Jharkhand High Court
Madhu Sudan Jha And Md. Nisar Alam vs The State Of Jharkhand And Ors. on 19 May, 2006
Equivalent citations: [2006(3)JCR463(JHR)], 2006 (2) AIR JHAR R 789, (2006) 3 JCR 463 (JHA) (2007) 3 JLJR 560, (2007) 3 JLJR 560
Author: M.Y. Eqbal
Bench: M.Y. Eqbal
JUDGMENT M.Y. Eqbal, J.
Page 1143
1. In these two writ petitions, the petitioners have challenged the order as contained in the letters dated 30.12.2005 issued by the Sub Divisional Officer, Madhupur, whereby he has cancelled the Fair Price Shop licences on the basis of recommendation made by the State Level Committee.
2. In W.P. (C) No. 476 of 2006, the petitioner was running a fair price shop under Public Distribution System (PDS) since 1982. On 5.8.2005, a first information report was lodged against the petitioner under Section 7 of the Essential Commodities Act, 1955 on the basis of report of the Assistant District Supply Officer, Madhupur alleging that the Sub Divisional Officer, Madhupur got secret information regarding petitioner's shop which was involved in black-marketing of the foodgrains supplied to him for distribution. The shop of the petitioner was raided and 12.08 quintals of wheat was seized. It is contended by the petitioner that a show cause notice was issued by the District Supply Officer asking him to show cause. The petitioner submitted a detailed show cause, but without initiating any cancellation proceeding and without giving opportunity of hearing, the District Level Committee headed by the Deputy Commissioner decided to cancel the licence and the said decision was communicated by the Sub Divisional Officer.
3. In W.P. (C) No. 796 of 2006, the petitioner was holding a Fair Price Shop licence at village Patwabad, Madhupur Circle in the district of Deoghar. In his case also, FIR was lodged alleging, inter alia, that he kept kerosene oil in the house of another person for the purpose of black-marketing and on raid being conducted, 380 litres of kerosene oil was seized. In the similar manner, the licence of the petitioner was cancelled.
4. Mr. S.L. Agarwal, learned Counsel appearing for the petitioners, assailed the impugned order as being illegal and wholly without jurisdiction. Learned Counsel firstly submitted that the action of the respondents in cancelling the licences on the basis of the decision taken in a meeting under the Chairmanship of Deputy Commissioner, Deoghar is absolutely illegal and wholly without jurisdiction. Learned Counsel submitted that neither the District Supply Officer had jurisdiction to issue show clause notice nor the Deputy Commissioner, being the appellate authority and not the licensing authority, can take a decision by heading a committee. Learned Counsel submitted that procedures adopted by the respondents in cancelling the licences are wholly arbitrary and violative of principles of natural justice.
5. A counter affidavit has been filed in this case by the respondents stating, inter alia, that the impugned order of cancellation of licences was passed by the Sub Divisional Officer on the basis of the recommendation of Public Distribution Review Committee headed by the Deputy Commissioner. Besides the facts alleged in the Page 1144 First Information Report it is stated that Food, Civil Supply & Commerce Department vide letter dated 16.6.2005 issued guidelines regarding fair price shop licence according to which, in each district a committee was constituted under the Chairmanship of Deputy Commissioner who will consider regarding grant, suspension and cancellation of fair price shop licence on the basis of recommendation of Sub Divisional Officer. A copy of such guidelines has been annexed as Annexure-F to the counter affidavit. It is stated that impugned order of cancellation of licence has been passed by the Sub Divisional Officer on the basis of recommendation of the Committee.
6. The moot question that falls for consideration in these writ petitions is as to whether a fair price shop licence can be cancelled by the Sub Divisional Officer on the basis of recommendation of District Level Committee constituted under the Chairmanship of the Deputy Commissioner.
7. Admittedly fair price shop licences are granted in accordance with the provisions of Bihar Trade Articles (Licences Unification) Order, 1984 (in short 'Unification Order')
8. Unification Order, 1984 was made by the Governor of Bihar in exercise of powers conferred by Section 3 of the Essential Commodities Act, 1955 read with orders of the Government of India, Ministry of Agriculture & Irrigation. Clause 2(i) defines the words "Licensing Authority" which means an officer not below the rank of S.D.O. appointed by the State Government to exercise the powers and perform the duties of Licensing Authority for different areas and under different provisions of this Order. Clause 3 provides that no dealer shall, after the commencement of this Order carry on business of purchase, sale or storage for sale or any of the trade articles mentioned in Schedule I except under and in accordance, with the terms and conditions of a licence issued in this behalf by the Licensing Authority under the provisions of this Order. Clauses 4 to 9 laid down the provisions for grant of licence, grant or refusal to grant licence, renewal of licence, etc. Clause 10 provides that no holder of licence issued under this Order or his agent or servant or another person acting on his behalf shall contravene any of the terms and conditions of the licence. Clause 11 deals with the suspension and cancellation of licence which reads as under:
11. Suspension and cancellation of licence, - (1) If any licensee of his agent 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 any 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 staling his case against the proposed cancellation but during pendency or in contemplation proceeding 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.
9. Clause 28 laid down the provision of appeal. According to this provision, any order passed by the Licensing Authority other than the Collector shall be appellable before the Collector/Deputy Commissioner.
