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2015 DIGILAW 314 (ORI)

Alok Kumar Agrawal v. State of Orissa

2015-05-06

A.K.RATH

body2015
JUDGMENT Dr. A.K. RATH, J - By this writ petition under Articles 226 and 227 of the Constitution of India, challenge is made to the order No. 562 dated 2.8.2014 passed by the District Agricultural Officer, Padampur, opposite party no.4, cancelling the licence of the petitioner to carryon business of seeds. 2. Shorn of unnecessary details, the case of the petitioner is that he is the proprietor of M/s. Venkateswar Seeds. On 9.7.2014, the District Agriculture Officer, Bargarh, opposite party no.4, issued licence to M/s. Venkateswar Seeds to carryon business of seeds, vide Annexure-1. On 10.07.2014, opposite party no. 4 issued a letter conveying the decision of the Government about the appointment of the petitioner. While the matter stood thus, on 2.8.2014, vide Annexure-3, opposite party no.4 cancelled the licence granted to the petitioner on the following grounds; "xxx xxx xxx 1. Ms Baisnodevi Seeds proprietor Hariram Agrawal, Paikmal is black listed in seed transaction under the License issued by JDA (Farm & Seed) who happens to be the father of Sri Alok Kumar Agrawal proprietor Venkateswar seeds, Paikmal. 2. Ms Balajee seeds Paikmal proprietor Sri Deepak Kumar Agrawal vide licence is also blacklisted in seed transaction under Licence issued by JDA(Farm & Seed) vide Letter No. 21 dated 25/11/2011 who happens to be the elder brother of Sri Alok Kumar Agrawal, Paikmal. 3. Mischief future seeds transaction by Sri Alok Kumar Agrawal is also apprehended as he belongs to the same family." xxx xxx xxx" 3. Pursuant to issue of notice, a counter affidavit has been filed by the opposite parties 2 to 4. The sum and substance of the case of the opposite parties 2 to 4 is that the petitioner was the proprietor of M/s. Venkateswar Seeds. He applied for the seed licence to the opposite party no. 4 for doing transaction of seeds for paddy, groundnut, moong and arhar certified seeds at the storage place and the place of sale at Paikmal in the district of Bargarh. The seed licence was issued in favour of the petitioner on 10.7.2014, vide Annexure 1 and 2. He applied for the seed licence to the opposite party no. 4 for doing transaction of seeds for paddy, groundnut, moong and arhar certified seeds at the storage place and the place of sale at Paikmal in the district of Bargarh. The seed licence was issued in favour of the petitioner on 10.7.2014, vide Annexure 1 and 2. The petitioner misled the opposite party no.4 by mentioning different storage address at different points in his application like in source certificate obtained from another Government agency, i.e., Odisha Agro Industries Corporation Ltd. mentioning his address as "At/PO/G.P-Paikmal", but in the application Form 'A', the address has been mentioned as "At-Kendubhata, P.O. Mithapali, Block-Paikmal". Further, in the rent agreement, the address has been mentioned as "Plot No. 305/873, Mouza-Dunguripalli, Tehsil-Paikmal". It is further stated that the petitioner is the son of Hariram Agrawal. Hariram Agrawal was the proprietor is the son of Hariram Agrawal. Hariram Agrawal was the proprietor of M/s. Maa Vaisnodevi Seeds of Paikmal, Dist.- Bargarh. He had earlier committed serious irregularities for which, the proprietorship was blacklisted by the Government. Thereafter, Deepak Kumar Agrawal, elder brother of the petitioner, started the business in the name and style of M/s. Balaji Seeds. It was found that M/s. Balaji Seeds had utilized forged purchase bills of a prestigious State Agriculture University of Karnataka, i.e. University of Agriculture Science, Bangalore and utilized the forged bills, forged breeder certificate, forged breeder tags for foundation seed production by registering a non-existent groundnut variety, i.e., TMV-2 which was ascertained from the Director, Odisha State Seed and Organic Products Certification Agency vide letter no. 1011 dated 28.4.2014. The University of Agriculture Sciences, Bangalore had recommended for initiating legal action against the brother of the petitioner vide letter no. 26 dated 25.4.2014. Thereafter, the Seed Certification Officer, Sambalpur lodged an FIR against Deepak Kumar Agrawal for submission of fake and forged documents in the groundnut seeds production during Kharif Season of 2013 and misled the Government officials for which his licence was cancelled after affording opportunity of hearing to him. 4. Further case of the opposite parties is that when the petitioner had applied for seed licence, opposite party no. 2 issued instructions to the opposite party no. 4 to enquire into the background of the petitioner, his past dealings with the department. 