was considering the question, whether the State Government or the Licensing Authority can issue directions for refusal to renew the licence granted to petty dealers under the U.P. High Speed Diesel Oil and Light Diesel Oil (Maintenance and Supplies and Distribution) Order, 1981, if their places of business are within a radius of 5 Kms. of a retail outlet run by a Government Oil Company. The petitioners therein were licensee as petty dealer in rural areas under the aforesaid statutory order. An executive order then came to be issued that no licence for retail sale of diesel oil under the statutory order shall be renewed if the places of such licence falls within a radius of 5 Kms. of a Government run retail outlet. It was held that the statutory order was a complete code by itself and renewal could not be refused on the ground that licensees place of business falls within a radius of 5 Kms. of a Government retail outlet. It was further held that since there is no provision in the statutory order to refuse renewal of a licence granted under the statutory order on the aforesaid ground, the direction/order issued by the Licensing Authority to the contrary was clearly inconsistent with the statutory order. 9. The Bihar Trade Articles (Licences Unification) Order has been framed under the Essential Commodities Act. Clause 3 of the same provides for licencing of dealers. Clause 4 of the Order deals with the issue of licence. Clause 5 deals with renewal of licence while clause 8 deals with the power to refuse the licence. 9. The Bihar Trade Articles (Licences Unification) Order has been framed under the Essential Commodities Act. Clause 3 of the same provides for licencing of dealers. Clause 4 of the Order deals with the issue of licence. Clause 5 deals with renewal of licence while clause 8 deals with the power to refuse the licence. The clause relevant for the present controversy is clause 11, which deals with the cancellation and suspension of a licence. 10. The petitioners are left with their valid licence, but with no business because the dealership agreement between them and the Respondents has been cancelled. The necessary result would be that even while they hold valid licence, there would be no supply made to them rendering the licence illusory. 11. Additionally, this Court also finds that the impugned order dated 3.7.2004 passed by the S.D.O., Sadar Darbhanga does not contain any discussion, materials, facts and figures with regard to his satisfaction that the grant of licence to the petitioners was contrary to the reservation policy as enunciated in the order dated 13.4.1992. Inasmuch as, there is no discussion of the total number of licensees in the area, which category held what number of licences to arrive at a determination that the petitioners allegedly held licence in excess of the declared policy. The order is clearly perverse. 12. In view of the aforesaid discussions, this Court does not find substance in the objection of the Respondents that the petitioners be relegated to the remedy of statutory appeal under the B|har Trade Articles (Licences Unification) Order when, in fact, their licences have not been cancelled. 13. In the circumstances, this Court finds it difficult to sustain the order dated 3.7.2004. The same is, accordingly, set aside. The petitioners shall be entitled to carry on business and to receive supplies subject to their holding valid licences. 14. This shall not prejudice the Respondents from considering the matter afresh and passing fresh orders in accordance with law to implement their policy decision, should they so desire. 15. The writ application is, thus, allowed.