Page 1145
10. The Unification Order, 1984 has undergone various amendments time to time made by the Governor of Bihar. From bare reading of the aforesaid provisions of Unification Order, it is manifestly clear that the Licensing Authority has been vested with the powers to initiate a proceeding for cancellation of licence and after giving notice to show cause and opportunity of hearing, can pass order cancelling the licence of fair price shop. There is nothing in the Unification Order which empowers the Deputy Commissioner or any of the authorities to constitute a committee and take a decision for cancellation of licence and such decision of the cancellation of licence by the Committee shall be communicated to the Licensee under the signature of the Sub Divisional Officer being the licensing authority.
11. As noticed above, the case of the respondents is that the Food, Civil Supply & Commerce Department issued guidelines regarding fair price shops by constituting a District Level Committee under the Chairmanship of Deputy Commissioner who will consider the case of grant, suspension and cancellation of fair price shop licences. From perusal of the guidelines (annexure-F to the counter affidavit), it is clear that this was issued by the Secretary, Food & Civil Supply, Government of Jharkhand. This guideline is nothing but an executive instruction
12. It is well settled that executive instruction or administrative orders cannot be issued in contravention of statutory rules, but could be issued to supplement them. The Unification Order, 1984 Has been made in exercise of powers conferred by Section 3 of the Essential Commodities act and the Order has got the statutory force.
13. In the case of Commissioner of Income Tax v. Sirpur Paper Mills Their Lordships held that a departmental circular imposing some conditions amounts rewriting the statutory provisions. Such a circular is illegal and unconstitutional.
14. In the case of K. Kuppusamy and Anr. v. State of T.N. and Ors. Their Lordships observed:
The short point on which these appeals must succeed is that the Tribunal fell into an error in taking the view that since the Government had indicated its intention to amend the relevant rules, its action in proceeding on the assumption of such amendment could not be said to be irrational or arbitrary and, therefore, the consequential orders passed have to be upheld. We are afraid this line of approach cannot be countenanced. The relevant rules, it is admitted, were framed tinder the proviso to Article 309 of the Constitution. They are statutory rules. Statutory rules cannot be overridden by executive orders or executive practice. Merely because the Government had taken a decision to amend the rules does not mean that the rule stood obliterated. Till the rule is amended, the rule applies. Even today the amendment has not been effected. As and when it is effected ordinarily it would be prospective in nature unless expressly or by necessary implication found to be retrospective. The Tribunal was, therefore, wrong in ignoring the rule.
15. In the case of Union of India and Anr. v. Charanjit S. Gill and Ors. a similar question arose for consideration and their Lordship observed:
It is not disputed that Section 191 of the Army Act empowers the Cantral Government to make rules for the purpose of carrying into affect the provisions of the Act and Section 192 to make regulations for all or any of the provisions of Page 1146 the Act other than those specified in Section 191. All rules and regulations made under the Act are required to be published in the Official gazette and on such publication shall have the effect as if enacted in the Act. No power is conferred upon the Central Government of issuing notes or issuing orders which could have the effect of the rules made under the Act. Rules and regulations or administrative instructions can neither be supplemented nor substituted under any provision of the Act or the rules and regulations framed thereunder. The administrative instructions issued or the notes attached to the rules which are not referable to any statutory authority cannot be permitted to bring about a result which may lake away the rights vested in a person governed by the Act. The Government, however, has the power to fill up the gaps in supplementing the rules by issuing instructions if the rules are silent on the subject provided the instructions issued are not inconsistent with the rules already framed. Accepting the contention of holding Note 2 as supplementing Rules 39 and 40 would amount to amending and superseding statutory Rules by administrative instructions.
16. In the case of State of Madhya Pradesh and Anr. v. G.S. Dall and Flour Mills 1992 Supp (1) S.C.C. 150, their Lordships reiterated the law and held that executive instructions can supplement a statute or cover areas to which the statute does not extend. But they cannot run contrary to statutory provisions or whittle down their effect.
17. As noticed above, the Dinar Trade Articles (Licences Unification) Order, 1984 lays down a procedure for the grant, suspension, renewal or cancellation of licence. For the purpose of cancellation of licences, the Licensing Authority has to comply the mandatory requirement of Clause 11 of the Order. In other words, no order of cancellation shall be passed by the Licensing Authority unless the Licensee has been given reasonable opportunity to put his case against the proposed cancellation. Contrary to this statutory provision, the Food & Civil Supply Department issued executive instruction/guidelines conferring powers to the committee constituted under the said guidelines. The said guidelines, inter alia, provide that henceforth the matter relating to grant of licence, renewal, suspension or cancellation of licence, shall be considered first by the Committee and the recommendation of the committee shall be sent to the Department for approval or disapproval. The procedure provided in the said guidelines is wholly unconstitutional and in conflict with the statutory provisions contained in the Unification Order. Such guideline is, therefore, liable to be struck down.
18. In the instant case, as noticed above, admittedly, no notice to show cause was issued by the Licensing Authority, namely, the Sub Divisional Officer. The Licensing Authority neither gave any opportunity of hearing to the petitioners nor he really passed a reasoned order. It is only on the basis of the recommendation made by the so-called committee constituted on the basis of guidelines issued by the concerned Department, the impugned order of cancellation of licences was passed. In my considered opinion, such a procedure adopted by the respondents in the matter of cancellation of licence is unknown to law and it is not only in contravention of provision of Unification Order, 1984, but also violative of principle of natural justice.
19. For the aforesaid reasons, these writ petitions are allowed and impugned order of cancellation of licences are set aside. However, it is made clear that this order will not, in any way, come in the way of the respondents to initiate proceeding for cancellation of licence in accordance with law.