4. Further case of the opposite parties is that when the petitioner had applied for seed licence, opposite party no. 2 issued instructions to the opposite party no. 4 to enquire into the background of the petitioner, his past dealings with the department. As the licence of M/s. Vaishnodevi Seeds, proprietor Hariram Agrawal, was blacklisted and M/s. Balaji Seeds, proprietor Deepak Kumar Agrawal, was cancelled, the petitioner succeeded with his diabolical plan. As per Section 18(2) of the Seed Control Order, 1983, the petitioner being a dealer of seed was required to deposit the monthly seed transaction report of the preceding month of his organization in Form-D to the opposite party no.4 by 5th day of each succeeding month, failing which, the authority reserves the right to suspend/cancel the licence. From the date of issue of licence, the petitioner had never submitted the monthly seeds transaction statement to the licensing authority and kept the authority in dark about the seeds transaction made by him in a clandestine manner. Further, the petitioner is not mentally developed to carryon the business and the father and brother might be the de facto operators. Thus opposite party no. 4 cancelled the seed licence of the petitioner for misrepresentation of facts. 5. It is further stated that there has been no infraction of the principle of natural justice. There is every scope of carrying forward the business of the family in seed business by the petitioner particularly when the father and brother of the petitioner were blacklisted for doing various irregularities in seeds transaction. This was a sinister plot and would have shattered the whole seeds supply chain of breeder to foundation certified seeds. It is further stated that the writ petition being WP(C) No.11118 of 2014 filed by the brother of the petitioner for the self-same issue has been dismissed by this Court. 6. Mr. A.R.Dash, learned counsel for the petitioner, submitted that no opportunity of hearing was provided to the petitioner before cancelling the seed licence of the petitioner, vide Annexure-3. Further, in the counter affidavit the opposite parties cannot supplement the reasons. 7. Per contra Mr. Muduli, learned Addl. 6. Mr. A.R.Dash, learned counsel for the petitioner, submitted that no opportunity of hearing was provided to the petitioner before cancelling the seed licence of the petitioner, vide Annexure-3. Further, in the counter affidavit the opposite parties cannot supplement the reasons. 7. Per contra Mr. Muduli, learned Addl. Standing Counsel for the opposite parties, submitted that clause 15(a) of the Seeds (Control) Order, 1983 provides that licensing authority may suspend or cancel the licence, if it is found that the licensing authority may suspend or cancel the licence, if it is found that the licence had been obtained by misrepresentation as to material particular. The petitioner has suppressed the facts regarding blacklisting of M/s. Baisnodevi Seeds and cancellation of licence of M/s. Balajee Seeds. He further submitted that the writ petition in its present form is not maintainable in view of availability of alternative remedy of appeal provided under clause 16(b) of the Seeds (Control) Order, 1983. He further submitted that the principle of natural justice has no application to the commercial transactions and no notice is required for cancellation of the seed licence. In support of his contention, Mr. Muduli relied on the decisions of the Supreme Court in the cases of Thansingh Nathmal v. The Superintendent of Taxes, Dhubri and others, AIR 1964 SC 1419 , Sadhna Lodh v. National Insurance co. Ltd. and another, (2003) 3 SCC 524 , Ram Narain Arora v. Asha Rani and others, (1999) 1 SCC 141 , M/s. Radhakrishna Agarwal and others v. State of Bihar and others, (1977) 3 SCC 457 and Siemens Public Communication Networks Private Limited and another v. Union of India and others, (2008) 16 SC 215. 8. On the rival pleadings of the parties and the submissions made at the Bar, really three points arise for consideration of this Court. I. Whether the existence of alternative remedy would operate as a bar in entertaining a writ petition under Article 226 of the Constitution? II. Whether the reasons mentioned in the order of cancellation of seed licence dated 2.8.2014, vide Annexure-3, can be supplemented by fresh reasons in shape of affidavit? III. Whether the order of cancellation of seed licence dated 2.8.2014, vide Annexure-3, is an infraction of principle of natural justice? 9. II. Whether the reasons mentioned in the order of cancellation of seed licence dated 2.8.2014, vide Annexure-3, can be supplemented by fresh reasons in shape of affidavit? III. Whether the order of cancellation of seed licence dated 2.8.2014, vide Annexure-3, is an infraction of principle of natural justice? 9. Point No. I In Thansingh Nathmal (supra), the Supreme Court held that the High Court does not act as a court of appeal against the decision of a Court or Tribunal, to correct errors of fact, and does not by assuming jurisdiction under Article 226 trench upon an alternative remedy provided by statute for obtaining relief. Where it is open to the aggrieved petitioner to move another tribunal, or even itself in another jurisdiction for obtaining redress in the manner provided by a statute, the High Court normally will not permit by entertaining a petition under Article 226 of the Constitution the machinery created under the statute to be bypassed, and will leave the party applying to it to seek resort to the machinery so set up. 10. In Sadhana Lodh (supra), the Supreme Court held that where a statutory right to file an appeal has been provided for, it is not open to High Court to entertain a petition under Article 227 of the Constitution. 