Kerala High Court
V.Sudhakaran Aged 61 Years vs Pallichal Grama Panchayat on 19 March, 2010
IN THE HIGH COURT OF KERALA AT ERNAKULAM
PRESENT:
THE HONOURABLE THE CHIEF JUSTICE MR.ASHOK BHUSHAN
&
THE HONOURABLE MR.JUSTICE A.M.SHAFFIQUE
THURSDAY, THE 17TH DAY OF MARCH 2016/27TH PHALGUNA, 1937
WP(C).No. 39314 of 2015 (L)
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PETITIONER(S):
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V.SUDHAKARAN AGED 61 YEARS
ROHINI SADANAM, T C 54/928, NEMOM P.O
THIRUVANANTHAPURAM
BY ADVS.SRI.BECHU KURIAN THOMAS (SR.)
SRI.PAUL JACOB (P)
SRI.ENOCH DAVID SIMON JOEL
SRI.S.SREEDEV
SRI.RONY JOSE
SRI.GEORGE A.CHERIAN
RESPONDENT(S):
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1. PALLICHAL GRAMA PANCHAYAT
VEDIVACHANKOVIL P.O, BALARAMAPURAM
THIRUVANANTHJAPURAM 695 501
REPRESENTED BY ITS SECRETARY
2. SECRETARY
PALLICHAL GRAMA PANCHAYAT, VEDIVACHANKOVIL P.O
BALARAMAPURAM, THIRUVANANTHAPURAM 695 501
BY ADV. SRI.P.A.MOHAMMED SHAH (AMICUS CURIAE)
R1 & R2BY SRI.T.K.ANANDA KRISHNAN, SC
THIS WRIT PETITION (CIVIL) HAVING BEEN FINALLY HEARD ON 11-02-2016,
THE COURT ON 17-03-2016 DELIVERED THE FOLLOWING:
WP(C).No. 39314 of 2015 (L)
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APPENDIX
PETITIONER(S)' EXHIBITS
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EXHIBIT P1 TRUE COPY OF THE QUARRYING LEASE DATED 19-03-2010 RELATING TO
SY.NO 271/20,270/8-1 AND 271/7 OF PALLICHAL VILLAGE VALID TILL 18-03-2022
EXHIBIT P2 TRUE COPY OF THE CONSENT ISSUED BY THE POLLUTION CONTROL
BOARD FOR CARRYING OUT QUARRYING OPERATIONS IN THE ABOVE SY.NOS,.
VALID TILL 15-04-2015
EXHIBIT P2(A) TRUE COPY OF THE ORDER DTD 27-05-2015 EXTENDING THE VALIDITY
OF EXT.P2 CONSENT TO 31-03-2016
EXHIBIT P3 TRUE COPY OF THE EXPLOSIVE LICENSE DTD 12-06-2015 ISSUED TO
THE PETITIONER
EXHIBITG P4 TRUE COPY OF THE PANCHAYAT LICENSE DTD 20-03-2014
EXHIBIT P5 TRUE COPY OF THE PANCHAYAT LICENSE DTD 29-05-2015
EXHIBIT P6 TRUE COPY OF THE ORDER DATED 3-8-2015 IN WP(C) 23389/2015
EXHIBIT P7 TRUE COPY OF THE LETTER DATED 5-12-2015 NO E-9628/15 ISSUED BY
THE 2ND RESPONDENT
EXHIBIT P7(A) TRUE COPY OF THE POSTAL RECEIPT
RESPONDENT(S)' EXHIBITS NIL
---------------------------------------
Rp
//True Copy//
P.S to Judge
ASHOK BHUSHAN, C.J. "C.R."
&
A.M. SHAFFIQUE, J.
================
W.P. (C) No. 39314 of 2015
==================
Dated this, the 17th day of March, 2016
J U D G M E N T
Shaffique, J.
This writ petition has been referred to this Court by the learned Single Judge as per reference order dated 21/1/2016. Petitioner in the writ petition claimed to have a deemed licence for conducting quarrying operations in a property for which he was having quarrying lease. According to the petitioner, though he submitted an application for renewal of licence for conducting the quarry, the application was not disposed of within a period of thirty days as provided under Section 236(3) of the Kerala Panchayat Raj Act, 1994 (hereinafter referred to as the Act) and therefore, he was entitled for deemed licence. However, the Panchayat after the prescribed period of thirty days issued a communication to the petitioner rejecting his application for renewal of licence. According to the petitioner, the Panchayat had no jurisdiction to reject the application for renewal on account W.P(C) No.39314/15 -:2:- of the fact that the renewal application is deemed to have been allowed for the usual period of renewal, in terms of Section 236(3) of the Act. The petitioner also relied upon judgment of this Court in Rajesh Ramachandran v. Corporation of Trivandrum (2008 (3) KLT 419) wherein it is held that the benefit of deemed licence can be availed for the whole period of the application notwithstanding the subsequent refusal. The learned Single Judge did not agree with the ratio decidendi in Rajesh Ramachandran (supra) and therefore referred the matter to the Division Bench for an authoritative pronouncement. Reference is also made to another judgment of this Court in Siyad Hassan v. Marady Grama Panchayat (2015 (1) KLT 961) wherein it was held that a deemed licence can be issued to the applicant in a physical form. In the reference order, it was observed that when a deemed licence is only a legal fiction wherein certain state of affairs is imagined to exist, the said judgment also requires to be reconsidered. The reference order therefore places doubt on two judgments of this Court, ie., Rajesh Ramachandran (supra) and Siyad Hassan (supra).
