1. While agreeing with the order proposed by my brother Mootham, I would like to point out that, having regard to the nature of our Constitution, a licence for the carrying on of a business or profession cannot be looked upon as a mere privilege which is within the unfettered discretion of the Executive Authority empowered to grant it.
Particular emphasis has been laid in Article 19(1)(g) on the right to practice any profession, or to carry on any occupation, trade or business, subject, of course, as laid down in Article 19(6), to any reasonable restrictions in the interests of the general public as may be placed on it. In guaranteeing this right the founding fathers were, no doubt, influenced by their concept of the functions of the State. As is clear from the directive principles of State policy to which I think it is permissible to refer in this connection, they were establishing a State guided by certain directive principles which, though not justiciable, were, nevertheless, to be 'fundamental' in the governance of the country, it being its duty to apply them in making laws. For after stating in Article 38 that the State shall try to promote the welfare of the people by securing and protecting as effectively as it may a social order in which justice, social, economic and political, shall inform all the institutions of the national life, the founding fathers went on in Article 39(a) to lay down that State shall, in particular, direct its policy towards securing that the citizens, men and women equally, have the right to an adequate means of livelihood. A refusal to renew a licence on grounds other than those which the licensing authority can legitimately take into consideration can dislocate and paralyse, in the case of a businessman, his entire business and deprive him of the means of earning his livelihood.
Necessarily, therefore, a misuse of that power can frustrate the very purpose of the welfare State established by the Constitution of this Country. I would like to emphasise that it is necessary to keep this background as the directives represent the political philosophy underlying the constitution in view in considering the questions raised by this application.
2. Now, what are the main facts of this case? In 1949 the applicant applied for and was granted licence in Form B1 under the U. P.Controlled Cotton Cloth and Yarn Dealers' Licensing Order, 1948, to buy and sell controlled cloth. This licence was, in the initial instance, to be valid up to 31st October 1950. Thereafter this licence was renewed on two successive occasions for a period of one year each. It expired on the 31st October 1952, Before its expiry on the 9th May 1952, the applicant was served with a notice that the District Magistrate had cancelled his licence for reasons which were not stated by the District Supply Officer in his communication to the petitioner.
On receiving that notice of cancellation, the petitioner came to this Court praying that the aforesaid order cancelling the petitioner's licence be quashed. A Bench of this Court admitted the aforesaid miscellaneous application and passed an 'interim' order staying the operation of the District Magistrate's order cancelling the licence. The allegation in the affidavit which has been presented to this Court on behalf of the petitioner is that, even after that order, the District Magistrate declined to permit the applicant to ply his business under the licence on the ground that the order of this Court was not clear and required clarification. It is stated in the affidavit that the view taken by the District Magistrate was that though this Court had directed that the order cancelling the licence should be suspended, it was nowhere ordered that the licence should be returned to the applicant.
On the 22nd June 1952 a Bench of this Court directed the District Magistrate to give possession of the licence to the applicant. On 25-9-1952 which was within the time allowed by law the petitioner presented an application to the District Magistrate for a renewal of his licence. The applicant did not get any communication from the District Magistrate in regard to the said application for renewal for a period of over two months. On 1-12-1952, however, he received a notice from the District Supply Officer that the District Magistrate had refused to renew his licence 'on account of the malpractices indulged in by you and your bad reputation.' The District Magistrate further directed him to suspend his business activities forthwith and declare stock of cloth within three days of the receipt of the notice. On 4-12-1952 the applicant informed the District Supply Officer that the applicant had stopped his business activities and supplied him with the details of the amount of stock in his hands.
On 12-12-1952 the applicant received a letter from the District Supply Officer directing him to transfer his stock of cloth to a licensed cloth dealer. The cloth was, as ordered by the District Supply Officer, duly transferred. Between 7-12-1952 and 4-1-1953 efforts were made by the applicant to find out from the District Magistrate the reasons for his refusing to renew the licence. It is asserted in the affidavit that he met him three or four times in that connection and drew his attention to the fact that the applicant had never indulged in any questionable activities nor had he contravened any of the relevant control orders.
