Bombay High Court
Nandlal Hiralalji Gupta vs The State Of Maharashtra Thr. Its ... on 13 July, 2015
Author: A.S. Chandurkar
Bench: A.S. Chandurkar
wp1547.14.odt 1/11
IN THE HIGH COURT OF JUDICATURE AT BOMBAY
NAGPUR BENCH : NAGPUR.
WRIT PETITION NO.1547 OF 2014
PETITIONER: Nandlal Hiralalji Gupta, aged 70
years, Occ-Business, R/o Kadvi Bazar,
Amravati, Tq. And Dist. Amravati.
-VERSUS-
RESPONDENTS: 1. State of Maharashtra through its
Secretary, Home Department,
Mantralaya, Mumbai, Tq. & Dist. -
ig Mumbai.
2. The Commissioner of Police,
Amravati City, Amravati, Tq. and
Dist. Amravati.
Shri P. S. Patil, Advocate for the petitioner.
Shri B. P. Maldhure, Asstt. Government Pleader for respondents.
CORAM: A.S. CHANDURKAR, J.
th
DATED: 13
JULY, 2015.
ORAL JUDGMENT :
1. Rule. Heard finally with the consent of the learned Counsel for the parties.
2. The petitioner herein takes exception to the order dated 2-12-2013 passed by the appellate authority under Section 33 of the Maharashtra Police Act, 1954 (for short, the said Act) whereby the appeal filed by the present petitioner challenging the order passed by the Commissioner of Police, Amravati cancelling the entertainment licence ::: Uploaded on - 23/07/2015 ::: Downloaded on - 10/09/2015 19:50:20 ::: wp1547.14.odt 2/11 of the Lodge run by the petitioner has been dismissed.
3. The petitioner claims to be running a Lodge pursuant to a license granted to him by the District Magistrate, Amravati on 7-12-1985. This license was granted in exercise of powers conferred by Section 33 (1) of the said Act. This license was being renewed on annual basis. On 16-10-2012, a show cause notice was issued to the petitioner by the respondent No.2 - Commissioner of Police as to why the said entertainment license should not be cancelled. The reason for issuing said notice was that, according to the respondent No.2, on 24-7- 2012 when a raid was conducted at the Lodge run by the petitioner, it was noticed that certain persons were indulging in indecent acts and, therefore, an offence under the provisions of Section 110, 112 and 117 of the said Act read with Section 188 of the Indian Penal Code had been registered. Similarly, an occupant of another room in the Lodge was found in possession of an iron knife and against said person, an offence under Sections 4 and 5 of the Arms Act had been registered. Therefore, it was stated that the petitioner was permitting persons to reside in the Lodge without proper verification. Hence, on the basis of the power conferred under the provisions of "Keeping Places of Public Entertainment Rules" (for short, the Rules), the petitioner was asked to show cause as to why the entertainment license should not be cancelled.
4. In response to aforesaid notice, the petitioner submitted his reply in which it was stated that necessary entries were taken in the visitors' register, but on the date of the incident, as the petitioner was ::: Uploaded on - 23/07/2015 ::: Downloaded on - 10/09/2015 19:50:20 ::: wp1547.14.odt 3/11 not feeling well and was resting at the counter, said persons had entered the Lodge. It was further stated that though necessary identification was sought from the concerned person, he had stated that same would be provided within a couple of days. After considering said explanation, the respondent No.2 on 20-12-2012 passed an order cancelling the public entertainment license issued for running said Lodge.
5. The petitioner being aggrieved by aforesaid order of cancellation filed an appeal under Section 33 of the said Act raising various grounds. The appellate authority considered the grounds as raised and held that initiation of criminal proceedings was distinct from action for breach of rules. The appellate authority found that the order cancelling the license was justified and hence, on 2-12-2013, the appeal filed by the petitioner came to be dismissed. Hence, this writ petition.
6. Shri P. S. Patil, learned Counsel appearing for the petitioner submitted that the action of cancelling the entertainment license granted to the petitioner was contrary to law. It was submitted that merely because certain offences were registered against some third persons, the same could not be the reason to cancel the license standing in the name of the petitioner. He submitted that mere initiation of prosecution was not sufficient so as to furnish a cause of action to cancel the license. In that regard, he placed reliance on the judgments in Kana Vs. Asstt.
Commr. Of Police 1996(2) Mh.L.J. 1052, A. G. Narvel vs. Shri B. I. Nhinglavha and others (1999) 101 BLR 196 and Dilip J. Bhatia Vs. The Commissioner of Police 2001(1) BCR 448. He then submitted that in so ::: Uploaded on - 23/07/2015 ::: Downloaded on - 10/09/2015 19:50:20 ::: wp1547.14.odt 4/11 far as the alleged breach that proper identification of persons using the Lodge was concerned, an explanation had been duly furnished that on account of the understanding given by the concerned person that documents in relation to his identity would be duly submitted, the concerned person was permitted to reside at the Lodge. In any event, it was submitted that the breach as alleged was not of a serious nature and it was only for the first time since issuance of license that such an incident warranting action had taken place. As running of the Lodge was the only source of livelihood, a strict action as regards cancellation of license was not warranted.
