Patna High Court
Durga Oil Mill And Anr. vs The State Of Bihar And Ors. on 3 May, 1976
Equivalent citations: AIR1977PAT134, 1978(26)BLJR575, AIR 1977 PATNA 134
ORDER
1. In this writ application, the petitioners have prayed for quashing the order of the State Government in the Department of Industries, dated the 10th January, 1976, withdrawing the registration and the benefits granted to Messrs. Durga Oil Mills, a partnership concern, under the Small Scale Industries Incentive Scheme. There is also a prayer to quash the order of the District Industries Officer, Patna, dated the 27th February, 1976, issued on the basis of above mentioned order of the State Government dated the 10th January, 1976. Copies of these orders have been filed as Annexures '11' and 12' to this writ application.
2. The petitioner's case is that petitioner No. 1 is a registered partnership firm carrying on business in manufacture of various types of edible, oil at Patna City, the partners of the firm being petitioners No. 2 and his brother, Girdhari Lal Saraf. With effect from the 18th November, 1974, the latter retired from the partnership. The petitioners have averred that the State Government" issued various notifications and orders in the Department of Industries and Technical Education, one of such orders dated the 9th June, 1969, with which we are concerned, has been filed as Annexure '1'. Various reliefs are granted to small scale industries registered under the scheme contained in the said order in matter of tax relief supply of raw materials as also purchase of their products by certain Government institutions, etc., as mentioned in Annexure '1'. The petitioner's case is that petitioner No. 2, with other partners, had already started an oil mill, known as M/s. Bhawani Oil & Flour Mills, Patna, in the Mills, Patna, in the year 1969, which manufactured different types of edible oil. In pursuance of the aforesaid scheme, on the 7th December, 1973, petitioner No. 2; along with Girdhari Lal Saraf, set up the aforesaid partnership firm, Messrs. Durga Oil Mills (petitioner No. 1). The petitioners applied for registration under the Small Scale Industries Incentive Scheme and on the 10th December, 1973, it was granted a temporary registration certificate for six months for manufacturing edible oil. A copy of the temporary registration certificate has been filed as Annexure '3'. Thereafter, on the 3rd February, 1974, an application for permanent registration under the said scheme (Annexure '4') was filed. After inspection, as per Annexure '5', the petitioner No. 1 was granted a registration certificate on the 2nd May, 1974, a copy of which has been filed as Annexure '6'.
The petitioners' grievance is that although the said firm is carrying on business of producing edible oil, their registration has been cancelled by the impugned orders.
3. A counter-affidavit has been filed on behalf of the State, stating that the registration in question had been obtained by practising deception, inasmuch as the petitioners, after obtaining registration of this firm, really started a new firm with son of the old partners of M/s. Bhawani Oil and Flour Mills, when the advantage availed of by Bhawani Oil and Flour Mills were coming to an end, and that is why the registration was withdrawn and the privileges, if any, available to oil mills have been withdrawn since the 5th September, 1975, and the petitioners have not been denied any special benefit, which would have accrued to them by the registration.
4. A reply to that counter-affidavit has been filed by the petitioners, denying the allegation of deception and stating at the same time that although both the firms were situated within the same compound, nothing was hidden from the authorities who had inspected the Mill premises of Messrs. Durga Oil Mills as also of Bhawani Oil and Flour Mills.
5. Mr. K. D. Chatterjee, on behalf on the petitioner, has urged that before cancelling the registration of the petitioners, principle of natural justice demanded that they should have been asked to show cause and that not having been done, the impugned orders are fit to be quashed. Learned counsel has relied on an unreported Bench decision of this court in the case of Arjun Kumar Doka-nia v. State of Bihar, (Civil Writ Jurisdiction Case No. 588 of 1975 - disposed of on the 7th January, 1976} (Pat) as also another. unreported decision of this court in the case of Vijay Kumar Bhuwania v. State of Bihar, (Civil' Writ Jurisdiction Case No. 1202 of 1974 -- disposed of on the 24th March, 1975) (Pat) in support of his submissions. The first decision, prima facie, supports the contention on behalf of the petitioners in this way that in that case, although a show cause notice was issued for de-registration on one ground, the cancellation was on another, which order was quashed by this court on the ground of the aforesaid infirmity. In the instant case, it is the admitted case that no notice was issued to the petitioners as to why the registration under the scheme should not be cancelled. Learned counsel submitted that the instant case is on a better footing than the one referred to above.
6. Mr. S. Shamsul Hassan, learned standing counsel on the other hand, has submitted that what has been granted to the Small Scale Industries is a privilege end no right for registration was conferred on the petitioners, so as to entitle them to issuance of any writ of mandamus. Registration only meant that certain facilities were created in favour of the newly set up firms and the State could withdraw those facilities at any point of time. Learned standing counsel relied upon a decision of the Supreme Court in the case of Raghunandan Panda v. The State of Orissa, (AIR 1975 SC 434). The Supreme Court case related to the settlement of Nazul land and in that context, Untwalia, J., held that all that the petitioner deserved was a fair consideration of his application and he had no right to settlement. That case, in our opinion, is not of much assistance to the learned standing counsel. It would be relevant to mention some of the concessions granted to a Small Scale Industries set up under the scheme, they being tax relief, preferential treatment in Government purchases, allotment of build up factory sheds in the industrial estates, allotment of land in Industrial Areas for the purpose of setting up industries, 50 per cent, of economic rent in the industrial areas, longer lease for lands, concessional rates on electricity tarrif as also in matters of marketing of goods produced by those registered industries in some of the Department of the State Government, besides some concessions available at the hands of the Central Government also. It is not disputed that these concessions available to the registered units are not available to units which are not registered. It is manifest that although there may be concessions or privileges granted by the State Governrnent, the privileges create some sort of interest to the petitioners for a period of five years, during which they are to remain registered and is deprivation entails civil consequences. We are, therefore, inclined to hold that in such circumstances, the petitioners were entitled to a notice before the registration was cancelled.
7. We have purposely avoided referring to some of the controversies between the parties, lest it may prejudice one party ' or the other in case the Government decides to issue a show cause notice for cancelling the registration of the petitioners, even after our decision. We must not be deemed to have expressed any opinion on the question as to whether the registration should be cancelled or not. If the authorities so desire, it will be open to them to issue proper notice for the cancellation of the registration.
8. That writ application is accordingly allowed and the impugned Annex-ures 11' and '12' are quashed. In the circumstances of the case, there will be no order as to costs.