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

G.S. SISTANI, J. DECEMBER 17, 2013 'ssn' * IN THE HIGH COURT OF DELHI AT NEW DELHI % Judgment Delivered on: 17.12.2013 [1J+ W.P.(C)948/2008& CM. no.1863/2008 RAJENDER PRASAD SURINDER KUMAR Petitioner Mr.Nitin Sehgal, Advocate THE ASSISTANCE COMMISSIOISIER FOOD & SUPPLIES Respondent Mr.Sushil Dutt Salwan and Mr.Neeraj Chaudhary, Advocates for respondents [2J W.P.(C) 5157/2008 & CM.No.9860/2008 AGGARWAL STORE Petitioner Mr.Pradeep Gupta and Mr.Suresh Bharti, Advocates for petitioner GOVT. OF NCT OF DELHI & ANR Respondent Mr.Sushil Dutt Salwan and Mr.Neeraj Chaudhary, Advocates for respondents [3J W.P.(C) 8386/2007 & CM No. 15850/2007 MAFIENDER KUMAR Petitioner Mr.Anurag Mangla, Advocate GOVT. OF N.C.T. OF DELHI & ORS. Respondent Mr.Sushil Dutt Salwan and Mr.Neeraj Chaudhary, Advocates for respondents [4] W.P.(C) 8478/2007 SHOBHA KUMARI Petitioner Mr.Sanjay Goel, Advocate. W.P.(C) 948/2008 & ors. THE GOVT. OF NC.T OF DELHI&ORS Respondent Mr.SushilDuttSalwanand Mr.Neeraj Chaudhary,Advocatesfor respondents [5] W.P.(C)8554/2007 ASHOKPROVISIONSTORE Petitioner Mr.PradeepGuptaandMr.SureshBharti, Advocates for the petitioner. GOVT. OF N.C.T.OF DELHI&ORS. Respondent Mr.SushilDuttSalwanand Mr.Neeraj Chaudhary,Advocatesforrespondents [6] W.P.(C)8611/2007& 16227/2007 ISHWARCHAND Petitioner Mr.AnuragMangla,Advocate. GOVT. OF N.C.T.OF DELHI&ORS. Respondent Mr.SushilDuttSalwanand Mr.Neeraj Chaudhary,Advocatesfor respondents [7] W.P.(Cj 8634/2007 smv STORE Petitioner Mr.PradeepGuptaandMr.SureshBharti, Advocates for the petitioner. GOVT. OFN.C.T. OFDELHI& ORS. Respondent Mr.SushilDuttSalwanandMr.Neeraj Chaudhary,Advocates for respondents [8] W.P.(C) 8635/2007 KANTADEVI Petitioner Mr.PradeepGuptaandMr.SureshBharti, Advocates for the petitioner. W.P.(C)94^2008&ors. ^ GOVT. OF N.C.T. OF DELIH & ORS. Respondent Mr.Sushil Dutt Salwan and Mr.Neeraj Chaudhary, Advocates for respondents [9] W.P.(C) 9456/2007 & CM.No.17820/2007 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 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 Petitioner Mr.Sanjay Goel, Advocate THE GOVT. OF NCT OF DELHI ..... Respondent Mr.Sushil Dutt Salwan and Mr.Neeraj Chaudhary, Advocates for respondents [11] W.P.(C) 8820/2007 PAWAN RATION 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 Chaudhary, Advocates for respondents [12] W.P.(C) 8985/2007 & CM.No. 16923/2007 ASHOK KUMAR AGGARWAL Petitioner Mr.Sanjay Goel, Advocate. W.P.(C)'948/2008&ors. Page3 of16 ( THE GOVT. OF NCT OF DELHI & ORS Respondent Mr.Sushil Dutt Salwan and Mr.Neeraj Chaudhary, Advocates for respondents [13] . W.P.(C) 8714/2007 & CM.No.16430/2007 DEVINDER GOEL Petitioner GOVT. OF NCT OF DELHI & ORS Respondent Mr.Sushil Dutt Salwan and Mr.Neeraj Chaudhary, Advocates for respondents [14] W.P.(C) 8646/2007 JANTA STORE Petitioner 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 Chaudhary, Advocates for respondents [15] W.P.