7. Smt. B. P. Maldhure, learned Assistant Government Pleader appearing for the respondents supported the impugned orders. It was submitted that the incident as alleged had come to light in view of the raid conducted by the authorities. It was on that basis that offence under relevant provisions of law had been registered against the persons concerned. She submitted that by not verifying the identity of the persons using the Lodge, there was a breach committed and, hence, in view of powers conferred by Rule 26 of the Rules, and after considering the explanation as furnished, the license had been cancelled. She further submitted that the aspect of criminal prosecution being launched against third persons was something distinct from the action of cancellation on account of breach of the terms of the license. She also submitted that an order under provisions of Section 144(1) of the Criminal Procedure Code, 1973 had been issued by the Office of the respondent No.2 under ::: Uploaded on - 23/07/2015 ::: Downloaded on - 10/09/2015 19:50:20 ::: wp1547.14.odt 5/11 which it was incumbent upon the petitioner as owner of the Lodge to obtain documents in relation to identity of persons occupying the Lodge.
Though the petitioner was aware of such requirements, said order was ignored by the petitioner.
8. I have carefully considered the respective submissions and I have gone through the documents placed on record. The show cause notice dated 16-10-2012 issued to the petitioner is based on two counts.
Firstly, that the petitioner had not verified the identity of the persons residing in the Lodge and secondly, he had permitted the Lodge to be used for conducting illegal activities.
In so far as the Lodge being used for conducting illegal activities is concerned, the initiation of prosecution against third persons found indulging in indecent acts as well as for being in possession of unauthorized arms is not in dispute. The legal position that mere initiation of prosecution by itself does not furnish a ground for initiating action to cancel or to refuse to renew a license is well settled. Reference in that regard can be made to the judgment of learned Single Judge in Dilip J. Bhatia (supra). In A. G. Narvel (supra), it was held that conviction of a third person under Section 110 of the said Act by itself could not be the basis to cancel a license under Rule 32 of the Rules framed under the said Act. Hence, merely because prosecution was launched against some third person under provisions of Sections 110, 112 and 117 of the said Act read with Section 188 of the Indian Penal Code or under provisions of Sections 4 and 5 of the Arms Act, that by ::: Uploaded on - 23/07/2015 ::: Downloaded on - 10/09/2015 19:50:20 ::: wp1547.14.odt 6/11 itself would not be a ground to initiate action against the petitioner for said reason.
9. In so far as failure to properly verify the identity of persons residing in the Lodge is concerned, the same is said to be based on the breach of orders issued by the concerned Authority thereby resulting in breach of the terms of the licence. Rule 25 of the Rules requires maintaining a register containing necessary particulars as specified which register is liable to be produced for inspection. On 1-6-2012, the concerned Authority had issued orders under Section 144(1) of the Criminal Procedure Code calling upon Hotel and Lodge owners to obtain proper documents of identification of persons to whom accommodation is provided. The petitioner in his reply dated 29-10-2012 has admitted knowledge of the orders dated 1-6-2012 issued by the concerned Authority for obtaining identification of visitors to the Lodge. He however, stated that the concerned visitor had told him that his identity papers would be furnished in two to three days and in the meanwhile the raid was conducted.
10. At this stage, it is necessary to refer to the relevant provisions under which the entertainment licence of the petitioner has been cancelled. Section 33 of the said Act empowers the Commissioner to make necessary rules in the matter of granting licence in respect of the places of public entertainment. In exercise of said powers, the respondent No.2 has made "the Keeping Places of Public Entertainment Rules". Rule 26 of the Rules empowers the Licensing Authority to at any ::: Uploaded on - 23/07/2015 ::: Downloaded on - 10/09/2015 19:50:20 ::: wp1547.14.odt 7/11 time cancel or suspend a licence if the said Licensing Authority is satisfied after such enquiry that there has been violation of the rules/conditions of the licence. Rule 26 of the Rules read as under:
"26. The Licensing Authority shall have the power in his discretion at any time to cancel a licence granted under these rules o to suspend it for such period as may specify or refuse to renew it and to direct the keeper of any pace of public entertainment to close such place, either permanently, or otherwise act with reference thereto if the Licensing Authority is satisfied after such inquiry as he deems fit that ig (i) the licensee is not a suitable person for continuing to hold the licence;
(ii) in order to prevent any obstruction, inconvenience, annoyance, risk, danger or damage to the disturbance in such place; or
(iii) the licensee frequently violates the rules/conditions of the licence.
and every person keeping a place of public
entertainment shall forthwith comply with such
direction."
