Patna High Court
Swami Distributors vs State Of Bihar And Ors. on 28 July, 1989
Equivalent citations: AIR1990PAT90, 1990(38)BLJR368, AIR 1990 PATNA 90
JUDGMENT S.B. Sanyal, J.
1. The petitioner is a licensee under the Bihar Trade Articles (Licenses Unification) Order, 1984. Pursuant to the said licence, it carries on wholesale business in kerosene oil. The petitioner has moved this Court in this writ petition for quashing the order dated 24-11-1988 of the Collector, Sitamarhi (respondent No. 2) as contained in Annexure-4, by which the petitioner's licence has been suspended with immediate effect because of institution of a criminal case against it under Section 7 of the Essential Commodities Act. The order of suspension of the licence was not preceded by any show cause notice and/or affording any opportunity therefor to the petitioner. The writ petition was filed on 20-2-1989 and it came up for admission on 9-3-1989 before Hon'ble Mr. Justice P.S. Mishra and Hon'ble Mr. Justice R.N. Sinha, who while admitting the writ petition, formulated two questions and required the aforesaid two questions to be decided by a Division Bench. The order dated 9-3-1989 reads as follows:
"Heard learned counsel for the petitioner and the state.
This application will be heard by Division Bench to consider whether the decisions with reference to the various Control orders, which existed prior to the Bihar Trade Articles (Licenses Unification) Order, 1984. On the question that no order of suspension of the licence can be ordered by way of interim measure on the ground of pendency of a criminal case are still applicable and whether in view of Sub-clause (2) of Clause 11 of the Unification Order, which makes issuance of show cause notice before cancellation of license imperative and not Sub-clause (1) for the purpose of suspension of licence on the ground of alleged contravention of the terms and conditions of licence, action be taken against the licencee for suspension of his licence without notice.
There shall, however, be no interim order."
2. Prior to the promulgation of the Bihar Trade Articles (Licences Unification) Order, 1984, (hereinafter referred to as the "Unification Order 1.984,") trade and business in kerosene oil was regulated by the Bihar Kerosene Dealers Licensing Order, 1965, an order made under Section 3 of the Essential Commodities Act. By Clause 32 of the Unification Order, 1984, some of the Control orders, as shown in Schedule III of the order stood repealed, Bihar Kerosene Dealers Licensing Order 1965, being one of them. Clause 8 of the Bihar Kerosene Dealers Licensing Order, 1965, envisages" Cancellation of licence". In the year 1975, the said Clause 8 was slightly amended by providing that if any case under Section 7 of the Essential Commodities Act is pending against a licensee, the licence of the licensee concerned shall remain suspended during the pendency of the case by order in writing of the licensing authority. By passing reference, it may be stated here that this power of suspension during the pendency of a criminal case was not contemplated by any other order made under Section 3 of the Essential Commodities Act applicable to the State of Bihar which were in vague prior to the Unification Order, 1984, but some of the orders provided that the licence shall stand cancelled in the case of conviction but the same will be restored or reissued if the conviction is subsequently set aside. The amendment in Bihar Kerosene Dealers Licensing Order, 1965, was necessitated and followed when this Court struck down an order of suspension made because of pendency of a criminal case in the case of Onkarmal Satyanarain v. State of Bihar, reported in 1977 Pat LJR 93 : (1977 Cri LJ 39) arising out of Kerosene Dealers Licensing Order, 1965. In that case, a Bench of this Court held that pendency of a criminal case under S, 7 of the Essential Commodities Act is neither contravention of any provision of the Order, nor any condition of the licence nor any directing issued under this Order.
3. Admittedly, the impugned order of suspension has been made in purported exercise of the power conferred under Clause 11 of the Unification Order, 1984, which reads as follows:--
Suspension and cancellation of licence-
(1) of any licence 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 Licencing Authority and an entry will be made in his licence relating to such suspension of 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 licenses of stating his case. Such suspension shall be limited only to those trade articles regarding which contravention has been made by the licensee.
4. At a glance it may be stated that in none of the two clauses aforesaid, the power of interim suspension of licence has been conferred in case of any criminal case pending finder Section 7 of the Essential Commodities Act against the licensee, as was invogue in the amended provision of Bihar Kerosene Dealers' Licensing Order, 1965.