(C) 8819/2007 & CM.No. 16625/2007 SARASWATI GENERAL STORE Petitioner Mr.Pradeep Gupta and Mr.Suresh Bharti, Advocates for the petitioner. GOVT. OF NCT OF DELHL & ORS Respondent Mr.Sushil Dutt Salwan and MrNeeraj Chaudhary, Advocates for respondents [16] W.P.(C) 8264/2007 &CM.NO.15614/2007 ANIL KUMAR MISHRA Petitioner W.P.(C) 948/2008 & ors. i Through; Mr.S.K.Chaudhary,Advocate. GOVT. OF N.C.T.OF DELHI&ORS. Respondent Mr.SushilDuttSalwanand Mr.Neeraj Chaudhary,Advocatesfor respondents [17] W.P.(C)8046/2007&CM.No.15855/2007 SUMERCED\NDMOHANLAL Petitioner Mr.SanjeevKumarGupta,Adv. GOVT. OF NOT OF DELHI Respondent Mr.SushilDuttSalwanand Mr.Neeraj Chaudhary,Advocatesforrespondents [18] W.P.(C)262/2008&CM.No.506/2008 SHRI SHERSNGH Petitioner Mr.AnilKumarJangra,Adv. GOVT. OF NCT OF DELHI&ORS Respondent Mr.SushilDuttSalwanand Mr.Neeraj Chaudhary,Advocatesfor respondents [19] W.P.(C)8523/2007 MEHARCHANDBALKISHORE Petitioner Mi'.PradeepGuptaand Mr.SureshBharti, Advocates for the petitioner. GOVT. OFNCTOFDELHI & ORS Respondent Mr.SushilDuttSalwanand Mr.Neeraj Chaudhary, Advocates for respondents [20] W.P.(C)8628/2007&CM.No.16252/2007 RAM DASS GUPTA PROP. OF MOHAN STORE Petitioner W.P.(C)948/2008&ors. - ^ I Mr.SanjayGoel, Adv. ' GOVT. OF N.C.T. OF DELHI & ORS. Respondent Mr.SushilDuttSalwanand Mr.Neeraj Chaudhaiy, Advocates for respondents [21] W.P.(C) 8644/2007 RAM CHANDER PAWAR Petitioner Mr.Nitin Sehgal, Adv. THE ASSISTANT COMMISSIONER OF FOOD AND SUPPLIES SOUTH DELHI Respondent Mr.SushilDutt Salwanand Mr.Neeraj Chaudhaiy, Advocates for respondents [22] W.P.(C)620/2008 & CMAPPL. 1214/2008 RAM AVTAR KAILASH CHAND FPS NO 8184 CIRCLE 2 Petitioner Mr.Nitin Sehgal, Adv. ASSISTANT COMMISSIONER FOOD AND SUPPLIES DELHI AND ANR Respondent Mr.Sushil Dutt Salwan and Mr.Neeraj Chaudhary, Advocates for respondents [23] W.P.(C) 291/2008 LAXMI STORE FPS Petitioner 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. [24] W.P.(C) 5505/2008& CMAPPL. 11408/2009 DAYAPRAKASHGUPTA Petitioner Through; ' Mr. SanjayMishra,Advocate STATE ANDORS. Respondent Mr.SushilDuttSalwanandMr.Neeraj Chaudhary, Advocates for respondents [25] W.P.(C) 8645/2007 RADHEY SHYAM ANAND Petitioner Mr.PradeepGuptaandMs.SoniaSharma, Advocates for petitioner GOVT. OF N.C.T. OF DELHI AND ORS. Respondent Thi'ough: Mr.SushilDutt Salwanand Mr.Neeraj Chaudhary, Advocates for respondents [26] W.P.(C) 530/2008 CHUNILAL .....Petitioner Mr.PradeepGuptaandMs.SoniaSharma, Advocates for petitioner GOVT. OF N.C.T. OF DELHI AND ORS. Respondent Mr.Sushil Dutt Salwan and Mr.Neeraj Chaudhary, Advocates for respondents [27] W.P.(C) 30/2009 M/S SHREE DURGA STORE Petitioner Mr.Pradeep Gupta and Ms.Sonia Sharma, Advocates for petitioner GOVT. OF N.C.T. OF DELHI W.P.(C) 948/2008& ors. Page 7of 16 I ANDORS. • Mr.SushilDuttSalwanandMr.Neeraj Chaudhary,Advocatesfor respondents [28] W.P.(C)9502/2007 TILAICRAJ Thi-ough; Mr.SanjayGoel,Advocate GOVT. OF N.C.T. OF DELHI AND ORS. • Mr.SushilDuttSalwanand Mr.Neeraj Chaudhaiy,Advocatesfor respondents CORAM: HON'BLE MR. JUSTICE G.S.SISTANI

