Saraswati General Store v. Govt. of NCT 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 Petitioner Through: Mr.NitinSehgal,Advocate TI-IEASSISTANCECOMMISSIONERFOOD &SUPPLIES Through: Mr.SushilDuttSalwanand Mr.Neeraj Chaudhary,Advocatesfor respondents [2] W.P.(C)5157/2008&CM.No.9860/2008 AGGARWALSTORE Petitioner Through: Mr.PradeepGuptaand Mr.SureshBharti, Advocates for petitioner GOVT. OF NCT OF DELHI& ANR Through: Mr.SushilDuttSalwanand Mr.Neeraj Chaudhary,Advocatesfor respondents [3] W.P.(C)8386/2007&CM No.15850/2007 MAHENDERKUMAR Petitioner Through: Mr.AnuragMangla,Advocate GOVT. OF N.C.T.OFDELHI& ORS. Through: Mr.SushilDuttSalwanand Mr.Neeraj Chaudhary,Advocatesfor respondents [4] W.P.(C) 8478/2007 SHOBHA KUMARI Petitioner Through: Mr.SanjayGoel,Advocate. W.P.(C) 948/2008&ors. ^ THE GOVT.OF NCT OF DELHI&ORS S Through' Mr.SushilDuttSalwanandMr.Neeraj Chaudhary,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 . .Petitioner Through: Mr.AnuragMangla,Advocate. GOVT OF N.C.T.OF DELHI&ORS. Through: Mr.SushilDuttSalwanandMr.Neeraj Chaudhary,Advocatesfor respondents [7] W.P.(C)8634/2007 SHIV STORE Through: Mr.PradeepGuptaand Mr.SureshBharti, Advocates for the petitioner. GOVT. OF N.C.T.OF DELHI&ORS. Through: Mr.SushilDuttSalwanand Mr.Neeraj Chaudhary,Advocatesfor respondents [8] W.P.(C)8635/2007 ICWTA DEVI ni, Through: Mr.PradeepGuptaandMr.SureshBharti, Advocates for the petitioner. W.P.(C) 948/2008 & ors. GOVT. OF N.C.T.OF DELIH&ORS. Through: Mr.SushilDuttSalwanandMr.Neeraj • Chaudhary,Advocatesfor respondents [9] W.P.(C)9456/2007&CM.No.17820/2007 AGGARWALSTORE Petitioner Through: Mr.PradeepGuptaandMr.SureshBharti, Advocates for the petitioner. GOVT. OFNCT OF DELHI& ORS Through: 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 Petitioner Through: Mr.Sanjay Goel, Advocate THE GOVT. OF NCT OF DELHI Through: Mr.Sushil Dutt Salwan and Mr.Neeraj Chaudhary, Advocates for respondents [11] W.P.(C) 8820/2007 PAWAN RATION STORE Petitioner Through: Mr.PradeepGuptaand Mr.SureshBharti, Advocates for the petitioner. GOVT. OF NCT OF DELHI & ORS Through: 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 Through: Mr.Sanjay Goel, Advocate. W.P.(C) 948/2008&ors. Page3 of16 THE GOVT. OF NCT OF DELHI&ORS Through: Mr.SushilDuttSalwanandMr.Neeraj Chaudhary,Advocatesfor respondents [13] W.P.(C)8714/2007&CM.No.16430/2007 DEVENDERGOEL Petitioner Through; GOVT. OF NCT OF DELHI&ORS Through: Mr.SushilDuttSalwanand Mr.Neeraj Chaudhary,Advocatesforrespondents [14] W.P.(C)8646/2007 JANTASTORE Petitioner Through: Mr.PradeepGuptaandMr.SureshBharti, Advocates for the petitioner. GOVT. OFN.C.T.OFDELHI& ORS. Through: Mr.SushilDuttSalwanand Mr.Neeraj .Chaudhary,Advocates for respondents [15] W.P.(C)8819/2007 &CM.No.16625/2007 SARASWATIGENERALSTORE Petitioner Through: Mr.PradeepGuptaand Mr.SureshBharti, Advocates for the petitioner. GOVT. OFNCT OF DELHI& ORS Through: Mr.SushilDuttSalwanandMr.Neeraj Chaudhary,Advocatesfor respondents [16] W.P.