1. This is an application under Article 226 of the Constitution for writ in the nature of Mandamus directing the respondents to Withdraw the Order of Cancellation of the petitioner's Establishment for manufacture of Condensed Milk & to restore to the petitioner the benefits under Sugar Permit No. N/ME/8 (Sug) No. 37688.
2. The petitioner carries on business under the name and style of National Milk Co. at 1/9 Nilmoney Mitra-Row within the municipal limits of Calcutta. It is alleged that prior to the introduction of Sugar Control the petitioner in his said business used to manufacture condensed milk and other preparations of sugar e.g. lozenges, sugar candy and toffee, and he has the necessary and complete equipments for the manufacture of sugar candy, lozenges and condensed milk at his said place of business. After the introduction of the Sugar Control the petitioner applied for and was granted an Establishment Sugar Permit for manufacture of condensed milk only. The petitioner made repeated representations for allotment of further quantities of sugar for manufacture of lozenges and sugar candy, but permission for such allotment was not granted owing to the sugar position prevailing. The correspondence annexed to the petition bears this out.
3. On 9-9-1950 an area Inspector visited a Lozenges manufacturing Establishment at 115A Beniatolla Street, Calcutta, known as 'Oriental Confectionery' where the petitioner works as manager and asked the petitioner who was there at the time to accompany the Inspector to the Condensed Milk Establishment of the petitioner at 1/9 Nilmoney Mitra Row. The petitioner did not accede to such request on the ground that it was not possible for him to leave the stock of sugar unattended in charge of the labourers who were working there. The Inspector thereupon made some Notes on the Daily Consumption Register of the 'Oriental Confectionery' and left the place.
4. On 11-9-1950 the said Inspector visited the petitioner's establishment at 1/9 Nilmoney Mitra Row while the petitioner was absent from that place and after some searches, inquiry and inspection recorded the following notes in the Daily Consumption register of that Establishment of National Milk Company:
'Stock of Sugar could not be weighed. Found one full bag and 2 bags loose - the total approximating 5 mds. 4 seers. Also found 44 tins of condensed milk (14 oz. each). Printed cash memos are not issued for sale of products. Found Kundas in the factory and one log of round solid wood. A/C up to 6-9-50 i.e. in arrears for 4 days.'
At the time while the Inspector was inspecting the Register etc. the petitioner arrived on the scene. On 23-10-1950 when the petitioner went to obtain his sugar ration from the Government Ration Shop he was told that his Sugar Permit has been suspended.
5. Correspondence followed and on 28-10-1950 the petitioner was called upon by the joint Controller of Rationing to show cause why the Permit should not be cancelled for Misuse of Sugar. As the Notice to show cause did not set out any particulars of the alleged Misuse, the petitioner proceeded to submit his explanation on the basis of the irregularities mentioned in the Inspector's Notes made on 11 & 22-9-1950. Such explanation was forwarded by letter dated 3-11-1950 a copy of which is set out in paragraph 14 of the petition. It appears that during the period 31-8-1950 and 24-9-1950 no work was done at the petitioner's Establishment of the National Milk Company. The explanation submitted by the petitioner was apparently not considered as satisfactory and by letter dated 11 and 13-12-1950 of the Joint Controller of Rationing (Establishments) the petitioner's Establishment was cancelled. The Order of Cancellation is as follows:
'Government of West Bengal,
Office of the Joint Controller of Rationing Establishments)
Shed No. 1,
11 A, Free School Street, Calcutta.
No. (a) 14931 (Sug/50 Estts.
11/13th December, 1950. To
Subal Chandra Kundu,
1/9, Nilmoney Mitra Row,
He is informed that his Establishment has been cancelled.
for Jt. Controller of Rationing.
6. The counter-affidavit on behalf of the Respondents has been affirmed by one Bivacor Das. It appears that he is a Special Officer in the office of the Directorate of Rationing but it is not stated when he joined that office nor does it appear that he is competent to depose to the facts. The verification clause of this affidavit is also defective. It does not state which specific parts are true to knowledge and which not. The affidavit fails to comply with Rule 27 of Chapter IV (4) of the Appellate Side Rules. It has been repeatedly pointed out by decisions of this Court that unless the affidavits are properly verified and are in conformity with Order 19, Rule 3 of the Code, they will be rejected by the Court. (See 'PADMABATI DASI v. RASIKLAL DHAR', 37 Cal 259 and 'GOBINDA MOHUN v. KUNJA BEHARI DAS', 14 Cal W N 153 at p. 157 and 'SHAMSHED AHMED v. CHATOO LAL', 46 Cal W N 474 at page 477). It is regrettable that the laxity in the matter of proper verification of the affidavits still persists. Some of the material statements in the affidavit are based on information received from the Inspector but the Inspector has not come forward to affirm any supporting affidavit and no explanation is forthcoming as to why this has not been done. The whole thing is to say the least most unsatisfactory.
