Shiv Store v. Govt. of N.C.T. of Delhi & Ors

G.S. SISTANI, J. DECEMBER 17, 2013 'ssn' Signed By:RAM DATT Certify that the digital and physical file have been compared and the digital data is as per the physical file and no page is missing. * IN THE HIGH COURT OF DELHI AT NEW DELHI ^ JudgmentDeliveredon: 17.12.2013 [1]+ W.P.(C)948/2008&CM. no.1863/2008 RAJENDERPRASADSURINDERKUMAR Mr.NitinSehgal,Advocate TI-IEASSISTANCECOMMISSIONERFOOD &SUPPLIES Mr.SushilDuttSalwanand Mr.Neeraj Chaudhary,Advocatesfor respondents [2J W.P.(C)5157/2008&CM.No.9860/2008 AGGARWALSTORE Mr.PradeepGuptaand Mr.SureshBharti, Advocates for petitioner ' GOVT. OFNCT OF DELHI& ANR Mr.SushilDuttSalwanand Mr.Neeraj Chaudhary,Advocates for respondents [3J W.P.(C)8386/2007& CM No.15850/2007 MAHENDER KUMAR Mr.AnuragMangla,Advocate GOVT. OF N.C.T. OF DELHI & ORS. Mr.SushilDuttSalwanand Mr.Neeraj Chaudhary, Advocates for respondents [4] W.P.(C) 8478/2007 SHOBHA KUMARI Mr.Sanjay Goel, Advocate. W.P.(C) 948/2008 & ors. the GOVT. OF NCT OF DELHI&ORS ? m ' Through; Mr.SushilDuttSalwanandMr.Neeraj Chaudhaiy,Advocatesfor respondents [5] W.P.(C)8554/2007 ASHOKPROVISION STORE Through; Mr.PradeepGuptaandMr.SureshBharti, Advocates for the petitioner. GOVT. OF N.C.T.OF DELHI& ORS. Through; Mr.SushilDuttSalwanandMr.Neeraj Chaudhary,Advocatesfor respondents [6] W.P.(C)8611/2007&16227/2007 ISHWARCHAND Through; Mr.AnuragMangla,Advocate. GOVT. OF N.C.T.OF DELHI&ORS. Mr.SushilDuttSalwanand Mr.Neeraj Chaudhary,Advocatesfor respondents [7] W.P.(C)8634/2007 SMV STORE Through; Mr.PradeepGuptaandMr.SureshBharti, Advocates for the petitioner. GOVT. OF N.C.T.OF DELHI&ORS. Through; Mr.SushilDuttSalwanandMr.Neeraj Chaudhary,Advocatesfor respondents [8] W.P.(C)8635/2007 KA.NTADEVI Mr.PradeepGuptaandMr.SureshBharti, Advocates for the petitioner. W.P.(C) 948/2008 &ors. \0li^ GOVT. OF N.C.T. OF DELIH&ORS. Through; Mr.SushilDuttSalwanand Mr.Neeraj Chaudhary,Advocatesforrespondents [9] W.P.(C)9456/2007&CM.No.17820/2007 AGGARWALSTORE Mr.PradeepGuptaand Mr.SureshBharti, Advocates for the petitioner. GOVT. OFNCT OF DELHI& ORS Mr.SushilDuttSalwanand Mr.Neeraj Chaudhary,Advocatesfor respondents [10] W.P.(C)9616/2007&CM.NO.18087/2007 RIKHAB CHAND PROP. OF M/S J.N.U. CAMPUS STORE Mr.Sanjay Goel, Advocate THE GOVT. OF NCT OF DELHI Mr.SushilDutt Salwanand Mr.Neeraj Chaudhary, Advocates for respondents [11] W.P.(C) 8820/2007 PAWAN RATION STORE Mr.Pradeep Gupta and Mr.Suresh Bharti, Advocates for the petitioner. GOVT. OF NCT OF DELHI & ORS Mr.Sushil Dutt Salwan and Mr.Neeraj Chaudhaiy, Advocates for respondents [12] W.P.(C) 8985/2007 & CM.No.16923/2007 ASHOK KUMAR AGGARWAL Mr.Sanjay Goel, Advocate. W.P.(C) 948/2008& ors. THE GOVT. OF NCT OF DELHI&ORS Mr.SushilDuttSalwanand Mr.Neeraj Chaudhary,Advocatesfor respondents [13] W.P.(C)8714/2007&CM.No.16430/2007 DEVINDERGOEL GOVT. OF NCT OF DELHI&ORS Mr.SushilDuttSalwanand Mr.Neeraj Chaudhary,Advocatesfor respondents [14] W.P.