Ashok Provision Store v. Govt. of N.C.T. of Delhi

1. Counsel for the parties submit that facts in all these matters are smiilar. All these petitions raise acommon 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 aFair Price Shop since the year 1987. On 19.3.1997, the shop was visited and inspected by officials ofdepartment of respondent and some irregularities were found. Ashow 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 authorisation/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. 8of16 2013:DHC:8265 dated 25.4.1997 forfeiting entire security amount of Rs.500/- and thereafter restored the licence ofthe petitioner. After passing ofthe 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 oflicence granted by the respondent, without any complaint fi-om 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 ofcosts ofRs.500/-. In the year 2007, after agap ofmore than 10 years, afresh 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 acommon case ofthe 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 passing the judgment, the Special Court had made it clear that the order ofconviction could not affect the operation ofthe fair price shop.

7. Attention ofthis 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.5,000/- with asecurity of like amount and to appear and receive sentence within aperiod of1years whenever called upon to do so and during time to keep peace and be ofgood behaviour. Accused, Surinder Kumar shall also pay Rs.500/- as costs of proceedings. This should not affect operation of F.P.S."

8. It is submitted by counsel for the petitioners that once the respondents had W.P.(C) 948/2008 &ors. Page 9of16 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 punished 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 counsel 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. Contravention of the temis and conditions of licence: (1) 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. (2) Without prejudice to the provisions of sub-clause 1 if the Commissioner is satisfied that the licensee has contravened any of the teims 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 his licence and shall forward a copy thereof to the licensee. W.P.(C) 948/2008 tfe ors. Page 10 of16 (3) Notwithstanding anytliing 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 ofthis 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 oflimitation 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 of the petitioner: "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 of any of the provisions of this 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 such 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. "

11. 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 transfeiTed in 10 years. M'.P. (C) 948/2008 & ors.

12. In response to the above, the counsel for the petitioners stated that in case the respondents were to rely upon Clause 6ofDelhi 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) Control 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 talcen away at this belated stage. 13.[1] 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 haying 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 of the 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 12 of16 of10 years. Thus in my view having not taken action for 10 years and on the contrary having renewed licences ofthe petitioners would amount to condoning the acts ofthe wrong doer; and after 10 years, the respondents are estopped from taking action against the petitioners having waived off their rights by their own conduct, and the respondents by their own act have condoned the acts of the wrongdoer and are now estopped from changing their position.

16. It is settled law that a statutory authority is required to act reasonably and fairly. The Apex Court in Power Control Appliances v. Sumeet Machines (P) Ltd., (1994) 2 see 448 has.held as under: ''Acquiescence is sitting by, when another is invading the rights and spending money on it. It is a course ofconduct inconsistent with the claim for exclusive rights in a trade mark, trade name etc. It implies positive acts; not merely silence or inaction such as is involved in laches. In Harcourt v. Wlnte Sr.John Rommilly said: "It is important to distinguish mere negligence and acquiesce." Therefore, acquiescence is onefact ofdelay. Iftheplaintiffstoodby knowingly and let the defendants build up an important trade until it had become necessary to crush it, then the plaintiffs would be stopped by their acquiescence. If the acquiescence in the infringement amounts to consent, it will be a complete defence as was laid down in Mouson (J.G.) & Co. v. Boehm. The acquiescence must be such as to lead to the inference ofa license to create a new right in thedefendant as was laid down inRodgers v. Nowill.