Delhi High Court
M/S. Madan Lal Pawan Kumar vs Govt. Of Nct Of Delhi & Ors. on 8 January, 2014
Author: G.S. Sistani
Bench: G.S. Sistani
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* IN THE HIGH COURT OF DELHI AT NEW DELHI
+ W.P.(C) 1095/2008 & 2146/2008
% Judgment delivered on 08.01.2014
M/S.MADAN LAL PAWAN KUMAR ..... Petitioner
Through: Mr.Kishan Nautiyal, Advocate
versus
GOVT. OF N.C.T. OF DELHI & ORS. ..... Respondent
Through: Mr.S.D. Salwan and Ms.Latika Dutta, Advs
CORAM :-
HON'BLE MR. JUSTICE G.S. SISTANI
G.S.SISTANI (ORAL)
1. Rule. With the consent of counsel for the parties, present petition is set
down for final hearing. Necessary facts for disposal of this petition are
that the petitioner, M/s.Madan Lal Pawan Kumar was issued a licence
(licence No.1783/77) for distribution of kerosene oil. The said Kerosene
Oil Depot (KOD) is situated at Block No.6/499, Khichripur, Delhi under
circle 38. The petitioner firm is a licence holder for distribution of
kerosene oil since 1977, a copy of the licence has been placed on record.
On 28.04.1995 an inspection staff of the respondent came on a routine
inspection to the depot of the petitioner firm. At that time, the father of
the present proprietor, late Sh.Madan Lal was running the kerosene oil
depot. Upon inspection of the depot, on account of allegation of shortage
of 1233 litres of kerosene oil for the period 1.4.1995 to 28.4.1995, an FIR
was registered. On 07.06.1995 the Assistant Commissioner (East)
suspended the licence of M/s.Madan Lal Pawan Kumar on the basis of the
W.P.(C)No.1095/2008 Page 1 of 9
said report. On 16.08.1995, Assistant Commissioner (Judicial) after
considering the facts and circumstances of the case as also the materials
placed on record, revoked the order of suspension and imposed a penalty
of forfeiture of the security amount on the ground that actual shortage of
kerosene oil was 68 litres, which was well within the permissible limit
and not on the higher side.
2. In the meanwhile in the proceedings initiated upon filing of the FIR for
prosecution of the offences under the Delhi Kerosene Oil (Export and
Price) Control Order 1962, the Additional Sessions Judge vide his
judgment dated 03.04.2001 convicted the father of the present proprietor
and sentenced him to undergo imprisonment till rising of the court and
also imposed fine of Rs.2,000/-.
3. It is the case of the petitioner that even after conviction, the father of the
present proprietor of the petitioner firm continued to run the Kerosene Oil
Depot, till 24.02.2006. Sh.Madan Lal (previous proprietor of the
petitioner firm) expired on 24.2.2006. In June, 2006 the present
proprietor of petitioner firm applied for change of name of proprietor in
the licence of Kerosene Oil Depot, due to his father's death. The
Assistant Commissioner vide order dated 13.06.2006 allowed the change
of name and the present proprietor of the petitioner firm was directed to
deposit an amount of Rs.5,000/- towards security of the Kerosene Oil
Depot. It is only on 17.08.2007 that a show cause notice was issued by
the Assistant Commissioner, as to why authorization may not be cancelled
under clause 6 (3) of the Delhi Kerosene Oil (Export and Price) Control
Order 1962. Reply to the show cause notice was filed on 30.08.2007.
Respondents being dissatisfied with the reply so received passed an order
dated 01.09.2007, cancelled the licence of the present proprietor. The
appeal filed against the aforesaid order was also dismissed.
W.P.(C)No.1095/2008 Page 2 of 9
4. It is submitted by counsel for the petitioner that the act of the respondents
of cancelling the licence of KOD after such a long period is unjustified, in
light of the fact that the respondents had earlier in 2006 allowed the
change of the proprietor's name. It is also submitted that no action
survives against the present proprietor, as the same is stale and the act of
the previous proprietor stands condoned, as the show cause notice was
issued after a gap of more than 6 years and during this period the licence
was renewed from time to time, moreover in the name of the present
proprietor as well. The second argument of the counsel for the petitioner
is that once the Assistant Commissioner (Judicial) vide its order dated
16.08.1995 had revoked the order of suspension and imposed a penalty of
forfeiture of the security amount, punishment for the same offence cannot
be imposed again and that too on the present proprietor, who has no
connection with the offence committed by the previous proprietor.
