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2013 DIGILAW 422 (PAT)

Binod Kumar v. State of Bihar

2013-03-22

RAVI RANJAN

body2013
ORDER I have heard learned counsel for the petitioner and the State. 2. The petitioner seeks quashing of the order dated 29.5.2010 by which his licence granted for dealership of kerosene oil bearing no. 10/1986 has been cancelled on the ground that he was involved in black marketing of the same. 3. Learned counsel for the petitioner submits that a show cause notice dated 28.2.2010 was served upon him which was issued by the District Magistrate-cum-Collector, Sheohar making an allegation that he has diverted about 94337 litres of kerosene oil and sold it in black marketing. The petitioner responded by giving a reply thereof vide reply dated 8.3.2010 refuting the allegation. In the reply a clarification was made that the dealer has never received any delivery on 22.2.2010 and 24.2.2010 as alleged. The moment he knew regarding this fact that some other person has received any delivery in his name he had informed the Indian Oil Corporation as well as the District Magistrate-cum-Collector, Sheohar regarding the aforesaid fact. Several other issues were raised in that show cause as would be evident from the plain reading of Annexure 2. However, it appears that the said explanation is dated 8.3.2010 whereas an order was also passed by the District Magistrate-cum-Collector, Sheohar on 8.3.2010 itself noticing therein that any reply to the show cause notice dated 28.02.2010 was yet to be received in his office. However, it appears from Annexure 2 that the same was sent through speed post on 8.3.2010 itself. There is no explanation as to why the petitioner did not comply the show cause notice Annexure 1 by filing the reply to the show cause within the period which has been specified in the show cause notice. It is also not the case of the petitioner that any extension for filing reply was also sought. However, it is submitted that upon the allegations made in the first show cause notice the licence of the petitioner was suspended vide Annexure 3 dated 8.3.2010 and under the same document further show cause notice was also issued to explain within 15 days as to why his licence should not be cancelled. However, it is submitted that upon the allegations made in the first show cause notice the licence of the petitioner was suspended vide Annexure 3 dated 8.3.2010 and under the same document further show cause notice was also issued to explain within 15 days as to why his licence should not be cancelled. There is dispute with regard to receipt of the order as well as the show cause notice dated 8.3.2010 by the petitioner inasmuch as the claim of the petitioner is that he never received the same whereas case of the State respondent is that it was tried to served upon him but he had refused to accept the notice. 4. Mr. N.K.Agrawal, learned Senior Counsel appearing for the petitioner has raised a question of law. It is urged that once a show cause notice was issued pointing out the charges levelled against the petitioner and a punishment thereafter was imposed upon the petitioner by suspending his licence, another show cause notice for cancellation of licence was without jurisdiction and so would be the subsequent order of cancellation of licence. It is pointed out that the relevant provision as contained in Clause 11(1) of the Bihar Trade Articles (Licenses Unification) Order, 1984 (hereinafter referred to as “the Unification Order”) discloses that in case of contravention of the terms and conditions of licence, without prejudice to any other action that may be taken against the dealer or retailer under the Essential Commodities Act, 1955, his licence may be cancelled or suspended with regard to one or more trade articles by passing an order in writing by the licensing authority. Thus, it is contended that once a show cause notice was issued, though it was not indicated in the notice that the same was being issued for proposed imposition of suspension or cancellation of licence, the subsequent order suspending the licence would necessarily mean that the Annexure 1, i.e., the show cause notice, was issued in contemplation of a proceeding for imposition of a punishment of suspension of licence only. Therefore, the subsequent show cause for cancellation of licence was totally unwarranted and would be without jurisdiction and so would be the subsequent order of cancellation also. Learned counsel, in support of his aforesaid submission, has placed reliance upon a decision of this Court rendered in Ram Ekbal Roy Vs. The State of Bihar & Ors.( 2012(3) PLJR 203 ). Therefore, the subsequent show cause for cancellation of licence was totally unwarranted and would be without jurisdiction and so would be the subsequent order of cancellation also. Learned counsel, in support of his aforesaid submission, has placed reliance upon a decision of this Court rendered in Ram Ekbal Roy Vs. The State of Bihar & Ors.( 2012(3) PLJR 203 ). In particular he places reliance upon paragraph 9 of the aforesaid decision recorded by this Court while considering identical situation. For better appreciation the relevant passage is reproduced as under:– “9. From perusal of the show cause notice, in the opinion of this Court, it does not appear that the same has been issued in contemplation of a proceeding of cancellation of his licence. If suspension is, as submitted by learned counsel, under sub-clause(2) of Clause 11, i.e, in a proceeding for proposed cancellation of a licence that is not reflected from Annexure-1. Annexure-1 does not disclose that there was a proceeding for cancellation of licence in which a show cause notice was issued and in that proceeding itself an order of suspension has been passed. Thus, the submission raised on behalf of the State would have to be rejected in this regard. Thus, I hold that from the notice, as contained in Anenxure-1, it does not appear that the same was issued in contemplation of any proceeding proposing cancellation of his licence and for the same there would be no difficulty for this Court in following the decision of this Court rendered in Paspat Prasad (supra).” 