Madhya Pradesh High Court
Habib Nathu Owners Of Diesel Pump vs State Of Madhya Pradesh And Ors. on 18 November, 1987
Equivalent citations: AIR1988MP283, AIR 1988 MADHYA PRADESH 283
JUDGMENT Sohani, J.
1. This is a petition under Article 226 of the Constitution of India.
2. The material facts giving rise to this petition, briefly, are as follows:
The petitioner was, at the material time, carrying on business as a dealer in diesel oil under the licence granted to him under the provisions of the Madhya Pradesh Motor Spirit and High Speed Diesel Oil (Licensing & Control) Order, 1980 (hereinafter referred to as "the Order"). On 12-12-1983, the Food Controller carried out a search at the premises of the petitioner and took sample of the diesel oil. On the basis of the report submitted by the Food Controller, a notice was issued to the petitioner by the Collector, Indore, to show cause why the licence be not cancelled and the security deposit be forfeited for the reasons set out in the notice. The petitioner showed cause; but the collector, by his impugned order, cancelled the licence and forfeited the amount of security deposit. The appeals preferred by the petitioner from the impugned order were dismissed. Hence, the petitioner has filed this petition.
3. Though in the petition, a number of averments were made and reliefs sought, the learned counsel for the petitioner confined his arguments to the relief of cancellation of the order (Annexure 'R') dated 29-11-1984 passed by the Collector cancelling the licence of the petitioner and forfeiting the amount of security deposit.
4. Having heard learned counsel for the parties, we have come to the conclusion that this petition deserves to be allowed. Clause 11 of the Order, which empowers the licensing authority to cancel the licence, reads as under :
"11. Cancellation or Suspension of Licence:-- No holder of a licence issued under this Order or his agent or servant or any other person acting on his behalf, shall contravene any of the terms of conditions of the licence or any provision of this Order and if any such holder or his agent or servant or any person acting on his behalf contravenes any of the said terms or conditions or provisions, then without prejudice to any other action that may be taken against him, his licence may be cancelled or suspended by order in writing of the licensing authority :
Provided that no order shall be made under this clause unless the licensing authority has obtained the opinion of the Oil Company, with whom the agreement has been made by the licensee and the licensee has been given a reasonable opportunity of stating his case against the proposed cancellation or suspension :
Provided further that if no communication containing the opinion of the Oil Company is received within thirty days of the date of receipt of a letter to that effect under the foregoing proviso by the District Manager or an officer of equivalent rank of that company, it shall be presumed that the Oil Company agree with the proposed action and the licensing authority shall be free to pass such order as may deem fit."
The only ground, on the basis of which action has been taken against the petitioner is that the sample of diesel taken from the petitioner was not according to specification. Now, the order passed by the Collector, does not, however, make any reference to the opinion of the Oil Company in question. It is also not stated in the order that the licensing authority had sought the opinion of the Oil Company and that no communication was received from the Oil Company within thirty days of the receipt of the letter seeking that opinion. Moreover, it has now come on record that the opinion of the Oil Company was that the sample was according to specification. It is thus clear that the licensing authority proceeded to pass an order of cancellation without caring to see whether the condition precedent for making an order under Clause 11 was fulfilled. That order cannot, therefore be sustained in law.
5. It was urged that the forfeiture of security deposit under Clause 15 of the Order was justified as the petitioner had contravened the conditions of the licence. The contention cannot be upheld. The only contravention alleged against the petitioner was that the diesel oil offered for sale by the petition er did not conform to the prescribed standard. But this allegation was not only not founded on the opinion of the oil company in question but was also contrary to the opinion received by the licensing authority from the Oil Company. The order directing forfeiture of the amount of security deposit cannot also be sustained in law.
6. For all these reasons, this petition, is allowed. The order dated 29-11-1984 (Annexure 'R') passed by the Collector, Indore, cancelling the licence of the petitioner and forfeiting the amount of security deposit; the order dated 21-6-1985 (Annexure 'S') passed by the Addl. Commissioner, Indore, dismissing the appeal; and the order (Annexure 'V') passed by the State Government affirming the order Annexure 'S' are all quashed. In the circumstances of the case, parties shall bear their own costs of this petition. The amount of security deposit, if any, be refunded to the petitioner.