(C) 8646/2007 JANTASTORE Mr.PradeepGuptaand Mr.SureshBharti, Advocates for the petitioner. GOVT. OFN.C.T. OF DELHI& ORS. Mr.SushilDutt Salwanand Mr.Neeraj Chaudhary,Advocates for respondents [15] W.P.(C)8819/2007 & CM.No.16625/2007 SARASWATI GENERAL STORE Mr.PradeepGuptaand Mr.SureshBharti, Advocates for the petitioner. GOVT. OF NCT OF DELHI & ORS Mr.SushilDutt SalwanandMr.Neeraj Chaudhary, Advocates for respondents [16] W.P.(C)8264/2007& CM.No.15614/2007 ANIL KUMAR MISHRA W.P.(C)948/2008&ors. Page4of16 \v}0 Tlirough: Mr.S.K.Chaudhary,Advocate. GOVT OF NCT. OF DELHI&ORS, m Through-Mr.SushilDuttSalwanandMr.Neeraj Chaudhary,Advocatesfor respondents [17] W.P.(C)8046/2007&CM.NO.15855/2007 SUMERCHANDMOHANLAL r' TdT Through; Mr.SanjeevKumarGupta,Adv. GOVT. OF NCT OF DELHI Mr.SushilDuttSalwanandMr.Neeraj Chaudhary,Advocatesfor respondents [18] W.P.(C)262/2008&CM.No.506/2008 SHRISHERSNGH Through; Mr.AnilKumarJangra,Adv. GOVT. OF NCT OF DELHI&ORS • Through; Mr.SushilDuttSalwanandMr.Neeiaj Chaudhary,Advocatesfor respondents [19] W.P.(C)8523/2007 MEHARCHANDBAL KISHORE ou Through; Mr.PradeepGuptaandMr.SureshBharti, Advocates for the petitioner. GOVT. OF NCT OF DELHI &ORS • Through; Mr.SushilDuttSalwanandMr.Neeraj Chaudhary,Advocatesfor respondents [20] W.P.(C)8628/2007&CMNo.16252/2007 ram DASS GUPTAPROP. OF MOHANSTORE W.P.(C) 948/2008 & ors. Mr.SanjayGoel,Adv. GOVT. OF N.C.T.OF DELHI&ORS. Through; Mr.SushilDuttSalwanand Mr.Neeraj Chaudhary,Advocatesfor respondents [21] W.P.(C)8644/2007 RAM CHANDERPAWAR Mr.NitinSehgal,Adv. THE ASSISTANT COMMISSIONER OF FOOD AND SUPPLIES SOUTH DELHI Thi-ough: Mr.SushilDuttSalwanand Mr.Neeraj Chaudhary, Advocates for respondents f22J W.P.(C) 620/2008& CMAPPL. 1214/2008 RAM AVTAR KAILASH CHAND FPS NO 8184 CIRCLE 2 Mr.Nitin Sehgal, Adv. ASSISTANT COMMISSIONER FOOD AND SUPPLIES DELHI AND ANR Mr.SushilDutt Salwan and Mr.Neeraj Chaudhary, Advocates for respondents [23J W.P.(C) 291/2008 LAXMI STORE FPS Mr.Nitin Sehgal, Adv. THE COMMISSIONER FOOD AND SUPPLIES DELHI AND ANR. Respondents Mr.Sushil Dutt Salwan and Mr.Neeraj Chaudhary, Advocates for respondents W.P.(C) 948/2008 & ors. Page 6 of16 [24] W.P.(C)5505/2008&CMAPPL.11408/2009 DAYA PRAKASH GUPTA Mr. SanjayMishra,Advocate STATEANDORS. Mr.SushilDuttSalwanand Mr.Neeraj Chaudhary,Advocatesfor respondents [25] W.P.(C)8645/2007 RADHEY SHYAM ANAND GOVT. OF N.C.T. OF DELHI AND ORS. [26] W.P.(C)530/2008 CHUNI LAL Mr.PradeepGuptaandMs.SoniaSharma, Advocates for petitioner Mr.SushilDuttSalwanand Mr.Neeraj Chaudhary,Advocatesfor respondents Mr.PradeepGuptaandMs.SoniaSharma, Advocates for petitioner GOVT. OF N.C.T. OF DELHI AND ORS. Mi".SushilDuttSalwanand Mr.Neeraj Chaudhary,Advocatesfor respondents [27] W.P.(C) 30/2009 M/S SHREEDURGA STORE Thi-ough: Mr.PradeepGuptaandMs.SoniaSharma, Advocates for petitioner GOVT. OF N.C.T. OF DELHI W.P.(C) 948/2008 & ors. ANDORS. ii: Mr.SushilDuttSalwanand Mr.Neeraj Chaudhary,Advocatesfor respondents [2Sj W.P.(C)9502/2007 TILAKRAJ GOVT.OFN.C.T.OFDELK ^ • Mr.SushilDuttSalwanandMr.Neeraj Chaudhary,Advocatesfor respondents CORAM: HON'BLEMR. JUSTICEG.S.SISTANI G.S.STSTANT.'J.(ORAL)

