Telangana High Court
M/S. Rajashree Enterprises vs Union Of India on 8 April, 2026
IN THE HIGH COURT FOR THE STATE OF TELANGANA AT
HYDERABAD
THE HONOURABLE SRI JUSTICE N.V.SHRAVAN KUMAR
WRIT PETITION No.32947 of 2024
DATE OF ORDER:08.04.2026
Between:
M/s. Rajashree Enterprises and 2 others
.....Petitioners
AND
Union of India, represented by its Secretary, Ministry of
Commerce & Industry, Petroleum and Explosives Safety
Organizations (PESO) Sastry Bhavan, New Delhi and three others
...Respondents
ORDER:
Heard learned counsel for the petitioners and Ms. L. Pranathi Reddy, learned Standing Counsel representing learned Deputy Solicitor General of India appearing for Central Government for respondent Nos.1 to 4.
2. The petitioners are challenging the impugned proceedings dated 17.10.2024 issued by respondent No.2 as being illegal, arbitrary, violative of Articles 14, 19 (1) (g) of the Constitution of India, and contrary to Rules 118 of the Explosives Rules, 2018, with a consequential prayer seeking direction to respondent No.2 and No.3 to renew the license No.A/HQ/TG/P3/55(A1343), license No.A/HQ/TG/P3/56(A1344), license No. A/HQ/TG/P1/3(A850) of petitioner Nos.1 & 2 by updating the online status of licenses 2 No.A/HQ/TG/P3/55(A1343), license No.A/HQ/TG/P3/56(A1344), license No.A/HQ/TG/P1/3(A850) by PESO (Petroleum and Explosives Safety Organization) to "Active" status.
BRIEF FACTS:
3. The petitioner No.1 firm was established in the year 2011 by the petitioner No.3 as a sole proprietorship firm, primarily engaged in trading of Sodium Nitrate and other chemical products. In the year 2014, the petitioner No.1 firm acquired license No.A/HQ/TG/P3/55(A1343) for the possession and sale of Ammonium Nitrate. The petitioner No.2 firm was established in the year 2011 by the petitioner No.3 as a sole proprietorship firm engaged in manufacturing sodium nitrate and other chemical products. In the year 2014, the petitioner No.2 acquired two licenses i.e., license No. A/HQ/TG/P1/3(A850) for the manufacturing/conversion and storage of Ammonium Nitrate and License No. A/HQ/TG/P3/56(A1344) for possession and sale of Ammonium Nitrate. The said licenses were valid till 31 March, 2024. The petitioner had applied for renewal of above licenses and paid requisite fees.
4. On 26.08.2019 an F.I.R.No.420 of 2019 was registered before the P.S.RGI Airport, Cyberabad District stating that a DCM Van bearing No.AP-03-TC-9707 was transporting Ammonium Nitrate in 200 bags from Bhuvanagiri to Madanapalli on e-way bill for sodium nitrate material in the name of Sri Raja Rajeshwara Chemicals and Allied from Bhuvanagiri to FSF Traders of Madanapalli. The said 3 DCM was intercepted by police at ORR Toll Gate Exit No.16 at Shamshabad. It is submitted that Raja Rajeshwara Chemicals and Allied was registered for supply of non-explosive material but explosive material like ammonium nitrate was supplied instead of sodium nitrate. It was alleged that the petitioner No.3 was involved in the said incident which led to filing of F.I.R.No.420 of 2019 against the petitioner No.3. It is submitted that petitioner No.3 has no connection with Sri Raja Rajeshwara Chemicals & Allied. The petitioner No.3 was arrested by the police and was enlarged on bail by this Court.
Subsequently, received suspension of license letters for license No.A/HQ/TG/P3/55(A1343), license No.A/HQ/TG/P3/56(A1344), license No.A/HQ/TG/P1/3(A850) vide Order dated 15.10.2019 from the 1st respondent whereby the license granted to the 1st and 2nd petitioner to sell ammonium nitrate was suspended with immediate effect by virtue of power conferred under Section 6E (3) of the Explosives Act, 1884 read with rule 42 of the Ammonium Nitrate Rules, 2012. Aggrieved by the same, petitioners filed W.P.No.23356 of 2019 seeking to set-aside the Order No.A/HQ/TG/P3/55(A1343) dated 15.10.2019 and W.P.No.23355 of 2019 was filed seeking to set- aside the Order No.A/HQ/TG/P3/56(A1344) dated 15.10.2019 and Order No.A/HQ/TG/P1/3(A850). Both the writ petitions were disposed of by a co-ordinate bench of this Court on 10.02.2021. The operative portion of the order is extracted for reference:
"This Court, having considered the rival submissions made by learned counsel for the respective parties, is of the considered view that both these writ petitions can be disposed of setting aside the 4 impugned orders, both dated 15.10.2019, cancelling the licenses of the petitioners and the matter be remanded to respondent No.2 for consideration of the case, afresh, by duly taking into account explanation dated 03.10.2019 submitted by the petitioners and respondent No.6 is also at liberty to file its objections and request for return of the seized stock of Ammonium Nitrate within a period of two weeks from the date of receipt of a copy of this order and upon such objections being filed by respondent No.6, the petitioners are also permitted to submit their explanation within two weeks thereafter and upon receiving the same, respondent No.2 shall consider the explanation being submitted by the petitioner as well as objections being filed by respondent No.6 and pass appropriate orders in accordance with law within a period of four weeks thereafter."
