Tilak Raj v. Govt. of N.C.T. of Delhi & Ors

G.S. SISTANI, J. DECEMBER 17, 2013 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 Through: Mr.NitinSehgal,Advocate • TI-IEASSISTANCECOMMISSIONERFOOD & SUPPLIES Through: Mr.SushilDuttSalwanand Mr.Neeraj Chaudhary,Advocatesfor respondents [2J W.P.(C)5157/2008&CM.No.9860/2008 AGGARWALSTORE Through: Mr.PradeepGuptaandMr.SureshBharti, Advocates for petitioner t GOVT. OF NCT OF DELHI & ANR Through: Mr.SushilDuttSalwanandMr.Neeraj Chaudhary,Advocates for respondents [3] W.P.(C)8386/2007& CM No.15850/2007 MAHENDER KUMAR Through: Mr.AnuragMangla,Advocate GOVT. OF N.C.T. OF DELHI & ORS. Through: Mr.SushilDuttSalwanand Mr.Neeraj (jhaudhary,Advocatesfor respondents [4] W.P.(C) 8478/2007 SHOBHA KUMARI Through: Mr.Sanjay Goel, Advocate. W.P.(C) 948/2008&ors. ^ THE GOVT. OF NCT OF DELHI&ORS 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 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.PradeepGuptaandMr.SureshBharti, Advocates for the petitioner. GOVT. QF N.C.T.OF DELHI&ORS. Through; Mr.SushilDuttSalwanandMr.Neeraj Chaudhary,Advocatesfor respondents [8] W.P.(C)8635/2007 KANTADEVI uu Through: Mr.PradeepGuptaandMr.SureshBharti, Advocates for the petitioner. W.P.fC)948/2008& ors. GOVT. OF N.C.T. OF DELIH& ORS. Through: Mr.SushilDuttSalwanand Mr.Neeraj Chaudhary,Advocates for respondents [9] W.P.(C)9456/2007& CM.No.17820/2007 AGGARWAL STORE Through: Mr.PradeepGuptaand Mr.SureshBharti, Advocates for the petitioner. GOVT. OF NCT OF DELHI & ORS Through: Mr.SushilDutt SalwanandMr.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 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 Through: Mr.Pradeep Gupta and Mr.Suresh Bharti, Advpcates 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 Through: Mr.Sanjay Goel, Advocate. W,P,(C) 948/2008&. ors. ^ r-THE GOVT. OF NCT OF DELHI&ORS Through: Mr.SushilDuttSalwanand Mr.Neeraj Chaudhary,Advocatesfor respondents [13] W.P.(C)8714/2007&CM.No.16430/2007 DEVINDERGOEL Through; GOVT. OF NCT OF DELHI&ORS Through: Mr.SushilDuttSalwanand Mr.Neeraj Chaudhary,Advocatesforrespondents [14] W.P.(C) 8646/2007 JANTASTORE Through: Mr.PradeepGuptaand Mr.SureshBharti, Advocates for the petitioner. GOVT. OFN.C.T. OFDELHI& ORS. Through: Mi-.SushilDuttSalwanandMr.Neeraj Chaudhary, Advocates for respondents [15] W.P.(C)8819/2007 & CM.No.16625/2007 SARASWATI GENERAL STORE Through: Mr.PradeepGuptaand Mr.SureshBharti, Advocates for the petitioner. GOVT. OF NCT OF DELHI& ORS Thi-ough: Mr.SushilDuttSalwanand Mr.Neeraj Chaudhary,Advocatesfor respondents [16] W.P.(C)8264/2007& CM.No.15614/2007 ANIL KUMAR MISHRA W.P.(C) 948/2008 & ors. Through; Mr.S.K.Chaudhary,Advocate. GOVT OF N.C.T.OF DELHI&ORS. Through: Mi".SushilDuttSalwanandMr.Neeraj Chaudhary,Advocatesfor respondents [17] W.P.(C)8046/2007&CM.No,15855/2007 SUMERCHANDMOHANLAL 7''ThT Through: Mr.SanjeevKumarGupta,Adv. GOVT. OF NOT OF DELHI Through: Mr.SushilDuttSalwanandMr.Neeraj Chaudhary,Advocatesfor respondents [18J W.P.