3. Now, it is important to note that according to the affidavit filed by the petitioner the District Magistrate refused to 'set out with any particular preciseness the reasons for his refusing to renew the licence without previously affording him any opportunity to explain the main allegations against him and merely told him that 'the applicant was free to take the matter to the High Court even as he had done previously. The District Magistrate with whom he had this talk having been transferred, the applicant presented an application on 15-1-1953, to the District Magistrate who had succeeded him setting out the facts of his case and praying that the order cancelling his licence be-reconsidered. The new District Magistrate expressed his inability to alter the order made by his predecessor.
I am not impressed with the argument that the version given of the talk in paragraph 22 of the petitioner's affidavit is somewhat different, being stronger in tone, than the one given in paragraph 14. The conversation, whenever it occurred, must have been within the knowledge of the then District Magistrate. The impression should not have been allowed to be created that the District Magistrate looks upon an approach to this Court as something 'reprehensible' or outrageous on the part of those affected by his orders.
In the circumstances of this particular case, it was incumbent on the part of the State to remove the impression created by the petitioner's affidavit. It cannot be said that the then District Magistrate could not be contacted for this purpose. This being the position, I am bound to assume that, having regard to the fact that it has not been controverted by any statement in a proper counter-affidavit, the version given by the petitioner of his talk or talks is substantially correct. That being so, I am driven to the conclusion that reasons which were not relevant to a consideration of the petitioner's petition for the renewal of the licence were not absent from the minds of the authority refusing the licence. On these facts, I am inclined to the view that the refusal to grant the licence was not influenced by considerations which can be solely said to be of a 'bona fide' nature.
In the affidavit filed on behalf of the petitioner it is asserted that on his asking him as to why the licence was not being renewed and he was being discriminated against, he was told that it was because 'he had dared to question the order in this Court'. It is true that there is only the applicant's statement, without any indication of the date when the conversation took place, in the affidavit to support the statement which has been attributed to the District Magistrate, but it is no less equally important to note that, in the counter-affidavit which has been filed on behalf of the District Magistrate by a Cloth Inspector in the office of the District Supply Officer the statement that the licence had been cancelled as the petitioner had dared, to approach the High Court on a previous occasion has not been refuted. It was possible for the State to file a counter-affidavit of the then District Magistrate to refute the above allegations which go to suggest that perhaps the District Magistrate was influenced, to some extent at all events, by considerations not relevant to the consideration of the petitioner's application for the renewal of the licence. This has not been done.
It may well be that the fact that he had approached this Court and obtained a stay order when his licence was cancelled was not the only operative reason so far as the decision not to renew his licence is concerned; but in theabsence of a counter-affidavit on behalf of the State, I am bound to attach importance, notwithstanding the absence of dates and minor discrepancies in the versions given in paragraphs 22 and 14 of the affidavit, to the statement made in this behalf by the petitioner in his affidavit. On the basis of the facts set out above, I am, driven to the conclusion that perhaps the refusal to renew the licence was influenced by the circumstance that the applicant had, when his licence was cancelled, dared, what was apparently annoying to the Executive authorities, to assert his right by coming to this Court and seeking its assistance in getting the order of cancellation stayed.
Ordinarily this Court does not interfere with administrative orders; but where there are reasons to think that the order has been influenced by extraneous consideration this Court has, in my opinion, irrespective of the question whether the order can be classed as falling within the category of 'certiorari' or not, ample authority under Article 226 of the Constitution to interfere with it by a proper order or direction. The words of Article 226 of the Constitution are wide enough to cover an order of that description,
Reference may be made to the observations of Bind Basni Prasad J. in -- 'Sm. Prabhabati Devi v. District Magistrate of Allahabad', : AIR1952All836 . While holding in that case that where they were in a state of doubt as to whether the order passed by the District Magistrate was quasi-judicial in character or not, that a writ of 'certiorari' was not permissible, they nevertheless thought that Article 226 was now so wide that, if any authority had acted against law, then an application under that Article was maintainable against the authority for the issue of proper directions to act according to law.