5. Pursuant to the said orders, the petitioner made a representation dated 17.02.2021 to the respondent No.2 requesting to update the status of licenses Nos.A/HQ/TG/P3/55(A1343), A/HQ/TG/P3/56(A1344), A/HQ/TG/P1/3(A850) to "Active" status, for all licenses and to inform the police authorities to unseal the godowns of petitioners and one M/s. Rajashree Enterprises located in Bhongir, Yadadri Bhongir District to enable the petitioners to dispose the material to valid license holders. The petitioners also issued a letter on 24.02.2021 to the respondent No.2 informing the order dated 10.02.2021 passed by the Hon'ble Court in W.P.No.23356 of 2019 and 23355 of 2019 and requested to release the entire stock lying inside the store house situated at Bhongir, Yadadri Bhuvanagiri District. Thereafter, on 22.03.2021, the officials of the respondent No.2 sent a mail to the Controller of Explosives, PESO regarding the decision taken by PESO on disposal of ammonium nitrate stored in M/s. Rajashree Enterprises and has enclosed the details of disposal for 5 further action. Accordingly, the petitioners have disposed of the ammonium nitrate to the suppliers. It is further submitted that the Police Department also issued a letter dated 06.02.2021 requesting the PESO Department to release the stock at any early date so as to comply with the directions of Hon'ble High Court.
6. The respondent No.3 issued another show cause notice to petitioner No.1 vide proceedings No.A/HQ/TG/P3/55(A1343), and proceedings to the petitioner No.2 vide No.A/HQ/TG/P3/56(A1344) and A/HQ/TG/P1/3(A850) both dated 02.07.2021 (received on 08.07.2021) alleging that the online record in Form R-9 of AN Returns System comprising total stock of ammonium nitrate of all licenses held by M/s. Rajshree ChemTech and M/s. Rajashree Enterprises is 5454.3 MT whereas, the quantity returned to supplier is 2062.1 MT and there is shortfall of 3392.2 MT for which no records of transactions were available and the quantity of 3392.2 of ammonium nitrate is missing, as such the respondent No.3 had informed the petitioners to show cause within 21 days as to why the subject license should not be revoked/cancelled. Thereafter, the petitioners submitted reply letter on 26.07.2021 mentioning the reasons for the shortfall accumulated over the period of years and requested the respondent No.3 to withdraw the show cause notice dated 02.07.2021 and update the status of the license as "Active" in the official PESO website for all the licenses to enable the petitioners to use the store houses for possession and sale of ammonium nitrate. 6
7. Further, petitioner No.1 filed W.P.No.7474 of 2024 before this Court seeking to set-aside the impugned Show Cause Notice No.A/HQ/TG/P3/55(A1343) dated 02.07.2021 issued by respondent No.3 seeking a direction to the respondent Nos.2 and 3 to update the status of the licenses Nos.A/HQ/TG/P3/55(A1343) granted by PESO to "Active" status, by suspending the operation of the impugned proceedings vide No.A/HQ/TG/P3/55(A1343) dated 02.07.2021 issued by respondent No.3. Similarly, the petitioner No.2 also filed W.P.No.7553 of 2024 seeking to set-aside the operation of the impugned show cause notice Nos.A/HQ/TG/P3/56(A1344) and A/HQ/TG/P1/3(A850) dated 02.07.2021. A co-ordinate bench of this Court has disposed both the writ petitions on 09.07.2024. The operative portion is extracted for reference:-
"10. In view of the said submissions and since it is the case of the petitioners that the respondents have issued impugned proceedings dated 02.07.2021, without considering their explanation, the impugned proceedings (show cause notices) vide Nos.A/HQ/TG/P3/55(A1344), A/HQ/TG/P3/56(A1343) & A/HQ/TG/P1/3(A850), dated 02.07.2021 are set aside and the respondents are directed to consider the explanation/representation, dated 26.07.2021 submitted by the petitioners and pass appropriate orders in accordance with law, within a period of three (3) weeks from the date of receipt of a copy of this order."
8. Thereafter, respondent No.2 in compliance with the orders dated 09.07.2024 passed by this Court in W.P.No.7474 of 2024 and 7553 of 2024 has issued notice No.A/HQ/TG/P3/55(A1343), A/HQ/TG/P3/56(A1344), A/HQ/TG/P1/3(A850) dated 27.08.2024 7 advising the petitioner to submit the details of licenses to whom Ammonium Nitrate has been sold as per the representation submitted by the petitioner and requested to inform about the status of Crime No.420 of 2019. Aggrieved by the same, petitioner filed W.P.No.24443 of 2024 challenging the action of respondent No.2 in issuing the impugned notice bearing Nos.A/HQ/TG/P3/55(A1343), A/HQ/TG/P3/56(A1344), A/HQ/TG/P1/3(A850) dated 27.08.2024. A co-ordinate bench of this Court on 03.10.2024 had passed the following order:
"In view of the same, pending further orders, the petitioners are directed to submit explanation before the respondents enclosing the particulars of Crime No.420 of 2019 and the charge sheet filed therein as reply the show cause notices issued by the respondents. On submission of such explanation, the respondents are directed to examine the same for grant/renewal of license to the petitioners, within a period of one (1) week from the date of receipt of such explanation."
9. Pursuant to the above order, the petitioner on 04.10.2024 had submitted a detailed representation to the respondent No.2 and requested to renew the licenses Nos.A/HQ/TG/P3/55(A1343), A/HQ/TG/P3/56(A1344), A/HQ/TG/P1/3(A850) and to update the status of licenses Nos.A/HQ/TG/P3/55(A1343), A/HQ/TG/P3/56(A1344), A/HQ/TG/P1/3(A850) granted by PESO to Active Status. Thereafter, respondent No.2 on 17.10.2024 has issued impugned order, wherein it is mentioned that in view of registration of Crime No.420 of 2019 under P.S.RGI Airport for which investigation is in process and judgment of the Hon'ble Court has not been delivered till date, revocation of suspension cannot be considered and that 8 necessary action can be taken after the outcome of the judgment in Crime No.420 of 2019 and as per the directions of Hon'ble Court in C.C.No.3891 of 2021. On 11.11.2024, the petitioner has withdrawn the W.P.No.24443 of 2024 with a liberty to challenge the impugned order dated 17.10.2024 issued by respondent No.2, as the same has been passed by respondent No.2 during the pendency of W.P.No.24443 of 2024 and in view of the fresh proceedings dated 17.10.2024, the petitioner filed the present writ petition.