W.P(C) No.39314/15 -:3:-
2. We have heard the learned senior counsel for the petitioner Sri.Bechu Kurian, learned Amicus Curiae Sri.P.A.Mohammed Shah and learned standing counsel for the Panchayat Sri.T.K.Anandakrishnan.
3. Before proceeding further, it will be useful to narrate the facts involved in the present writ petition.
4. Petitioner has been operating a quarry on the basis of a quarrying lease dated 19/3/2010 and licence/permission obtained from various authorities including the Pollution Control Board, the Controller of Explosives, the Panchayat etc,. As per Ext.P4 dated 20/3/2014, the licence was granted for a period of one year upto 31/3/2015 covering all the survey numbers of the property held by the petitioner. By Ext.P5 dated 29/5/2015, the licence was renewed for quarrying operations in Sy.No.271/20/pt alone for a period from 29/5/2015 to 13/11/2015. Petitioner filed WP(C) No. 23389/15 in which an interim order dated 3/8/2015 (Ext.P6) was issued permitting the petitioner to operate the quarry in all the survey numbers.
5. When Ext.P5 licence relating to Sy.No.271/20 was to W.P(C) No.39314/15 -:4:- expire on 13/11/2015, petitioner submitted application for renewal on 12/11/2015. Since the Panchayat did not communicate to the petitioner any order on the said application on or before 11/12/2015, according to the petitioner, he got the benefit of a deemed licence in terms of Section 236(3) of the Act. Subsequently, on 15/12/2015, petitioner was served with a registered letter dated 5/12/2015 stating that his application for renewal of licence has been rejected. Ext.P7 is the said communication and Ext.P7(a) is the postal cover. Petitioner, hence sought for quashing Ext.P7 and for a declaration that he was entitled for a deemed licence for conducting quarry operations in Sy.No.271/20 of Pallichal Village.
6. In Rajesh Ramachandran (supra), the issue involved was relating to an application for licence to run a retail store in a Municipality. The question considered was whether under Sec.447 (6) of the Municipality Act, 1994, the deeming provision would apply even if it is found that the application was defective and the said fact is not communicated to the applicant beyond 30 days and whether the applicant was entitled for a deemed licence. The W.P(C) No.39314/15 -:5:- learned Single Judge held that, since the communication regarding the defective application was issued beyond 30 days, the applicant is entitled to the benefit of deemed licence as provided under Sec.447(6). Paras 5 to 8 are relevant which read as under:
"5. A reading of S.447(3A) shows that once an application is received, the options available to the Municipality are twofold. It can either grant licence for using the place for trade or refuse to grant licence in the interest of the general public and an order as above shall be passed within 15 days of receipt of the application. If the Secretary does not pass an order and communicate the same to the applicant within 30 days of its receipt or such longer period prescribed, the consequence provided is in sub-s.(6), which states that the application for licence shall be deemed to have been allowed for the period required in the application subject to the Rules and Bye-laws and all conditions which would have been ordinarily imposed by the Corporation.
6. Learned counsel for the petitioner submitted that the application having been admittedly made on 13.3.2008, even if it is assumed that the communication dated 23.4.2008 is an order rejecting the application, still that communication was issued beyond the 30 days of receipt of the application, prescribed in S.447(6) and therefore the petitioner is W.P(C) No.39314/15 -:6:- entitled to deemed licence.
7. Going by the dates noticed above, this contention of the petitioner deserves to be accepted, as it cannot be disputed that the communication of 23.4.2008 was issued much beyond the 30 days prescribed. In such a case, the deemed grant as provided in sub-s.(6) comes to play and the petitioner will be entitled to the benefit of deemed licence as provided in S.447(6) of the Act.
8. Learned counsel for the petitioner relied on the decision of the Apex Court in the decisions in Harish Tandon v. Addl. District Magistrate, Allahabad, U.P. & Ors. (1995) 1 SCC 537 and Gajraj Singh & Ors. v. State Transport Appellate Tribunal and others (1997) 1 SCC 650 for explaining the effect of a deeming provision Paras 13 to 16 of the judgment in (1995) 1 SCC 537 read as follows:-
"13. The role of a provision in a statute creating legal fiction is by now well settled. When a statute creates a legal fiction saying that something shall be deemed to have been done which in fact and truth has not been done, the Court has to examine and ascertain as to for what purpose and between what persons such a statutory fiction is to be resorted to. Thereafter full effect has to be given to such statutory fiction and it has to be carried to its logical conclusion. In the well- known case of East End Dwellings Co. Ltd v. Finsbury Borough Council Lord Asquith while dealing with the provisions of the Town and Country Planning Act, 1947, observed:
W.P(C) No.39314/15 -:7:-
"If you are bidden to treat an imaginary state of affairs as real, you must surely, unless prohibited from doing so, also imagine as real the consequences and incidents which, if the putative, state of affairs had in fact existed, must, inevitably have flowed from or accompanied it. ........ The statute says that you must imagine a certain state of affairs; it does not say that havingdone so, you must cause or permit your imagination to boggle when it comes to the inevitable corollaries of that state of affairs."
