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

G.S.SISTANI, J. (ORAL) \ \_(1 l For Order see detailed judgment passed in the matter [W.P.(C) 948/20(])8].

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. - - ---- --,------ \ l \ '-"- $- * IN THE HIGH COURT OF DELHI AT NEW DELHI % Judgment Delivered on: 17.12.2013 [I]+ W.P.(C) 948/2008 & CM)no.l863/2008 RAJENDER PRASAD SURINDER KUMAR Mr.Nitin Sehgal, Advocate TI-ll ASSISTANCE COMMISSIONER FOOD & SUPPLIES ..... Respondent Mr.Sushil Dutt Salwan and Mr.Neeraj [2] W.P.(C) 5157/2008 & CM.No.9860/2008 AGGARWAL STORE Mr.Pradeep Gupta and Mr.Suresh Bharti, Advocates for petitioner GOVT. OF NCT OF DELl-IT & ANR ..... Respondent Mr.Sushil Dutt Salwan and Mr.Neeraj [3] W.P.(C) 8386/2007 & CM No.15850/2007 MAHENDER KUMAR Mr.Anurag Mangla, Advocate GOVT. OF N.C.T. OF DELHI & ORS. . .... Respondent Mr.Sushil Dutt Salwan and Mr.Neeraj [4] W.P.(C) 8478/2007 SHOBHA KUMAR! W.P. (C) 94812008 & ors. Mr.Sanjay Goel, Advocate. Page I of I6 .-- \\)' \ \.....-· \ THE GOVT. OF NCT OF DELHI & ORS ...... Respondent Mr.Sushil Dutt Salwan and Mr.Neeraj {5] W.P.(C) 8554/2007 ASHOK PROVISION STORE Mr.Pradeep Gupta and Mr.Suresh Bharti, Advocates for the petitioner. GOVT. OF N.C.T. OF DELHI & ORS. .. ... Respondent Mr.Sushil Dutt Salwan and Mr.Neeraj {6] W.P.(C) 861112007 & 16227/2007 ISHW AR CHAND Mr.Anurag Mangla, Advocate. GOVT. OF N.C.T. OF DELHI & ORS. .. ... Respondent Mr.Sushil Dutt Salwan and Mr.Neeraj {7] W.P.(C) 8634/2007 SHIV STORE Mr.Pradeep Gupta and Mr.Suresh Bharti, Advocates for the petitioner. GOVT. OF N.C.T. OF DELHI & ORS. .. ... Respondent Mr.Sushil Dutt Salwan and Mr.Neeraj {8] W.P.(C) 8'635/2007 KANT A DEVI Mr.Pradeep Gupta and Mr.Suresh Bharti, Advocates for the petitioner. \ . W.P.(C) 948/2008 & ors. ---------------------'--------- ·--- ·-·· I GOVT. OF N.C.T. OF DELIH & ORS. . .... Respondent Mr.Sushil Dutt Salwan and Mr.Neeraj [9] W.P.(C) 9456/2007 & CM.No.l7820/2007 AGGARWAL STORE ...... ·Petitioner Mr.Pradeep Gupta and Mr.Suresh Bharti, Advocates for the petitioner. GOVT. OF NCT OF DELHI & ORS ..... Respondent Mr.Sushil Dutt Salwan and Mr.Neeraj [10] W.P.(C) 9616/2007 & CM.No.l8087/2007 RIIOIAB CHAND PROP. OF MIS J.N.U. CAMPUS STORE ..... Petitioner Mr.Sanjay Goel, Advocate THE GOVT. OF NCT OF DELHI ..... Respondent Mr.Sushil Dutt Salwan and Mr.Neeraj [11] W.P.(C) 8820/2007 PAW AN RATION STORE Mr.Pradeep Gupta and Mr.Suresh Bharti, Advocates for the petitioner. GOVT. OF NCT OF DELHI & ORS ..... Respondent Mr.Sushil Dutt Salwan and Mr.Neeraj [12] W.P.(C) 8985/2007 & CM.No.l6923/2007 ASHOK KUMAR AGGARWAL Mr.Sanjay Goel, Advocate. W.P. (C) 948/2008 & ors. ' r/ rl ':,_ \ ' '-" THE GOVT. OF NCT OF DELHI & ORS ..... Respondent Mr.Sushil Dutt Salwan and Mr.Neeraj [13] W.P.(C) 8714/2007 & CM.No.164310/2007 DEVINDER GOEL GOVT. OF NCT OF DELID & ORS ..... Respondent Mr.Sushil Dutt Salwan and Mr.Neeraj [14] W.P.(C) 8646/2007 JANTA STORE Mr.Pradeep Gupta and Mr.Suresh Bharti, Advocates for the petitioner. GOVT. OF N.C.T. OF DELHI & ORS, ..... Respondent Mr.Sushil Dutt Salwan and Mr.Neeraj [15] . W.P.(C) 8819/2007 & CM.No.16625/2007 SARASW ATI GENERAL STORE Mr.Pradeep Gupta and Mr.Suresh Bharti, Advocates for the petitioner. GOVT. OF NCT OF DELHI & ORS ..... Respondent Mr.Sushil Dutt Salwan and Mr.Neeraj [16] W.P.