5. Admittedly, no show cause notice was issued on the petitioner before the order of Suspension of the licence was passed and on the date the writ petition was admitted refusing interim stay, 90 days as contemplated under Section 11(2) of the Unification Order, 1984, stood long expired.
6. Mr. Bharuka appearing on behalf of the petitioner contended that under the Scheme of Clause 11 of the Unification Order, 1984, the licensing authority has been empowered to cancel a licence or suspend a licence by way of punishment with regard to one more trade articles, if any licensee or his agent or servant or any other persons acting on his behalf contravenes any of the terms and conditions of the licence. Clause 11(2) of the Unification Order, 1984, on the other hand, envisages that before an order of cancellation is rendered, the licensee should be given a reasonable opportunity of stating his case against the proposed cancellation of the licence. During the pendency or in contemplation of a proceeding of cancellation, there could be an interim suspension of the licence for a period not exceeding ninety days, for which no show cause is at all required to be given, and the order of interim suspension will be limited only to those trade articles regarding which contravention has been made by the licensee. Learned counsel for the petitioner, after having stated the scheme of Clause11, submitted that if the instant order of suspension of the licence is treated to be by way of punishment, then it ought to have been preceded by a reasonable opportunity of showing cause, even though it not so mentioned under Clause 11(1), and if it is treated to be an order of interim suspension, it could not be for more than ninety days. Learned counsel also contended that an order of interim suspension for a period of ninety days could only be made in the case of proposed cancellation of licence, and hot for any other reason, namely, pendency of a criminal case and no cancellation proceeding has been taken against the petitioners.
7. The respondents have filed a counter-affidavit. Wherein it has been stated that the suspension order of the licensee under the Bihar Kerosene Dealers' Licensing Order, 1965, conferred power upon the licensing authority to suspend a licence for such duration as a criminal case under Section 7 of the Essential Commodities Act remained pending in the Court and in-exercise of that power the impugned order has been passed. Learned Additional Advocate General, however, at the time of the argument did not press this submission put forward in the counter-affidavit, and rightly so, as the impugned order has been passed long after the Unification Order, 1984, came into force, repealing the Kerosene Dealers' Licensing Order, 1965. He, however, submitted that the order of suspension in the instant case is under Clause 11(1) of the Unification Order, 1984, for which issuance of a show cause is not contemplated under the said clause. The institution of a criminal case under Section 7 of the Essential Commodities Act is only when a person contravenes any of the terms and conditions of the licence, and since a criminal case under Section 7 of the Essential Commodities Act was instituted, the authority had rightly suspended the licence till further orders. According to the learned Additional Advocate General, Clause 11(2) of the Unification Order, 1984, contemplates cancellation of licence for which a show cause notice is a must, and if any interim suspension order is made during the pendency of such a cancellation proceeding, the life of such an Order of suspension is for a period of ninety days only. Since the impugned order of suspension was not made under Clause 11(2) of the Unification Order, 1984, the order of suspension will legally continue beyond ninety days.
8. The Bench while admitting the writ petition quaried whether the decisions rendered on the question of interim suspension of a licence pending criminal case under Section 7 of the Essential Commodities Act are still good law after the promulgation of the Unification Order, 1984, particularly because of an express provision of interim suspension provided under Clause 11(2) of the Unification Order, 1984. Another question which the admission Bench has referred for consideration is whether a show cause notice for suspension of a licence is imperative in view of Clause 11(1) of the Unification Order, 1984, which provision while providing, reasonable opportunity of a cancellation proceeding is quite silent of such a procedure in the case of suspension of a licence.
9. Suspension, both under service jurisprudence as well as control or regulatory law are of two kinds:--
(a) suspension by way of punishment, and
(b)suspension pending enquiry and/or contemplated enquiry.
(See Smt. Hira Devi v. District Board, Shahjahanpur, AIR 1952 SC 362 at p. 364 and Sub-Divisional Officer v. Shambhoo Narain Singh, AIR 1970 SC 140). This power, however, has to be culled out from the express provision of the statute.