10. The petitioners submits that respondent No.2 cannot deny the renewal of explosive licenses due to pendency of C.C.No.3891 of 2021 inspite of the fact that this Court has set-aside the said suspension orders on 10.02.2021 and further submits that petitioners have no connection with the alleged transportation of 10 tons of the ammonium nitrate which is a subject matter of C.C.No.4076 of 2021 arising out of Crime No.420 of 2019. As per the charge sheet in C.C.No.3891 of 2021 (Crime No.420 of 2019), 10 tons of ammonium nitrate seized on 26.08.2019 does not belong to the petitioner i.e., M/s.Raja Shree Chem Tech or M/s Rajashree Enterprises instead, it belongs to one M/s Raja Rajeshwari Chemicals and Allied, owned by Mr. Ravindra Tatipalli, which is located 8 kilometers away from the petitioner's factory at 1-5-12, Sruthi Nagar, Yadadri, Bhongir, Telangana (GST No.36AZZ PT344 7Q1ZZ). It is further submitted that respondent No.2 cannot deny the renewal of explosive licenses due to pendency of C.C.No.3891 of 2021 as it is in contravention to Rule 118 9 of the Explosives Act, 2008. It is further submitted that as per Rule 118 (1) (b), the license will be cancelled only if the person is convicted or sentenced in any criminal offence. It is further submitted that a third party affidavit was also filed by the said M/s Raja Rajeshwari Chemicals and Allied stating that he is not uncle or relative of the petitioner and he is not connected with the business of the petitioners as he had a separate entity with GSTIN No.36AZZ PT344 7Q1ZZ and his warehouse is located at 8 kilometers away from the petitioners factory. It is submitted that Petitioner No.3 is Accused No.1 in C.C.No.3891 of 2021 and has nothing to do with the alleged crime in C.C.No.3891 of 2021 and the petitioner No.3 has not been convicted in the said crime and the respondent No.2 keeping in view of the registration of the crime in C.C.No.3891 of 2021 against the petitioner No.3 is not revoking the suspension of license. The petitioner further submits that respondent No.2 has revoked the licenses of similarly placed entities/individuals who have pending criminal cases and one such entity being M/s Eswar Enterprises whose license was renewed pending F.I.R.No.621/G1/2021 dated 26.04.2021. As such the conduct of respondent No.2 is discriminative, arbitrary and in violation of Article 14 of the Constitution of India. The petitioners further submit that as per Rule 112 (5) of the Explosive Rules, 2008 there is a deeming provision, as such the Licenses are deemed to be in force. The petitioner further submits that the shell life of ammonium nitrate is between six months to one year and the petitioners are not in business for the last five years, though they possess proper 10 infrastructure to run its business and have sustained huge losses on account of suspension of Licenses and Seizure of stock and Godown. It is further submitted that the Staff, labour and all stake holders and are on the verge of bankruptcy, as such the licenses are to be renewed by the respondents at the earliest.
11. The respondent No.2 vide proceedings dated 17.10.2024 informed the petitioners referring to letter dated 22.03.2021 that necessary action can be taken after out come of the judgment in Crime No.420 of 2019 and as per the directions of the Court in C.C.No.3891 of 2021. Questioning the proceedings dated 17.10.2024, the present writ petition has been filed.
12. The respondent No.3/Deputy Controller of Explosives has filed counter and would submit that the licenses granted to the petitioners was granted under Ammonium Nitrate Rules, 2012 and does not attract the provision of Rule 118 of Explosives Rules, 2008. It is submitted that the Deputy Commissioner of Police, Shamshabad Zone, Cybderabad vide letter dated 28.08.2019 and 09.09.2019 informed the office regarding registration of case against petitioner No.3, proprietor of M/s. Rajashree Enterprises in RGI Airport P.S for illegal sale of Ammonium Nitrate and further the Deputy Commissioner of Police, Cyberabad visited the office on 31.08.2019 and informed that the consignment of Ammonium Nitrate (quantity 10 tons) was being transported on 26.08.2019 from M/s. Rajashree Enterprises/Rajashree Chemtech firms in Bhongir to FSF Chemicals 11 in Madanapalle, Andhra Pradesh showing as consignment of Sodium Nitrate. Based on the said facts, further actions were taken as per provisions of Ammonium Nitrate Rules, 2012 and the licenses were suspended vide suspension orders dated 15.10.2019 for violation and contravention of provisions of Ammonium Nitrate Rules, 2012 under which the subject licenses were granted. Further, The Deputy Commissioner of Police, Shamshabad Zone, Cyberabad vide his letter dated 28.06.2019 and 19.09.2019 informed regarding the registration of crime against petitioner No.3, proprietor of M/s. Rajashree Enterprises in RGI Airport P.S for illegal sale of Ammonium Nitrate, as such an explanation was called from M/s Rajashree Enterprises vide show cause notice dated 13.09.2019. The petitioner No.1 has replied to the show cause notice on 03.10.2019 denying that the said consignment belong to him and that the reply to the show cause notice was not found satisfactory since no documents/online records in Form R-6, R-7, R-11 (a) and R-11 (b) of transaction of purchase and sale of Ammonium Nitrate were submitted to prove the genuineness of the sale and receipt of Ammonium Nitrate. It is further submitted that as per Ammonium Nitrate Rules, 2012 having more than 45% Ammonium Nitrate by weight has been brought under licensing for regulating the manufacturing, conversion, import, export, bagging, transport and possession for sale or use of Ammonium Nitrate. It is further submitted that Crime No.420 of 2019 has been registered against the subject firm and no information has been received from the Police Authorities regarding disposal of the case. It is further 12 submitted that pilferage of Ammonium Nitrate, being an explosive, is serious in nature and endanger the security of Public and Nation. It is further submitted that Deputy Commissioner of Police, Cyberabad vide letter dated 28.08.2024 has communicated that one Akkanpally Raj Kumar (petitioner No.3) was arrested on 28.08.2019 and sent to judicial remand and charged on 31.08.2021 and obtained C.C.No.3891 of 2021, and the case is pending trial. It is further