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Dautatram Khanchand Vs. Delhi Administration - Court Judgment

LegalCrystal Citation
SubjectCommercial
CourtDelhi High Court
Decided On
Case NumberCivil Writ Appeal No. 386 of 1983
Judge
Reported in1984RLR270
ActsEssential Commodities Act; Essential Supplies Act, 1955 ; Criminal Law
AppellantDautatram Khanchand
RespondentDelhi Administration
Advocates: M. Chandra Sekharan,; T.C. Kumar,; Savita and;
Cases ReferredMannalal Jain v. State of Assam
Excerpt:
.....u/clause [7] of the licensing order the authorities were well within their powers to refuse to renew the license. the inquiries reveal that both the firms are more like a family concern. (17) judges love to play with words. the policy of a statute [or order] should be drawn out of its terms, as nourished by their proper environ- ment, and not, like nitrogen, out of the air [frankfurter j in d. clause 9 says :forfeiture of security-(i) without prejudice to any other action that may be taken by or under this order, if the licensing authority is satisfied that the licensee has contravened any provisions of this order or any, terms/conditions of the license, and forfeiture of his security deposit is called for, it may after giving the licensee a reasonable opportunity of stating his case..........ingress and egress etc. (19) under clause [7] of the licensing order the grounds for refusal to renew a license are enumerated. they are confined to grounds (a), (b) and (c). the refusal to renew the license cannot be on a ground outside these three grounds. but i need not pursue this argument in view of the firm's offer. (20) on the point of suitability of the premises mr. chandrasekharan, on behalf of the petitioner firm, says that he is prepared to take another premises for carrying on business under the licensing order, if the authorities have particular objection to the premises in question. (21) power to punish violation distinct from power to refuse renewal. the power to refuse to renew a license is contained in clause 7 clause 9 deals with the power to forfeit security for.....
Judgment:

Avadh Behari, J.

(1) The petitioner firm M/s. Daulat Ram Khan Chand applied for renewal of its license on 26.7.82 under the Delhi Where it (Licensing & Control) Order 1975 (the licensing order). This application for renewal was refused by the Deputy Commissioner, Food & Supplies Department, Delhi Administration, on 28.8.82. An appeal from his order was dismissed on 15.10.82 by the Commissioner, Food and Supplies. The appellate order was affirmed inrevisiononl5.12.82by the Lt. Governor. The firm has brought this writ petition against the refusal to renew the license and other reliefs.

(2) The firm has made an application for an interim relief that the respondents be directed to renew its license till the decision of the petition,

(3) The dates are important in this case. The petitioner firm was granted a license under the licensing Order which expired on 25.2.81. Under the licensing Order the firm should have applied for renewal of license at least one month in advance, that is, on 25.2.81. It was not so done. On 30.4.82 the enforcement staff raided the premises of the firm and found various contraventions of the licensing Order, apart from the fact that it had no valid license to carry on business under the licensing Order. On 26.7.82 the firm made an application for renewal of license on the ground that inadvertently it did not apply for renewal of the license during the period from 25.2.81 till July, 82.

(4) Negligence : First Ground. Mr. Chandhiok on behalf of the respondent Administration, has supported Government's refusal to renew the license on two grounds. In the first place he relies on clause (5) of the licensing Order where it is provided that an application for renewal of a license shall be so made as to reach the licensing authority not less than 30 days before the expiry of the license. The proviso says :

'PROVIDED that the Licensing Authority may entertain an application after the said period of thirty days if it is satisfied that the applicant was prevented by sufficient cause from submitting the application in time.'

(5) The firm has pleaded 'inadvertance' as the sole ground for failure to apply for renewal in February 1981 as it was bound to do u/clause (5). Mr. Chandhiok says that mere inadvertence is not a good ground.

(6) In my opinion, the circumstances of the case decisively show that the firm was complying with the requirement of the licensing Order and was submitting regularly monthly returns right from Feb. 81 till Aug. 82. The submission of these returns is a Strong factor to be taken into account in favor of the firm. If it had a guilty mind and was minded to violate the law and intended to carry on business without a license knowingly it would not have submitted the returns as required by the licensing Order. So it appears to me that there is no other ground for failure to apply for renewal except the ground of inadvertence or negligence. In August 81 the firm as a wholesaler sought permission to sell wheat to another wholesaler. Permission was granted by the Administration, though the license had expired.