The aforesaid principle is quite consistent with the scheme of Clause 11 of the Unification Order, 1984, as it provides two kinds of suspension, namely, one under Clause 11(1) i.e., suspension by way of punishment, and under Clause 11(2), suspension during the pendency or contemplation of a proceeding for cancellation of licence. The second kind of suspension, is an interim suspension with a life of ninety days. Clause 11(1), which speaks about the first kind of suspension i.e., suspension by way of punishment, is absolutely silent about providing reasonable opportunity, where as it provides for an opportunity in a case of cancellation of licence, which is ex facie punishment. Clause 11(2), however, excludes giving of any opportunity for passing an order of interim suspension.
10. The question, therefore arises whether the suspension by way of punishment can be inflicted without giving a reasonable opportunity in absence of any provision under Clause 11(1). The suspension of a licence to carry on trade and business by way of punishment is a drastic measure, inasmuch as the power to. carry on trade and business is taken away for a certain period, where as the cancellation of a licence with the same consequences for the entire period for which the licence is granted. The. licensee, therefore suffers from a severe civil consequence as in both the cases, trade and business activities, come to a halt, thus putting the licensee to serious jeopardy. It results in serious abridgement of the right to carry on business and, therefore, it must ensure just exercise of power. In the case of Gauri Shankar Badri Narain v. State of Bihar, 1973 Pat LJR 129, a Bench of this Court while considering validity of Clause 8(2) of the Bihar Motor Spirit High Speed Diesel Oil Licensing Order, 1966, which reads.
"The State Govt. may without giving any previous notice and without assigning any reason suspended or cancel any licence under Order."
has held the same as ultra vires and void (see also AIR 1974 SC 175 and AIR 1974 SC 1539). Much water has flown since then. In the case of Mohinder Singh Gill v. The Chief Election Commr., New Delhi, AIR 1978 SC 851), audi alteram was held to be a functional obligation, the silence of statute has no exclusionary effect." It is not always a necessary inference that if opportunity is expressly provided in one provision and not so provided in another, opportunity is to be considered as excluded from that other provision. It may be a weighty consideration to be taken into account but the weighter consideration as whether the administrative action entails consequences was so observed by the Supreme Court in the case of S.L. Kappor v. Jagmohan, AIR 1981 SC 136. Catena of authorities, both of this Court and of the Supreme Court, have veered round this point that an action which visits a person with civil consequences, the person affected must be provided a reasonable opportunity to be heard and this right has to be read in the statute. To follow the course of natural justice is irrigating inconvenience albeit inconvenient obligation for men in authority, since, notice and opportunity are its very marrow. I, therefore, hold that suspension by way of punishment can only be passed by providing a reasonable opportunity to the person concerned, even though Clause 11(1) of the Unification Order, 1984, is silent on this point! What is reasonable in given circumstances, is in the domain of practibility, not formalised rigidity.
11. So far as the question of giving opportunity in the case of interim suspension is concerned, Clause 11(2) of the Unification Order, 1984, expressly excludes the same. The question is whether it is permissible since an interim suspension also affects the right of the licensee. This question came up for consideration in the case of Sukhwinder Pal Bipan Kumar v. State of Punjab, AIR 1982 SC 65. Where the Appex Court was considering the provision of Clause 11 of the Punjab Foodgrains Dealers Licensing and Price Control Order, 1978. As there is some similarity between Clause 11(2) of the Unification Order, 1984, and 2nd proviso to Clause 11 of the Punjab Food-grains Dealers Licensing and Price Control Order, I am tempted to quote Clause 11 of the Punjab Foodgrains Dealers Licensing and Price Control Order which reads as follows (at p. 67 of AIR) :--
(1) If a licensee or his agent or any person acting on his behalf contravenes any of the terms and conditions of his licence or any provision of this Order then without prejudice to any action that may be taken against him, the licensing authority may by an order in writing, cancel or suspend licence in so far as it relates to the foodgrains in respect of which contravention has been made.
Provided that no order shall be made under this clause unless the licensee has been given a reasonable opportunity of stating his case.
Provided further that the licensing authority may suspend a licence without giving a reasonable opportunity to the licensee of stating his case for a period not exceeding ninety days during the pendency or in contemplation of the proceedings for cancellation of his licence."