That statement of law in respect of a statutory fiction is being consistently followed by this Court. Reference in this connection may be made to the case of State of Bombay v. Pandurang Vinayak. From the facts of that case it shall appear that Bombay Buildings (Control on Erection) Ordinance, 1948 which was applicable to certain areas mentioned in the schedule to it, was extended by a notification to all the areas in the province in respect of buildings intended to be used for the purposes of cinemas. The Ordinance was repealed and replaced by an Act which again extended to areas mentioned in the schedule with power under sub-s.(3) of S. 1 to extend its operation to other areas. This Court held that the deemed clause in S.15 of the Act read with S.25 of the Bombay General Clauses Act has to be given full effect and the expression 'enactment' in the Act will cover the word 'Ordinance' occurring in the notification which had been issued. In that connection it was said:
W.P(C) No.39314/15 -:8:-
"The corollary thus of declaring the provisions of S.25, Bombay General Clauses Act, applicable to the repeal of the ordinance and of deeming that ordinance an enactment is that wherever the word 'ordinance' occurs in the notification, that word has to be read as an enactment."
14. In the case of Chief Inspector of Mines v. Karam Chand Thaper it was said:
"Were these regulations in force on the alleged date of contravention? Certainly, they were, in consequence of the provisions of S.24 of the General Clauses Act. The fact that these regulations were deemed to be regulations made under the 1952 Act does not in any way affect the position that they were laws in force on the alleged date of contravention. The argument that as they were 'regulations' under the 1952 Act in consequence of a deeming provision, they were not laws in force on the alleged date of contravention is entirely misconceived."
15. In the case of J.K.Cotton Spinning and Weaving Mills Ltd. v. Union of India it was said:
"It is well settled that a deeming provision is an admission of the non-existence of the fact deemed. Therefore, in view of the deeming provisions under Explanations to Rr. 9 and 49, although the goods which are produced or manufactured at an intermediate stage and, thereafter, consumed or utilised in the integrated process for the manufacture of another commodity is not actually removed shall be construed and regarded as removed. The Legislature W.P(C) No.39314/15 -:9:- is quite competent to enact a deeming provision for the purpose of assuming the existence of a fact which does not apply exist."
16. Recently in the case of M.Venugopal v. Divisional Manager, Life Insurance Corporation of India after referring to the case of East End Dwellings Co. Ltd. v. Finsbury Borough Council it was said that when one is bidden to treat an imaginary state of affairs as real, he must surely, unless prohibited from doing so, also imagine as real the consequences and incidents which, must inevitably have flowed."
These judgments have been followed in the case reported in (1997) 1 SCC 650 where in paragraph 22, it has been held as follows:-
" Legal fiction is one which is not an actual reality and which the law recognises and the court accepts as a reality. Therefore, in case of legal fiction the court believes something to exist which in reality does not exist. It is nothing but a presumption of the existence of the state of affairs which in actuality is non- existent. The effect of such a Legal fiction is that a position which otherwise should not obtain is deemed to obtain under the circumstances."
The principles laid down by the Apex Court applies to S.447(6) of the Act and though, in fact, there is no licence in favour of the petitioner, still law assumes that a licence exists in favour of the petitioner. This court is bound to give full effect to the statutory provisions and petitioner should be given the benefit of the section. Read in the light of the law as laid W.P(C) No.39314/15 -:10:- down by the Apex Court in the aforesaid decisions, S.447(6) entitles the petitioner for deemed licence for the period required in the application subject to the provisions of the Act, Rules and the Bye-laws and on conditions which would have been ordinarily imposed."
7. In Siyad Hassan (supra), the question considered was whether a licence in physical form has to be issued in a case where an applicant claims benefit of deemed licence. It was held at paragraphs 10 to 15 as under:
"10. Indeed the issue in this Writ Petition lies in a narrow compass. The solitary issue that is required to be resolved is whether the petitioner is entitled to the physical form of licence in terms of the deemed provisions he has taken advantage of, especially on the strength of Ext.R1(a) resolution passed by the respondent Grama Panchayath, despite the objections said to have been raised through Exts.R1(b) and R1(c) by the residents of the locality and the ward member of the Grama Panchayath respectively.
11. It is not in dispute that subsequent to the petitioner's submission of Ext.P2 application, till this day there has been no communication from the respondent Grama Panchayath either accepting or rejecting the petitioner's request for D & O licence in terms of S.236(3) of the Act, r/w R.12(3)(c) of the W.P(C) No.39314/15 -:11:- Rules. It could be seen that Ext.R1(a) is the resolution passed by the respondent Grama Panchayath deciding in principle that the necessary licence should be granted to the petitioner. I am of the opinion that there is some force in the contention of the learned counsel for the petitioner that Ext.R1(a) resolution was indeed passed by the respondent Grama Panchayath exercising its powers under S.233(3) of the Act. It appears that subsequent to Ext.R1(a), the Grama Panchayath received Exts.R1 (b) objections from certain residents. Similarly, it also received objections through a resolution passed by the Grama Sabha of ward No.7, where the petitionerpresently established his industry.