Reference may also be made in this connection to two other cases, viz., -- 'Dalchand Chittar Mal v. Commr. Food and Civil Supplies, Lucknow', : AIR1952All61 and -- 'Manohar Ramkrishna v. G. G. Desai', AIR 1951 Nag 33 (C). The latter was a case in which the petitioner had impugned an order requisitioning a house belonging to him under the C. P. and Berar Act, 63 of 1948. A preliminary objection was taken to the effect that Article 226 did not permit the Court to assist the petitioner as writs of 'certiorari' and 'prohibition' could not issue unless the impugned order was a judicial or quasi-judicial order and that an order requisitioning property did not fall in either category. A further contention was that a writ of mandamus could issue only for the purpose of requiring the doing of a positive act and that in that case as no positive act was required from the State, the petitioner was not entitled to the relief or reliefs asked for.
On the above state of facts, Mangalmurti and Mudholkar JJ. made the observations quoted below:
'It is difficult to appreciate Shri Naik's argument that 'Directions, orders or writs' can issue only in the circumstances in which the writs named specifically can issue because that argument, if accepted, would so restrict the meaning of the words 'directions, orders or writs' as to render them otiose. It is commonplace that effect must be given to every provision of a statute and that no word should be regarded as a surplusage unless that would lead to an absurdity. No absurdity results because of the construction we place on this article.'
After emphasising that the power conferred by Article 226 was discretionary, they went on to add that that being so
'It would, therefore, not, in our opinion, be right to read limitations in the wide powers conferred by the general words used therein merely because these words are followed by some specific words which connote a restricted power, more so when the article provides that the power conferred by the specific words is included in that conferred by the general words. The contention, therefore, that our powers are limited to the issuing of the specific writs only must fail.'
4. Finally I would refer to the case of --Rashid Ahmad v. Municipal Board of Kairana : 1SCR566 . In that case the Supreme Court granted relief to the petitioner who had complained that the Municipal Board, Kairana, U. P., had granted a monopoly of wholesale business in vegetables to a third person with the result that the Board had become powerless to grant a licence to the petitioner, there being consequently no bye-law under which the Board could grant a licence. The petitioner was carrying on wholesale business in vegetables before the acts complained of were done. On the above facts the petitioner who had been prohibited from carrying on his business filed a petition under Article 32 before the Supreme Court for the enforcement of his fundamental right of trade under Article 19(1)(g). The Supreme Court allowed the petition and made the following observations:
'The powers given to this Court under Article 32 are much wider and are not confined to issuing prerogative writs only.'
The Supreme Court passed an order directing the Municipal Board not to prohibit the petitioner from carrying on the trade of wholesale dealer etc. within the limits of the Municipal Board, Kairana.
5. On the facts as gathered from the affidavit, the counter-affidavit and the affidavit in rejoinder, and on the strength of the authorities to which attention has been invited above, I have come to the conclusion that this Court should issue (a) an order quashing the order of the District Magistrate, Kanpur declining to renew the licence of the petitioner and (b) a direction to consider the application on the merits.
6. For the reasons given above, I concur in the order proposed to be made by my brother Mootham.
7. This is a petition under Article 226 of the Constitution.
8. The petitioner carries on business as a cloth dealer at Kanpur under the style of Rameshwar Prasad Kedar Nath. In 1948 the U. P. Controlled Cotton Cloth and Yarn Dealers Licensing Order of that year came into operation, and in 1949 the petitioner applied for and was granted a licence in Form E1, that is a licence to buy and sell controlled cloth, valid up to the 31st October 1950. The licence was renewed for two further periods, each of one year.
9. On 9-5-1952, the petitioner was informed by the District Magistrate of Kanpur, the first respondent, that his licence had been cancelled; and from the order of cancellation made by the District Magistrate on the 1st May it appears that his action was taken on account of the alleged contravention by the petitioner of Clause 24(1), Cotton Textile (Control) Order, 1948. The Operation of this order was subsequently stayed by an order of this Court.
10. On 25-9-1952, the petitioner applied for a renewal of his licence which would in any event expire on the 31st October of that year. On the 1st December he was informed by the District Supply Officer that the District Magistrate had refused to renew the licence 'on account of the malpractices indulged in by you and your bad reputation'. This allegation is denied by the petitioner, and it is common ground that he was not afforded any opportunity of making a representation or of being heard before either of the orders cancelling his licence or refusing to renew that licence were made.
