Ram Dass Gupta Prop. of Mohan 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 [1J+ W.P\(C)948/2008&CM. no.1863/2008 RAJENDERPRASADSURINDERKUMAR Mr.NitinSehgal,Advocate TIffi ASSISTANCE COMMISSIONERFOOD & SUPPLIES Mr.SushilDuttSalwanand Mr.Neeraj Chaudhary, Advocates for respondents f2J W.P.(C)5157/2008&CMNO.9860/2008 AGGARWAL STORE Mi'.PradeepGuptaandMr.SureshBharti, Advocates for petitioner • GOVT. OF NCT OF DELHI & ANR Mr.SushilDutt Salwanand Mr.Neeraj ? Chaudhary, Advocates for respondents [3] W.P.(C)8386/2007& CMNo.15850/2007 MAHENDER KUMAR Mr.Anurag Mangla, Advocate GOVT. OF N.C.T. OF DELHI & ORS. Respondent ' Mr.SushilDutt Salwanand Mr.Neeraj Chaudhary, Advocates for respondents [4] W.P.(C) 8478/2007 SHOBHA KUMARI Mr.Sanjay Goel, Advocate. W.P.(C) 948/2008&ors. 1of16 THE GOVT. OF NCT OF DELHI&ORS Through; Mr.SushilDuttSalwanandMr.Neeraj Chaudhary,Advocatesfor respondents [5] W.P.(C)8554/2007 ASHOKPROVISION STORE Mr.PradeepGuptaandMr.SureshBharti, Advocates for the petitioner. i. • GOVT. OF N.C.T.OF DELHI& ORS. Mr.SushilDuttSalwanandMr.Neeraj Chaudhary,Advocatesfor respondents [6] W.P.(C)8611/2007&16227/2007 ISHWARCHAND Mr.AnuragMangla,Advocate. GOVT OF N.C.T.OF DELHI&ORS. Mr.SushilDuttSalwanandMi'.Neeraj Chaudhary,Advocatesfor respondents [7] W.P.(C)8634/2007 STORE Mr.PradeepGuptaandMr.SureshBharti, Advocates for the petitioner; GOVT. OF N.C.T.OF DELHI&ORS. Mr.SushilDuttSalwanand Mr.Neeraj Chaudhary,Advocatesfor respondents [8] W.P.(C)8635/2007 KANTADEVI Mr.PradeepGuptaandMr.SureshBharti, Advocates for the petitioner. Pase 2 of 16 fV.P.(C) 948/2008& ors. GOVT. OFN.C.T.OFDELIH& ORS. Mr.SushilDuttSalwanand Mr.Neeraj Chaudhary,Advocatesfor respondents [9] W.P'.(C)9456/2007&CM.No.17820/2007 AGGARWAL STORE Mr.PradeepGuptaand Mr.SureshBharti, Advocates for the petitioner. • GOVT. OF NCT OF DELHI & ORS Mr.SushilDuttSalwanandMr.Neeraj Chaudhary, Advocates for 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 DELffl Mr.Sushil Dutt Salwan and 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 Chaudhary, 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 DEVINDER GOEL Through; GOVT. OF NCT OF DELHI & ORS Mr.SushilDuttSalwanand Mr.Neeraj Chaudhary, Advocates for respondents [14] W.P.(C) 8646/2007 JANTA STORE Through Mr.PradeepGupta and Mi-.SureshBharti, Advocates for the petitioner. GOVT. OF N.C.T. OF E Throi ELHI & ORS. igh: Mr.SushilDutt Salwanand Mr.Neeraj Chaudhary, Advocates for respondents [15] W.P.(C) 8819/2007 & CM.No.16625/2007 SARASWATI GENERAL STORE Mr.PradeepGuptaandMr.SureshBharti, Advocates for the petitioner. GOVT. OF NCT OF DELHI & ORS Mr.SushilDutt Salwanand Mr.Neeraj Chaudhary, Advocates for respondents [16] W.P.