11. In the present case, the respondent No.2 after considering the reply furnished by the petitioner to the show cause notice found that the explanation furnished by the petitioner for the failure to obtain proper identification of visitors using the Lodge was not satisfactory and the petitioner had been permitting the visitors to use the Lodge without proper verification. This finding of the Licensing Authority has been confirmed in appeal by the respondent No.1. It has also noted that initiation of criminal prosecution and action for the breach of the Rules ::: Uploaded on - 23/07/2015 ::: Downloaded on - 10/09/2015 19:50:20 ::: wp1547.14.odt 8/11 are two independent matters after which aforesaid finding recorded by the Licensing Authority has been confirmed. To that extent, hence, it will have to be held that the petitioner has been rightly found responsible for having committed breach of the terms of the licence by not complying with the order issued by the competent Authority dated 1-6-2012 in the matter of obtaining proper identification from the visitors to the Lodge.
Moreover, the petitioner has clearly admitted that he was aware about such requirement being duly stipulated by the competent Authority.
Hence, said finding regarding breach of the conditions of the licence does not deserve to be interfered.
12. The other aspect of the matter that requires consideration is the action of cancelling the licence in exercise of powers conferred by Rule 26 of the Rules. Perusal of Rule 26 indicates that discretion has been granted to the Licensing Authority in the matter of exercising powers on being satisfied after enquiry that there has been a violation of the conditions of the licence. The discretion is either to cancel the licence or to suspend it for such period or to refuse to renew the licence.
This discretion has to be exercised after taking into account all the relevant facts and circumstances that have resulted in the breach of the conditions of the licence. Rule 26 of the Rules does not contemplate cancellation of licence for any and every breach of the conditions of the licence. In fact, a discretion has been conferred on the Licensing Authority by which the licence either could be suspended or there could be a refusal to renew the same or then to cancel it. The discretion, ::: Uploaded on - 23/07/2015 ::: Downloaded on - 10/09/2015 19:50:20 ::: wp1547.14.odt 9/11 therefore, has to be exercised by the Licensing Authority after due consideration of the facts of the case. Sub clause (iii) of Rule 26 refers to frequent violation of the rules/conditions of the licence. This, therefore, indicates that a singular violation may not always lead to cancellation of the licence and the Licensing Authority in exercise of the discretion conferred could even suspend the same. In case of frequent violation of the conditions of the licence, the Licensing Authority may in the facts of a particular case cancel the licence or refuse to renew the same. Rule 26, therefore, expects the Licensing Authority to exercise discretion before it directs cancellation or suspension or refuses to renew the licence. The order of the Licensing Authority, therefore, should reflect application of mind in that regard.
13. In this backdrop, if the show cause notice issued by the respondent No.2 is perused, it would indicate that the same is a show cause notice for cancelling the licence. At the stage of issuance of the show cause notice itself, the respondent No.2 had called upon the petitioner to show cause why the licence should not be cancelled.
Hence, while exercising discretion in the matter of taking action against the petitioner for breach of conditions of the licence, the option of either suspending it or refusing to renew it was not even considered by respondent No.2.
It is to be noted that an order of cancellation of licence is a drastic order that is required to be passed when it is found that the violation or breach is of a serious nature and it warrants strict action.
::: Uploaded on - 23/07/2015 ::: Downloaded on - 10/09/2015 19:50:20 ::: wp1547.14.odt 10/11The same is taken when it is also found that an order of suspending the licence or refusing to renew it would not be a sufficient action in the facts of a particular case. Considering the consequence of an order cancelling the licence, it cannot be doubted that the same is normally resorted to as a last option.
14. In the present case, according to the petitioner, he was operating the licence since the year 1985. There was no earlier occasion to either suspend or cancel the same. He has further stated that running the Lodge was the source of livelihood for him. Hence considering the purport of Rule 26 of the Rules, in the facts of the present case the aspect of imposition of appropriate penalty deserves to be reconsidered by the Licensing Authority. It is for the Licensing Authority to consider the facts of the case and then to either direct suspension of the licence or refuse renew it or to ultimately cancel the same. To that extent, the orders impugned deserve to be interfered with.
15. In the light of aforesaid discussion, it is held that the finding recorded as regards breach of conditions of the licence does not deserve to be interfered with. However, the action of imposing appropriate penalty for such breach requires reconsideration.
16. Hence, the following order is passed:
ORDER (1) The finding recorded by both the authorities that by failing to obtain proper identification from the visitors to the Lodge, the ::: Uploaded on - 23/07/2015 ::: Downloaded on - 10/09/2015 19:50:20 ::: wp1547.14.odt 11/11 petitioner had committed breach of the terms and conditions of the licence stands confirmed.
(2) However, the action of cancelling the entertainment licence is set aside and the proceedings are remitted to the respondent No.2 -
Licensing Authority to reconsider imposition of appropriate penalty in terms of Rule 26 of the Rules. The power in that regard shall be exercised after taking into account all relevant facts of the matter including previous breaches, if any.
(3) ig Fresh decision in the matter of imposing appropriate penalty be taken by the respondent No.2 within a period of six weeks from today after giving an opportunity to the petitioner.
(4) Rule is partly made absolute in aforesaid terms with no order as to costs.
JUDGE //MULEY// ::: Uploaded on - 23/07/2015 ::: Downloaded on - 10/09/2015 19:50:20 :::