12. None of the counsel has brought to my notice any provision in the Act providing for any mechanism for persons affected to raise their objections and also the consequential redressal mechanism in that regard. I hasten to add that merely because there is no such provision, it cannot be said, much less concluded, that the people of the locality do not have any say concerning the establishment of any industry or manufacturing unit, provided it is fraught with hazardous consequences affecting their lives or livelihood. I am afraid, the respondent Grama Panchayath could not have remained inert or inactive on a mere premise that it received certain objections, especially in the face of deeming provisions in the W.P(C) No.39314/15 -:12:- Act. The petitioner cannot be found fault with for taking advantage of what has been statutorily provided in the name of deemed provisions. At this juncture, if the respondent Grama Panchayath negates its claim through Ext.P5 to have a physical form of licence taking shelter under objections from other quarters, the petitioner would be left stranded in a no-man's land, so to speak. Having invested substantial amount of money, the petitioner has every legitimate expectation, more particularly having taken aid of the deeming provision, to obtain the physical form of licence so that it could proceed further. The respondent Grama Panchayath, being the local authority having the responsibility of civic administration, is expected to perform a balancing act of securing the interest of an individual vis-a-vis that of the residents of the Panchayath. It could have duly taken note of the objections and could have acted further, which it did not.
13. In the totality of circumstances, this Court is inclined to conclude that Ext.R1(a) was passed in terms of S.233(3) of the Act after taking into account all the eventualities, such as the density of population and the nuisance the industry is likely to cause. Under those circumstances, it cannot reverse its earlier decision based on the objections of the people of the locality received later. At the same time, it is made clear that those objectors are not remedyless, inasmuch as they could as well take recourse to S.276 of the Act r/w R.12(4) of the W.P(C) No.39314/15 -:13:- Rules.
14. In the facts and circumstances, having regard to the respective submissions of the learned counsel for all the parties concerned, this Court directs the respondent Grama Panchayath to issue the licence in physical form in response to the petitioner's Ext.P5 application, provided the petitioner has complied with all other statutory parameters, if any. This shall be done as expeditiously as possible, at any rate, within two months from the date of receipt of a copy of this judgment.
15. Further it is made clear that the additional 2nd respondent or any other affected person is at liberty to lay challenge against the licence thus granted to the petitioner before the appellate forum. If any such challenge is made before an appellate forum, it is made clear that the said challenge shall be decided on merits uninfluenced by any observation made by this Court while disposing of the present Writ Petition."
8. Sec.236 comes under Chapter XXIA of the Act. The section deals with general provisions regarding licenses and permissions. Sub section (1) indicates that every application for licence or permission under the Act or any rule or bye-law made thereunder, or for the renewal of the same, shall be made not less than thirty and not more than ninety days before the earliest date W.P(C) No.39314/15 -:14:- with effect from which, or the commencement of the period for which the licence or permission is required. Sub section (2) relates to the fee that may be charged for considering the application and rendering necessary services in that regard. Sub section (3) is the deeming provision which indicates that if orders on an application for any such licence or permission are not communicated to the applicant within thirty days, or such longer period as may be prescribed in any class of cases after the receipt of the application by the Secretary, the application shall be deemed to have been allowed for the period if any, for which it would have been ordinarily allowed and subject to the law, rules and bye-laws and all conditions ordinarily imposed. Sub section (4) indicates that acceptance of the pre-payment of the fee shall not entitle a person to claim the licence or permission but can only seek a refund in case of refusal of the licence. Sub section (5) deals with the eventualities of carrying on an act without licence or permission or in a manner inconsistent with the terms of the licence or permission. Sub section (6) deals with the eventualities of a person being convicted for an offence involving failure to W.P(C) No.39314/15 -:15:- obtain licence or permission. Sub section (7) deals with a direction to the Secretary to publish on the notice board of the village Panchayat regarding grant of licence/permission. Sub section (8) imposes an obligation on the Secretary to state the grounds, if a licence or permission is refused, suspended, cancelled or modified. Sub section (9) gives authority to the Secretary to suspend or revoke any licence or permission if there is breach of conditions of the licence or permission or the provisions of the Act or if the licence or permission is obtained by misrepresentation or fraud. Sub section (10) gives power to the Secretary to enter into any premises for inspection. Sub section (11) indicates that when any licence or permission is suspended or revoked or when the period for which it was granted, or within which application for renewal has expired, the grantee shall for all the purposes of the Act or any rule made under will be deemed to be without a licence or permission until the order suspending or revoking licence or permission is cancelled or, subject to sub sections (3) and (4), until the licence or permission is renewed, as the case may be. Sub section (12) provided that every grantee of a licence or W.P(C) No.39314/15 -:16:- permission, while such licence or permission remains in force, produce the same when required by the Secretary. Sub section (13) which was incorporated with effect from 24/3/1999 indicates that no licence or permission shall be granted to any person who had defaulted any payment of tax, fees or other dues to the Village Panchayat.
9. To answer the question referred by the learned Single Judge, it is enough that a reference is made to Section 236 (1), (3) and 11 which read as under:
"236: General provisions regarding licences and permissions (1) Save as otherwise expressly provided in, or may be prescribed under this Act, every application for any licence or permission under this Act or any rule or bye-law made thereunder, or for the renewal thereof, shall be made not less than thirty and not more than ninety days before the earliest date with effect from which, or the commencement of the period being three year or such lesser period as is mentioned in the application for which the licence or permission is required."