¶1Counsel for the parties submitthat facts in all these matters are smiilar. All these petitionsraiseacoinmonlegal question,which ean be disposed of by a commonorder.

¶2Rule. With the consentof counsel for the parties,the writ petitionsare takenup for finalhearingand disposal.

¶3As agreed, the facts of the Writ PetitionNo.948/2008are being noticed. The petitionerhas beenrunningaFairPriceShop sincethe year 1987. On

19.3.1997,the shopwas visitedand inspectedby officialsofdepartmentof respondentand some in-egularitieswere found. Ashowcausenotice-cum-suspension memo dated 31.3.1997 was issued by the then Assistant-Commissionerfor violation,as mentionedand simultaneouslyan FIR was lodgedagainstthe authorisation/licenceholder. Reply to the show cause notice was submittedand hearingwas grantedby the Department. Upon hearing,the AssistantCommissioner,Food and Suppliespassed an order W.P.(C) 948/2008 & ors. Thorough: Mr.SanjayGoel,Advocate .T) dated 25.4.1997 forfeiting entire security amount of Rs.500/- and thereafterrestoredthe licenceofthepetitioner. Afterpassingofthe order, the Assistant Commissionerdid not resort to any fiirther penal action againstthe petitionerfor cancellationofthe fairpriceshop. Thereafter,the petitionercontinuedto carryon its businesson thebasisoflicencegranted by the respondent,withoutany complaintfromthe card-holders.

¶4In the meanwhile,in the criminalproceedings,initiatedupon registration of the FIR, a judgment dated 22.8.1998 was passed by which the petitioner,thoughconvicted,was releasedon probationfor one year and onpaymentofcostsofRs.500/-. In theyear2007,afteragap ofmorethan 10 years,afresh show causenoticewas issuedon 10.9.2007callingupon thepetitionerto showcauseas to whythe licencebe notcancelled.

¶5After hearmg, by an impugned order dated 1.2.2008 the licence of the petitionerhas been cancelled. It is acommoncase ofthe petitionersthat the impugnedorder of cancellationpassed by the respondentis unfair, unjustand contraryto law and liableto be setaside.

¶6Counsel for the petitioners ftirther submitted that while passing the judgment,the SpecialCourthad made it clearthatthe orderofconviction couldnot affectthe operationofthe fairpriceshop.

¶7Attentionofthis courthas been drawnto thejudgmentdated22.8.1998,a copy of which has been placed on record. Concludingportion of the judgmentdated22.8.1998readsas under: "In respectof sentence,accused,SuridnerKumar,I directthat he shall be releasedon entering into a personal bond in the sum o Rs 5000/-with asecurityoflike amountand to appearand receive sentencewithinaperiodof 1years whenevercalledupon to do so and duringtimeto keep peaceand be ofgood behaviour. Accused, SurinderKumar shall also pay Rs.500/-^as costs of proceedings. This shouldnot affectoperationofF.P.S."

¶8It is submittedby counselfor the petitionersthatoncethe respondentshad W.P.(C)94S/2008& ors. issuedshow causenotice-cum-suspensionmemo dated31.3.1997and after due hearing a penalty of forfeiture of security amount was imposed, petitionerscarmot be punishedtwice for the same offence. The second argumentofcounselfor the petitionersis that in view of Section12 ofthe Probation of Offenders Act, 1958, petitioners do not suffer any disqualification.The third argumentof counselfor the petitionersis that the show cause notice issued and cancellationorder passed is liableto be quashed, as firstly the action initiatedhas become stale; and secondly, violation, if any, of the petitioners stands condoned as licences were renewed subsequentlyfor 10 years and more.