(C) 8264/20( 7 & CM.No. 15614/2007 ANIL KUMAR MISHRA W.P.(C) 948/2008 & ors. GOVT. OF N.C.T. OF DE Through [17] W.P.(C)8046/2007 GOVT. OF NCT OF DEL Throu: Througlpi: Mr.S.K.Chaudhary,Advocate. .HI &ORS. Mr.SushilDuttSalwanandMr.Neeraj Chaudhary,Advocatesfor respondents &CM.NO.15855/2007 SUMERCHANDMOHANLAL •-••Petitioner Through; Mr.SanjeevKumarGupta,Adv. rh: Mr.SushilDuttSalwanandMr.Neeraj Chaudhary,Advocatesfor respondents [18] W.P.(C)262/2008 &CM.No.506/2008 sma SHER SNGH Throu GOVT. OF NCT OF DE Throi] gh: Mr.AnilKumarJangra,Adv. .m&ORS gh; Mr.SushilDuttSalwanandMr.Neeraj Chaudhary,Advocatesfor respondents [19] W.P.(C)8523/2007 MEHAR CHAND BAL ".^iaSHORE Mr.PradeepGuptaandiVtr.SureshBharti, Advocates for the petitioner. GOVT. OF NCT OF D^^LHI &ORS ugh: Mr.SushilDuttSalwanandMr.Neeraj Chaudhary,Advocatesfor respondents Thro [20] W.P.(C)8628/20P7&CM.No.16252/2007 ram DASS GUPTA P W.P.(C)948/2008& ors. ROP. OF MOHANSTORE Mr.SanjayGoel,Adv. GOVT. OF N.C.T.OF DELHI&ORS. Mi-.SushilDuttSalwanand Mr.Neeraj Chaudhary,Advocatesforrespondents [21] W,P.(C)8644/2007 RAM CHANDER PAWAR Mr.Nitin Sehgal, Adv. THE ASSISTANT COMMISSIONER OF FOOD AND SUPPLIESSOUTHDELHI Mr.SushilDuttSalwanand Mr.Neeraj Chaudhary,Advocatesfor respondents [22] W.P.(C)620/2008&CMAPPL.1214/2008 RAM AVTAR KAILASH CHAND FPS NO 8184 CIRCLE 2 Mr.NitinSehgal,Adv. ASSISTANT COMMISSIONER FOOD AND SUPPLIESDELHI AND ANR Mr.SushilDuttSalwanand Mr.Neeraj Chaudhary,Advocates for respondents [23] W.P.(C) 291/2008 LAXMI STORE FPS Mr.Nitin Sehgal, Adv. THE COMMISSIONER FOOD AND SUPPLIES DELHI AND ANR. Respondents Mr.SushilDuttSalwanand Mr.Neeraj Chaudhary,Advocates for respondents W.P.(C) 948/2008 & ors. [24] W.P.(C)5505/2008&CMAPPL.11408/2009 DAYA PRAKASH GUPTA Mr. SanjayMishra,Advocate , Petitioner STATE ANDORS. ..... Respondent Mr.SushilDuttSalwanandMr.Neeraj Chaudhary,Advocatesfor respondents [25] W.P.(C)8645/2007 RADHEYSHYAMANAND Mr.PradeepGuptaand Ms.SoniaSharma, Advocates for petitioner GOVT. OF N.C.T. OF DELHI ANDORS. Mr.SushilDuttSalwanandMr.Neeraj Chaudhary,Advocatesfor respondents [26] W.P.(C)530/2008 CHUM LAL Mr.PradeepGuptaand Ms.SoniaSharma, Advocates for petitioner GOVT. OF N.C.T. OF DELHI ANDORS. Mr.SushilDuttSalwanand Mr.Neeraj Chaudhary,Advocatesfor respondents [27] W.P.(C)30/2009 M/S SHREEDURGASTORE Mr.PradeepGuptaand Ms.SoniaSharma, Advocates for petitioner GOVT. OF N.C.T. OF DELHI W.P.(C) 948/2008 & ors. Page 7of 16 AND ORS. Mr.SushilDuttSalwanandMr.Neeraj Chaudhary,Advocatesfor respondents [28] W.P.(C)9502/2007 TILAKRAJ GOVT. OFN.C.T.OF DELHI ORS Mr.SushilDuttSalwanandMr.Neeraj Chaudhary,Advocatesfor respondents CORAM: HON'BLEMR. JUSTICEG.S.SISTANI C S.STSTANT.'J.(ORAL)