(C)8264/2007&CM.No.15614/2007 ANIL KUMARMISHRA Petitioner W.P.(C) 948/2008 & ors. Through: Mr.S.K.Chaudhary,Advocate, GOVT. OF N.C.T.OF DELHI&ORS. Through: Mr.SushilDuttSalwanandMr.Neeraj Chaudhary,Advocatesfor respondents [17] W.P.(C)8046/2007&CM.No.15855/2007 SUMERCHANDMOHANLAL • Through: Mr.SanjeevKumarGupta,Adv. GOVT. OF NCT OF DELHI Through; Mr.SushilDuttSalwanandMr.Neeraj 'Chaudhary,Advocatesfor respondents [18] W.P.(C)262/2008&CM.No.506/2008 SHRISHERSNGH Petitioner Through: Mr.AnilKumarJangra,Adv. GOVT. OF NCT OF DELHI&ORS • Through: Mr.SushilDuttSalwanandMr.Neeraj Chaudhary,Advocatesfor respondents [19] W.P.(C)8523/2007 MEHARCHANDBALKISHORE f Th Rh.rti 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&CM.No.16252/2007 ramDASS GUPTAPROP.OF MOHANSTORE Petitioner W.P.(C) 948/2008& ors. Through; Mr.SanjayGoel,Adv. GOVT. OF N.C.T.OF DELHI&ORS. Through: . Mr.SushilDuttSalwanandMr.Neeraj Chaudhary,Advocatesfor respondents [21] W.P.(C)8644/2007 RAM CHANDERPAWAR Petitioner Through: Mr.NitinSehgal,Adv. THE ASSISTANT COMMISSIONEROF FOOD AND SUPPLIESSOUTHDELHI Through: Mr.SushilDuttSalwanand Mr.Neeraj Chaudhary,Advocatesforrespondents [22] W.P.(C) 620/2008&CMAPPL. 1214/2008 RAM AVTAR KAILASH CHAND FPS NO 8184 CIRCLE 2 Petitioner Through: Mr.NitinSehgal,Adv. ASSISTANT COMMISSIONER FOOD AND SUPPLIES DELHI AND ANR Through: Mr.SushilDuttSalwanandMr.Neeraj Chaudhary,Advocates for respondents [23] W.P.(C) 291/2008 LAXMI STOREFPS Petitioner Through; Mr.Nitin Sehgal, Adv. THE COMMISSIONER FOOD AND SUPPLIES DELHI AND ANR. Respondents Through: Mr.SushilDuttSalwariand Mr.Neeraj Chaudhary,Advocates for respondents W.P.(C) 948/2008 & ors. [24] W.P.(C) 5505/2008&CMAPPL. 11408/2009 DAYA PRAKASH GUPTA Through: Mr. SanjayMishra,Advocate Petitioner STATE ANDORS. Through: Mr.SushilDuttSalwanandMr.Neeraj Chaudhary,Advocatesfor respondents [25] W.P.(C)8645/2007 RADHEYSHYAMANAND Petitioner Through: Mr.PradeepGuptaandMs.SoniaSharma, Advocates for petitioner GOVT. OF N.C.T. OF DELHI AND ORS. Through: Mr.SushilDuttSalwanandMr.Neeraj Chaudhary,Advocatesfor respondents [26] W.P.(C)530/2008 CHUNILAL Through; Petitioner Mr.PradeepGuptaand Ms.SoniaSharma, Advocates for petitioner GOVT. OF N.C.T. OF DELHI ANDORS. Through: Mr.SushilDuttSalwanand Mr.Neeraj Chaudhary,Advocatesfor respondents [27] W.P.(C) 30/2009 M/S SHREEDURGASTORE Petitioner Through: Mr.PradeepGuptaandMs.SoniaSharma, Advocates for petitioner GOVT. OF N.C.T. OF DELHI W.P.(C) 948/2008 & ors. Page 7of 16 ANDORb, h: Mr.SushilDuttSalwanandMr.Neeraj Chaudhary,Advocatesfor respondents [28] W.P.(C)9502/2007 TILAK RAJ GOVT.OFN.C.T.OFDELHI ANDORS, Through-Mr.SushilDuttSalwanandMr.Neeraj Chaudhary,Advocatesfor respondents CORAM; HON'BLEMR. JUSTICEG.S.SISTANI f:.S.STSTANT.-T. (ORAL) Counsel for the partiessubmitthat facts in all these matters are smiilar. All thesepetitionsraiseacommonlegalquestion,which can be disposed ofby a commonorder.

