Ishwar Chand v. Govt. of N.C.T. of Delhi

1. Counsel for the parties submit that facts in all these matters are similar. All these petitions raise a common legal question, which can be disposed ofby a common order.

2. Rule. With the consent of counsel for the parties, the writ petitions are taken up for final hearing and disposal.

3. As agreed, the facts of the Writ Petition No.948/2008 are being noticed. The petitioner has been running a Fair Price Shop since the year 1987. On 19.3.1997, the shop was visited and inspected by officials of department of respondent and some irregularities were found. A show cause notice-cumsuspension memo dated 31.3.1997 was issued by the then Assistant Commissioner for violation, as mentioned and simultaneously an FIR was lodged against the authoris~tion/licence holder. Reply to the show cause notice was submitted and hearing was granted by the Department. Upon hearing, the Assistant Commissioner, Food and Supplies passed an order W.P. (C) 948/2008 & ors. Page 8 of l[6] 2013:DHC:6854 -·· dated 25.4.1997 forfeiting entire security amount of Rs.500/- and thereafter restored the licence ofthe petitioner. After passing of the order:, the Assistant Commissioner did not resort to any further penal action against the petitioner for cancellation ofthe fair price shop. Thereafter, the petitioner continued to carry on its business on the basis of licence granted by the respondent, without any compLaint from the card-holders.

4. In the meanwhile, in the criminal proceedings, initiated upon registration of the FIR, a judgment dated 22.8.1998 was passed by which the \ petitioner, though convicted, was released on probation for one year and on payment of costs ofRs.500/-. In the year 2007, after a gap of more than 10 years, a fresh show cause notice was issued on 10.9.2007 calling upon (. the petitioner to show cause as to why the licence be not cancelled.

5. After hearing, by an impugned order dated 1.2.2008 the licence of the petitioner. has been cancelled. It is a common case of the petitioners that the impugned order of cancellation passed by the respondent is unfair, unjust and contrary to law and liable to be set aside.

6. Counsel for the petitioners further submitted· that while passmg the judgment, the Special Court had made it clear that the order of conviction could not affect the operation ofthe fair price shop.

7. Attention of this court has been drawn to the judgment dated 22.8.1998, a copy of which has been placed on record. Concluding portion of the judgment dated 22.8.1998 reads as under: "In respect of sentence, accused, Suridner Kumar, I direct that he shall be released on entering into a personal bond in the sum of Rs.S,OOO/- with a security of like amount and to appear and n~ceive sentence within a period of 1 years whenever called upon to do so and during time to keep peace and be of good behaviour. Accused, Surinder Kumar shall also pay Rs.SOO/- as costs of proceedings. This should not affect operation ofF.P.S."

8. It is submitted by counsel for the petitioners that once the respondents had W.P.(C) 94812008 & ors. Page 9of 16 \ r·r ·"" l \' l ' issued show cause notice-cum-suspension memo dated 31.3.1997 and after due hearing a penalty of forfeiture of security amount was imposed, petitioners cannot be _purtished twice for the same offence. The second argument of counsel for the petitioners is that in view of Section 12 of the Probation of Offenders Act, 1958, petitioners do not suffer any disqualification. The third argument of counsel for the petitioners is that the show cause notice issued and cancellation order passed is liable to be quashed, as firstly the action initiated has become stale; and secondly, violation, if any, of the petitioners stands condoned as licences were renewed subsequently for 10 years and more.