11. The petitioner prays for the issue of a writ of 'certiorari' or other order to quash the order of the District Magistrate refusing to renew his licence. The principal submission made on his behalf is that the District Magistrate in determining whether his licence should be renewed was bound to hear the petitioner and afford him an opportunity of rebutting the allegations made against him. It is also contended that in his order refusing to renew the petitioner's licence the District Magistrate did not state the reasons therefor within the meaning of Clause 11, U.P. Controlled Cotton Cloth and Yarn Dealers Licensing Order, 1948, that the order refusing to renew the licence was made 'mala fide', and finally that Clause 11 of the Order, if it does not require the District Magistrate to give the person concerned a hearing before refusing to renew his licence, is unreasonable and void as being in conflict with Article 14 of the Constitution.
12. Clause 11 of the Order is in the following terms:
'A licence granted under this Order shall, unless previously cancelled or suspended, be valid for 12 months from the date of issue, but may on application made not less than one month before the expiry of the said period be renewed for a year at a time on payment of the fees prescribed in respect of such licence in Schedule II.
Provided that the Licensing Authority may for reasons to be recorded in writing refuse to renew a licence.'
13. The argument on behalf of the State is that the renewal or refusal to renew a licence is purely an administrative act, and reliance is placed on the recent decision of the Privy Council in -- 'Nakkuda Ali v. Jayaratne', (1951) AC 66 (E).
14. In a well known passage in his judgment in -- 'The King v. The Electricity Commissioners', (1924) 1 K. B. 171 (F) Atkin, L. J., as he then was, denned the conditions subject to which the King's or Queen's Bench in England could issue a writ of 'certiorari' or prohibition. He said at p. 205:
'Wherever any body of persons having legal authority to determine questions affecting the rights of subjects and having the duty to actjudicially, act in excess of their legal authority they are subject to the controlling jurisdiction of the King's Bench Division exercised in these writs.'
14A. It has not been contended by the State in this case that the refusal of the Licensing Authority to renew the petitioner's licence did not involve a question affecting the petitioner's rights; the argument was that in determining this question the Licensing Authority had no duty to act judicially. The test, it was urged, was a comparatively simple one: did the enactment which conferred authority on the Licensing Authority to determine whether the petitioner's licence should be renewed impose upon that authority, either specially or by necessary implication, the duty to act judicially? If it did not then the act was ministerial.
In my opinion this argument, in view of the decision of the Supreme Court in -- 'Province of Bombay v. Khushaldas S. Advani : 1SCR621 must prevail. In that case the Court had to consider the effect of Section 3, Bombay Land Requisition Ordinance, 1947, by which the Provincial Government was given power, if in its opinion it was necessary or expedient to do so, to requisition land for any public purpose. By a majority the Court held that the decision of the Provincial Government that certain property was required for a public purpose was not a judicial or quasi-judicial decision but an administrative act, and that therefore the Bombay High Court had no jurisdiction to issue a writ of 'certiorari' in respect of the order of requisition. The Court approved, as correctly laying down the law, the passage from Lord Justice Atkin's judgment in -- 'The King v. Electricity Commissioners' (F) to which I have referred, and all the learned Judges who constituted the majority took the view that as there was nothing to be found in the Ordinance which required the Provincial Government to act judicially in deciding whether the property in dispute was required for a public purpose, the Provincial Government acted in an administrative capacity.
Kania C. J., (with whom Patanjali Sastri J., as he then was, agreed) said at page 226:
'It seems to me that the true position is that when the law under which the authority is making a decision, itself requires a judicial approach, the decision will be quasi-judicial.'
and Das, J., said (at p. 260):
'If a statutory authority has power to do any act which will prejudicially affect the subject, then, although there are not two parties apart from the authority and the contest is between the authority proposing to do the act and the subject opposing it, the final determination of the authority will yet be a quasi-judicial act provided the authority is required by the statute to act judicially.'
15. It is therefore necessary in the first place to examine the U.P. Controlled Cotton Cloth and Yarn Dealers Licensing Order. It is common ground that there is nothing in the Order which expressly or by necessary implication imposes the duty on the Licensing Authority to act judicially, unless it is to be found in the requirement contained in the proviso to Clause 11 that if the Licensing Authority refuses to renew a licence he must record his reasons therefor in writing. It is also common ground thatthere is nothing in the Order which plainly indicates the intention of the legislature that the exercise by the Court of its power to issue a writ of 'certiorari' in appropriate circumstances should be excluded.
