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Cycle Equipments (P) Ltd. and anr. Vs. Municipal Corporation of Delhi and ors. - Court Judgment

LegalCrystal Citation
SubjectCommercial
CourtDelhi High Court
Decided On
Case NumberLetter Patent No. 31 of 1981
Judge
Reported inAIR1983Delhi94; 21(1982)DLT445; ILR1982Delhi728; 1982RLR372
ActsDelhi Municipal Corporation Act, 1957 - Sections 439
AppellantCycle Equipments (P) Ltd. and anr.
RespondentMunicipal Corporation of Delhi and ors.
Advocates: V.P. Singhal,; D.D. Chawla,; S.N. Sapra,;
Cases Referred and R. v. Minister of Housing and Local Government
Excerpt:
(i) delhi municipal corporation act, 1957 - section 430 proviso (b) to sub-section (3)--scope of.; (ii) natural justice--duty to give reasons and the principle of audi alteram partem.; the appellants are running a factory foe manufacturing free wheels. the license for running the said factory was initially granted to the appellant under sections 416 & 417 of the delhi municipal corporation act. from year to year the license was renewed up to 31st march 1979. in the year 1979-80, the license of the appellant was not renewed but a show cause notice was sent alleging that the terms and conditions of the license were being violated. the respondent not being satisfied with the reply of the appellants, revoked the license on the ground that the reply was not found satisfactory. being.....j.d. jain, j. (1) the controversy in this letters patent appeal against an order of a learned single judge of this court rejecting the writ petition of the petitioners (being civil writ petition no. 1284/79) lie in a narrow compass. shorn of superfluous details, the facts germane to the disposal of this appeal are that the appellant m/s. cycle equipments (p) ltd. are running factory for manufacturing free wheels of cycles in kalkaji industrial estate, the factory being located in premises no. 8 kalkaji, new delhi. the requisite license for running the said factory was .initially granted to the petitioners under section 416 read with section 417 of the delhi municipal corporation act, 1957 (hereinafter referred to as the act) in the year 1960-61. thereafter, it was renewed from year to.....
Judgment:

J.D. Jain, J.

(1) The controversy in this Letters Patent Appeal against an order of a learned Single Judge of this Court rejecting the writ petition of the petitioners (being Civil Writ Petition No. 1284/79) lie in a narrow compass. Shorn of superfluous details, the facts germane to the disposal of this appeal are that the appellant M/s. Cycle Equipments (P) Ltd. are running factory for manufacturing free wheels of cycles in Kalkaji Industrial Estate, the factory being located in premises No. 8 Kalkaji, New Delhi. The requisite license for running the said factory was .initially granted to the petitioners under Section 416 read with Section 417 of the Delhi Municipal Corporation Act, 1957 (hereinafter referred to as the Act) in the year 1960-61. Thereafter, it was renewed from year to year up to 31st March, 1979. The appellants applied for renewal of the license as usual for the year 1979-80. However, the respondent-Corporation vide their notice dated 4th August, 1979, called upon the appellants to show-cause why their license for running the aforesaid industry be not cancelled. The relevant portion of the notice is extracted below for ready reference :

'ANDwhereas on inspection of the site by the Chief Licensing Inspector/Area Inspector, it has been found that you are running the trade of melting of iron scraps in an Electric furnace to form Steel Slab instead of sanctioned trade of manufacturing of free-wheel of cycle, thus violating the terms and conditions of the license. This new trade, which causes smoke nuisance and pollution is not permissible without prior approval of the competent authority.'

(2) The appellants sent a reply to the said notice on 18th August, 1979, explaining the position thus :

'THATwith regard to your objection regarding melting furnace we have to submit that the same is fully operated by electricity only and no use of coal or oil is made any of the processes, and as such there is no question of any smoke arises. This process is a part of bicycle free-wheel manufacturing done by us for the last over 20 years in this factory. The above fact has been verified by your officers who have been visiting our factory regularly.'