(C) 8264/2007 & CM.No.15614/2007. ANIL KUMAR MISHRA W.P. (C) 948/2008 & ors. . .... Petitioner Mr.S.K. Chaudhary, Advocate. GOVT. OF N.C.T. OF DELHI & ORS. . .... Respondent Mr.Sushil Dutt Sal wan and Mr.Neeraj [17] W.P.(C) 8046/2007 & CM.No.15855!/2007 SUJ\1ER CHAND MOHAN LAL Mr.Sanjeev Kumar Gupta, Adv. GOVT. OF NCT OF DELHI ..... Respondent Mr.Sushil Dutt Salwan and Mr.Neeraj [1B] W.P.(C) 262/2008 & CM.No.506/2008 SHRI SHER SNGH · ..... Petitioner Mr.Anil Kumar Jangra, Adv. if. ' GOVT. OF NCT OF DELHI & ORS ..... Respondent Mr.Sushil Dutt Salwan and Mr.Neeraj [19] W.P.(C) 8523/2007 MEHAR CHAND BAL KISHORE Mr.Pradeep Gupta and Mr.Suresh Bharti, Advocates for the petitioner. GOVT. OF NCT OF DELHI & ORS ..... Respondent Mr.Sushil Dutt Sal wan and Mr.Neeraj [20] W.P.(C) 8628/2007 & CM.No.16252/2007 RAM DASS GUPTA PROP. OF MOHAN STORE W.P.(C) 948/2008 & ors. .. Mr.Sanjay Goel, Adv. GOVT. OF N.C.T. OF DELHI & ORS. . .... Respondent Mr.Sushil Dutt Salwan and Mr.Neeraj [21) W.P.(C) 8644/2007 \ r.' '\ \ \,, ) I -- r RAM CHANDER PAW AR Mr.Nitin Sehgal, Adv. THE ASSISTANT COMMISSIONER OF FOOD r AND SUPPLIES SOUTH DELHI ..... Respondent Mr.Sushil Dutt Sal wan and Mr.Neeraj [22] W.P.(C) 620/2008 & CM APPL. 1214/2008 RAM A VTAR KAILASH CHAND FPS NO 8184 CIRCLE 2 Mr.Nitin Sehgal, Adv. ASSISTANT COMMISSIONER FOOD AND SUPPLIES DELHI AND ANR ..... Respondent Mr.Sushil Dutt Salwan and Mr.Neeraj [23] W.P.(C) 29112008 LAXl\1I STORE FPS Mr.Nitin Sehgal, Adv. THE COMMISSIONER FOOD AND SUPPLIES DELHI AND ANR. W.P.(C) 948/2008 & ors. . .... Respondents Mr.SushilDutt Salwan and Mr.Neeraj [24] W.P.(C) 5505/2008 & CM APPL. DAY A PRAKASH GUPTA Mr. Sanjay Mishra, Advocate STATE ANDORS. . .... Respondent Dutt Salwan and Mr.Neeraj [25] W.P.(C) 864512007 RADHEY SHY AM ANAND Mr.Pradeep Gupta and Ms. Sonia Sharma, Advocates :for petitioner GOVT. OF N.C.T. OF DELHI ANDORS. [26] W.P.(C) 53012008 CHUNILAL ..... Respondent Mr.Sushil Dutt Salwan and Mr.Neeraj Mr.Pradeep Gupta and Ms.Sonia Sharma, Advocates for petitioner GOVT. OF N.C.T. OF DELHI ANDORS. [27] W.P.(C) 30/2009 ..... Respondent Mr.Sushil Qutt Salwan and Mr.Neeraj MIS SHREE DURGA STORE Mr.Pradeep Gupta and Ms. Sonia Sharma, Advocates for petitioner GOVT. OF N.C.T. OF DELHI W.P. (C) 948/2008 & ors. ANDORS. ..... Respondent Mr..Sushil Dutt Salwan and Mr.Neeraj [28] W.P.(C) 950212007 TILAKRAJ Mr.Sanjay Goel, Advocate GOVT. OF N.C.T. OF DELHI ANDORS. CORAM: ..... Respondent Mr:Sushil Dutt Salwan and Mr.Neeraj HON'BLE MR. JUSTICE G.S.SISTANI G.S.SISTANI, J. (ORAL)

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

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

¶3As 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-cum-suspension memo dated 31.3.1997 was issued by the then Assistant Commissioner for violation, as mentioned and simultaneously an FIR was lodged against the 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 l6 -·· dated 25.4.1997 forfeiting entire security amount of Rs.500/- and thereafter restored the licence of the petitioner. After passing of the order: , the Assistant Commissioner did not resort to any further penal action against the petitioner for cancellation of the 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.

