Patna High Court
Sita Oil And Flour Mills vs The State Of Bihar And Ors. on 7 September, 1971
Equivalent citations: AIR1972PAT198, AIR 1972 PATNA 198
Author: N.L. Untwalia
Bench: N.L. Untwalia
ORDER
1. The petitioner was hold-ins a wholesale foodgrain dealers' licence granted by the District Magistrate, Monghyr, under the Bihar Foodgrains Licensing Order, 1967 hereinafter called the Licensing Order. A notice dated the 20th of August, 1968, a copy of which is Annexure 1 to the writ application, was issued to the petitioner by the District Supply Officer, Monghyr to show cause why its wholesale dealers' licence should not be cancelled for its failure to submit the fortnightly returns for the fortnights ending on 15th April, 15th May and 15th June, 1968. The petitioner filed its show cause petition dated 2-9-1968 before the District Supply Officer, Monghyr, a copy of which is Annexure 2 to the writ application. In this show cause petition it took the stand that it had sent the quarterly returns in question through post under postal certificates. The District Supply Officer gave hearing to a representative of the petitioner on 25-3-1969, as stated in his communication dated 4-6-1969 (Annexure 3). Thereafter, in the said communication, he informed the petitioner that from the statement of its representative it appeared that it was not dealing in foodgrain, at one time it did not store more than 100 quintals of foodgrains, it was dealing only in manufacture of edible oil and flour and, therefore, it was not necessary that it should continue to have a wholesale foodgrain licence; its purpose could very well be served by retail foodgrain licence. The District Magistrate, therefore, the communication stated further, had been pleased to cancel the wholesale foodgrain licence No. 145/66 of the petitioner on that ground.
2. The petitioner filed an appeal before the Commissioner. Bhagalpur Division. The Commissioner by his order dated 27-10-1969 (Annexure 4) dismissed the appeal upholding the ground on which the licence had been cancelled, as stated in Annexure 3, as also stating in his order that the firm had not been submitting fortnightly returns as required under the terms of the licence and on being satisfied on that account also the licence had been cancelled. The petitioner has obtained a rule from this Court for the quashing of Annexures 3 and 4 by grant of an appropriate writ. Cause has been shown by filing a counter-affidavit on behalf of the respondents as also by the learned Government Pleader I at the time of hearing.
3. Three points were urged in support of the writ application by learned Counsel for the petitioner--
(i) That under the Licensing Order the District Supply Officer had no power to issue a show cause notice of in any event the matter ought to have been considered by the District Magistrate himself on either giving a personal hearing to the petitioner's representative or on perusal of its show cause petition.
(ii) That the licence was cancelled by the District Magistrate, as communicated by Annexure 3, on a ground which was not mentioned in Annexure 1, the show cause notice.
(iii) That the licence could not be cancelled on the ground mentioned in annexure.
4. We do not think that the first submission made on behalf of the petitioner is sound and should be held to be correct. The notice (Annexure 1) shows that it has been issued under the orders of the Collector, namely, the District Magistrate. The proviso to Clause 7 of the Licensing Order requires that no order under the said clause shall be made unless the licensee has been given a reasonable opportunity of stating his case against the proposed cancellation. Under the orders of the District Magistrate such an opportunity could be and was given by the District Supply Officer. Nor was it necessary to give a personal hearing to the petitioner's representative by the District Magistrate himself. The District Supply Officer was competent to give personal hearing. Although strictly speaking even that was not essential in the eye of law for the sake of fairness it was rightly given. Thereafter, as it appears from Annexure 3, the order must have been made by the District Magistrate on the report of the District Supply Officer. The first point, therefore, is rejected as being without any substance.
5. The other two points urged on behalf of the petitioner are well founded and must be accepted as correct. The ground on which the licence has been cancelled, as contained in Annexure 3, was not at all communicated in Annexure 1. Licence cannot be cancelled under Clause 7 of the Licensing Order on a ground different from the one in respect of which the licensee has been asked to explain. The observation of the learned Commissioner in his order (Annexure 4) that the licensing authority had cancelled the licence on being satisfied on the charge of non-submission of returns Is not correct. It is not supported by what is stated in Annexure 3. The learned Government Pleader also fairly conceded before us that he could not support this observation of the learned Commissioner.
6. Clause 7 of the Licensing Order authorises the licensing authority to cancel the licence if the holder of the licence or his agent or servant or any other person acting on his behalf contravenes any of the terms and conditions of the licence and on no other ground. Even assuming that the petitioner was not carrying on any business which the petitioner has tried to explain by stating that it was not able to carry on business because of certain export restrictions put under the law the licence could not be cancelled on that account. It was not a term or condition of the licence that the licensee must carry on the wholesale business. It may well be that, under Clause 6 of the Licensing Order, on that ground the renewal of the licence could be refused but cancellation could not be made on that ground. It was not within the power of the licensing authority to cancel a foodgrain licence on the ground that the licensee, during the period for which the licence has been granted, does not carry on the business.
7. For the reasons stated above, we allow this writ application and by grant of a writ of certiorari quash the order of the District Magistrate, as communicated by Annexure 3, and the order of the Commissioner dismissing the appeal, as contained in Annexure 4. We shall make no order as to cost.