5. Per contra, Mr.Salwan, counsel for the respondent submits that once the
original licence holder had committed breach and was convicted the
respondents were well within their right to take action in terms of Clause
6 of Delhi Kerosene Oil (Export and Price) Control Order 1962 dated
5.12.1962, which reads as under:
"6. Contravention of the terms and conditions of licence:
(1) If any licencee or his agent or servant or any other person
acting on his behalf contravenes any of the terms and
condition or directions or any provisions of this order then
without prejudice to any other action that may be taken
against licensee according to law, his licence can be
suspended by order in writing by the Commissioner.
Proviso to clause 6(1) order vide Dt. 15.2.80.
(2) Without prejudice to the provisions of sub-clause 1 if the
W.P.(C)No.1095/2008 Page 3 of 9
Commissioner is satisfied that the licensee has contravened
any of the terms and conditions of a licence or the directions
issued under clause 3-D or any provision of this order and
cancellation of his licence is called for, may after giving the
licencee a reasonable opportunity of stating his case against
the proposed cancellation by order in writing cancel his
licence and shall forward a copy thereof to the licensee.
(3) Notwithstanding anything contains in this clause, where a
licencee is convicted by a court of law for breach of the
terms and conditions of the licence or contravention of the
provision of this order the licensing authority may by order
in writing, cancel his licence.
Provided that no such order shall be passed until the
appeal, if any, filed against such conviction is dismissed and
where no such appeal is filed until the period of limitation for
filing an appeal expires."
6. With respect to the submissions made by counsel for the petitioner for
delay, counsel for the respondent submits that the delay is procedural, as
in the period of 18 years, 24 Assistant Commissioners had been
transferred in one zone, and in another zone 12 Assistant Commissioners
were transferred in 10 years.
7. In response to the above, the counsel for the petitioner stated that in case
the respondents were to rely upon Clause 6 of Delhi Kerosene Oil (Export
and Price) Control Order 1962, the same should have been invoked by
them within the shortest span of time from the date of the cause of action
and in any case within a reasonable period of time. It is further contended
that on account of gross delay in taking action, the respondents are
estopped from relying on Clause 6 of Delhi Kerosene Oil (Export and
Price) Control Order 1962, which would be deemed to have been given up
by the respondents, by virtue of their conduct; and on the contrary, vested
rights have been created in favour of the petitioner by continuous renewal
W.P.(C)No.1095/2008 Page 4 of 9
of licence, which cannot be taken away at this belated stage.
8. I have heard counsel for the parties and also perused the petition as also
the annexures filed along with the petition.
9. In this case, father of the present proprietor was issued a licence for
distribution of kerosene oil. On an inspection having been carried out
shortage was found, which resulted in suspension of his licence.
Subsequently the order of suspension of licence was revoked and a
penalty of forfeiture of security deposit was imposed on the father of the
present proprietor on the ground that actual shortage of kerosene oil was
68 ltrs., which was well within the permissible limits. A copy of the order
dated 16.8.1995 has been placed on record. Operative portion of the order
reads as under:
"Hence, I Z.U. Siddiqui, Asst. Commissioner, Food &
Supplies Dept. in exercise of powers conferred upon me
under the provision of Delhi K. Oil (Export & Price) Control
Order 1962, do hereby order forfeiture of entire security
amount of Rs.100/- (One hundred rupees only) which should
be deposited by the licencee within one week after the receipt
of the order. The suspension order dated 7.6.95 is revoked
and the K.oil Licence No 1783/77 held by M/s Madan Lal
Pawan Kumar shall stand restored on depositing the forfeited
amount of security. The licencee is also warned to be more
careful to avoid reaccurance (sic. reoccurrence) of such
irregularities. However, this order is passed by the
undersigned without prejudice to any action / decision that
shall be taken by the competent court in case of FIR lodged
against the Depot holder."
10. In the meanwhile, an FIR was also lodged against the father of the present
proprietor; and by a judgment dated 3.4.2001, he was convicted and
sentenced to undergo imprisonment till rising of the Court, besides
imposing fine of Rs.2000/-.
11. The present proprietor applied for change of name of proprietorship, upon
W.P.(C)No.1095/2008 Page 5 of 9
death of his father which was permitted and the present proprietor
continued to run his Kerosene Oil Depot since then. On 17.8.2007 a show
cause notice was issued to the present proprietor as to why the
authorization be not cancelled under Clause 6(3) of the Delhi Kerosene
Oil (Export and Price) Control Order 1962. Reply to the show cause
notice was filed. Being dissatisfied with the response of the present
proprietor, the licence was cancelled.
12. In this case, admittedly on the administrative side the Assistant
Commissioner (Judicial), upon going through the facts of the case
revoked the order of suspension of licence and imposed a penalty of
forfeiture of the security amount on the ground that actual shortage of
kerosene was 68 liters which was well within the permissible limit and not
on the higher side.