I do not think that the fact that the Licensing Authority has to record his reasons when he refuses to renew a licence is, in the absence of any specification of the grounds on which a renewal may be refused, or indeed of any other limitation on his powers in this respect, a sufficient indication that he has to act judicially. I am therefore of the opinion that we are bound to hold that the act of the Licensing Authority in refusing to renew the petitioner's licence was an administrative act and that accordingly this Court cannot interfere with such order by a writ in the nature of 'certiorari'.
16. I venture to think however that the question whether the Licensing Authority acted quasi-judicially or ministerially is one which is somewhat unreal. This Court has power under Article 226 of the Constitution to issue directions and orders, as well as writs, for any purpose; and in exercise of that power it can direct that an administrative order be quashed: see : AIR1952All836 ' and -- 'Ram Charan Lal v. The State of Uttar Pradesh : AIR1952All752 . The question, therefore, which in my opinion really arises is whether the order complained of in this case is an order made in circumstances which run counter to the elementary principles of justice; for if that question be answered in the affirmative I am of the opinion that whether the order be quasi-judicial or administrative the Court would be justified in directing that it be quashed.
17. Now there is a line of cases in England which is authority for the general principle that, in the absence of statutory provision to the contrary, no man can be deprived of his property without having the opportunity of being heard. That this is so is established I think by cases such as -- 'Cooper v. The Board of Works for Wandsworth District', (1863) 14 C. B. N. Section 180 (I); -- 'Hopkins v. Smethwick Local Board of Health', (1890) 24 Q B D 712 (J) and -- 'Smith v. The Queen', (1878) 3 AC 614 (K) -- the last being a decision of the Privy Council.
In -- 'Cooper's case (I)' the Board of Works were empowered by statute to pull down a house if the builder had neglected to give notice of his intention to the Board seven days before beginning to dig or lay the foundations. Whether any notice was given in this case was a matter of dispute, but Cooper admitted that he had commenced digging out the foundations within five days of the day on which he alleged he had sent notice. The house had reached the second storey when the Board, without notice to Cooper, sent their workmen to the site and raised the building to the ground. Cooper brought an action for trespass; the defence was that the Board had acted within its legal rights under S. 76, Metropolis Local Management Act, 1855, Erle, C. J., said:
'The contention on behalf of the plaintiff has been, that, although the words of the statute, taken in their literal sense, without any qualification at all, would create a justification for the act which the District Board has done, the powers granted by that statute are subject to a qualification which has been repeatedly recognised, that no man is to be deprivedof his property without having an opportunity of being heard.........I think the power whichis granted by the 76th section is subject to the qualification suggested.........I think theBoard ought to have given notice to the plaintiff, and to have allowed him to be heard.'
Willes J., in the same case laid down the law in these terms:
'I apprehend that a tribunal which is by law invested with power to affect the property of one of Her Majesty's subjects, is bound to give such subject an opportunity of being heard before it proceeds: and that that rule is of universal application, and founded upon the plainest principles of justice.'
18. The principle laid down in -- 'Cooper's case (I)' was approved by the Court of Appeal in -- '(1890) 24 Q B D 712 (J)', also an action for damages for trespass.
19. That principle had indeed been affirmed a few years earlier in -- ('1878) 3 AC 614 (K)' decided by the Privy Council in 1878. In that case the appellant had obtained from the Crown a lease of a plot of land measuring some 870 acres in Queensland, Australia, for a term of ten years. The lease was granted under the Crown Lands Alienation Act, 1868, Sub-section 5 of Section 51 of which provided that 'the lessee of any agricultural or pastoral land, his agent or bailiff, shall reside on such selection continuously and 'bona fide' during the term of his lease, provided that if at any time during the currency of the lease it shall be proved to the satisfaction of the Commissioner that the lessee has abandoned his selection and failed in regard to the performance of the conditions of residence during a period of six months, it shall be lawful for the Governor to declare the lease absolutely forfeited and vacated.'