0.5.5.STANL'J.

(ORAL)

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

¶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 beenrunningaFairPrice Shop sincethe year 1987. On

19.3.1997,the shop was visitedand inspectedby officialsofdepartmentof respondentand some irregularitieswere found. Ashow causenotice-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 notice was submittedand hearingwas grantedby the Department. Upon hearing,the AssistantCommissioner,Food and Suppliespassed an order W.P.(C) 948/2008&ors. 8of16 dated 25.4.1997 forfeiting entire security amount of Rs.500/- and thereafterrestoredthe licenceofthe petitioner. Afterpassingofthe order, the Assistant Commissionerdid not resort to any further penal action againstthe petitionerfor cancellationofthe fairpriceshop. Thereafter,the petitionercontinuedto carryon its businesson the basisoflicencegranted by the respondent,withoutany complaintfi-omthe 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,though convicted,was releasedon probationfor one year and on paymentofcostsofRs.500/-. In the year2007,afteragap ofmorethan 10 years, afresh show cause noticewas issuedon 10.9.2007callingupon the petitionerto showcauseas to why the licencebe not cancelled.

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

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

¶7Attentionofthis courthas been drawnto the judgmentdated 22.8.1998,a copy of which has been placed on record. Concludingportion of the judgmentdated22.8.1998reads as under: "In respectof sentence,accused, SuridnerKumar, I directthat he shall be releasedon,enteringinto a personalbond in the sum of Rs.5,000/-withasecurityoflike amountand to appearand receive sentencewithinaperiodof1years whenevercalledupon to do so and duringtimeto keep peaceand be ofgoodbehaviour. Accused, SurinderKumar shall also pay Rs.500/- as costs of proceedings. This should not affect operation of F.P.S."

¶8It is submittedby counselfor the petitionersthat once the respondentshad W.P.(C)948/2008&ors. Page9of16 issuedshow causenotice-cum-suspensionmemo dated 31.3.1997and after due hearing a penalty of forfeiture of security amount was imposed, petitionerscannot be punishedtwice for the same offence. The second argumentof counselfor the petitionersis that in view of Section12 of the Probation of Offenders Act, 1958, petitioners do not suffer any disqualification.The third argumentof counsel for the petitionersis 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 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)948/2008tfe ors. Page 10 of16

(3) Notwithstandinganytliing 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 provisionofthis order the licensingauthoritymay by order in writing, cancel his licence. Provided that no such order shall be passed until the appeal,if any, filed againstsuch convictionis dismissedand whereno such appealis 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 respondentswere boundto cancelthe licenceof 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 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. "

¶11Counsel 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 Assistant Commissioners were transfeiTed in 10 years. M'.P.(C) 948/2008 & ors.

¶12In responseto the above,the counselfor the petitionersstatedthat in case the respondentswere to rely upon Clause6ofDelhiKeroseneOil (Export and Price)ControlOrder 1962 and Clause7 ofthe orderdated 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 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 Clause 7 of the Order dated 12.01.1981 which would deem to have been given up by the respondents,by virtueof their conduct;and on the contrary,vestedrights 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.

¶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 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.

¶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. of10 years. Thus in my viewhavingnot takenactionfor 10 years and 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 changing their position.

¶16It is settledlaw that a statutoryauthorityis requiredto act reasonablyand fairly.The Apex Courtin PowerControlAppliancesv. SumeetMachines

(P) Ltd., (1994)2 see 448 has.heldas under: ''Acquiescenceis sittingby, when anotheris invadingthe rightsand spendingmoneyon it. It is a courseofconductinconsistentwith 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,acquiescenceis onefact ofdelay.Iftheplaintiffstoodby knowinglyand let the defendantsbuild up 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 completedefence 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 thedefendantas was laid down inRodgersv. 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. Page 13of 16 i petitionershave reasonablyand fairlygivenarightto petitioners.Further, the respondentsin the presentpetitionshave given areasonablebeliefto thepetitionersthattheirrightsandtitleis good and shallnot be disturbed.

¶18Consequent to raids carried out on different dates in different cases, proceedingswere initiatedagainstdifferentpersons by respondents.The matters were pursued by the respondentsand the order(s) was/were so passed, were within the loiowledge of the respondents. In case the respondents/departmentwas of the view that in addition to the administrativeaction licence of authorizationis also to be cancelled,then the respondent/departmentwould have been well within its rights to take appropriateaction within a reasonableperiod of time. Whereas in the presentcases,the departmentin many caseshas onlytakenadministrative I actionand passedordersofforfeitureof securitydeposit,but decidednot to take extreme action of cancellation of licence. At this belated stage, the action of the respondenthas become stale and more so the authorization of person who was actually convicted has already been transfeiTedto another, which transfer has been carried out by the respondents department and the new proprietor authorizationholder has been continuously running KOD/ Fair Price Shop for years. The above narration of facts would show that the department has been extremely careless and casual in enforcing the terais of the license, in accordance with law, and, thus, respondents' action cannot be sustained.

¶19Moreover, in my view the petitioners have not incurred the disqualificationof grant of license/authorizationdue 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 Gulzar v. State of M.P., (2007) 1 SCC 618, it has been held as under: W.P.(C) 948/2008& ors. Page 14ofj 6 ''....While Section 12 of the PO Act states that the person found guilty of an offenceand dealt with under Section 3 or 4 of the PO Act shall not suffer disqualification, if any, attached to the conviction ofan ojfence 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 obsei-vations, respondents cannot at this stage get benefit of their inaction or the findings on the report.

¶21In view of the aforesaid, present petitioners cannot be penalized, at this stage even 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 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 proceedingsare also pending. It is clarified that in addition to the order of cancellation, all other proceedingswhich are stated to be pending in the case of WP(C)No.9502/2007 shall be H'.P.(C) 948/2008&ors. page15of16 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. Page 16of16

* IN THE HIGH COURT OF DELHI AT NEW DELHI % Judgment Delivered on: 17.12.2013 + W.P.(C) 8554/2007 ASHOK PROVISION STORE Petitioner 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 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].