"(3) Save as aforesaid, if orders on an application for any such licence or permission are not communicated W.P(C) No.39314/15 -:17:- to the applicant within thirty days or such longer period as may be prescribed in any class of cases after the receipt of the application by the Secretary, the application shall be deemed to have been allowed for the period, if any, for which it would have been ordinarily allowed and subject to the law, rules and bye-laws and all conditions ordinarily imposed."
"(11) When any licence or permission is suspended or revoked or when the period for which it was granted, or within which application for renewal should be made, has expired, whichever expires later, the grantee shall for all purposes of this Act or any rule made under it be deemed to be without a licence or permission until the order suspending or revoking the licence or permission is cancelled or, subject to sub-
sections (3) and (4), until the licence or permission is renewed, as the case may be."
On a bare reading of sub section (3), we do not find any ambiguity in the said provision. The section itself clearly indicates that if orders on any such application or permission are not communicated to the applicant within thirty days or such longer period as may be prescribed in any class of cases, after the receipt of the application by the Secretary, "the application shall be deemed to have been allowed for the period, if any, for which W.P(C) No.39314/15 -:18:- it would have been ordinarily allowed and subject to the law, rules and bye-laws and all conditions ordinarily imposed". The aforesaid words in the statute clearly indicates that a deemed licence comes into existence if orders in an application for licence or permission is not communicated to the applicant within thirty days. An application for renewal of a licence is akin to an application for licence as well.
10. Section 233 gives power to the Village Panchayat to grant permission to construct or establish any factory, workshop or workplace in which it is proposed to employ steam power, water power or other mechanical power or electrical power. The provisions of Section 233 is a one time affair and which is intended only for setting up of the establishment. Section 232 (1) indicates that the industries which were offensive or dangerous to human life, health or property by the Government shall not be carried on without a licence issued by the Secretary and except in accordance with the conditions specified in such licence. Sec 232 (1) reads as under:
"232:Purpose for which places may not be used W.P(C) No.39314/15 -:19:- without a licence (1) The Village Panchayat may notify that no place in the Panchayat area shall be used for any of the purposes specified in the rules made in this behalf being purposes which in the opinion of Government, are likely to be offensive or dangerous to human life or health or property, without a licence issued by the [Secretary] and except in accordance with the conditions specified in such licence:
Provided that no such notification shall take effect until the expiry of thirty days from the date of its publication."
11. Rules have been framed for grant of licence or permission for dangerous and offensive trades as the Kerala Panchayat Raj (Issue of Licence to Dangerous and Offensive Trades and Factories) Rules 1996, (hereinafter referred to as the D&O Rules). Rule 8 indicates that the period of licence issued under Rule 6 will expire at the end of year unless, for special reasons, the President considers that it should expire at an earlier date. Rule 8 reads as under:
"8. Period of licence.-- The period of every licence issued under Rule 6, will expire at the end of the year unless, for special reasons, the President considers that it should expire at an earlier date, when it shall expire at such earlier W.P(C) No.39314/15 -:20:- date as may be specified therein:
Provided that the period of licence in respect of factory, industrial establishment etc. shall be fixed as five years and in such cases five times of the fee for licence per annum fixed by the Panchayat under Schedule III and IV shall be realised in advance."
However, in respect of factories and industrial establishments, the period of licence could be fixed at five years on charging five times of the fee. Rule 10 deals with submission of application for renewal of licence, which reads as under:
"10. Period for submitting application for renewal of licence and that for submitting fresh application for licence - An application for renewal of licence shall be submitted thirty days before the end of an year and application for licence for fresh opening shall be submitted thirty days before the openings thereof."
Rule 12 prescribes the procedure to be adopted in respect of an application for constructing or establishing factory, workshop or workplace where steam power or other power is used which is akin to Section 233 of the Act. Rule 24 relates to the instructions that the licensee shall obey and Rule 25 gives power to the W.P(C) No.39314/15 -:21:- President to cancel the licence if he is convinced that any of the conditions of the licence had been violated or if the Court of law has convicted the licensee under the Protection of Civil Rights Act,1957 or he has committed any offence in respect of any matter connected with licence.