5. Learned counsel has further placed reliance upon an unreported decision of this Court dated 31.1.2013 rendered in C.W.J.C. No. 16326 of 2010 (Laxmi Rai Vs. The State of Bihar & Ors.) taking a similar view of the matter. 6. Per contra, learned Standing Counsel 16 appearing for the State has submitted that it is not stated in the show cause notice as contained in Annexure 1 that it was issued in contemplation of imposition of a punishment of suspension of licence, therefore, the same cannot be presumed and, thus, it cannot be further held that the subsequent notice of cancellation would be without jurisdiction. Learned counsel has also pointed that the petitioner did not respond either to the first notice or the second notice, therefore, the licensing authority was not left with any option other than to cancel the licence as the allegation was of black marketing of huge amount of kerosene oil. Learned counsel has pointed out the provision as contained in Clause 11(2) of the Unification Order to impress upon this Court that even in a case initiated for proposed cancellation, the licence can be suspended without issuing any notice to the petitioner. Learned counsel for the State has further submitted that Clause 11(2) clearly stipulates that a notice is required only in case of cancellation of licence and no notice is required for suspension of licence even if it was being imposed by way of punishment. 7. On consideration of rival contentions, following issues emerge in this case for determination. (I) Whether the show cause notice dated 28.2.2010, as contained in Annexure 1, can be considered to be in contemplation of a proceeding for imposing punishment of suspension or for cancellation of the licence concerned? (II) Whether the order of suspension of licence as contained in Annexure 3, is to be considered to have been passed under clause 11(1) or 11(2) of the Unification order? (III) Whether the impugned order of cancellation of licence, as contained in Annexure 4, can be held to be without jurisdiction in view of the order of suspension already having been passed vide Annexure 3? 8. In view of all the aforesaid issues being interrelated and intertwined, they are being considered simultaneously. Before proceeding further it would be beneficial to reproduce the relevant provision under Clause 11 of the Unification Order itself for better appreciation of the matter:– “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 Licensing 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.” Clause 11(1) provides two modes of punishment to be imposed upon the retailer or wholesale dealer in case of contravention of terms and conditions of the concerned licence. First punishment would be suspension of licence and the second punishment would be cancellation of licence. Clause 11(1) does not provide that punishment of suspension and cancellation of licence both could be imposed upon the licensee for the same set of charges. However, from the conjoint reading of the clause 11(1) and 11(2) it appears that after initiation of a proceeding for proposed cancellation of licence also the concerned licence can be suspended for 90 days. The question is as to whether the show cause notice, as contained in Annexure 1, was issued for the suspension or cancellation of licence, i.e., whether the authority concerned had proceeded under Clause 11(1) by suspending the licence or Annexure 3, subsequently, was passed under the provisions of Clause 11(2) of the Unification Order. In Ram Eqbal Roy (supra) this Court has held that in case the subsequent order has been passed by the authority for suspension of the licence and that order itself contains a second show cause for the proposed cancellation of licence then the earlier notice, even though not disclosing the contemplated action, would be deemed to have been issued for imposing a punishment of suspension of licence only otherwise there would not have been any requirement for issuing any further notice for cancellation of licence. Thus, in my considered opinion, since the Annexure 3 which is an order of suspension of the licence of the petitioner also contains a notice directing the licensee to show cause within 15 days why his licence should not be cancelled, the Annexure 1 would be deemed to have been issued in contemplation of a proceeding for imposing a punishment of suspension of licence otherwise subsequent notice for cancellation of licence was not required at all. Once it is held as such then it has to be held that the order of suspension, which has obviously not been passed after initiation of contemplated proceeding of the cancellation and definitely having been passed after show cause notice as contained in Annexure 1, was a punishment which had been imposed upon the petitioner under Clause 11(1) of the Unification Order. That being the situation then law has been settled in Ram Eqbal Roy (supra) as well as C.W.J.C. No. 16326 of 2010 (Laxmi Rai Vs. The State of Bihar & Ors.) that once a punishment of suspension has been imposed the subsequent imposition of punishment by cancelling the licence upon the same set of charges would be without jurisdiction as only one mode of punishment could be selected by the licensing authority. Once having suspended the licence, it was divested with the power to proceed further and impose another punishment of cancellation specially when it has been held that the order of suspension was not passed during any proceeding for cancellation of licence of the petitioner. The order of suspension is a detailed one and has been passed after consideration of allegations upon the petitioner as well as the fact that he had not responded to the show cause notice. The aforesaid fact further indicates that a punishment of suspension was being imposed and that was definitely not an order imposing interim suspension. 