¶9While counsel for the respondent submits that in addition to the administrativeaction, 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 terms and conditions of licence:

(1) If any licenceeor his agent or sei-vantor 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 suspendedby orderin writingby the Commissioner. Proviso to clause 6(1) order vide Dt. 15.2.80.

(2) Without prejudice to the provisionsof sub-clause 1 if the Commissioner is satisfied that the licensee has contravened any of the terms and conditionsof 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& ors. Page 10 of16

(3) Notwithstandinganything contains in this clause, where a licencee is convictedby a court of law for breach of the terms and conditionsof the licence or contraventionof the provisionof this order the licensingauthoritymay by order in writing, cancel his licence. Providedthat no such order shall be passed until the appeal,ifany, filed againstsuch convictionis dismissedand whereno suchappealis fileduntilthe periodoflimitationfor filing an appeal expires."

¶10Counsel for the respondentalso 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 submitsthat once the petitioners had committed breach and he/she was convicted the respondentswereboundto cancelthe licenceofthe 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 convictedby a court of law in respect of contraventionof 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 authorization forth 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. "

¶11Counselfor the respondentsubmitsthat the delay is procedural,as in the period of 18 years, 24 AssistantCommissionershad been transferredin one zone, and in another zone 12 Assistant Commissioners were transferred in 10 years. W.P.(C) 948/2008&ors. Page 11 of16

¶12In responseto the above,the counselfor the petitionersstatedthat in case the respondentswereto relyupon Clause6ofDelhiKeroseneOil (Export and Price)ControlOrder 1962 and Clause7ofthe orderdated 12.1.1981, the same shouldhave been invokedby them within a shortestperiod of time from the date of the cause of action and in any case withm a reasonableperiod of time. It is further contendedthat on account of delay, the respondentsare estopped from relying on Clause 6 of Delhi KeroseneOil (Exportand Price)ControlOrder 1962 and Clause7ofthe Order dated 12.01.1981which would deem to have been givenup by the respondents,by virtueoftheir conduct;and on the contrary,vestedrights have been createdin favour of the petitionersby continuousrenewal of licenses,whichcannotbetakenaway atthis belatedstage.

¶13I have heard counselfor the partiesand also perusedthe petitionas also the annexures filed along with the petitions.

¶14The basic facts are not in dispute that the licenses were granted to the petitionersto run fair price shops/KeroseneOil Depots. Upon inspection havingbeen earnedout and some irregularitieshavingbeen found, show cause notice was issued; hearing was granted and the petitionerswere 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 incurreda disqualificationhaving been convictedby a criminalcourt, in terms of the 1962 and 1981 Orders.

¶15Admittedly,action was taken by the AssistantCommissioneragainstthe petitionersand a penaltyof forfeitureof security amount was imposed. No furtheractionagainstthe petitionerswas taken for more than a period fV.P.(C) 948/2008&ors. Page12 of16 of 10 years. Thus in my viewhavingnottakenactionfor 10 yearsand on the contraryhavingrenewedlicencesofthe petitionerswould amountto condoningthe acts ofthe wrongdoer; and after 10 years,the respondents are estoppedfrom takingactionagainstthe petitionershavingwaivedoff their rights by their own conduct,and the respondentsby their own act have condonedthe acts of the wrongdoerand are now estopped from changingtheir position.

¶16It is settledlaw thatastatutoryauthorityis requiredto act reasonablyand fairly.The Apex Courtin PowerControlAppliancesv. SumeetMachines

(P) Ltd., (1994)2see 448 has held as under: ''Acquiescenceis sittingby, whenanotheris invadingthe rightsand spendingmoneyon it. It is acourseofconductinconsistentwith the claim for exclusive rights in a trade mark, trade name etc. It implies positive acts; not merely silence or inaction such as is involvedin laches.InHarcourtv. WhiteSr.JohnRommillysaid. It is important to distinguish mere negligence and acquiesce. Therefore,acquiescenceis onefactofdelay.Iftheplaintiffstoodby knowinglyand let the defendantsbuildup an importanttrade until it had become necessaryto crush it, then the plaintijfswould be stopped by their acquiescence. If the acquiescence in the infringementamounts to consent, it will be a completedefenceas 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 rightin the defendantas was laiddown in Rodgersv. Nowill

¶17Accordingly,the respondentshave not only sleptover its rightsand, thus, waived it but also by agreeingto transferthe licensesin the name of the W.P.(C) 948/2008 & ors. petitionershavereasonablyand fairlygivenarightto petitioners.Further, the respondentsin the presentpetitionshave givenareasonablebeliefto thepetitionersthattheirrightsandtitleis goodand shallnot be disturbed.