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

¶3As agreed, the facts ofthe Writ PetitionNo.948/2008are bemg noticed. ThepetitionerhasbeenrunningaFairPriceShopsincethe year 1987. On

19.3.1997,the shopwasvisitedand inspectedby officialsofdepartmentof respondentand someirregularitieswerefound. Ashowcausenotice-cum-suspension memo dated 31.3.1997 was issued by the then Assistant Commissionerfor violation,as mentionedand simultaneouslyan FIRwas lodgedagainstthe authorisation/licenceholder. Replyto the show cause noticewas submittedand hearingwas grantedby the Department. Upon hearing,the AssistantCommissioner,Food and Supphespassed an order W.P.fC)948/2008& ors. Petitioner Thi"ough: Mr.SanjayGoel,Advocate \ dated 25.4.1997 forfeiting entire security amount of Rs.500/- and thereafterrestoredthe hcenceofthe petitioner. Afterpassingofthe order, the AssistantCommissionerdid not resort to any further penal action againsttliepetitionerfor cancellationofthe fairpriceshop. Thereafter,the petitionercontinuedto can^on,its businessonthe basisofUcencegranted by therespondent,withoutany complaintfromthecard-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/-. Intheyear2007,afteragap ofmorethan 10 years,afresh show cause noticewas issuedon 10.9.2007callingupon thepetitionerto showcauseas to whythehcencebe notcancelled.

¶5After hearing, 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 further submitted that while passmg the judgment,the SpecialCourthad made it clearthatthe orderofconviction couldnot affectthe operationofthe fair priceshop.

¶7Attentionofthis courthas beendrawnto 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 mthe sum ot Rs 5000/-with asecurityoflike amountand to appearand receive sentencewithinaperiodof 1yearswhenevercalledupon to do so and duringtimeto keep peaceand be ofgoodbehaviour. Accused, SurinderKumar shall also pay Rs.500A as costs of proceedings. This shouldnot affectoperationofF.P.S." .8. It is submittedby counselfor the petitionersthatoncethe respondentshad W.P.(C)948/2008& ors. I issuedshow causenotice-cum-suspensionmemo dated31.3.1997and 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 ofSection12 ofthe Probation of Offenders Act, 1958, petitioners do not suffer any disqualification.The third argumentofcounselfor the petitionersis that the show cause notice issued and cancellationorder passed is liable to be quashed, as firstly the action initiatedhas become stale; and secondly, violation, if any, of the petitioners stands condoned as licences were renewedsubsequentlyfor 10years 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 ternis 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 directionsor 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 orderinwritingby 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 ofthe terms and conditionsof a licenceorthe 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. P.(C) 948/2008&ors. 10of16

(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 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 licenceofthe petitioner: ''7. Cancellation of authorization upon Conviction.- Notwithstandinganything contained in this clause where an authorized wholesaler or a fair price shop holder has been convictedby a court of law in respectof 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. " 1:1. Counselfor 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 V