submitted that the Chief Controller of Explosives, Nagpur issued letter dated 22.03.2021 to petitioner No.1 instructing not to purchase and sell ammonium nitrate other than the return of stock to the supplier i.e., M/s Smartchem Technologies Limited along with request to the Commissioner of Police, Cyberabad to dispose off the stock of ammonium nitrate (10 MT) seized by him in Crime No.420 of 2019 of RGI Airport P.S. from the vehicle presently stored in the magazine of M/s Patel Mining Services in the interest of Public safety. It is further submitted that the status of the license as active in the PESO portal can only be updated after the revocation of the suspension as C.C.No.3891 of 2021 is pending trial. It is further submitted that to the Show cause notice dated 27.07.2021 issued by the Chief Controller of Explosives, as per the records, the petitioner had not submitted any reply. It is further submitted that the subject licenses were suspended as per the provision of the Rule 42 of the Ammonium Nitrate Rules, 2012 in exercise of the powers conferred under Section 6 (E) of the Explosives Act, 1884 for contravention of the Rules and Condition of the subject license. It is further submitted that as 13 ammonium nitrate is an explosive as defined under Rule 2 (b) of Ammonium Nitrate Rules, 2012, pilferage of Ammonium Nitrate is of serious nature as the same can be used in combination to produce a practical effect by explosion endangering public life/national security and also referred to the explosion occurred in Beirut in the year 2020 as an example which caused huge loss to human life and property and eventually prayed to dismiss the writ petition.
13. The petitioners have filed reply reiterating the submissions made in the writ petition and would submit that the petitioners prior to the expiry of the licenses has made an application for renewal of the licenses on 04.03.2024 by paying requisite fees, therefore, the licenses of the petitioners are deemed to be renewed and in force as on this date, and despite the same, the respondents have not uploaded the status of the petitioners as "Active" on PESO portal and the respondents have neither replied nor rejected the renewal applications dated 04.03.2024. Further, as per Section 6 E (6) of the Explosives Act, 1884 read with Rule-118 of the Explosive Rules, 2008, if the court convicts the holder of a license of any offence under this Court or the rules made thereunder, may suspend or revoke a license and if the conviction is set-aside on appeal or otherwise, the suspension or revocation shall become void and in the present case, the petitioner No.3 was not convicted in the aforesaid crime, therefore the contentions of the respondents that the revocation of suspension of license can be considered only after the outcome of C.C.No.3891 of 14 2021 against the petitioner No.3 is unsustainable. It is further submitted that the petitioners have supplied the ammonium nitrate to the license holders who generally uses for agricultural purposes and the police have only seized 10 tons of ammonium nitrate that does not belong to the petitioners but belongs to Raja Rajeshwari Chemicals & Allied, Bhongir and in fact if ammonium nitrate is mixed with other substances to form AN-based explosives, slurry explosives etc., causes imminent danger to the public and in the present case police had seized only ammonium nitrate and not an AN-based explosive, which causes imminent danger to the public, as such the petitioners have not violated the provisions of Section 6E (6) of the Explosives Act, 1884 read with Rule-118 of the Explosive Rules, 2008 and Rule 42 of Ammonium Nitrate Rules, 2012 and the petitioner as on date is not convicted.
SUBMISSIONS OF PETITIONERS:
14. Sri B. Chandrasen Reddy, learned senior counsel appearing for petitioners would submit that the respondent No.4 has granted three licenses to possess and manufacture Ammonium Nitrate to petitioner Nos.1 and 2 initially valid till 31.03.2019 and were extended till 31.03.2024. A charge sheet dated 31.08.2021 was filed in C.C.No.3891 of 2021 in F.I.R.No.420 of 2019 for the offences under Sections 419, 420, 468, 473 of IPC and Section 9 (B) read with 5 of Explosive Act, 1884 and 6 (6), 9 and 22 of Ammonium Nitrate Rules, 2012. The respondent No.2 has issued 1st show cause notice on 13.09.2019 calling upon the petitioner why the subject license should 15 not be suspended. Petitioner replied to the said show cause notice on 03.10.2019 and on 15.10.2019, the license of the petitioners was suspended as an interim measure by respondent No.2. The said suspension was challenged by petitioner by way of filing W.P.No.23355 of 2019 and 23356 of 2019 and this Court by vide common order dated 10.02.2021 was pleased to set-aside the suspension order dated 15.10.2019 and remanded back to respondent No.2 directing to consider the issue afresh taking into account the explanation dated 03.10.2019. Thereafter, the respondent No.3 on 02.07.2021 issued 2nd show cause notice alleging that there is a shortfall of 3392.2 MT of Ammonium Nitrate and why the license of the petitioners should not be revoked. The petitioner has replied to the said show cause notice on 26.07.2021. The petitioner filed W.P.No.7474 of 2024 and 7553 of 2024 challenging the action of the respondent No.2 in not complying the orders dated 10.02.2021 of this Court and updating the status of the petitioner as ACTIVE in PESO website and this Court vide common order dated 09.07.2024 disposed of the said writ petitions by setting aside the show cause notices dated 02.07.2021 and directed respondents to pass appropriate order considering the representation dated 26.07.2021. The respondent No.2 on 27.08.2024 has issued notice directing the petitioners to submit details of sale and purchase of ammonium nitrate as there is a difference of 3392.2 MT of Ammonium Nitrate and also sought the status of Cr.No.420 of 2019. This Court in W.P.No.24443 of 2024 by order dated 03.10.2024 directed the petitioners to submit an 16 explanation enclosing particulars of Cr.No.420 of 2019 and the charge sheet and further directed the respondents to consider the same. On 04.10.2024 the petitioner submitted detailed explanation and would submit that as per findings in C.C.No.3891 of 2021 arising out of Cr.No.420 of 2019 the 10 tons of ammonium nitrate seized on 26.08.2019 does not belong to