The attack was to the vires of the second proviso to Clause II of the said order which expressly excluded giving of a reasonable opportunity in case of interim suspension of licence during the pendency or in contemplation of the proceedings for cancellation of a licence. The question of giving an opportunity in the case of suspension by way of punishment was provided for, unlike Clause 11(1) of the Unification Order, 1984. While upholding the vires of the second provision, the Supreme Court held that the suspension of licence is a drastic measure, but "if the breach is of such a nature that it must result in the cancellation of a licence", the licensee must face the further consequence of suspension of the Hence during the pendency or in contemplation of the proceedings for cancellation of the licence. According to their Lordships, it seeks to strike a proper balance between the freedom of trade or business guaranteed under Article 19(1)(g) and the social control permitted by Clause (6) of Article 19 of the Constitution. It is therefore, difficult to hold that the second proviso to Sub-clause (1) of Clause 11 of the order is of an excessive nature beyond what is required in the interests of the general public" Their Lordships struck a note by observing (at p. 69 of AIR):
"It must, however, be read along with the main enacting provision in Sub-clause (1) and if so construed, the power of suspension during the pendency of an inquiry cannot be exercised unless there is contravention of any of the terms and conditions of the licence or any of the provisions of the Order. Secondly, it provides for a reasonable safeguard, in that it limits the period of suspension. The period of suspension would necessarily depend upon the nature of the breach, and in no case, can it exceed ninety days. During this period, the licensing authority is expected to complete the inquiry and take a decision as to the cancellation or otherwise of the licence. Thirdly, as a check upon possible injustice that might result from an improper exercise of the power of suspension of a licence by the licensing authority under the second proviso, there is an additional safeguard to a dealer by way of an appeal to the Director, Food and Supplies, under Clause 13 of the Order. This Court has repeatedly laid down that where the discretion to apply the provisions of a particular statute is left with the Government or one of the highest officers, it will be presumed that the discretion vested in such highest authority will not be abused."
The observations referred to above, even though made with regard to interim suspension for a limited period, throws sufficient light to show that where the suspension is by way of punishment, even though the provision makes no reference for giving a reasonable opportunity, a person visited with civil consequences shall be entitled to it as a matter of course, and the said right of the person affected has to be read in the statute.
12. In the instant case, admittedly no cancellation proceeding for the licence of the petitioner has been taken or ever contemplated. Therefore, there could be no question of interim suspension. Even if it was contemplated the suspension period has long lapsed. The contention of the learned Additional Advocate General that the order of suspension should be read as an order passed under Clause 11(1) of the Unification Order, 1984, is not acceptable to me because no authority has concluded that the petitioner has contravened any of the terms and conditions of the licence. The impugned order of suspension contained in Annexure 4 also does not say so. It only says that in view of the pendency of a criminal case under Section 7 of the Essential Commodities Act, the licence of the petitioner has been suspended till further orders. This, to my mind, is in the nature of interim suspension till the conclusion of the criminal case. No such power has been conferred under Clause 11 of the Unification Order, 1984. In this connection may unhesitatingly refer to the decision in Govind Saran and Sons v. State of Bihar reported in 1983 Pat LJR 26 : (AIR 1983 Pat 96) and Onkarmal Satyanarain (1977 Cri LJ 39) (Pat) (supra) where it was held that in absence of such a power being conferred by the statute, the authorities have no jurisdiction to pass an order of suspension of the licence because of the pendency of a criminal case. The said judgments are still relevant in spite of Clause 11 of the Unification Order, 1984, inasmuch as there is no power of suspension provided in the Unification Order, 1984, during the period of pendency of a criminal case under Section 7 of the Essential Commodities Act. The initiation of a proceeding under Section 7 of the Essential Commodities Act does not amount to "contravention of the terms and conditions of the licence", for which alone an order of suspension of cancellation can be ordered. The question of contravention is at best sub judice.
13. In the result, this writ petition is allowed and the order of suspension of the licence of the petitioner as contained in Annexure-4 is quashed and the petitioner be permitted to carry on trade and business under the licence till the licence is cancelled. There will be no order as to costs.
R.N. Lal, J.
14. I agree.