¶1Counsel for the parties submitthat facts in all these matters are similar. All these petitionsraiseacommonlegal question,which can be disposed of by a conraionorder.

¶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 sincetheyear 1987, On

19.3,1997,the shopwas visitedandinspectedby officialsofdepartmentof respondentand someirregularitieswerefound. Ashowcausenotice-cum-suspension memo dated 31.3,1997 was issued by the then Assistant Commissionerfor violation,as mentionedand simultaneouslyan FIR was lodged againstthe authorisation/licenceholder. Reply to the show cause noticewas submittedand hearingwas grantedby the Department, Upon hearing,the AssistantCommissioner,Food and Suppliespassed an order Page.8 of 16 W.P.(C)948/2008& ors. Mr.SanjayGoel,Advocate dated 25.4.1997 forfeiting entire security amount of Rs.500/- and thereafterrestoredthe licenceofthe petitioner. Afterpassingofthe order, the Assistant Commissionerdid not resort to any fiirther penal action againstthepetitionerfor cancellationofthe fairpriceshop. Thereafter,the petitionercontinuedto carryon its businesson the basisoflicencegranted 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 on paymentofcostsofRs.500/-. In theyear2007,afteragap ofmorethan • 10 years,afresh show cause noticewas issuedon 10.9.2007callingupon thepetitionerto showcauseas to why the licencebe notcancelled.

¶5After hearing, by an impugned order dated 1.2.2008 the licence of the petitionerhas been cancelled. It is acommoncase ofthe petitionersthat the impugned order of cancellationpassed by the respondentis unfair, unjustand contraryto law and hableto be set aside.

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

¶7Attentionofthis courthas been drawnto the judgmentdated22.8.1998,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 enteringinto a personalbond in the sum of Rs.5,000/-with asecurityoflike amountand to appearand receive sentencewithinaperiodof 1years whenevercalledupon to do so and duringtimeto keep peaceand be ofgoodbehaviour. Accused, SurinderKumar shall also pay Rs.500/- as costs of proceedings. This shouldnot affectoperationofP.P.S."

¶8It is submittedby counselfor the petitionersthatoncethe respondentshad W.P.(C)948/2008& ors. issuedshowcausenotice-cum-suspensionmemo dated31.3.4997and after due hearing a penalty of forfeiture of security amount was imposed, petitionerscannot 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 cancellationorderpassedis liableto be quashed, as firstly the action initiatedhas become stale; and secondly, violation, if any, of the petitioners stands condoned as licences were renewedsubsequentlyfor 10 yearsandmore.

¶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 servantor 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 prejudiceto the provisionsof sub-clause 1 if the Commissioner is satisfied that the licensee has contravened any of the terms and conditionsof a licenceor 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 cancellationby order in writing cancel his licence and shall forward a copy thereof to the licensee. W.F.(CJ 948/2008&ors. ' 10 of16

(3) Notwithstandinganything contains in this clause, where a licencee is convicted by 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. Provided that 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 Ailicles (Regulations of Distribution)Order, 1981 which reads as follows, and submitsthat once the petitioners had committed breach and he/she was, convicted the respondentswere boundto 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 provisionsof 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. 11 of16

¶12In responseto the above,the counselfor the petitionersstatedthatin case the respondentswereto relyuponClause6ofDelhiKeroseneOil (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 within a reasonableperiod of time. It is further contendedthat on account of delay, the respondentsare estopped from relying on Clause 6 of Delhi KeroseneOil (ExportandPrice) ControlOrder 1962 and Clause7 ofthe Order dated 12.01.1981whichwould 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 grantedto the petitionersto run fair price shops/KeroseneOil Depots. Upon inspection havingbeen carriedout and some irregularitieshavingbeen 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 timeto 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 accordingto the respondent,petitionershad incurreda disqualificationhaving been convictedby a criminalcourt, in terms of the 1962 and 1981 Orders.