the petitioner i.e., M/s. Raja Shree Chem Tech or M/s Rajashree Enterprises and it belongs to a separate entity i.e., M/s Raja Rajeshwari Chemicals & Allied, a proprietary concern owned by Mr. Ravindra Tatipalli, which is 8 kilometers away from the petitioner factory. The respondent No.2 on 17.10.2024 issued speaking order in compliance to the order of this Court dated 03.10.2024 wherein it was mentioned that in view of registration of Crime No.420 of 2019 under P.S.RGI Airport for which investigation is in process and judgment by the Court has not been delivered till date, revocation of suspension cannot be considered and necessary action would be taken against the petitioner after outcome of the judgment in Crime No.420 of 2019 and as per the directions of Hon'ble Court in C.C.No.3891 of 2021. Learned senior counsel would further submit that Third party affidavit has been filed by Mr. Ravindra Tatipalli on 18.10.2024 of M/s. Raja Rajeshwari Chemicals and Alied stating that it is a separate entity. Thereafter, on 11.11.2024 W.P.No.24443 of 2024 was withdrawn as impugned proceedings dated 17.10.2024 was passed with a liberty to challenge the same by virtue of a fresh writ petition. Learned senior counsel further submits that suspension was revoked in a case of M/s. Eswar Enterprises despite crime No.167 of 17 2021 pending for far more serious offence of high explosive composition of Penta Erythritol Nitrate (PETN) seized as per charge sheet. Learned senior counsel further submits that as per Section 6 E (6) of the Explosives Act, 1884 read with Rule-118 of the Explosive Rules, 2008, if the Court convicts the holder of a license of any offence under this Court or the rules made there under may suspend or revoke a license and if the conviction is set aside on appeal or otherwise, the suspension or revocation shall become void and in the present case, the petitioner No.3 was not convicted as such the contention of the respondents that the revocation of suspension of license can be considered only after the outcome of C.C.No.3891 of 2021 against the petitioner No.3 is not sustainable. In support of his case, learned senior counsel for the petitioners relied on a decision of Hon'ble Supreme Court in MOHINDER SINGH GILL V. CHIEF ELECTION COMMISSIONER 1. Learned senior counsel further submits that ammonium nitrate is used for agriculture, pharmaceuticals and to make it an explosive it requires catalyst and the petitioner requires an active access to PESO for doing business and the petitioner is ready to comply with any of the conditions that are imposed and subject to result of the criminal case. Learned senior counsel draws attention of this Court to Rule 118 of the Explosive Rules, 2008 which is extracted for reference:
"Suspension and revocation or cancellation of licence: (1) Every licence granted under these rules shall---
(I) stand cancelled, if---1
(1978) 1 SCC 405 18
(a) the licensee has ceased to have any right for the lawful possession over the licensed premises;
(b) the licensee is convicted and sentenced under any criminal offences or ordered to execute under Chapter VIII of the Code of Criminal Procedure, 1973 (2 of 1974), a bond for keeping peace for good behavior.
(II)xxx (III) be liable to be suspended or cancelled by an order of the licensing authority for any contravention of the Act or these rules or of any condition contained in such licence, or by order of the Central Government, if it is satisfied that there are sufficient grounds for doing so:
Provided that before suspending or cancelling a licence under this rule, the holder of the license shall be given an opportunity of being heard."
Learned senior counsel would further draw attention to Section 6 (E) (3) and (6) of the Explosive Act, 1884, which is extracted for reference:
"6E. Variation, suspension and revocation of licences:---
(1)xxx (2)xxx (3) The licensing authority may, by order in writing, suspend a licence for such period as it thinks fit or revoke a license:---
(a) if the licensing authority is satisfied that the holder of the licence is prohibited by this Act or by any other law for the time being in force to manufacture, possess, sell, transport, import or export any explosive, or is of unsound mind, or is for any reason unfit for a licence under this Act;
(b) if the licensing authority deems it necessary for the security of the public peace or for public safety to suspend or revoke the licence; or ( c ) if the licence was obtained by the suppression of material information or on the basis of wrong information provided by the holder of the licence or any other person on his behalf at the time of applying for the licence; or
(d) if any of the conditions of the licence has been contravened; or 19
(e) if the holder of the licence has failed to comply with a notice under sub-section (1) requiring him to deliver-up the licence.
(6) A court convicting the holder of a licence of any offence under this Act or the rules made thereunder may also suspend or revoke a licence:
Provided that if the conviction is set-aside on appeal or otherwise, the suspension or revocation shall become void."
15. Learned senior counsel further draws attention of this Court to Rule 36 (5) of Ammonium Nitrate Rules, 2012, which is extracted for reference:
"36. Renewal of licence:
xxx (5) If the application for renewal reaches the renewing or licensing authority on or before the date of expiry, the licence shall be deemed to be in force until such date as the licensing authority renews the licence or until an intimation that the renewal of the licence is refused has been communicated to the applicant and if no application is received till the date of validity of the licence, the licence shall stand expired."
16. Learned senior counsel for the petitioners would submit that the petitioners had made an application for renewal of the licence to possess and for sale Ammonium Nitrate on 04.03.2024 for the period from 01.04.2024 to 31.03.2029 under the Ammonium Nitrate Rules, 2012 and paid requisite fees, which means that the licence of the petitioner was deemed to be in force. As such the communication of the respondent No.2 dated 17.10.2024 that the necessary action would be taken as per directions of the Hon'ble Court in C.C.No.3891 of 2021 is not sustainable since the matter is pending trial and the petitioner has not been convicted as on date.