¶12In responseto the above,the counselfor the petitionersstatedthat in case the respondentswereto relyuponClause6ofDelhiKeroseneOil (Export and Price)ControlOrder1962 and Clause7ofthe orderdated 12.1.1981, the same should have been invokedby them within a shortestperiodof 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 estoppedfrom relying on Clause 6 of Delhi KeroseneOil (Exportand Price)ControlOrder 1962 and Clause7ofthe Orderdated 12.01.1981which would deem to have been given up by the respondents,by virtueoftheirconduct;and on the contrary,vestedrights have been createdin favour of the petitionersby continuousrenewal of licenses,whichcannotbe takenaway 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 carriedout 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 petitionerswere renewed from time to time and only after a gap ofmore than 10 years, firesh show cause for cancellationof the Fair Price Shop/KODswas issued and the licences were cancelledas accordingto the respondent,petitionershad incurreda disqualificationhavingbeen convictedby a criminalcourt, in terms of the 1962 and 1981 Orders.

¶15Admittedly,actionwas taken by the AssistantCommissioneragainstthe petitionersand a penaltyof forfeitureof securityamount was imposed. No furtheractionagainstthe petitionerswas takenfor more than a period W.P.(C) 948/2008&ors. 12of16 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 condoned the acts of the wrongdoer and 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 heldas 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.In Harcourtv. WhiteSr.JohnRommillysaid: "It is important to distinguish mere negligence and acquiesce. Therefore,acquiescenceis onefactofdelay.Iftheplaintiffstoodby Jmowinglyand let the defendantsbuildup an importanttrade until it had become necessaryto crush it, then the plaintiffswould 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 inferenceofa 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. petitionershavereasonablyand fairlygivenarightto petitioners.Further, the respondentsin the presentpetitionshave givenareasonablebeliefto thepetitionersthattheirrightsandtitleis 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 manycaseshas onlytakenadministrative actionand passedordersofforfeitureof securitydeposit,but decidednot to talce extremeactionofcancellationoflicence.At thisbelatedstage,the actionof the respondenthas becomestale 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 ofthe 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 of the Probationof OffendersAct shall not suffer any disqualification. In the case ofGulzar v. State ofM.P., (2007) 1 SCC 618, it has been held as under: W.P.(C) 948/2008 & ors. « 2) ''....WhileSection 12 ofthe PO Act states that the personfound guiltyofan offenceand dealtwith underSection3or 4ofthe PO Act shall not suffer disqualification, if any, attached to the convictionofan offenceunderany law...."

¶20Respondents counsel has placed rehance upon the report of Justice Wadhwa Committeeconstitutedby the SupremeCourt of India. Due to the aforesaidfacts and observations,respondentscannotat 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 withoutprejudiceto the rights of the petitioners. Giventhat the authorityhas itselfrenewedto license(s)ofthe petitioners, they themselveshave condonedthe earlier convictions.Further by not acting within a reasonableperiod oftime and by agreeingto renew the licensesinthe name ofpetitionershave giventhe petitionersa reasonable cause to believethat a right has accrued in their favour. Petitionersare also entitled to the benefit of Section 12 of the Probation of Offenders Act. Accordingly,the impugnedordersofshow causenotices/cancellation orders are quashed.

¶22Rule is made absolute. All the petitions and the applications stand disposedofinaboveterms.Partiesshallbeartheirown costs.

¶23It is informedthat in the case of WP(C)No.9502/2007in additionto 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.9502/2007shall be W.P.(C) 948/2008&ors. 15of16 decided unaffected by the orders passed by this court in the present proceedings.

G.S. SISTANI, J. DECEMBER 17, 2013 'ssn' JV.P.(C) 948/2008&ors. 16of16

* IN THE HIGH COURT OF DELHI AT NEW DELHI % Judgment Delivered on: 17.12.2013 + W.P.(C) 8819/2007 & CM.No. 16625/2007 SARASWATI GENERAL STORE Petitioner Through: Mr.Pradeep Gupta and Mr.Suresh Bharti, Advocates for the petitioner. / •; GOVT. OF NCT OF DELHI & ORS Through: 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].