11. After survey of the earlier decisions, the Supreme Court in Whirlpool Corporation v. Registrar of Trade Marks, Mumbai and others, (1998) 8 SCC 1 in paragraphs 15 and 20 of the report held as follows: "15. Under Article 226 of the Constitution, the High Court, having regard to the facts of the case, has a discretion to entertain or not to entertain a writ petition. But the High Court has imposed upon itself certain restrictions one of which is that if an effective and efficacious remedy is available, the High Court would not normally exercise its jurisdiction. But the alternative remedy has been consistently held by this Court not to operate as a bar in at least three contingencies, namely, where the writ petition has been filed for the enforcement of any of the Fundamental Rights or where there has been a violation of the principle of natural justice or where the order or proceedings are wholly without jurisdiction or the vires of an Act is challenged. There is a plethora of case law on this point but to cut down this circle of forensic whirlpool, we would rely or some old decisions of the evolutionary era of the constitutional law as they still hold the field. " xxx xxx xxx "20. Much water has since flown under bridge, but there has been no corrosive effect on these decisions, which, though old, continue to hold the field with the result that law as to the jurisdiction of the High Court in entertaining a writ petition under Article 226 of the Constitution, in spite of the alternative statutory remedies, is not affected, specially in a case where the authority against whom the writ is filed is shown to have had no jurisdiction or had purported to usurp jurisdiction without any legal foundation." 12. Thus alternative remedy is not a bar to entertain a writ application under Article 226 of the Constitution in at least three categories mentioned in Whirlpool Corporation (supra), namely, where the writ petition has been filed for the enforcement of any of the Fundamental Rights or where there has been a violation of the principle of natural justice or where the order of proceedings are wholly without jurisdiction or the vires of an Act is challenged. 13. Point No. II More than sixty years back, the Supreme Court, in the case of Commissioner of Police, Bombay v. Gordhandas Bhanji, AIR 1952 SC 16 , speaking through the Bench Justice Vivian Bose in para-9 of the report, held that the 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 order made by public authorities are meant to have public effect and are intended to affect the acting and conduct of those to whom they are addressed and must be construed objectively with reference to the language used in the order itself. 14. The same view was echoed in Mohinder Sigh Gill and another v. The Chief Election Commissioner, New Delhi and others, AIR 1978 SC 851 . 14. The same view was echoed in Mohinder Sigh Gill and another v. The Chief Election Commissioner, New Delhi and others, AIR 1978 SC 851 . It was held 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 a challenge, get validated by additional grounds later brought out. Orders are not like old wine becoming better as they grow older. 15. On the anvil of the decisions cited supra, this Court is required to examine the impugned order dated 2.8.2014 passed by the District Agricultural Officer, Padampur, opposite party no. 4, vide Annexure-3. The order of cancellation of licence, vide Annexure-3, has been made on three grounds mentioned in the preceding paragraphs. As would be evident from the impugned order, Hariram Agrawal (father of the petitioner) was the proprietor of M/s. Venkateswar Seeds and was blacklisted, the seed licence of Deepak Kumar Agrawal (elder brother of the petitioner), proprietor of M/s. Balaji Seeds, had been cancelled and there is apprehension that the petitioner may commit mischief in future seeds transaction. The same has been tried to be justified by Mr. Muduli on the ground that the petitioner has suppressed the material facts and violated the provision of Seed Control Order, 1983, but the same has not been reflected in the impugned order. 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. Merely because the father of the petitioner was blacklisted and the seed licence of his brother has been cancelled, the same per se cannot be a ground to cancel the seed licence of the petitioner. In the absence of any allegations or infraction of the provisions of the Seed Control Order, 1983, the petitioner cannot be punished or made to suffer for the action of his' father and brother. The third ground shows that there is apprehension that the petitioner may commit mischief in future seeds transaction as he belongs to the same family. This is based on surmises and conjectures. 