(3) Hence, the appellants requested the respondent Corporation to validate the license as per application made in this behalf. It would appear that the respondent Corporation Was not Satisfied with the Explanationn furnished fey the appellants. Consequently, vide their letter dated 4th September, 1979, they revoked the aforesaid license of the appellants. The following passage is pertinent to note :

'YOURreply dated 18-8-1979 to the above said show cause notice is not found-satisfactory as such your aforesaid license has been revoked for violation of terms and conditions of the license. You are hereby asked to stop the industrial use of the site forthwith failing which legal action will be initiated.'

(4) Feeling aggrieved by this order, the appellants invoked the writ jurisdiction of this Court vide application dated 12th September, 1979, inter alia, on the ground that the impugned order does not conform to the requirements of law, namely, provisions of Section 430(3) of the Act. On merits it was urged that the melting furnace was fully operated by electricity only and use of coal or oil was not made. As such there was no question of any smoke or nuisance arising from the working of the factory. Further it was contended that the entire process had been carried out for the last 20 years and it constituted a part of process of bicycle free-wheel manufacturing.

(5) It may be pertinent to add here that the aforesaid action appears to have been taken by the respondent Corporation on a number of complaints having been made by the residents of the locality to the effect that the melting process of scrap iron which was designed to manufacture steel ingots was emitting large quantities of smoke and soot. It also produced lot of noise and sparking light in the night as the factory was being run in the night shift also. This caused lot of hardship and affliction to the citizens living near and around the factory. Indeed some of the residents of the locality moved even a writ petition in this Court (being Civil Writ No. 63/80 filed by the Kalkaji Welfare Assciation and other citizens) complaining of nuisance caused by the appellants' factory by omitting smoke, sparking light and noise. Their grievance precisely was that it was injurious to health arid property of the citizens living in the neighborhood. Hence, they prayed that the Corporation be restrained from renewing the license or issuing a fresh license to the appellants for the said factory.

(6) The learned Single Judge has vide his order dated 21st January, 1981, dismissed the writ petition of appellants holding that there was sufficient compliance with the relevant provisions of the Act and the impugned order revoking the license of the appellants assigned reasons for the same as contemplated in Section 430(3) of the Act. However, he allowed the writ petition No. 63/80 filed by the citizens and directed that so long as the appellants' factory continued the melting process it would be. the statutory duty of the respondent Corporation to stop the said activity by all lawful actions including revocation of license or not renewing license or not issuing a fresh license.

(7) The principal contention raised by the learned counsel for the appellants is that the impugned order dated 4th September, 1979, of the respondent Corporation does not contain a brief statement of the reasons for the revocation of the license as envisaged in clause (b) of proviso to sub-section (3) of Section 430 of the Act and as such it is bad in law. In order to appreciate the validity of the argument in proper perspective we may examine the relevant provisions. Section 416 of the Act debars any person from establishing in any premises' any factory, workshop or trade in which it is intended to employ steam, electricity, water or other mechanical power except with the permission in writing of the Commissioner. Sub-section (2) thereof empowers the Commissioner to refuse to give such permission if he is of the opinion that the establishment, alteration, enlargement or extension of such factory, workshop or trade premises, in the proposed position, would be objectionable by reason of the density of the pollution in the neighborhood or would be a nuisence to the inhabitants of the neighborhood Section 417 prohibits any person from using or permitting to be used any premises for any of the purposes enumerated therein without or otherwise then in conformity with the terms of a license granted by the Commissioner in this behalf. Clause (b) thereof, runs as follows :

'ANYpurpose which is, in the opinion of the 'Commissioner, dangerous to the life, health or property or likely to create a nuisance.'