7. It appears however from the counter-affidavit that according to the deponent the petitioner was not granted any sugar permit for manufacture of lozenges or sugar candy because he could not satisfy the authorities that he had any such business before. But the annexures to the petition convey the impression that as the Sugar position prevailing at the time did not permit the grant of such permits, the permits were not granted. The deponent does not deny positively that the petitioner never carried on business of manufacture of sugar candy or Lozenges business, and is not in a position to controvert the case of the petitioner that the petitioner did manufacture sugar candy & lozenges when there was no control in force. He cannot say that the petitioner had misused any rationed sugar supplied to him but he believes that the petitioner did so. Neither the Inspector nor the deponent had at any time seen the petitioner manufacturing Sugar Candy during the Control period. Their conclusion is based on suspicion and the statements of some neighbours. With regard to the statements of these neighbours it may be noted that some of them gave their statements in writing saying that they saw the petitioner manufacturing sugar candy but they did not say that it was done during the Control period. Some of them were approached again by the Inspector and they are supposed to have stated that they saw sugar candy being manufactured by the petitioner during the control period. It is stated that another Government Officer has also supported the statements of the neighbours. None of the neighbours nor the Government Officer has come forward to swear any affidavit and their statements are therefore not of much value. It is the case of the petitioner that some of his neighbours including the persons who have made the alleged statements against him are not on good terms with the petitioner. It is stated in the counter-affidavit that the Authorities were obliged to pass the order of cancellation as the petitioner was found to be guilty of misuse of sugar and other breaches, but what these other breaches are have not been specified. No particulars are given of such breaches. The only breach appears to be not writing up the books of account of the business Of National Milk Company for four days. The petitioner's explanation is that because the Establishment was closed & he was otherwise busy the accounts of these four days could not be written up. My attention has been drawn to Clause 39 of the Calcutta Industrial Area Rationing Regulation, 1943 which is as follows:
'39(1) : Every appointed establishment proprietor shall in respect of his establishment, maintain regular and accurate accounts of each rationed article obtained by him in Form Establishments No. 7 appended to these Regulations.'
This Clause 39 appears to have been amended on 28-6-1950 and the word 'daily' has been added to the clause after the word 'accurate'. In other words the amendment reads as follows'.........maintain regular, accurate & daily accounts'.
8. Paragraph 17 of the Bengal Rationing Order, 1943, provides that any contravention of any regulation made under paragraph 16 of this Order (which the Calcutta Industrial Area Rationing Regulation is) shall be deemed to be a contravention of this Order. Clause 39 is mandatory in character. The petitioners' Permit was dependent on observance of this condition of maintaining regular accounts. The petitioner committed breach of this condition. It is well settled that where a power or privilege is conferred by a Statute and the observance of certain formalities or conditions is attached to the same it is generally held that the fulfilment of those conditions is mandatory as it is only just and convenient that he who exercises a right or privilege ought to be compelled to strictly observe the conditions subject to which that right or privilege is conferred. Mr. Mazumdar has relied on certain English and Indian cases on this point but as the facts of those cases have no resemblance to this case it is not necessary to deal with them here.
9. Mr. Mazumdar has contended that the conduct of the petitioner in relation to his business has been far from straightforward. When the petitioner is called upon to show cause for the misuse of sugar and preserve the stock of sugar in his custody, the petitioner in his explanation comes out with the story that he has used up the entire stock in his possession before he received the Notice to preserve the stock. But although he has annexed an account to the petition he does not show how this stock was used up or when was it exhausted. His account stops short long before the crucial date. It is further pointed out by Mr. Jogneshwar Mazumdar that the Authorities cancelling the Permit have acted in a perfectly reasonable and bona fide manner. The Inspector received information that sugar was being misused by the petitioner for purpose other than that for which the Permit had been given. He visited the Oriental Confectionery on 9-9-1950 and saw the petitioner there. The petitioner was asked to accompany the Inspector but he did not do so. The Inspector was not satisfied with the excuse put forward by the petitioner for not accompanying the Inspector. The Inspector went alone to the Condensed Milk Establishment and found it closed. He again visited the Shop and detected various equipments and articles lying there which were solely required for the purpose of manufacturing sugar candy. He found 9 Kundas and a log of wood and Toosh. He found the accounts not written upto date but the accounts were in arrears for four days. He made enquiries from local people and gathered that sugar candy was being manufactured at the condensed milk factory. He collected statements in writing from the neighbours. Later on it was discovered that the statements were lacking in particulars about the time or the period during which the neighbours saw the sugar candy being manufactured. So the Inspector again went to the neighbours to collect the particulars wanting and did collect the particulars. The Corporation License dated 6-9-1950, shows that the petitioner had the desire and intention to manufacture sugar candy, lozenges, etc., in his business of National Milk Company and the fact remains that the petitioner attempted to secure Permit for sugar candy and lozenges, etc. but did not succeed in his attempt. Therefore it is not improbable that he would try to divert the sugar allotted for condensed milk for other purposes. It was after the Authorities were satisfied by this process that they decided to cancel the permit. The petitioner was given opportunity to show cause. The petitioner did show cause but his explanation was not considered satisfactory. Although the Notice to show cause was rather vague it is clear that the petitioner understood the nature of complaints against him, but he failed to satisfy the authorities by his explanation.