9. While colinsel for the respondent submits that in addition to the administrative action, respondents were entitled to take action as per Clause 6 of Delhi Kerosene Oil (Export and Price) Control Order 1962 dated 5.12.1962, which reads as under: "6. (1) (2) W.P. (C) 948/2008 & ors. Contravention ofthe terms and conditions of licence: If any licencee or his agent or servant or any other person acting on his behalf contravenes any of the terms and condition or directions or any provisions of this order then without preJudice to any other action that may be taken against licensee according to law, his licence can be suspended by order in writing by the Commissioner. Proviso to clause 6(1) order vide Dt. 15.2.80. Without prejudice to the provisions of sub-clause 1 if the Commissioner is satisfied that the licensee has contravened any of the terms and conditions of a licence or the directions issued under clause 3-D or any provision of this order and cancellation of his licence is called for, may after giving the licencee a reasonable opportunity of stating his case against the proposed cancellation by order in writing cancel hi~. licence and shall forward a copy thereofto the licensee. Page IOof 16 2013:DHC:6854.,_ (3) Notwithstanding anything contains in this clause, where a licencee is convicted by a court of law for breach of the terms and conditions of the licence or contravention of the provision of this order the licensing authority may by order in writing, cancel his licence. Provided that no such order shall be passed until the appeal, if any, filed against such conviction is dismissed and where no such appeal is filed until the period of limitation for filing an appeal expires."

10. Counsel for the respondent also relied on Clause 7 of the 1981 Order dated 12.01.1981, i.e. Delhi Specified Articles (Regulations of Distribution) Order, 1981 which reads as follows, and submits that once the petitioners had committed breach and he/she was convicted the respondents were bound to cancel the licence ofthe petitioner:

11. "7. Cancellation of authorization upon Conviction.- Notwithstanding anything contained in this clause where an authorized wholesaler or a fair price shop holder has been convicted by a court of law in respect of contravention ofany of the provisions ofthis Order or any other order made under Section 3 of the Essential Commodities Act, 1955 (10 of 1955), the Deputy Commissioner may, by order, in writing cancel his authorizationforth with: Provided that where s1Jlch conviction is set aside in appeal or revision the Deputy Commissioner may on application by the person whose authorization has been cancelled re-issue the authorization to such person. " Counsel for the respondent submits that the delay is procedural, as in the period of 18 years, 24 Assistant Commissioners had been transferred in one zone, and in another zone 12 Assistant Commissioners were transferred in 10 years. W.P. (C) 948/2008 & ors. Page II of 16

12. In response to the above, the counsel for the petitioners stated that in case the respondents were to rely upon Clause 6 of Delhi Kerosene Oil (Export and Price) Control Order 1962 and Clause 7 ofthe order dated 12.1.1981, the same should have been invoked by them within a shortest period of time from the date of the cause of action and in any case within a reasonable period of time. It is further contended that on account of delay, the respondents are estopped from relying on Clause 6 of Delhi Kerosene Oil (Export and Price) Ccmtrol Order 1962 and Clause 7 of the Order dated 12.01.1981 which would deem to have been given up by the respondents, by virtue·of their conduct; and on the contrary, vested rights have been created in favour of the petitioners by continuous renewal of licenses, which cannot be taken away at this belated stage.

13. I have heard counsel for the parties and also perused the petition as also the annexures filed along with the petitions.

14. The basic facts are not in dispute that the licenses were granted to the petitioners to run fair price shops/Kerosene Oil Depots. Upon inspection having been carried out and some irregularities having been found, show cause notice was issued; hearing was granted and the petitioners were penalized by forfeiting their security amount or some administrative action was taken. Thereafter, licences of the petitioners were renewed from time to time and only after a gap of more than 10 years, fresh show cause for cancellation of the Fair Price Shop/KODs was issued and the licences were cancelled as according to the respondent, petitioners had incurred a disqualification having been convicted by a criminal court, in terms ofthe 1962 and 1981 Orders.

15. Admittedly, action was taken by the Assistant Commissioner against the petitioners and a penalty of forfeiture of security amount was imposed. No further action against the petitioners was taken for more than a period W.P. (C) 948/2008 & ors. Page 12of16 of 10 years. Thus in my view having not taken action for 10 years and on the contrary having renewed licences of the petitioners would amount to condoning the acts of the wrong doer; and after 10 years, the respondents are estopped from taking action against the petitioners having waiv,ed off their rights by their own conduct, and the respondents by their ovm act have condoned the acts of the wrongdoer and are now estopped from changing their position.