12. Learned counsel for the petitioner placed reliance on a Division Bench judgment of Karnataka High Court in M/s Ameya Presence Marketing v. Bangalore City Corporation (AIR 1998 Karnataka 400) wherein the court while considering a deeming provision under Section 443 (10) of the Karnataka Municipal Corporation Act held that when the legislature in its wisdom has power to provide deemed permission or deemed rejection on the happening or non-happening of a particular event or contingency, the Court has to give effect to such a permission. Paras 8 and 9 are relevant, which read as under:
"8. The term 'deemed' is used in the statute in various senses. Sometimes, it means "generally regarded, taken prima facie to be, and taken conclusively to be". When used in a statute it means some matter or thing has happened, the way in which it has to be attached. When a statute W.P(C) No.39314/15 -:22:- enacts that something should be deemed to be done, which in fact and truth was not done, the Court is required to ascertain for what purpose and between what persons statutory fiction was intended to be resorted to. In the modern statute, this expression is used to introduce artificial conceptions which are intended to go beyond legal principles and to give an artificial construction to a word or a phrase. The deeming provision is generally made to include what is obvious or what is uncertain or to impose for the purpose of a statute an artificial construction of a word or phrase that would not otherwise prevail. The Supreme Court in Commissioner of Income Tax/excess profits Tax, Bombay City v. M/s.Bhogilal Laherchand Including Batliboi and Co. Bombay AIR 1954 SC 155, while dealing with the provisions of S.42(1) of the Income-tax Act where the term 'deemed to accrue' had been used, held (at page 157):
"The term 'deemed' brings within the net of chargeability income not actually accruing but which is supposed notionally to have accrued. It involves a number of concepts. By statutory fiction income which can in no sense be said to accrue at all may be considered as so accruing. Similarly, the fiction may relate to the place, the person or be in respect of the year of taxability. S. 42(1) defines what income is deemed to accrue 'within taxable territories'. It is only by application of this W.P(C) No.39314/15 -:23:- definition that one class of income "deemed to accrue to a resident within taxable territories"
within the meaning of S.4(1)(b)(i) can be estimated. The words "in the case of any person residing out of British India" were deleted from S.42(1) during the pendency of the amendment bill of 1939 in the Council of State presumably with the object of making the section applicable to any person who had any income which in a primary sense arose in British India, even though technically it had arisen abroad, irrespective of the circumstance whether that person was resident, ordinarily resident or not ordinarily resident."
9. The word 'permission' is a word of wide import which means to do some act which but for the leave, would be illegal. A joint reading of the provisions of Ss. 134 and 135 and 443(10) would lead to the conclusion that the respondent Corporation has imposed a tax on the advertisement which cannot be erected, exhibited, fixed or retained upon or over any land, building, wall, hoarding or structure within the city without the written permission of the Commissioner. Such permission has to be obtained in accordance with the procedure prescribed under the Act. If the licensing authority or the authority conferred with the power of granting permission fails to pass effective orders on any application for license or permission within forty five days after the receipt of the application, the application has to be W.P(C) No.39314/15 -:24:- deemed to have been allowed for the year or for such less period as is mentioned in the application and such deemed permission is subject to the provisions of the Act, the Rules, the Bye-laws, Regulations and all conditions ordinarily imposed for granting such permission. It has to be kept in mind that deemed permission is the converse of deemed rejection. The Legislature in its wisdom has the power to provide for deemed permission or deemed rejection on the happening or the non- happening of a particular event or contingency. The Legislature in the instant case had thought it proper to make provision for deemed permission which if interpreted otherwise, would defeat the purpose intended to be achieved by incorporating sub-sec (10) of S.443 of the Act."
In that case, though an application was submitted for erecting hoardings at different places in the city, no order was passed and when steps were taken for removing the hoardings, writ petition was filed seeking for a direction to the Corporation not to remove the hoardings erected by them on the ground that they have deemed permission in terms of Sec.443(10) of the relevant Act. It is in that background that the Division Bench had occasion to consider the effect of the deeming provision. It was also a case W.P(C) No.39314/15 -:25:- where the statute namely Sec.443(10) of the Karnataka Act indicated that "if orders on an application for licence or permission or for registration are not communicated to the applicant within forty-five days after the receipt of the application by the Commissioner, the application shall be deemed to have been allowed for the year or for such less period as is mentioned in the application and subject to the law, rules, bye-laws, regulations and all conditions ordinarily imposed." It was held that the said provision applies even in respect of an application for renewal though the word used is 'licence or permission'. In the said case, further directions were not issued as by the time the matter was heard, the time specified by sub section (10) of Section 443 had already expired.
13. Another judgment relied upon is Sivadasan v. Alexander (2015 (1) KLT 819). That was a case in which the Division Bench of this Court considered the effect of Section 447 (6) of the Municipalities Act, 1994 which provides a similar deeming provision in the matter relating to grant of licence. In that case, the tenant of a building required to change the nature W.P(C) No.39314/15 -:26:- of business and he submitted an application to the Municipality on 13/01/2011 for grant of licence. Municipality by notice dated 8/2/2011 directed the tenant to comply with certain requirements. The said notice was received by the tenant only on 14/2/2014. The tenant preferred an appeal before the Municipal Council on 16/2/2011 which came to be rejected against which revision was filed before the Tribunal for Local Self Government Institutions. The Tribunal having set aside notice dated 8/2/2011 directed the Secretary to consider the application afresh. The same was challenged by the landlord before this Court and as per directions issued by this Court, the order of the Tribunal was set aside, and the Tribunal was directed to take a fresh decision in the matter. The Tribunal held that the tenant got the benefit of a deemed licence. The Tribunal's order was set aside by learned Single Judge against which an appeal was filed. The contention of the tenant was that no orders were passed and communicated to him within 30 days from 13/01/2011, the date on which he submitted application for grant of licence. The Municipality took a contention that the notice dated 8/2/2011 was sent to the W.P(C) No.39314/15 -:27:- petitioner on 14/2/2011 as 13/2/2011, the 30th day was Sunday. It was held at paras 12, 13 and 14 as under:
"12. Now we have to look into the provision of S.447 of Act, 1994 to find out as to what act or proceeding is required to be done in the office of the Municipality, to which benefit under S.10 of Act, 1897 can be extended. The provision which needs to be interpreted is sub-s.(6) of S.447 of Act, 1994. The key words in sub-s.(6) are "if the order on an application for any licence or permission is not communicated to the applicant within 30 days after the receipt of the application by the Secretary..."