10. It is not suggested by the petitioner that the Inspector bears any grudge against him. If the Inspector had been acting 'mala fide' or with any evil intention he would have suppressed the first set of statements collected by him from the neighbours and would have produced only the subsequently collected set of statements which contained the full particulars in order to eliminate the possibility of any comment. But the Inspector fairly laid his cards on the table and gave the petitioner opportunity to explain. The petitioner however failed to allay the suspicion of the Authorities. He could not produce any trade license or books or documents to show that he had been carrying on the business of manufacture of sugar candy during the decontrol period. Mr. Mazumdar contends that if in these circumstances the Authorities decided to cancel the Permit, this Court should not interfere with that decision. Mr. Mazumdar relies on the decision of the Judicial Committee reported in 'NAKKUDA ALI v. M.F. DES V. JAYARATNE' 54 Cal W N 883 and 'JAYARATNE v. BAPU MIYA MOHAMED MIA', 54 Cal W N 893. I think that there is considerable force in Mr. Mazumdar's contention. It is difficult to hold in the facts of this case that the Authorities acted 'mala fide', in cancelling the permit of the petitioner. To quote the words of the Judicial Committee in 'NAKKUDA ALI'S CASE 'A heavy cloud of suspicion remained and the petitioner failed to produce explanation that would have dissolved it.'
11. In a sense it is indeed true that the Rationing Authorities condemned the petitioner on suspicion but it cannot be said that the suspicion did not arise reasonably out of the facts that were before them. In my view it is not open to this Court to sit in appeal over the decision of the Rationing Authorities and inter fere with it on the merits.
12. It may be pointed out in passing that although the Counter-affidavit has not been properly verified and is defective in that respect the statements in the affidavit are characterised by a frankness and straightforwardness which show that the conduct of the Authorities in dealing with the petitioner was above board. It is frankly admitted that the Authorities did not see with their own eyes that the petitioner had actually diverted the sugar in manufacturing sugar candy but surrounding circumstances raised strong suspicion and the petitioner had failed to remove that suspicion.
13. Mr. Binayak Banerjee the learned Advocate for the petitioner has contended that the Order of Cancellation is bad as it does not set out the reasons for cancellation and he submits that Clauses 3(4) and 10(3) of the Bengal Rationing Order, 1943 must be declared void in so far as they provide for cancellation of Permits without assigning any reasons therefor. His argument is that these clauses or sections are unreasonable and infringe Article 19(1)(g) of the Constitution. This contention of Mr. Banerjee must be accepted as sound. I have already held in several cases that such a provision is an unreasonable provision and infringes Article 19(1)(g) of the Constitution. A provision like this does not give any opportunity to the permit holders to make any representation against the action taken by the Authorities or to protect their interest against any wrongful action of the Authorities. It further provides scope for the exercise of the power in an arbitrary or capricious manner & with impunity. It is clear law that an arbitrary exercise of the power is no exercise at all. The permit-holder is not in a position to detect or judge whether the action of the Authorities in cancelling the 'Permit was reasonable or it was 'mala fide' or arbitrary. By this provision the authorities are empowered to stop or interfere with the carrying on of the business of traders without letting the traders known as to why their business was being stopped. I hold that the Clauses 3(4) and 10(3) of the Rationing Order in so far as they provide for cancellation of Permit without assigning any reasons are void.
14. Thus although the Order of Cancellation is technically bad for not setting out the reasons for cancellation I do not in the exercise of my discretion under Article 226 propose to interfere with the Order as it appears to me from the facts stated in the Counter-affidavit that the Authorities had justifiable reasons for cancelling the Permit of the petitioner. It is most likely that the Authorities thought that it was not obligatory on them to set out the reasons for cancellation in the Order itself as paragraphs 3(4) & 10(3) of the Rationing Order empowered them to pass order of Cancellation without assigning reasons. They thought that the clauses were 'intra vires'.
15. In the result the petition fails & the Rule must be discharged. I make no order as to costs.