During the currency of the lease the acting Commissioner reported that it had been proved to his satisfaction that the appellant had abandoned the plot and had failed in regard to the performance of the conditions of residence during a period of six months, and a few days later the Governor issued a proclamation declaring the lease to be absolutely forfeited and vacated. It was contended on behalf of the appellant, 'inter alia', that there had been no proper hearing before the Commissioner which would enable the Crown to assert that there had been proof to the satisfaction of the Commissioner such as is required by the statute of either abandonment or non-residence. The Crown contended that the Commissioner's decision on questions relating to forfeiture was purely ministerial but their Lordships held that Sub-section 5 of Section 51 was not so limited in terms nor was it so limited by reasonable intendment.
The Judicial Committee were disposed to think that there had not been a finding of the Commissioner of abandonment apart from non-residence. 'But', their Lordships said,
'they decide the case upon broader grounds. It appears to them that the defendant has not been heard in the sense in which 'a hearing', has been used in the cases which have been quoted in many others, and in the sense required by the elementary principles of natural justice.'
20. I think these cases are, as I have said authority for the salutary principle that a man must not be deprived of his property without being given the opportunity of being heard.But does a man's property stand in this respect on a special and exclusive footing? I cannot see in principle why that should be so. The loss of a man's right to carry on his business may be no less serious in its consequences than the loss of his property; and under the Constitution the right to hold property and the right to carry on a business are equally fundamental rights possessed by every citizen. If there be authority--as I think there is, founded upon, the plainest principles of justice--that (in the absence of statutory provisions to the contrary) , a man be not deprived of his property without being heard, I can see no reason why that principle should not be applied to the protection, of another fundamental right, namely the right to carry on business.
21. '1950 A. C. 66 (E)', was an authority much relied on by the State. Narkudda Ali was a dealer in textiles in Ceylon who had been granted a licence to carry on his business under the Defence (Control of Textiles) Regulation's, 1945. In 1947 his licence was revoked under Regulation 62, which provided that:
'Where the controller has reasonable grounds to believe that any dealer is unfit to be allowed to continue as a dealer, the controller may cancel the textile licence..........'
on the ground that he had falsified paying-in slips in his dealings with the Textile Coupon Bank. The appellant applied for a writ of certiorari, alleging 'inter alia' that he had not been given a proper opportunity of answering the charge against him.
The Privy Council held that the cancellation of the licence was an executive act, the Controller having no duty to act judicially. 'In truth', their Lordships said,
'when he cancels a licence he is not determining a question: he is taking executive action to withdraw a privilege because, he believes, and has reasonable grounds to believe, that the holder is unfit to retain it.'
22. I have stated the reasons why in my opinion the fact that an order is an administrative one is not necessarily conclusive against the exercise by the Court of its powers under Article 226. It has not been the State's contention that the Licensing Authority was not in the present case determining a question; and in my judgment it is clear that, in contrast to Narkudda Ali the present petitioner has by virtue of Article 19(1)(g) of the Constitution the fundamental right to carry on his trade or business subject to such reasonable restrictions as may be imposed under Article 19(6). He is, therefore, 'prima facie', entitled to a licence, and the granting of it cannot therefore appropriately be described as a privilege. -- 'Nakudda Ali's case, (E)', is not therefore in my view of assistance in the determination of the main question which arises in this case.
23. It is common ground that in this case the petitioner was not afforded an opportunity of being heard. I would on that ground and for the reasons which I have endeavoured to state, hold that the order of the Licensing Authority, even though it be an administrative order, is one which we should quash in the exercise of our powers under Article 226. I can see no harm which would happen to the Licensing Authorities from hearing the person before they subject him to a disadvantage so grievous as the loss of his right to carry on business; and it I may adoptthe words of Erie, C. J., in -- Cooper's case(I)'.
'I can conceive a great many advantages which might arise in the way of public order, in the way of doing substantial justice, and in the way of fulfilling the purposes of the statute, by the restriction which we put upon them, that they should hear the party before they inflict upon him such a heavy loss'.
24. In the view I take of the petition it is unnecessary for me to express an, opinion on the other points which were canvassed before us.
25. The petitioner is in my opinion entitled to his costs which I would fix at Rs. 250.
26 BY THE COURT : The order of the District Magistrate, Kanpur, refusing to renew thepetitioner's licence for the year 1952-53 isquashed, and a writ in the nature of mandamus will issue to the District Magistrate, Kanpur, directing him to consider the applicationof the petitioner for the renewal of his licenceon its merits. The petitioner is entitled to hiscosts which we fix at Rs. 250.