16. The third ground shows that there is apprehension that the petitioner may commit mischief in future seeds transaction as he belongs to the same family. This is based on surmises and conjectures. 16. Point No. III The concept of natural justice has undergone a sea change in recent years. The old distinction between a judicial act and an administrative act has withered away. Even an administrative order which involves civil consequence must be consistent with the rules of natural justice. The expression "civil consequences" encompasses infraction of not merely property or personal rights, but of civil liberties, material deprivations, and non pecuniary damages. It takes within its sweep everything that affects a citizen in his civil life. 17. In Uma Nath Pandey and others v. State of Uttar Pradesh and another, AIR 2009 SC 2375 , the Supreme Court held as follows: - "6. Natural justice is another name for common sense justice. Rules of natural justice are not codified cannons. But they are principles ingrained into the conscience of man. Natural justice is the administration of justice in a common sense liberal way. Justice is based substantially on natural ideals and human values. The administration of justice is to be freed from the narrow and restricted considerations which are usually associated with a formulated law involving linguistic technicalities and grammatical niceties. It is the substance of justice which has to determine its form. 7. The expressions "natural justice" and "legal justice" do not present a water-tight classification. It is the substance of justice which is to be secured by both, and whenever legal justice fails to achieve this solemn purpose, natural justice is called in aid of legal justice from unnecessary technicality, grammatical pedantry or logical prevarication. It supplies the omissions of a formulated law. As Lord Buckmaster said, in form or procedure should ever be permitted to exclude the presentation of a litigants defence. 8. The adherence to principle of natural justice as recognized by all civilized States is of supreme importance when a quasi-judicial body embarks on determining disputes between the parties, or any administrative action involving civil consequences is in issue. These principles are well settled. The first and foremost principle is what is commonly known as audi alteram partem rule. It says that no one should be condemned unheard. Notice is the first limb of this principle. It must be precise and unambiguous. These principles are well settled. The first and foremost principle is what is commonly known as audi alteram partem rule. It says that no one should be condemned unheard. Notice is the first limb of this principle. It must be precise and unambiguous. It should appraise the party determinatively the case he has to meet. Time given for the purpose should be adequate so as to enable him to make his representation. In the absence of a notice of the kind and such reasonable opportunity, the order passed becomes wholly vitiated. Thus, it is but essential that a party should be put on notice of the case before any adverse order is passed against him. This is one of the most important principles of natural justice. It is after all an approved rule of fair play. The concept has gained significance and shades with time. When the historic document was made at Runnymede in 1215, the first statutory recognition of this principle found its way into the "Magna Carta". The classic exposition of Sir Edward Coke of natural justice requires to vocate, interrogate and adjudicate". In the celebrated case of Cooper v. Wandsworth Board of Works [(1863) 143 ER 414], the principle was thus stated: "Even God did not pass a sentence upon Adam, before he was called upon to make his defence. "Adam" says God, "where are thou? hast thou not eaten of the tree whereof I commanded thee that thou shouldest not eat"." 18. It is apt to refer here the verdict in Kesar Enterprises Limited v. State of Uttar Pradesh and others. (2011) 13 SCC 733 wherein the Supreme Court was considering the applicability of principles of natural justice to Rule 633 (7) of the Utter Pradesh Excise Manual. The said Rule provided that if certificate was not received within the time mentioned in the bond or pass, or if the condition of bond was infringed, the Collector of the exporting district or the Excise Inspector who granted the pass shall take necessary steps to recover from executant or his surety the penalty due under the bond. I para-30 of the report, it is held as under; "30....... I para-30 of the report, it is held as under; "30....... we are of the opinion that keeping in view the nature, scope and consequences of direction under sub-rule (7) of Rule 633 of the Excise Manual, the principles of natural justice demand that a show cause notice should be issued and an opportunity of hearing should be afforded to the person concerned before an order under the said Rule is made, notwithstanding the fact that the said Rule does not contain any express provision for the affected party being given an opportunity of being heard." 