20SUBMISSIONS OF RESPONDENTS:
17. Per contra learned standing counsel appearing for the respondents would submit that the Deputy Commissioner of Police on 09.09.2019 addressed a letter to the Deputy Chief Controller, Petroleum stating that the petitioner No.3/A-1 with 4 other accused persons were involved in illegal transportation of Explosive material. That petitioner No.3/A-1 used to supply Ammonium Nitrate to his previous customers and created a firm in the name of Rajarajeshwari Chemicals and allied, in the name of Ravinder who is his uncle, and obtained GST licence for the said firm. That A-1 was sending sodium nitrate requisition from Rajshree Chem Tech to Rajarajeshwari chemicals later creating way bills and invoices in the name of his customers who intend to take ammonium nitrate by mentioning as transporting sodium nitrate but physically sending ammonium nitrate to customers in the name of sodium nitrate resorting to cheating. The licence bearing No.A/HQ/TG/P3/55(A1343) was granted to M/s Rajashree Enterprises, Prop. Sri A. Raj Kumar and licence Nos.A/HQ/TG/P3/56(A1344) and A/HQ/TG/P1/3(A850) was granted to proprietor and Occupier Sri A. Raj Kumar, M/s. Rajashree Chem- Tech under Ammonium Nitrate Rules, 2012 and the subject licences were suspended. Learned standing counsel further submits that the Deputy Commissioner of Police, Shamshabad Zone, Cyberabad vide letters dated 28.08.2019 and 09.09.2019 informed the respondents regarding registration of case against Sri A. Raj Kumar, Proprietor of M/s. Rajashree Enterprises in RGI Airport P.S. for illegal sale of 21 Ammonium Nitrate. The consignment of Ammonium Nitrate (quantity 10 tons) was being transported on 26.08.2019 showing the consignment as Sodium Nitrate. On receipt of the report from the Deputy Commissioner of Police, Shamshabad Zone, Cyberabad an explanation was called from the petitioner vide show cause notice dated 13.09.2019 to which the petitioner M/s. Rajshree Enterprises had submitted reply to show cause notice dated 03.10.2019. However, the reply to show cause notice was not found satisfactory since no documents/online records in Form R-6, R-7, R-11 (a) and R- 11 (b) of transaction of purchase and sale of Ammonium Nitrate were submitted to prove his genuineness regarding sale and receipt of Ammonium Nitrate. Further, no online documents in Form R-11 (b) of AN Rules, 2012 pertaining to pass issued by the consignor for transport of consignment of Ammonium Nitrate to consignee has been generated and submitted to the respondent's office. Further, the Chief Controller of Explosives, Nagpur issued letter dated 22.03.2021 to petitioner instructing him to purchase and sell ammonium nitrate and ordered return of stock to the supplier i.e., M/s Smartchem Technologies Limited along with request to the Commissioner of Police, Cyberabad to dispose off the stock of ammonium nitrate (10 MT) seized by him in Crime No.420 of 2019. Learned standing counsel would further submit that the status of the license as active in PESO portal can only be updated after the revocation of the suspension as C.C.No.3891 of 2021 which is pending trial in the Court of law as informed vide Deputy Commissioner of Police letter 22 cited above. It is further submitted that the show cause notice dated 27.07.2021 has been issued by the Chief Controller of Explosives as per records, to which petitioner has not submitted any reply and in compliance to the Hon'ble High Court direction in W.P.No.24443 of 2024, a representation was received from the petitioner by post on 09.10.2024, and a speaking order dated 17.10.2024 was issued to the petitioner and the subject licenses were suspended as per the provision of the Rule 42 of Ammonium Nitrate Rules, 2012 in exercise of the powers conferred under Section 6 E(3) of Explosives Act, 1884 for contravention of the Rules and Condition of the subject license. In view of the serious nature of the case and violation of Rule 4, 13, 14, 20 (3) and 27 (2) of Ammonium Nitrate Rules, 2012 and Conditions 10 & 11 of the license in Form P-3 of the said rule, the suspension of the license pertaining to possession for sale of Ammonium Nitrate was necessary. Learned standing counsel would further refer to the notification No.1749 dated 15.12.2008 issued by Ministry of Home Affairs wherein the Central Government has specified "Ammonium Nitrate or a Combination thereof" as a "special category explosive substance". Learned standing counsel further submits that as Ammonium Nitrate is an explosive as defined under Rule 2 (b) of Ammonium Nitrate Rules, 2012, pilferage of Ammonium Nitrate is of serious nature as the same can be used in combination to produce a practical effect by explosion endangering public life/national security and the explosion occurred in Beirut in the year 2020 is an example which caused huge loss to human life and property. Learned standing 23 counsel further submits that as regards to Eswar Enterprises Case, violations or contravention of rules are different in the case of M/s. Eswar Enterprises and M/s. Rajashree Enterprises. Since the petitioner No.3 is shown as A-1, the respondents are awaiting for the outcome of the result in pending case before the learned trial Court. Learned standing counsel would further submit that the petitioner is not generating records through online system provided by this Organization to track the sale/receipt of Ammonium Nitrate in order to prove the genuineness of the transaction of the sale/receipt of transaction. Moreover, the allegations made in the F.I.R are serious in nature as the Police Authorities have informed that petitioner is selling Ammonium Nitrate in the name of Sodium Nitrate and the case in C.C.No.3891 of 2021 is pending in the Hon'ble Court. It is further submitted that the licenses were issued in Form-3 with statutory warning which reads as under:
"Statutory Warning:
Mis-use of ammonium nitrate shall constitute serious criminal offences under the law."