(8) On a combined reading of these two Sections it is manifest that the requirement of a license for running a trade or industry is designed to regulate the same so as to ensure that running of it does not result in nuisance to the inhabitants of the neighborhood or it is not a source of hazard to the life, health or property of the citizens living in the neighborhood. In such like cases', thereforee, the Commissioner has been specifically empowered to refuse a license. Further Section 418(2) contemplates that whenever the Commissioner is of opinion that the user of any premises for any of the purposes referred to in sub-section of Section 417 is causing a nuisance and such nuisance should be immediately stopped, he may order the owner or the occupier of the premises to stop such nuisance within such time as may be specified in the order and in the event- of failure of the owner or occupier to comply with such order, the Commissioner may himself or by an officer subordinate to him cause such user to bestopped. Still more Section 430(3) provides for suspension revocation of a license already granted by the Commissioner or by the officer by whom it was granted if he is satisfied that (a) it has been secured by the grantee through misrepresentation or fraud ; (b) if any of its restrictions or conditions has been infringed or evaded by the grantee; or (c) if the grantee has been convicted for the contravention of any of the provisions of this Act or any bye-law made there under relating to any matter for which the license or permission has been granted.

(9) However, before such an action can be taken, the Commissioner or the officer concerned must comply with the conditions laid down in the proviso to sub-section (3) of Section 430 which runs as follows :

'(A)before making any order of suspension or revocation reasonable opportunity should be afforded to the grantee of the license or-the written permission to show-cause why it should not be suspended or revoked, (b) every such order shall contain a brief statement of the reasons for the suspension or revocation of the license or the written permission.'

(10) Evidently the license of the appellants in the instant case has been cancelled on the ground of violation of the terms and conditions of the license. However, what we are concerned with is whether the safeguards incorporated in the proviso to sub-section (3) (supra) have been duly complied with or not.

(11) Obviously the proviso is designed to incorporate the salatary principle of audi alteram partem which is perhaps the most important aspect of administrative justice. Natural justice obligates administrative tribunals to give an affected party a fair opportunity to meet any evidence obnoxious to his case if it is to be pressed into service against him and the legislature has assured compliance with this principle by casting a statutory obligation on the Commissioner or officer concerned to afford a reasonable opportunity to the licensee whose license is sought to be suspended or revoked to show-cause why the same be not done. Further, the principle of natural justice requires that there should be a fair determination of a question by quasi-judicial authorities. The judicial process does not end by making known to a person the proposal against him and giving him a chance to explain. It extends further to a judicial consideration of a representation and the materials and a fair determination of the question involved. That necessitate giving of reasons justifying the action contemplated against the affected person. That is precisely the aim and object of clause (b) of the proviso requiring an order of suspension or revocation of a license to contain a brief statement of the reasons for the same. It is one of the attributes of the natural justice that the party affected should be given benefit of 'speaking order' for him to seek further redress. It is thus well-settled that where a statute expresses a duty to give reasons the Court should imply a condition that reasons given in discharge of their duty should be adequate and intelligible. It should not be merely a statement of the conclusion arrived at by the concerned party.

(12) In re Poyser and Mills Arbitration, (1963) I All E. R. 612, (1) while dealing with the scope and ambit of the Tribunals and Inquiries Act, 1958, Megaw, J. said :

'THEwhole purpose of S. 1-2 of the Tribunals, arid Inquiries Act, 1958, was to enable persons whose property or interests were being affected by some administrative decision or some statutory arbitration to know, if the decision was against them, what the reasons for it were. . . ..... ..........Now, Parliament having provided that reasons shall be given, in my view that must clearly be read as meaning that proper, adequate, reasons must be given; the reasons that are set out, whether they are right or wrong, must be reasons which not only will be intelligible, but also can reasonably be said to deal with the substantial points that have been raised, and in my view it is right to consider that statutory provision as being a provision as to the form which the arbitration award shall take.'

Lord Denning, M. R., concurred in this view in Iveagh (Earl) and others v. Minister of Housing and Local Government and Another, (1963) 3 All M. R.817. He observed that :

'SECTION 12(1) of the Tribunals and Inquiries Act, 1958, says that the minister must give his reasons. and that his reasons are to form part of the record. The whole purpose of that enactment is to enable the parties and the courts to see what matters he has taken into consideration and what view he has reached on the points of fact and law which arise. If he does not deal with the points that arise, he fails in his duty, and the court can order him to make good the omission.'