¶15Admittedly,actionwas taken by the AssistantCommissioneragainstthe petitionersand a penalty of forfeitureof securityamount was imposed. No furtheractionagainstthe petitionerswas takenfor more than a period W.P.(C)948/2008&ors. . Page12 of16 p of 10 years. Thus in my viewhavingnottakenactionfor 10 yearsand on the contraryhavingrenewedlicencesofthe petitionerswould amountto condoningthe acts ofthe wrong doer; and after 10 years,the respondents are estoppedfrom takingactionagainstthe petitionershavingwaivedoff their rights by their own conduct, and the respondentsby their own act have condoned the acts of the wrongdoer and are now estopped from changingtheir position.

¶16Itis settledlaw that astatutoryauthorityis 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. Itis 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 involved in laches. In Harcourt v. WhiteSr.John Rommillysaid: It is important to distinguish mere negligence and acquiesce." Therefore,acquiescenceis onefact ofdelay.If theplaintiffstoodby knowinglyand let the defendantsbuildup an importanttrade until it had become necessary to crush it, then the plaintiffs would 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. Bbehm. 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 sleptoverits rightsand, thus, waivedit but also by agreeingto transferthe licensesin the name of the W.P.(C) 948/2008 & ors. V petitionershavereasonablyand fairlygivenarightto petitioners.Further, the respondentsin the presentpetitionshave givenareasonablebeliefto the petitionersthattheirrightsandtitleis goodand shallnotbe 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 passedordersof forfeitureofsecuritydeposit,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 transferredto another, which transfer has been carried out by the respondents department and the new proprietor authorization holder has been continuously running KOD/ Fair Price Shop for years. The above narrationof facts would show that the departmenthas been extremely careless and casual in enforcingthe terms of the license, in accordance withlaw, and, thus,respondents'actioncannotbe sustained.

¶19Moreover, in my view the petitioners have not incurred the disqualificationofgrantoflicense/authorizationdue to conviction,as it is settledlaw that a person releasedon probationunder Section 12 ofthe Probationof 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; W.P.(C) 948/2008 & ors. ''....WhileSection 12 of the PO Act states that the personfound guiltyofan offenceand dealtwith underSection3 or 4ofthe PO Act shall not suffer disqualification, if any, attached to the convictionofan offenceunderanylaw...."

¶20Respondents counsel has placed reliance upon the report of Justice Wadhwa Committee constitutedby the Supreme Court of India. Due to the aforesaid facts and observations,respondents cannot at this stage get benefit of their inaction of 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 withoutprejudiceto the rights of the petitioners. Giventhat the authorityhas itselfrenewedto license(s)of the petitioners, they themselves have condoned the earlier convictions.Further by not O acting,within a reasonable period of time and by agreeing to renew the licenses in the name of petitioners have given the petitioners a 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 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 of cancellation, other proceedings are also pending. It is clarified i 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 W.P.(C) 948/2008 & ors. decided unaffected by tlie' orders passed by this court in the present proceedings. G.S. sistaniTx DECEMBER 17, 2013 'ssn' W.P.(C) 948/2008 & ors.

* IN THE HIGH COURT OF DELHI AT NEW DELHI % Judgment Delivered on: 17.12.2013 + W.P.(C) 8628/2007 & CM.No. 16252/2007 RAM DASS GUPTA PROP. OF MOHAN STORE Mr.Sanjay Goel; Adv. GOVT. OF N.C.T. OF DELHI & ORS. Mr.l^ushilDuttSalwanandMr.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"