ANALYSIS & CONCLUSIONS:
18. In the counter filed by the respondents, as per the communication of the Deputy Chief Controller of Explosives/respondent No.3 dated 26.08.2024 in compliance to the Hon'ble Court Order in W.P.Nos.7474 of 2024 and 7553 of 2024 dated 09.07.2024, it is submitted that petitioner has violated the ammonium nitrate rule 4, 13, 20 (3), 27 of Ammonium Nitrate Rules, 2012 which was communicated vide show cause notice for which the 24 petitioner has submitted explanation regarding the violations vide reply dated 26.07.2021 and has admitted that in the communication there was a short fall of stock of 3392.20 MT of Ammonium Nitrate continuing from the date of grant of license and that in future they will not commit such mistake and requested to condone the mistake that time. It is noted that the respondent No.3 in the said letter has highlighted that the petitioners have admitted that there is a difference in online and stock return and were directed to submit a detailed documentary evidence regarding sale and purchase of Ammonium Nitrate in the form of bills for justification and also requested to inform the office regarding the status of Crime No.420 of 2019. The respondents have suspended the licenses as per provisions of Section 6 (E) of Explosives Act, 1884 and Rule 42 of Ammonium Nitrate Rules, 2012 for contravention of the rules and conditions of the subject licenses. The Assistant Commissioner of Police, Shamshabad, Cyberabad in the charge sheet dated 31.08.2021 filed before the XIV Additional Metropolitan Magistrate, Cyberabad at Rajendranagar, Rangareddy District, recorded that the petitioner No.3/A-1 and A-2 one T. Ravinder on thorough interrogation have confessed to have committed the offence, admitted their guilt and prayed to punish the accused under Sections 419, 420, 468, 473 of IPC and Sections 9 (B) read with 5 of Explosive Act, 1884 and Section 6 (6), 9 and 22 of Ammonium Nitrate Rules, 2012. The Assistant Commissioner of Police, Shamshabad, Cyberabad had prima-facie found that A-1 and A-2 have found to have committed the offences.25
Further, on a perusal of the communication of the Joint Chief Controller of Explosives (HOD) to the petitioners vide letter dated 22.03.2021, it was informed to the petitioners that the licenses were suspended on 16.10.2019 as an interim measure. It is further observed that the petitioner has made a representation dated 04.10.2024 as per the orders passed by this Court in W.P.No.24443 of 2024 dated 03.10.2024 wherein it is submitted that the petitioner has no connection with the alleged transportation of 10 tons of ammonium nitrate which is a subject matter of C.C.No.4076 of 2021 in Crime No.420 of 2019 and that the petitioner on 26.07.2021 has given a detailed representation stating that there is no shortfall of ammonium nitrate however, in the said communication it is stated that the shortfall of 3392.20 of MT of Ammonium Nitrate stock is continuing from the date of granting license and any excess fee is required would be paid immediately and requested that in future they would not commit such misstate and requested for its consideration.
19. On a perusal of the order dated 15.10.2019, issued by the Deputy Chief Controller of Explosives/respondent No.2 in exercise of powers conferred under Section 6 E (3) (d) of the Explosive Act, 1884 read with Rule 42 (5) (i) of the Ammonium Nitrate Rules, 2012 license was granted in Form P-3 under Ammonium Nitrate Rules 2012 to petitioner for storage of Ammonium Nitrate is suspended as an interim measure with immediate effect till further orders and the 26 violations were also recorded in the said order and were communicated to the petitioner on 15.10.2019.
20. Further, referring to the letter of the Deputy Commissioner of Police, dated 09.09.2019 in RGI Airport P.S and seizure of consignment of Ammonium Nitrate and non-satisfactory compliance report, the following violations of ammonium nitrate are extracted for reference:
"1. Sale of Ammonium Nitrate to firms without possession of license and receipt of indent in Form R10, in violation of Rule 4 and Condition 27 (2) of Ammonium Nitrate Rules, 2012.
2. Illegal sale of Ammonium Nitrate in the name of other chemicals viz. Sodium Nitrate through the firm M/s. Rajarajeshwari Chemicals and allied, who do not possess licence under Ammonium Nitrate Rules, 2012 in violation of Rules 4 and 13 of Ammonium Nitrate Rules, 2012.
3. Sale of Ammonium Nitrate without giving prior intimation in Form R.11 (a) and Ammonium Nitrate Rules, 2012 to respective District Superintendent of Police of the place of dispatch and place of destination before supply in violation of Rule 131 of Ammonium Nitrate Rules, 2012.
4. Illegal Sale of Ammonium Nitrate by passing the online system in violation of Rule 14, Condition 10, 11 of licence in Form P3 of Ammonium Nitrate Rules, 2012. The subject license was granted to you with statutory warning stating any misuse of Ammonium Nitrate shall constitute serious criminal offence under the law."
21. The petitioner was further directed to declare the stock of ammonium nitrate in their possession and submit the below mentioned online records of purchase and sale of ammonium nitrate under the subject licenses, vide show cause notice dated 13.09.2019. The information sought is extracted for reference: 27
"Form R-6 (Record of Ammonium Nitrate transported by vehicle) Form R-7 (Account of sale of Ammonium Nitrate) Form R-9 (Monthly returns of Ammonium Nitrate) Form R-10 (Indent of Ammonium Nitrate) Form R-11(b) (Pass issued for transport of Ammonium Nitrate) Form R-11(a) Form of intimation to be given to the District Superintendent of Police before dispatch of consignment of Ammonium Nitrate."