(13) The Supreme Court has held in M/s. Mahabir Prasad Santosh Kumar v. State of U.P. and others, : [1971]1SCR201 in which case the licenses of the appellants under U.P. Sugar Dealers' Licensing Order, 1962, had been cancelled by the District Magistrate and their appeal had been dismissed by the State Government, that :

'THEpower of the District Magistrate was quasi-judicial; exercise of the power of the State Government was subject to the supervisory power of the High Court under Article 227 of the Constitution and of the appellate power of this Court under Article 136 of the Constitution. The High Court and this Court would be placed under a great disadvantage if no reasons are given and the appeal is dismissed without recording and communicating any reasons.'

Shah, J speaking for the Court, further observed that :

'ITmust appear that he has reached a conclusion which is according to law and just, and for ensuring that end he must record the ultimate mental process leading from the dispute to its solution. Satisfactory decision of a disputed claim may be reached only if it be supported by the most cogent reasons that appeal to the authority. Recording of reasons in support of a decision on disputed claim by a quasi- judicial authority ensures that the decision is reached according to law and is not the result of caprice, whim or fancy on reached on grounds of policy of expediency. A party to the dispute is ordinarily entitled to know the grounds on which the authority has rejected his claim.'

That was a case where no statutory obligation was cast on the authority concerned to record his reasons. So, the instant case stamds on a much stronger footing.

(14) MLS. Ajanta lndustries and others v. Central Board of Direct Taxes, New Delhi, : [1976]102ITR281(SC) , is another authority for the proposition that :

'WHENlaw requires reasons to be. recorded in a particular order affecting prejudicially the interests of any person, who can challenge the order in court, it ceases to be a mere administrative order and the vice of violation of the principles of natural justice on account of omission to communicate the reasons is not expiated.'

(15) In that case a transfer of the case had been made under Section 127(1) of the Income-Tax Act, 1961, as amended. The question which arose for consideration was whether failure to record the reason in the order which was communicated to the appellants is vocative of the principles of natural justice for which the order should be held to be invalid. Since there was no provision of appeal or revision under the said Act against such orders of transfer the appellants preferred an application under Article 226 of the Constitution before the High Court of Andhra Pradesh questioning the validity of the order chiefly on the ground' of violation of the principle of natural justice inasmuch as no reasons were given nor communicated in the said order. It was submitted On behalf of the Revenue that reasons were communicated to the assessed in the notice calling for objection against the proposed transfer and as such it was manifest that the reason given in that show-cause notice, namely, 'facility of investigation' could be read as part of the impugned order although there was no mention of any reason therein as such. It was further submitted on behalf of the Revenue that the very fact that the reasons were recorded in the file although the same were not communicated to the assessed fully met the requirement of Section 127(1).. However, their Lordships repelled both these contentions with the above observations. They further held that :

'THEreason for recording of reasons in the order and making these reasons known to the assessed is to enable an opportunity to the assessed to approach the High Court under its writ jurisdiction under Article 226 of the Constitution or even this Court under Article 136 of the Constitution in an appropriate case for challenging the order, inter alia, either on the ground that it is mala fide or arbitrary or that it is based on irrelevant and extraneous considerations.' the requirement of recording reasons under Section 127(1) is a mandatory direction under the law and non-communication thereof is not saved by showing that the reasons exist in the file although not communicated to the assessed.'

(16) These observations are quite apposite to the facts of the case in hand which stands on a stronger footing inasmuch as the impugned order dated 4th November, 1979, is to Cryptic and obscure as to how the appellants had violated the terms and conditions of the license. It simply contains the statement of conclusion and not reasons thereforee as envisaged in the proviso to sub-section (8) of Section 430. The learned Single Judge, in the course of his judgment, has observed that :

'AFTERthis admission of the petitioner, no additional statement of reasons was necessary. A brief reason that the terms are violated was sufficient on the facts of the case. The reason was adequate and intelligible. It was not mere statement of conclusion.'