(7) The Administration was also accepting the returns submitted every month. thereforee: it is not a case of willful default or contumacious conduct which may be a good ground for refusal to entertain the application for renewal beyond the prescribed period. It is a simple case of a careless state of mind. It is also clear that after the raid on 30.4.82 the firm stopped carrying on business. It did submit returns but in those returns the sales as well as the stocks were shown as nil. The firm says that it received a memo dt. 25.5.82 from the Administration asking it to show cause against the alleged violations of the licensing Order. It was busy in replying to that notice and thereforee could not apply immediately for renewal after the raid and did so only on 26.7.82. The circumstances of the case do not suggest that it is a case where the authorities ought to have denied the renewal of license on the ground that there was no sufficient Explanationn for delay. The submission of the returns every month regularly throughout the whole course of this period and their acceptance by the Administration is a strong circumstance of the firm's bona fides and explains the inadvertence on the part of its partners as pleaded by them.

(8) The excuse is inadvertance. The authorities have refused to renew the license on this ground. Let me examine it. I do not say anything on the question whether the offence under the Essential Commodities Act is one of strict liability. This will be decided in the criminal prosecution. I am concerned only with the proviso to clause (5). The definition of negligence is as follows :

'Aperson is negligent if he fails to exercise such care, skill or foresight as a reasonable man in his situation would exercise.'

(9) Prof. Glanville Williams opines that although negligence has occasionally been treated as a form of means rea, there seems to be every argument against this view. (Criminal Law, The General Part pp. 102)

(10) To refuse renewal of license is to punish thoughtlessness. There is no knowledge that one is doing wrong. For fault, culpability, blameworthiness the actor's intent is essential. 'If some one is acting wrongfully and he believes that he is doing wrong, then he is culpable for what he is doing'. [Elliott and Wood's Casebook on Criminal Law 4th ed. [1982] p 55-56]. But here the case is of carelessness. It just did not occur to the mind.

(11) NON-COMPLIANCE with the law can thus be subdivided into unwitting failure to comply and deliberate defiance of the law. [Antony Allot-The Limits of Law [1980] Butterworths p 81]. For my purpose this is sufficient. This is a commonsense, popular, robust view of the law. On the pro and contra views on means read in statutory offences the criminal courts will pronounce. I say nothing.

(12) On the facts of this case I have come to the conclusion that due submission of returns and their acceptance by the department and the permission given by Administration in August 1982 establish a sufficient cause within the meaning of the proviso to clause (5).

(13) Unsuitability of Premises : Second Ground Secondly, Mr. Chandhiok submitted that at the premises in question there is another firm known as M/s Durga Trading Co. and thereforee u/clause [7] of the licensing Order the authorities were well within their powers to refuse to renew the license. [Rule 7 of licensing Order is then reproduced].

(14) On the suitability of the premises the Deputy Commissioner in his order dt. 28.8.82 simply says this :

'Its also pertinent to note that M/s Daulat Ram Khan Chand is otherwise also a sister concern of M/s Durga Trading Co. The inquiries reveal that both the firms are more like a family concern. Although there is no legal bar on any individual to float firms of this kind nor there is any restriction imposed by this department as such to sell under such circumstances enumerated above, there is every likelihood that the firm would indulge in unscrupulous dealings adversely affecting the smooth public distribution of essential commodities, more so the important commodities such as wheat products.'

(15) This is not a finding of 'unscrupulous dealing'. This is no more than a suspicion. There is only a likelihood, as the Deputy Commissioner put it, that the firm will indulge in future in 'unscrupulous dealings.' He admits that there is no bar to float firms of this kind nor is there any restriction imposed by the Administration. But all the same he thinks there is every likelihood that the firm would indulge in mal-practices in future. On this ground he refused to renew the license. I do not think this view can be sustained on the terms of the licensing Order.

(16) Is likelihood a ground Likelihood means that the licensing authority entertains an apprehension which may be true or may not be true. Only future can tell. It is a suspicion or belief that is entertained A suspicion and belief cannot exist together. Suspicion is much less than belief; belief includes or absorbs suspicion.

(17) Judges love to play with words. This is their life's work. This is often said against them. But it is in words that the law-making authority expresses itself. Hence the words of an Act or Order carry a sort of disembodied or dehumanised meaning.

(18) I do not think that the licensing Order contemplates that the likelihood of malpractices in a particular place can be a criterion to determine the suitability of the place. Suitability means a suitable place where the essential commodity can conveniently be sold and man's necessities can be easily available The bare possibility of malpractices is not to be taken into account in holding the place unsuitable. The policy of a Statute [or Order] should be drawn out of its terms, as nourished by their proper environ- ment, and not, like nitrogen, out of the air [Frankfurter J in D.A. Shulte Inc. vs. Gangi [1946] 328 U.S. 108. I venture to think that the likelihood of malpractice is not within the contemplation of the Order. It is incongruous with its scheme and manifest object. What is included in suitability of the premises is the structural shape, physical accommodation, easy accessibility, ingress and egress etc.