19. The submission of Mr. Muduli, learned Addl. Standing Counsel that natural justice is not required to be followed before cancelling the seed licence of the petitioner is difficult to fathom. In Radhakrishna Agrwal (supra), the petitions filed by the appellant under Article 226 were directed against the orders of the State Government revising the rate of 'royalty payable by them under the lease granted to them by the State, through its Forest Department, permitting them to collect sat seeds from the forest area. The subsequent cancellation of the lease was also challenged. The petitioners raised the question of breach of contract and mala fides for the action taken. The questions raised also related to constitutional provisions regarding exercise of executive power and entering into contracts by the Government under Articles 298 and 299, and if the same continued to be subject to Part III of the Constitution in the said context, the Supreme Court held that the proposition that whenever a State or its agents or officers deal with the citizen, either when making a transaction or, after making it acting in exercise of powers under the terms of a contract between the parties, there is a dealing between the State and the citizen which involves performance of "certain legal and public duties", is too wide to be acceptable. The remedy of Article 226 is not open for such complaints. 20. In Siemens Public Communication Networks Private Limited (supra), the Supreme Court held that a contract is a commercial transaction and evaluating tenders and awarding contracts are essentially commercial functions. In such cases principles of equity and natural justice stay at a distance. The remedy of Article 226 is not open for such complaints. 20. In Siemens Public Communication Networks Private Limited (supra), the Supreme Court held that a contract is a commercial transaction and evaluating tenders and awarding contracts are essentially commercial functions. In such cases principles of equity and natural justice stay at a distance. If the decision relating to award of contracts is bona fide and is in public interest, Courts will not exercise the power of judicial review and interfere even if it is accepted for the sake argument that there is a procedural lacuna. 21. A bare reading of the said decisions, however, shows that there is a significant difference in the factual matrix in which the said case arose for consideration. The reliance placed upon Radhakrishna Agarwal (supra) and Siemens Public Communication Networks Private Limited (supra), therefore, is of no assistance to the opposite parties. 22. The submission of Mr. Muduli that the order of cancellation dated 2.8.2014, vide Annexure-3, is a speaking one and no prejudice has been caused to the petitioner is like a billabong. The decision cited by Mr. Muduli in Ram Narain Arora (supra) is also distinguishable on facts. The Supreme Court in Ram Narain Arora had the occasion to deal with the Delhi Rent Control Act, 1958. 23. No case has been set out by the opposite parties that non issuance of show-cause notice has not caused any prejudice to the petitioner. Had the show cause notice been issued, the petitioner could have mentioned as to why such extreme order was to justified. The petitioner could have come out with extenuating circumstances defending such an action, even if defaults were there and the opposite party no. 4 was not satisfied with the explanation qua the charges. It is not at all possible to accept the submission of Mr. Muduli, learned Addl. Standing Counsel that no prejudice has been caused to the petitioner due to non issuance of show cause notice. Further the extreme nature of cancellation of seed licence with severe consequence would itself amount to causing prejudice to the petitioner. Thus there has been clear violation of principles of natural justice, which invalidates the order of cancellation of seed licence dated 2.8.2014, vide Annexure-3. 24. Further the extreme nature of cancellation of seed licence with severe consequence would itself amount to causing prejudice to the petitioner. Thus there has been clear violation of principles of natural justice, which invalidates the order of cancellation of seed licence dated 2.8.2014, vide Annexure-3. 24. On taking a holistic view of the matter, this Court is of the considered opinion that the order of cancellation of seed licence of the petitioner dated 2.8.2014, vide Annexure-3, by the opposite party no. 4, is an infraction of principle of natural justice and the same is hereby quashed. While quashing the same this Court leaves it to the opposite parties to grant an opportunity to the petitioner to have his say in relation to allegations or complaints, which according to the authority concerned provide foundation for taking action against the petitioner and only after grant of such opportunity, the action as authorized -under law should be taken. 25. The writ petitioner is allowed. There shall be no order as to costs.