(17) With respect we do not think that the learned Judge was right in this conclusion. The expression 'a brief statement of the reasons' dearly implies that the concerned authority, must, at least, indicate how the grantee of a license has infringed or evaded any of the restrictions or conditions of a license. It is not enough merely to say that 'your license has been revoked for violation of the terms and conditions of the license' and it must be further stated how such violation has occurred. Needless to say that the appellants have avital slake in the matter and the concellation of their license adversely affects their fundamental right to carry on their trade and industry. The respondent-Corporation was, thereforee, under legal obligation to exercise its quasi-judicial power strictly in accordance with the provisions of the Act and non-compliance therewith vitiates the order. Thus, we hold that the impugned order in vitiated lor want of statement of reasons turn revocation of the license and it is liable to be set aside on this short ground.

(18) The learned counsel for the Municipal Corporation has, however, argued with considerable favor that the reasons for the proposed revocation of the license having been detailed at length in the stow-cause notice dated 4th August, 1979, the appellants were well aware of the same and there was hardly any necessity to reiterate the same in the impugned order. In other words, for seeking reasons which impelled the responder-Corporation to revoke the license of the appellants reference can conveniently be made to the show-cause notice. However, we are not persuaded to accept this rather specious argument because the statute itself requires on its plain language that the order of revocation or suspicion should incorporate a brief statement of the reasons. It is in addition to the requirement of affording reasonable opportunity to the grantee of a license to show-cause why it should not be suspended or revoked. Ajantha Industries (supra) clearly negatives such a contention. It was thus obligatory on the part of the respondent-corporation to strictly comply with these twin requirements which are aimed at ensuring that the grantee of a license who is faced with the threat of suspension or revocation of his license must not only have an opportunity to defend himself but also must know what reasons have weighed with the authority concerned in coming to a particular conclusion.

(19) Elliott and others v. London Borough of Southwark, (1976) 2 All E.R. 781 and Tara Chand Khatri v. Municipal Corporation of Delhi and others, : (1977)ILLJ331SC on which reliance has been placed by Mr. Chawla, the learned counsel for the respondent-corporation are both distinguishable on facts. In former, applications of the persons, who were owners of certain properties, for 'a Rehabilitation Order' under the provisions of the Housing Act, 1974, were refused in the following terms :

'WITHreference to your application dated 8th May 1975 for the Council to make rehabilitation orders in respect of the above properties, in accordance with the provisions of section 114 and Schedule 10 of the Housing Act, 1974, I write to inform you that the Council, at their meeting on 16th July, resolved to refuse the application for the reason that the properties should be demolished and the sites used for the erection of new housing accommodation.'

(20) It was the Wording of the said letter which was the nub of the appeal, the contention raised being that the said order was not speaking one. However, it was submitted for the respondents that the purported reason was adequate and intelligible, against the background of the inquiry, the inspector's report rind the Secretary of State's decision letter. So, it was urged that the request for a rehabilitation order was refused because it could not be granted consistently with the policy of the respondents to demolish the existing and errect new housing accommo dation. This argument prevailed with the Court of Appeal who held that the letter was more than a mere statement of conclusion as it did state the salient reason why the house In question could not be retained. The argument of the learned counsel for the respondents precisely is that evidently the Court took into consideration what had 'gone before' at the public inquiry etc. while rejecting the conteation raised by the appellants'. Having regard to the policy of the local authority concerned in that case we do not think any more information was at all necessary, the reason given being quits sufficient and self- evident. That is not atall the position in the instant case. As for Tara Chand Khatri, we may simply advert to the following 'passage appearing at page 418 of the book 'Judicial Review of Admimstrative Action' (Second Edition) 'by Prof. S. A. De Smith which has been quoted therein with approval by the Supreme Court :

'If the record is incomplete (e.g. because reasons or findings of material fact are omitted), has the court power to order the tribunal to complete its record It is common ground that the court has no inherent power to compel a tribunal to give reasons for its decisions..........If, of course, a tribunal is required by statute to declare its reasons or its findings on the material facts, an order or mandamus may be obtained to compel the tribunal to perform its legal duty..............Where a tribunal that is not expressly obliged to gave reasons for is decisions chooses not to give any reasons for a particular decision, it is not permissible to infer on that ground alone that its reasons' for that decision were bad in law. Even if it gives reasons which 'are exfacie. insufficient in law to support its decision, the court will not necessarily assume that these are the sole reasons on which the tribunal has based its decision. [See Cf. Davies v. Price. (1958)1 Wlr 434 and R. v. Minister of Housing and Local Government, ex. p. Chichester R.D.C, (1960) 1 Wlr 587.'