Sub-s.(6) contains a deeming clause on happening of a particular circumstance. The licence is deemed to have been allowed when the order on an application for licence or permission are not communicated to the applicant. Thus the deeming clause comes into play when order or permission is not communicated to the applicant. Communication to the applicant of an order or permission of the Municipality is not an act or proceeding which are to be done in an office or court. The above clearly indicates that the present is not a case for application of S.9 of Act, 1125 or S.10 of Act 1897.
13. From the above analysis, it is clear that sub-s. (6) of S.447 of Act, 1994 does not contemplate application of S.9 of Act, 1125 and the Municipality cannot take benefit of the said Section by excluding W.P(C) No.39314/15 -:28:- 13.02.2011 which was Sunday since communication was to be made to the applicant which act was to be done within 30 days. The act of communication was not required to be done in a court or office hence there is no applicability of S.9 of Act, 1125. We are thus of the view that the Tribunal has rightly held that the tenant has been granted licence. Learned Single Judge has erred in applying the provisions of S.9 of Act, 1125. We thus conclude that due to non-communication of the order by the Municipality within 30 days from the date of application, the tenant shall be deemed to have allowed the licence. When the deemed licence is allowed to the tenant no obstruction could have been caused for running the business of fast-food by the tenant.
14. The third submission of the learned counsel for the tenant is that he was not required to obtain or to submit a fresh consent from the landlord while submitting application for licence for fast-food within the meaning of sub-s.(3) of S.492 of Act, 1994. His submission is that the tenant was not applying for licence for the first time. In view of our observations and findings on the facts of the case that the tenant shall be deemed to have been granted licence it is unnecessary for us to consider the said submission or to express any opinion. We leave the said question open without expressing any opinion."
W.P(C) No.39314/15 -:29:- Another judgment relied upon is that of a learned Single Judge of this Court in Babu P.V. v. Thanneermukkam Grama Panchayat, Cherthala and Others (2014 (4) KHC 174). In the said case, it was held that an appeal is maintainable against grant of deemed licence. It is therefore argued that going by the statutory provision, the deemed licence has to operate for the period for which licence is normally granted and once the deemed licence is in operation, there cannot be any question of considering the application for licence again.
14. The consideration of an application for permission or licence or renewal thereof is available only during the period prescribed for the same and unless the order is communicated within the specified time, either granting the renewal or rejecting the same, the Panchayat cannot exercise jurisdiction to reject the same at a later occasion. Thereafter, the remedy of the Panchayat is only to verify whether the licensee is complying with the conditions imposed under the licence as per the rules, bye- laws etc.
15. Learned counsel for the Panchayat however places W.P(C) No.39314/15 -:30:- reliance on Section 236(1) of the Act and Rule 10 of the D & O Rules to contend that the application submitted by the petitioner was not an application submitted in accordance with law. It is argued that as per the statutory provision, an application for renewal has to be submitted thirty days prior to the date on which the licence/permit expires. Petitioner has submitted the application only a few days prior to the date of expiry of the said period of licence. The delay in submitting application is dealt with in Rule 19 of the D&O Rules, which reads as under:
"19. Additional Fee-The maximum fee specified in Schedule III appended to these rules shall be applicable only for the application submitted in due time. In the case of belated applications an additional fee of 25 per cent of the fee for licence payable under the schedule may be charged."
In the light of the fact that an additional fee can be charged for any delay in submission of an application for renewal of licence, there is no illegality in submitting the application at a later date. At any rate, as far as the Panchayat is concerned, they have an obligation to consider the application and to communicate the decision to the applicant within thirty days from the date of W.P(C) No.39314/15 -:31:- application. At best, it could be said that during the intervening period from the date of expiry of the licence, the applicant is not armed with any licence to operate the unit, but that does not mean that the Panchayat can pass orders after the expiry of the statutory period, by which time the deemed licence comes into effect.
16. The effect of deeming provision has been considered by the Apex Court and various Courts in a long line of judgments. In Income-Tax, West Bengal v. Calcutta Stock Exchange Association (AIR 1959 SC 763), the Apex Court held that the use of the word 'deemed' shows that the legislature is deliberately using the fiction of treating a thing as something which otherwise it may not have been. In Larsen & Tourbo Ltd. v. Union of India [(2005) 3 SCC 654], the Supreme Court was considering the question of 'deemed exports' with reference to the import policy by which it was indicated that every import of raw material made from domestic tariff area for units in Free Trade Zone would amount to 'deemed export'. It was held that supplies of goods and services made indigenously to the projects of various specified W.P(C) No.39314/15 -:32:- organizations are considered exports though there was no physical export.
17. The word 'deem' is defined under Black's Law Dictionary, Eighth Edition as under:
"deem, vb 1. To treat (something) as if (1) it were really something else, or (2) it had qualities that it does not have <although the document was not in fact signed until April 21, it explicitly states that it must be deemed to have been signed on April 14>.