22. Further, by letter dated 09.09.2019 of Deputy Commissioner of Police, Shamshabad Zone, Cyberabad requested the respondent No.2 for cancellation of licenses and for necessary action under relevant rules against illegal transportation of Ammonium Nitrate which as submitted is an explosive substance. On a perusal of the said communication, it is clear that petitioner No.3 who is A-1 has nexus with other four accused persons who were involved in illegal transportation of explosive material. The relevant paragraph is extracted for reference:
"A1: Akkinapally Rajkumar and along with 4 other accused persons were involved in illegal Transportation of Explosive material. They are A2: Thatipalli Ravinder S/o late Venkataiah, aged 62 yrs, occ:
employee of A1 company, R/I H.No.3-11-273/, near Brahmamgari Temple, L.B.nagar, Bhuvanagiri Town & Dist, A-3: Saleem C/o FSF traders, Madanapally, Chittoor, AP State, A-4: Venkatesh @ Venkat, A- 5: Shaik Habeeb Basha, S/o Shaik Kahadar Sab, age 38 yrs, Occ: Driver, R/o Dadamvaripalli (V), Mudivedu (M), Kurabalakota, Chotoor (D) of Andhra Pradesh State. A-1, A-2 and A-5 were arrested and send to judicial remand on 28.08.2019. They are running company at Muthi Reddy Gudem village, Bhongiri on the name of Rajashree Enterprises and Rajashree Chem Tech they are doing illegal transportation of Explosive material to other companies."28
23. It is pertinent to note that the respondent No.3 on behalf of respondent No.2 vide proceedings dated 15.10.2019 suspended the licenses of the petitioners as an interim measure, the same was confirmed by the respondent No.2 vide impugned proceedings dated 17.10.2024 stating that further action in the subject matter would be taken as per the directions of the Hon'ble Court in C.C.No.3891 of 2021. The Hon'ble Supreme Court in Santosh De V. Archana Guha 2 held that interference in criminal proceedings is called for only in case of grave illegality. The relevant paragraph is extracted for reference:
"15. The facts of this case impel us to say how easy it has become today to delay the trial of criminal cases. An accused so minded can stall the proceedings for decades together, if he has the means to do so. Any and every single interlocutory is challenged in the superior courts and the superior courts, we are pained to say, are falling prey to their stratagems. We expect the superior courts to resist all such attempts. Unless a grave illegality is committed, the superior courts should not interfere. They should allow the court which is seized of the matter to go on with it. There is always an appellate court to correct the errors. One should keep in mind the principle behind Section 465 CrPC. Any and every irregularity or infraction of a procedural provision cannot constitute a ground for interference by a superior court unless such irregularity or infraction has caused irreparable prejudice to the party and requires to be corrected at that stage itself. Such interference by superior courts at the interlocutory stages tends to defeat the ends of justice instead of serving those ends. It should not be that a man with enough means is able to keep the law at bay. That would mean the failure of the very system."
24. Since the case of the petitioners is pending before the trial Court, as there are disputes with regard to the identity of the parties, 2 (1994) 2 Supreme Court Cases 420 29 classification of the seized material and also violations recorded by the respondents, as such in the present writ petition there are serious disputed question of facts which requires consideration on leading meaningful evidence, which is now on record pending before the trial Court. Since there are disputed question of facts, the same cannot be adjudicated in summary proceedings under Article 226 of the Constitution of India as per the judgment of Hon'ble Apex Court in Shubhas Jain V. Rajeshwari Shivam 3 and Radha Krishan Industries V. State of Himachal Pradesh 4.
25. Further, this Court cannot sit in an appeal over the decision vide impugned proceedings dated 17.10.2024 issued by respondent No.2 and the Writ Court cannot interfere with a plausible or possible view taken by the authorities below as per the judgment of Hon'ble Apex Court in West Bengal Central School Service Commission and Others V. Abdul Halim and Others 5. The relevant paragraph is extracted for reference:
"32. The sweep of power under Article 226 may be wide enough to quash unreasonable orders. If a decision is so arbitrary and capricious that no reasonable person could have ever arrived at it, the same is liable to be struck down by a writ Court. If the decision cannot rationally be supported by the materials on record, the same may be regarded as perverse.
33. However, the power of the Court to examine the reasonableness of an order of the authorities does not enable the Court to look into the sufficiency of the grounds in support of a 3 2021 SCC OnLine SC 562 4 (2021) 6 SCC 771 5 (2019) 18 SCC 39 30 decision to examine the merits of the decision, sitting as if in appeal over the decision. The test is not what the Court considers reasonable or unreasonable but a decision which the Court thinks that no reasonable person could have taken, which has led to manifest injustice. The writ Court does not interfere, because a decision is not perfect."
26. Having regard to the entire narrative of events and on a perusal of the various communications and noting the submissions of the learned counsel on either side, this Court is of the prima-facie opinion that petitioner No.3 appears to have been involved in the crime which is registered in F.I.R.No.420 of 2019, wherein a charge sheet is already filed on 31.08.2021 and the matter is pending before the trial Court vide C.C.No.3891 of 2021 and considering the impugned proceedings dated 17.10.2024, wherein the respondent No.2 had informed the petitioner that necessary action would be taken after the outcome of the judgment in C.C.No.3891 of 2021 and since there are disputed question of facts involved in this writ petition, and further considering the communication of the respondent No.3 to the effect that the licenses suspended are only as an interim measure and as the petitioners are already pursuing the case before the trial Court, this Court in exercise of its jurisdiction under Article 226 of the Constitution of India, declines to interfere at this stage, as any interference may prejudice the pending proceedings before the trial Court. As such no mandamus can be issued to the respondents at this point of time. The petitioners may work out their remedies before the trial Court and before the respondent authorities. It is 31 made clear that any observations made herein are only for the purpose of disposal of this writ petition and shall not have any bearing on the proceedings pending before the trial Court, which shall decide the matter independently in accordance with law.
27. The writ petition is devoid of merits, fails and accordingly dismissed.
Miscellaneous applications, if any pending, shall stand closed.
_________________________________ JUSTICE N.V.SHRAVAN KUMAR Date:08.04.2026 VRKS 32 428 THE HONOURABLE SRI JUSTICE N.V.SHRAVAN KUMAR WRIT PETITION No.32947 of 2024 Date:08.04.2026 VRKS