Hence, these authorities are of no assistance to the respondent Corporation.

(21) Another consideration which is prevailed with the tenoned Single Judge in dismissing the writ petition is that the appellants had filed a civil suit on the very next day of the impugned order and they had also come up in writ petition to assail the impugned order of the respondent-corporation. So, they could not make a grievance of its being non-speaking one of the objects of the speaking order being that the aggrieved person is not handicapped by an order in making a representation or appeal to the higher authorities or to take an action in a court of law. With respect we may say that non-compliance with the statutory requirement of giving reasons being in itself fatal to the order the question of prejudice recedes into the background. Surely want of prejudice will not cure the illegahty which afflicts and vitiates the order.

(22) Faced with this predicament the learned counsel for the respondent-corporation has made a ferven attempt to contend that there is undisputed material on the record which clearly lands support to the stand of the respondent-corporation that the petitioner has of late started running the melting furnace has thus contravened the essential nature and conditions of the license granted to him for manufacturing only free-wheels for bicycles. He has invited our attention to the first application dated 22nd August, 1960 made by the petitioner to the respondent-corporation for grant of license for manufacture of bicycle free-wheels. In column 8 of .the said applica ion which required information as to whether blast furnaces, forges or bhatties would be used, the petitioner stated as below : 'No blast or melting foundry, only heating & hardening furnaces.' Again in a subsequent application dated 12th December, 1966. the petitioner reiterated that no blast furnace or forge 01 bhatti was to be used. He described the process of manufacture in the following words : '(i) Forging Shop (ii) Machine Shop (iii) Hardening Shop (iv) Assembly Shop

(23) It is thus contended by the learned counsel for the respondent-corporation that the use of any melting furnace was specifically ruled out in the application for grant of license itself land in view of the admitted position that as at present a melting furnace although electrically operated is working in the factory of the petitioner there can be no shadow of doubt about the infringement of the terms and conditions of the license which was confined to manufacture of free-wheels for bicycles by mechanical process only. Further, according to the respondents' counsel the new melting process commenced by the petitioner omits large quantity of smoke and soot. It also produces a lot of noise and sparking light in the night as the factory is being run in the night shift also. Thus, it constitutes a great hazard to the peace, comfort and health of the citizens living in the neighborhood. Hence according to the learned counsel for the respondent if constitutes a clear contravention of condition 13 of the printed terms and conditions of the license. Be that as it may, but we are riot concerned with the same at this stage. We are on the short point that the impugned order being vocative of the specific statutory provisions which are mandatory in nature cannot be sustained. It may be noticed that the show-cause notice dated 4th August, 1979, contemplated two grounds for revocation of. the license, namely, (1) the running of trade of melting iron scrap in an electric furnace to form steel slabs, and (2) the said trade causing smoke, noise and pollution. However, the impugned order is singularly silent about both and it simply states that the reply given by the petitioner 'is not found satisfactory' and as such the aforesaid license has been revoked for violation of the terms and conditions of the license. Surely, it does not deal with the contentions raised by the petitioner in its reply dated 18th August, 1979, which did not contain an unqualified admission on its part about infringement of the terms and conditions of the license. Since We are knocking down the impugned order on a purely legal ground, it will be open to the respondent-corporation to deal with and decide the contentions raised by the petitioner against revocation of license after affording proper opportunity of hearing.