¶4In 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.

¶5After 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.

¶6Counsel 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 of the fair price shop.

¶7Attention 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 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."

¶8It 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.

¶9While 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 of the 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 licence and shall forward a copy thereof to the licensee. Page IOof 16 .,_

(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."

¶10Counsel 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:

¶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 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 authorization forth 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 ----------,-------,---------------------

¶12In 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 of the 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.

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

¶14The 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.

¶15Admittedly, 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 12of 16 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 1 0 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.

¶16It 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 SCC 448 has held as under: "Acquiescence is sitting by, when another is invading the rights and spending money on it. It is a course of conduct 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 lS involved in laches. In Harcourt v. White Sr.John Rommilly said· "It is important to distinguish mere negligence and acquiesce. '' Therefore, acquiescence is one fact of delay. If the plaintiff stood by 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 (JG.) & Co. v. Boehm. The acquiescence must be such as to lead to the inference of a license to create a new right in the defendant as was laid down in Rodgers v. Nowill.

¶17Accordingly, the respondents have not only slept over its rights and, thus, waived it but also by agreeing to transfer the licenses in the name of the W.P.(C) 948/2008 & ors. !I. \ r -- l \.:::"'I petit 10I1c1·s have reasonably and fairly given a right to petitioners. Further. !he respondents in the present petitions have given a reasonable belief to the petitioners that their rights and title is good and shall not be disturbed.

¶18Consequent to raids carried out on different dates in different cases, . •' proceedings were initiated against different persons by respondents. The matters were pursued by the respondents and the order( s) was/were so passed, were within the knowledge of the respondents. In case the respondents/department was of the view that in addition to the administrative action licence of authorization is also to be cancelled, then the respondent/department would have been well within its rights to take appropriate action within a reasonable period of time. Whereas in the present cases, the department in many cases has only taken administrative action and passed orders of forfeiture of security deposit, but decided not to take)extreme action of cancellation of licence. At this belated stage, the ,-, .. action -Df the respondent has become stale and more so the authorization of person who was actua¥y convicted has already been transferred to another, which transfer :has been -carried out by the respondents department and the new proprietor authorization holder has been running KOD/ Fair Price Shop for years. The above narration of facts would show that the department has been extremely and casual in enforcing terms of the in accordance wtth l&w, and, thus, respondents' actwn cannot be sustamed. r

¶19Moredver, in my view the petitioners have not incurred the . disqualification of grant oflicense/authorization due to conviction, as it is settled law that a person released on probation under Section 12 of the Probation of Offenders Act shall not suffer any disqualification. In the case of Guizar v. State of M.P., (2007) 1 SCC 618, it has been held as under:·· W.P. (C) 948/200/j:& ors. .. "' ( '!// \' t: I, " .... While Section 12 of the PO Act states that the person found guilty of an offence and dealt with under Section 3 or 4 of the PO shall not suffer disqualification, if any, attached to the conviction of an offence under any law .... "

¶20Respondents counsel has placed reliance upon the report of Justice Wadhwa Committee constituted by the Supreme Court of India. Due to the aforesaid facts and ob.servations, respondents cannot at this stage get I . benefit or their inaction or the findimgs on the report.

¶21In view of the aforesaid, present petitioners cannot be penalized, at this stage·•e'ven more so since the published acts, in some cases, were never committed by the present license holders. A party is bound to act reasonably more so a statutory authority. The authority was under a duty to act reasonably and without prejudice to the rights of the petitioners. Given that the authority has itself renewed to license(s) of the petitioners, they themselves have condoned the earlier convictions. Further by not acting within a reasonable period of time and by agreeing to renev.· the licenSf.S in the name of petitioners have given the petitioners a reasonable cause to believe that a has accrued in their favour. Petitioners are also entitled to the berrefit of Section 12 of the Probation of Offenders Act. Accordingly, the impugned orders of show cause notices/cancellation orders are quashed.

¶22Rule is made absolute. -All the petitions and the applications 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 t'f cancellation, other proceedings are also pending. It is clarified that iri 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

(C) 94812008 & ors.

r '' '' $- * IN THE HIGH COURT OF DELHI AT NEW DELHI % Judgment Delivered on: 17.12.2013 + W.P.(C) 8611/2007 & 16227/2007 ISHW AR CHAND Mr.Anurag Mangla, Advocate. GOVT. OF N.C.T. OF DELHI & ORS. . .... Respondent Mr.Sushil IDutt Salwan and Mr.Neeraj CORAM: HON'BLE MR. JUSTICE G.S.SISTANI