2. To consider, think, or judge <she deemed it necessary>.
"Deem has been traditionally considered to be a useful word when it is necessary to establish a legal fiction either positively by 'deeming' something to be what it is not or negatively by 'deeming' something not to be what it is... All other uses of the word should be avoided...Phrases like 'if he deems fit' or 'as he deems necessary' or 'nothing in this Act shall be deemed to...' are objectionable as unnecessary deviations from common language. 'Thinks' or 'considers' are preferable in the first two examples and 'construed' or 'interpreted' in the third...'Deeming' creates an artificiality and artificiality should not be resorted to if it can be avoided." G.C.Thornton, Legislative Drafting 99 (4th ed.1996)."
18. In the case on hand, there is no doubt about the W.P(C) No.39314/15 -:33:- proposition that the deeming provision came into application, the moment the petitioner is not communicated of any order with reference to his application for renewal of licence within 30 days from the date of application. The doubt expressed by the learned Single Judge is regarding the right available to the Panchayat to subsequently consider the application and reject the same. In so far as the case on hand is concerned, the deeming provision postulates that the "application shall be deemed to have been allowed for the period, if any, for which it would have been ordinarily allowed", which clearly means that the application for renewal is allowed and going by Rule 8 of the D&O Rules, the period of every licence will expire at the end of the year unless, for special reasons, the President considers that it should expire at an earlier date. In Mohanan v. Sub Inspector of Police, (2011 (1) KLT 1023), a Division Bench of this Court held that the one year as stipulated in Rule 8 must be reckoned as the ordinary period for which deemed licence will be valid. Paragraphs 9, 13 and 14 are relevant which read as under:
"9. Rule 8 extracted above reveals that the W.P(C) No.39314/15 -:34:- application will expire at the end of the year. If the year is reckoned as calendar year the deemed licence must expire on 31.12.2009. If the same is reckoned as financial year as it ought to be under S.2(xlviii) of the Kerala Panchayat Raj Act. The period has to expire on 31.3.2010. If the date of the application is reckoned as the relevant date it must expire at any rate on 23.12.2010.
Thus in any view of the matter the deemed licence cannot have validity beyond 31.12.2010. That aspect of the matter is not seriously disputed. The period of the deemed licence has thus expired undoubtedly."
"13. We are in agreement with the learned counsel. We take note of the purpose of S.236(3). The purpose is certainly not to give a convenient excuse for the applicant for a licence to carry on a dangerous or offensive trade without securing any licence from the Panchayat. The expression 'ordinary period' will certainly have to be understood, conscious of the legislative purpose and the rights of ordinary people which may be trammelled by the unjustified securing of a deemed licence under S.236(3). To not perceive the real mandate of S.236(3) will certainly be serious dereliction of duty on the part of the interpreter also.
14. Conscious of the purpose which S.236(3) has to serve and conscious of the mandate of R.8 W.P(C) No.39314/15 -:35:- prescribing the period for licence, we deem it absolutely safe to conclude that not five years as prescribed under the enabling proviso but one year as stipulated in the body of R.8 must be reckoned as the ordinary period for which the deemed licence will be valid. So reckoned the petitioner does not have a valid licence for the working of his establishment after expiry of the period of one year-at any rate after 31.12.2010."
In the case on hand, the petitioner had submitted the application for renewal of licence and nothing is borne out in regard to the period for which renewal has been sought. 'Year' is defined under the Act as per Section 2(xlviii) as "'year' means the financial year". Under the D&O Rules, year is not defined, whereas, as per Rule 2(e), it is stated that in respect of words and expressions which are not defined under the Rules, the meanings assigned to them under the Act shall be followed. Therefore, the words in Rule 8 of D&O Rules that the period of every licence "will expire at the end of year", in the absence of any other indication, 31st March shall be treated as the end of the financial year, unless otherwise stated.
19. Coming to the next question regarding the correctness W.P(C) No.39314/15 -:36:- of judgment in Siyad Hassan (supra), in fact such an issue does not arise for consideration in the present case. As rightly pointed out by the learned Single Judge, when a legal fiction is created for providing a deemed licence for enabling the applicants to have a deemed licence, the question of granting a licence in physical form may not arise. However, in respect of an industrial unit which may require other permissions/licences from various statutory authorities and credit facilities from Bank etc., on the request of the applicant, the Secretary will have to certify whether they are operating the unit with a deemed licence or not. Even in the absence of a licence in the prescribed format, on the request of the applicants, the Secretary of the Panchayat may have to issue appropriate certificate to enable the applicant to utilize the same for other statutory permissions/licences and even to produce the same before the financial institutions for availing necessary credit facilities. However, we do not think that a further consideration of the relevant aspects in the present reference is required, as such an issue does not arise in the present writ petition.
W.P(C) No.39314/15 -:37:-
Therefore, having regard to the aforesaid discussion, we are of the following view:
i) The writ petition is allowed and Ext.P7 is quashed.
ii) The judgment in Rajesh Ramachandran (supra) lays down the correct proposition of law.
iii) It is declared that the petitioner has a deemed licence for conducting the quarrying operations in Sy.No.271/20 of Pallichal village, based on his application dated 12/11/2015, which shall operate till the end of the financial year.
Sd/-
ASHOK BHUSHAN, CHIEF JUSTICE Sd/-
A.M. SHAFFIQUE, JUDGE Rp //True Copy// PS to Judge