(24) Before parting with this case we may also advert to what the learned Single Judge has called initial hurdles in the way of the petitioner for seeking a relief of discretionary nature by way of writ petition. In the first instance it has been pointed out that no application having been made by the petitioner for renewal of license for the subsequent, period, viz. 1980-81, the whole exercise in this writ petition would be futile inasmuch as even if the petitioner succeeded in the petition re would be entitled to hold license up to 31st March, 1980, only, and the same would be the position even assuming that the license was, in fact, extended up to 31st March, 19 80. Consequently, after the expiry of the said period the license would come to an end automatically whether revoked or otherwise. An argument was advanced by the learned counsel for the petitioner that the revocation of the license would stand in the way of future renewal and as such the writ petition survived to that extent. Reliance in this context was placed on sub-section (4) of Section 430 of the Act which reads as under : sub-section (4).

'WHENany such license or written permission is suspended or revoked, or when the period for which the same was granted has expired, the grantee shall, turn all purposes of this Act or any bye-law made there under, be deemed to be without a license or written permission until such time as the order suspending or revoking the license or written permission is rescinded or until the license or written permission is renewed.'

However, the learned Single Judge has repelled the contention with the observations :

'Ifind that the provisions of Section 430(4) are quite clear and unambiguous. Either by revocation or by expiration, the petitioner was without a license at the relevant time. There is no alternative to the petitioner but to approach the Corporation to renew a license or to get a fresh license.'

(25) With respect we may say that sub-section. (4) of Section 430 is a complete answer to the contention that an application for renewal of the license for the year 1980-81 ought to have been made by the petitioner in order to pursue the writ petition. It lays down in explicit terms that when any such license is suspended or revoked the grantee shall, for all purposes of the Act or any bye-law made there under, be deemed to be without a license until such' time as the order suspending or revoking the license is rescinded. Thus the revocation of the license is a complete bar to the petitioner moving an application for renewal of the license. There is clear distinction between expiry of the license issued turn a specific period by afflux of time and revocation /cancellation of the license. As segn above, the order revoking a license is quas-judicial in nature and it stands in the way of the petitoner in seeking a fresh license or renewal of the old license so long as it is not itself set aside or recalled. Indeed, the writ petition had been dismissed as having become infructuous on this very ground by the learned Single Judge vide order dated 23rd May, 1980. However, the order was reversed by the L.P.A. Bench, who held :

'ITdoes appear, prima facie, that the Writ Petition is not infructuous and the question of the renewal of license for the year 1980-81 is inter-related with the question whether the license is in force. Once it is held that the revocation is bad, then the petitioner will be free to apply for renewal of the license.'

(26) In view of this observation of the L.P.A. Bench, there was hardly any occasion for the learned Single Judge to go over this aspect of the matter again.

(27) The learned Single Judge has also observed that the petitioner is guilty of suppressing material facts and has not come with clean hands in seeking equitable and discretionary relief of a writ or a direction under Article 226 of the Constitution. It is pointed out that on the very next day of the impugned order dated 4th September, 1979, the petitioner instituted a civil suit being Suit No. 62179 in the Court of Senior Sub-Judge, Delhi and he also moved an application for ad-interim injunction restraining respondent-corporation from revoking or cancelling the license in question and also directing the Delhi Electric Supply Undertaking not to discontinue the supply of electric energy for running its factory. However, none of these facts were disdosed by the-petitioner in the writ petition which was filed on September 13, 1974 and on a similar prayer being made to the Admitting Bench for ad-interim relief, operation of the impugned order was stayed by the Admitting Bench on 14th September, 1979. Thereafter, the petitioner obtained an interim ex-parte injunction from the trial court on 18th September, 1979, without disclosing that a writ petition for a similar relief had already been filed in the High Court and that ad-interim stay had been granted therein. It was only when counsel for the respondent-corporation brought to notice of the Admitting Bench that a suit had been earlier instituted by the petitioner-for the same relief, that the following order was made by the Admitting Bench on 22nd November, 1979 :

'MR.Ramesh Chandra says that a suit filed by the petitioner is already pending. However, Mr. Singh says that the Corporation is considering giving him relief. The petitioner has to choose either to pursue the suit' or be satisfied with the relief to be granted by the Corporation or pursue the writ petition. His choice among the three alternatives to be intimated to the court by the 23rd January, 1980.'