13. The arguments of counsel for the petitioner can be summarized as under:
(i) The violation/breach, if any, was committed by the father of
the present proprietor and after his demise a fresh licence
was issued in favour of the present proprietor, thus the act of
his father stands condoned; and secondly, he cannot be made
to suffer for the acts of the previous licence holder.
(ii) Administrative action was already taken against the previous
licence holder and a penalty was imposed.
(iii) The impugned action initiated after almost 12 years, is stale.
14. The argument of counsel for the respondent is that the respondents were
well within their rights to initiate action in terms of Clause (6) of the
Delhi Kerosene Oil (Export and Price) Control Order 1962 being an
W.P.(C)No.1095/2008 Page 6 of 9
independent action and mere delay by itself cannot be a ground to
condone the acts of the petitioner firm.
15. The basic facts are not in dispute that the license was granted to the father
of the present proprietor to run Kerosene Oil Depot. Upon inspection
having been carried out, some irregularities were found during the
lifetime of the father of the present proprietor, who was the licencee then.
Resultantly the licence was suspended by the Assistant Commissioner
(East) and thereafter the Assistant Commissioner (Judicial), revoked the
order of suspension and imposed a penalty of forfeiture of the security
amount. It is also not in dispute that as long as the father of the present
proprietor was alive, no action was taken against him in terms of Clause
(6) of the Delhi Kerosene Oil (Export and Price) Control Order 1962.
Thereafter, licence stood transferred in the name of the present proprietor,
who is a separate entity, and further the said licence was renewed from
time to time. It is only after a gap of more than 12 years fresh show cause
notice for cancellation of the KOD was issued and the licence was
cancelled as according to the respondents, previous licencee had incurred
a disqualification having been convicted by a criminal court, in terms of
the 1962 Order.
16. Admittedly, action was taken by the Assistant Commissioner against the
father of the present proprietor and a penalty of forfeiture of security
amount was imposed. No further administrative action was taken against
the petitioner firm for more than 12 years. Thus in my view no action lies
at such a belated stage and that too against the present proprietor of
petitioner firm for the act committed by the previous licence holder. Even
otherwise having not taken any administrative action for 12 years and on
the contrary having renewed licence of the petitioner firm from time to
time would amount to condoning the act of the wrong doer; and after 12
W.P.(C)No.1095/2008 Page 7 of 9
years, the respondents are estopped from taking action against the
petitioner firm having waived off their rights by their own conduct. The
Government must act in a fair, just and expeditious manner. The delay
and inaction on the part of the respondent has resulted in creation of
valuable rights in favour of the petitioner firm.
17. It is settled law that a statutory authority is required to act reasonably,
fairly and expeditiously.
18. The respondents have not only slept over their right, but also there is no
reasonable and plausible explanation for the gross delay, and, thus, the
respondents waived their right for taking any action against the petitioner
firm. Moreover, the respondents by agreeing to transfer the licence in the
name of the present proprietor of petitioner firm have condoned the act of
the previous licence holder of the petitioner firm; further, the respondents
have given a reasonable belief to the present proprietor that his right and
title is good and shall not be disturbed, hence, the licence of the present
proprietor cannot be cancelled for the acts of the previous licencee.
19. Counsel for the respondent has placed reliance upon the report of Justice
Wadhwa Committee constituted by the Supreme Court of India. In the
light of the aforesaid facts and observations, respondents cannot at this
stage get benefit of their inaction or the findings of the report.
20. In view of the aforesaid, present proprietor of the petitioner firm cannot
be penalized, at this stage even more so since the published act was never
committed by the present license holder. A party is bound to act
reasonably more so a statutory authority. The authority was under a duty
to act reasonably and without prejudice to the rights of the petitioner.
Given that the authority has itself renewed the licence of the petitioner
firm, they themselves have condoned the earlier conviction. Further by
not acting within a reasonable period of time and by agreeing to renew the
W.P.(C)No.1095/2008 Page 8 of 9
licence in the name of the present proprietor of the petitioner firm,
respondents have given him a reasonable cause to believe that a right has
accrued in his favour.
21. Taking into consideration the fact that on the administrative side the
respondents had decided to revoke the suspension of licence of the
petitioner firm and only imposed a penalty of forfeiture of the security
amount and thereafter despite the order of conviction no action was
initiated by the respondent against the petitioner firm during the lifetime
of the previous licence holder i.e. Sh.Madan Lal, the action of the
respondents amounts to condoning the offence committed and by their
action the respondents have themselves decided to resort to a lesser
punishment on the petitioner. Accordingly, the impugned order of
cancellation is quashed.
22. Rule is made absolute. Petition and the application stand disposed of in
above terms. Parties shall bear their own costs.
G.S. SISTANI, J.
JANUARY 08, 2014 'ssn' W.P.(C)No.1095/2008 Page 9 of 9