9. This would not be the end of the matter. The licensing authority has not stated anywhere that the show cause sent by the petitioner by the speed post dated 8.3.2013 has never reached its destination. In that case, even if the petitioner did not respond to the second show cause notice and even assuming that an order of interim suspension was passed under Clause 11(2) of the Unification Order, then before passing the final order of cancellation at least that reply should have been considered. 10. In that case, even if the petitioner did not respond to the second show cause notice and even assuming that an order of interim suspension was passed under Clause 11(2) of the Unification Order, then before passing the final order of cancellation at least that reply should have been considered. 10. The limb of argument that, as per the clause 11(2) of the Unification Order, a show cause notice would be required only in a proceeding in contemplation of cancellation of licence and for suspension of licence same is not required, is noted only to be rejected. The principle of audi alteram partem has to be followed by the authorities while taking such steps if that is going to visit any civil consequence upon the concerned person or party. Therefore, in my considered opinion if an order of suspension is going to be passed for by way of imposing a punishment then, before inflicting such punishment, a reasonable opportunity has to be given even if there is no express provision to that extent otherwise the order would have to be held to have been passed in violation of the principle of natural justice. Reference in this regard is made to a decision of Division Bench of this Court rendered in M/s Swami Distributor Vs. The State of Bihar and others ( 1990(1) PLJR 210 ). 11. Accordingly, in my considered opinion the order as contained in Annexure 4 cannot be sustained in law as the moment the authorities concerned has passed the order of suspension they were not empowered to proceed further and cancel the licence of the petitioner. As a result, the same is quashed and set aside. 12. Once the order of cancellation is set aside the question would emerge as to what would be the fate of the order of suspension of licence as contained in Annexure 3. As I have discussed above, Clause 11(2) speaks about interim suspension which can be of a maximum period of 90 days. So far imposition of suspension of licence by way of punishment is concerned, i.e., under Clause 11(1) of the Unification Order, no time limit of the suspension period has been provided. What should be the period of interim suspension has been discussed in several decisions of this Court as has been pointed out by the parties, for example 1988 PLJR 571 (Yugal Kishore Rastogi Vs. What should be the period of interim suspension has been discussed in several decisions of this Court as has been pointed out by the parties, for example 1988 PLJR 571 (Yugal Kishore Rastogi Vs. The State of Bihar), 1987 PLJR 1150 (Punsraj Begawani and another Vs. The State of Bihar and another), and 1991 B.R.LJ. 48 (Sachindra Kumar Vs. The State of Bihar and others). 13. However, so far as the period of suspension is concerned, if the same was passed by way of punishment under Clause 11(1), the provision itself as well as the aforesaid judicial pronouncements are silent. So far PDS dealership is concerned a new Control Order namely Public Distribution System (Control) Order, 2001 has been enforced on 15th February, 2007. In the aforesaid Control Order a provision was initially included vide Clause 7(iii) that the licence would remain suspended during the pendency of a criminal case lodged under the Essential Commodities Act and there was express provision under Clause 7(v) also that in the cases of suspension other than Clause 7(iii), i.e., the order of suspension having been passed by way of imposing punishment, that could continue for 90 days only. Subsequently, the provision of suspension of licence has completely been omitted by enforcing Public Distribution System (Control) Amendment Order 2011. Therefore, so far the PDS dealers are concerned, as of now, there is no provision of suspension of licence at all. However, aforesaid provisions cannot be made applicable in the present case. But looking into the entire matter, in my considered opinion, it has to be held that order of suspension cannot be made equivalent or at par with the order of cancellation of licence in its effect otherwise there would not have any requirement of providing two different modes of punishment in the Unification Order. If suspension of licence is allowed to continue for indefinite period then there would be no distinction between it and cancellation. Therefore, in my opinion, since the licence has admittedly remained suspended for three years, and as such, there has already been much atonement on part of the petitioner coupled with the fact that the order of cancellation has already been quashed as above, the order of suspension now also has lost its legal significance as the same cannot be allowed to continue for indefinite period and effectuated like the order of cancellation of the licence. 14. 14. I am of aforesaid opinion also for the reason that a criminal case is going on against the petitioner with respect to the first information report lodged against him under Section 7 of the Essential Commodities Act. If he is convicted then his licence could be cancelled under Clause 13 of the Unification Order. This writ application stands allowed.