(28) On 12th March, 1980, the Admitting Bench issued the Rule and also directed that the writ petition be listed for final hearing in the week commencing 31st March, 1980, high-up. Since the stay order was made in the presence of counsel for the petitioner the learned Single Judge assumed that the petitioner must have informed the Court that he wanted to pursue the writ petition and not the suit and concluded that the position in law would be that on 12th March, 1980, civil suit No. 62179 pending in the court of the Senior Sub-Judge, Delhi, stood withdrawn. The learned Single Judge has further observed that 'it was the duty of the petitioner thereafter to withdraw the suit filed by him. He did not do so till the writ petition was finally heard. Perhaps his strategy was to enforce the injunction granted by the trial court against the Corporation if he failed in the writ petition.' Thus, the learned Single Judge was of the view that the petitioner has violated the principle of Uberrima Fides i.e. principle of honest and true disclosure and concluded that the writ petition deserved to be dismissed on the ground of suppression of material fact.

(29) We have carefully pursued the pleadings contained in the plaint in Suit No. 62179 and we find that the relief sought therein was to restrain the respondent-corporation, its officers, employees and agents from revoking or cancelling the municipal trade license No. 39786 which is granted to the petitioner for the manufacture of free-wheels for bicycles and further restraining the respondent from directing the Delhi Electric Supply Undertaking to discontinue the supply of electric energy for running his aforesaid industry. There is- no mention whatsoever of the impugned order and. there is no challenge to the same. Indeed, from the whole tenor of the pleadings in the plaint it would appear that till then the petitioner had not been served with the impugned order and the suit was aimed at warding off the threatened revocation of the license. On the contrary the petitioner has, in the present writ petition, has assailed the legality and validity of the order of revocation of the license itself. Obviously the relief sought in this writ covers grounds which do not fall within the ambit of the previous suit. It is no doubt true that the decision in this writ will cover the controversy in the aforesaid suit but the converse will not held good. In a way, thereforee, the previous suit has become infructuous to the extent similar relief is sought in the present writ petition but by no stretch of reasoning it can be held that this writ petition is barred or not maintainable on account of the pendency of the previously instituted suit. Further, while there can be no doubt, that the petitioner ought to have informed this Court about the pendency of the previous suit or the ad-interim relief 'already obtained by him while asking for ad-interim, relief of discretionary nature, we do not 'flunk that non-disclousure of this fact will in itself be fatal to this writ petition or it will disentitle the petitioner to any relief. Indeed, the desired relief was granted to the petitioner by the Admitting Bench even after the correct position had been made known by the counsel for the responding Corporation and the petitioner had been directed to choose either to pursue the suit or be satisfied with the relief to be granted by the Corporation or pursue the writ petition. We do not think much would turn on omission I failure on the part of the petitioner to divulge these facts in the writ petition itself, and the same has to be disposed of on its own merits.

(30) Lastly, the learned Judge has observed that the petitioner made an offer through his application after agreeing to all the terms of a license. The Corporation accepted the offer by accepting the fees and issued a license. Thus, a legally enforceable contract came into being and liability to revocation under Section 430(3) is a term of the said contract. Hence, the petitioner cannot challenge revocation of license in a writ petition. With respect we are unable to subscribe to this view. It is for the single reason that the appellant had to apply for a license for manufacture of free-wheels of bicycles in compliance with the statutory requirement as embodied in Sections 416 and 417 of the Act and the license was granted by the respondent in exercise of the statutory power vesting in the Commissioner in this regard. On a parity of reasoning the license of the appellant has been revoked by the respondent in exercise of his statutory power under Section 430(3) of the Act. The question of any kind of contract coming into existence between the parties or revocation of the license under the terms of such conract does not arise. This Court has, thereforee, jurisdiction in an appropriate writ petition to examine the legality and validity of the order passed by a statutory body in exercise of the powers conferred on it by the Statute. This writ petition is dearly maintainable.

(31) To sum up, thereforee, .we allow this appeal, set aside the impugned order and direct the responding Corporation to decide the question of revocation of the license of the appellant afresh after affording an opportunity to them in accordance with law and in the light of the observations made by us above. However, no order is made as to costs.


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