¶18Consequentto raids carried out on different dates in different cases, proceedingswere initiatedagainstdifferentpersonsby respondents.The matters were pursued by the respondentsand the order(s) was/were so passed, were within the knowledge of the respondents. In case the respondents/departmentwas of the view that in addition to the administrativeactionlicenceofauthorizationis also to be cancelled,then the respondent/departmentwouldhave been well withinits rightsto take appropriateaction within a reasonableperiod of time. Whereas in the presentcases,the departmentin many caseshas onlytakenadministrative actionand passedorders offorfeitureof securitydeposit,but decidednot to take extremeactionofcancellationoflicence.At this belatedstage,the actionofthe respondenthas become stale and more so the authorization, of person who was actually convictedhas already been transfeiiedto another, which transfer has been carried out by the respondents department and the new proprietor authorization holder has been continuously rurming KOD/ Fair Price Shop for years. The above narration of facts would show that the departmenthas been extremely careless and casual in enforcingthe terms of the license, in accordance with law, and, thus,respondents'actioncannotbesustained.

¶19Moreover, in my view the petitioners have not incurred the disqualificationofgrantoflicense/authorization,due to conviction,as it is settled law that a person releasedon probationunder Section 12 ofthe Probation of OffendersAct shall not suffer any disqualification. In the case of Gulzar v. State of M.P., (2007) 1 SCC 618, it has been held as under: }V.P.(C) 948/2008&ors. 14of16 ''....WhileSection 12 of the PO Act states that the personfound guiltyofan ojfenceand dealtwith underSection3or 4ofthe PO Act shall not suffer disqualification, if any, attached to the convictionofan ojfenceunderany law...."

¶20Respondents counsel has placed reliance upon the report of Justice Wadhwa Committeeconstitutedby the Supreme Court of India. Due to the aforesaid facts and observations,respondents cannot at this stage get benefit of their inaction or the findings on the report.

¶21In view of the aforesaid,presentpetitionerscannot be penalized,at this stage even more so since the publishedacts, in some cases, were never committed by the present license holders. A party is bound to act reasonablymore so a statutoryauthority.The authoritywas under a duty to act reasonablyand without prejudiceto the rights of the petitioners. Giventhat the authorityhas itselfrenewedto license(s)of the petitioners, they themselveshave condoned the earlier convictions.Further by not acting within a reasonableperiod of time and by agreeingto renew the licensesin the name of petitionershave giventhe petitionersa reasonable cause to believe that a right has accrued in their favour. Petitioners are also entitled to the benefit of Section 12 of the Probation of Offenders Act. Accordingly,the impugnedorders of show causenotices/cancellation orders are quashed.

¶22Rule is made absolute. All the petitions and the apphcations stand disposed of in above terms. Parties shall bear their own costs.

¶23It is informed that in the case of WP(C)No.9502/2007 in addition to the order of cancellation, other proceedings are also pending. It is clarified that in addition to the order of cancellation, all other proceedings which are stated to be pending in the case of WP(C)No.9502/2007 shall be H'.F.fCJ 948/2008& ors. decided unaffected by the orders passed by this court in the present proceedings. DECEMBER 17, 2013 'ssn' - C . G.S. SISTANfX W.P.(C)948/2008& ors. Page 16of16

* IN THE HIGH COURT OF DELHI AT NEW DELHI % Judgment Delivered on: 17.12.2013 + W.P.(C) 8634/2007 SfflV STORE Mr.PradeepGupta and Mr.Suresh Bharti, Advocates for the petitioner. GOVT. OF N.C.T. OF DELHI & ORS. Mr.Sushil Dutt Salwan and Mr.Neeraj Chaudhary, Advocates for respondents CORAM: HON'BLE MR. JUSTICE G.S.SISTANI G.S.SISTANI, J. (ORAL) For Order see detailed judgment passed in the matter [W.P.(C) 948/2008].