(19) Under clause [7] of the licensing Order the grounds for refusal to renew a license are enumerated. They are confined to grounds (a), (b) and (c). The refusal to renew the license cannot be on a ground outside these three grounds. But I need not pursue this argument in view of the firm's offer.

(20) On the point of suitability of the premises Mr. Chandrasekharan, on behalf of the petitioner firm, says that he is prepared to take another premises for carrying on business under the licensing Order, if the authorities have particular objection to the premises in question.

(21) Power to Punish Violation Distinct from Power to Refuse renewal. The power to refuse to renew a license is contained in clause 7 Clause 9 deals with the power to forfeit security for contravention of the provisions of the licensing Order or the conditions of the license. The power to launch a criminal prosecution is contained in the Essential Supplies Act, 1955 under which the licensing Order has been promulgated by the Administration. Clause 9 says :

'FORFEITURE of security-(I) Without prejudice to any other action that may be taken by or under this Order, if the Licensing Authority is satisfied that the licensee has contravened any provisions of this order or any, terms/conditions of the license, and forfeiture of his security deposit is called for, it may after giving the licensee a reasonable opportunity of stating his case and of being heard against the forfeiture by order, forfeit the whole or a part of the security deposited by the licensee and then the licensee shall deposit the forfeited amount within 15 days of the receipt of the order by him (2) The Licensee shall, if the amount of security at any time falls short of the amount specified in clause 8, deposit further security to make up the deficiency on being required by the Licensing Authority so to do.'

(22) On 30.4.1982 the enforcement staff and the special cell crime jointly conducted a a surprise check at the premises of the firm. They found a number of 'irregularities', namely, contraventions of the licensing Order. The licensing authority has issued a show cause notice to the firm and has launched a criminal prosecution. These matters are pending adjudication and it will not be proper to comment on them at this stage. The only question at the moment is whether on the facts and circumstances of this case the license ought to be renewed or not.

(23) The license issued on 26.4.1979 was valid up to 25.3,1981. Application for renewal was made on 26.7.1982. The ground pleaded is in advertance', 'oversight' or 'negligence' as described by the authorities in their Orders dated 28.8.1982 and 15.10.1982.

(24) The power to renew is distinct from power to forfeit security for contravention of the licensing Order. So is the power to launch criminal prosecution. In clause 7 which deals with the renewal of a license there is no ground that 'the past activities of the applicant as a licensee or business man' can be taken into consideration. In the Assam Food Grain (Licensing and Control) Order, 1960 there was such a ground, as would be seen from the Supreme Court case of Mannalal Jain v. State of Assam : [1962]3SCR936 . So the petitioner firm's 'post activities' in not observing the terms of the licensing Order or the license as alleged by the licensing authority cannot be taken into consideration in refusing to renew the license. For that the licensing authority has commenced action by issuing a show cause notice and by filing the F.I.R.

(25) The truth is that the authorities under the licensing Order, namely, the Deputy Commissioner, the Commissioner, and the Lt. Governor, were all swayed by the contraventions found on the premises and which are listed in the order of the Commissioner. The Commissioner says 'the charges against the appellant firm are of a very serious nature'. The Lt. Governor says, 'Running of the wholesale business in wheat, an essential commodity, unauthorisedly is too serious a charge to be ignored'. The authorities, it appears to me, have refused to renew the license because of the contraventions they found and which are the subject matter of civil and criminal proceedings. But, as I have said, the past conduct of the licensee is not a ground to be taken into account. Only 3 specific grounds enumerated in clause 7 can be taken into consideration. The licensing authority has to confine itself to these grounds. Only these grounds should be present to its mind at the time of deciding the question of renewal of license and nothing else.

(26) In human mind there are no compartments. There is always a danger of psychic transference of thought. The past conduct of the petitioner firm in carrying on business from 25.3.1981 to 26.7.1982 without a license has largely influenced the mind of the authorities in refusing to renew the license. This is punishing the man for his past conduct and nothing else.

(27) Until the licensing Order is suitably amended the past contraventions cannot be made a ground for refusal to renew the license. This is exactly what has happened in in the case. We are not trying the man. We are dealing with his application for renewal of license. This has to be done within the four corners of clause 7. No other consideration can be allowed to influence our judgment. The authorities under the licensing Order ought to address themselves only to clause 7 and nothing else. I cannot thereforee uphold their refusal to renew the license because the grounds which seem to have weighed with the authorities are outside clause 7.

(28) In this view of the matter I make this order. The petitioner will apply to the authorities for the renewal of the license and inform them of the premises where it proposes to carry on the business. The authorities will consider the application on grounds (a), (b) and (c) of clause 7 of the licensing Order. The petitioner may apply within two weeks or more from the date of this order. The authorities will decide the application within four weeks from tin; receipt of the application. The petitioner says that it has already deposited rupees two hundred with the authorities as renewal fee,


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