(C).262/2008&CM.No.506/2008 SHRI SHERSNGH Through: Mr.AnilKumarJangra,Adv. GOVT. OF NCT OF DELHI& ORS • Thi-ough: Mr.SushilDuttSalwanandMr.Neeraj Chaudhary,Advocatesfor respondents [19] W.P.(C)8523/2007 MEHARCHANDBAL KISHORE , Through: Mr.PradeepGuptaandMr.SureshBharti, Advocates for the petitioner. GOVT. OF NCT OF DELHI & ORS • Through: Mr.SushilDuttSalwanand Mr.Neeraj Chaudhary,Advocatesfor respondents [20] W.P.(C)8628/2007&CM.No.16252/2007 ram DASS GUPTAPROP. OF MOHANSTORE W.P.(C) 948/2008& ors. V 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 Through: Mr.NitinSehgal,Adv. THE ASSISTANT COMMISSIONER OF FOOD AND SUPPLIESSOUTHDELHI Through: 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 Through: Mr.Nitin Sehgal,Adv. ASSISTANT COMMISSIONER FOOD AND SUPPLIES DELHI AND ANR .....Respondent Through: Mr.SushilDuttSalwanand Mr.Neeraj Chaudhary,Advocates for respondents [23] W.P.(C) 291/2008 LAXMI STOREFPS Through: Mr.Nitin Sehgal,Adv. THE COMMISSIONER FOOD AND SUPPLIES DELHI AND ANR. Respondents ,Through: Mr.SushilDuttSalwanand Mr.Neeraj Chaudhary, Advocates for respondents W.P.(C)948/2008&ors. 6of16 [24] W.P.(C) 5505/2008 CMAPPL. 11408/2009 DAYAPRAKASHGUPTA Through: Mr. SanjayMishra,Advocate STATE ANDORS. Through; Mr.SushilDuttSalwanandMr.Neeraj Chaudhary,Advocatesfor respondents [25] W.P.(C)8645/2007 RADHEY SHYAM ANAND GOVT. OF N.C.T. OF DELHI ANDORS. [26] W.P.(C)530/2008 CHUNILAL Through; Through: Mr.PradeepGuptaandMs.SoniaSharma, Advocates for petitioner • Through; Mr.SushilDuttSalwanandMr.Neeraj Chaudhary,Advocatesforrespondents Mr.PradeepGuptaand Ms.SoniaSharma, Advocates for petitioner GOVT. OF N.C.T. OF DELHI AND ORS. Through; Mr.SushilDuttSalwanand Mr.Neeraj Chaudhary,Advocatesfor respondents [27] W.P.(C)30/2009 M/S SHREEDURGASTORE Through: Mr.PradeepGuptaand Ms.SoniaSharma, Advocates for petitioner GOVT. OF N.C.T. OF DELHI W.P.(C) 948/2008 & ors. Page 7of 16 ANDORS. h: Mr.SushilDuttSalwanandMr.Neeraj Chaudhary,Advocatesfor respondents [28] W.P.(C)9502/2007 tilakraj Through; Mr.SanjayGoel,Advocate GOVT.OFN.C.T.OFDELHI AND ORS. Tjirough: Mr.SushilDuttSalwanandMr.Neeraj Chaudhary,Advocatesfor respondents CORAM: HON'BLEMR. JUSTICEG.S.SISTANI ? f; S.STSTANTr.T.(ORAL)

¶1Counsel for the partiessubmitthat facts in all these matters are suniiar. All thesepetitionsraiseacommonlegal question,which can be disposed ofby a commonorder.

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

¶3As agreed,the facts of the Writ PetitionNo.948/2008are being noticed. Thepetitionerhas beenrumiingaFairPriceShopsincetheyear 1987. On

19.3.1997,the shopwas visitedand inspectedby officialsofdepartmentof respondentand someirregularitieswere found. Ashowcausenotice-cum-suspension memo dated 31.3.1997 was issued by the then Assistant Commissionerfor violation,as mentionedand simultaneouslyan FIRwas lodgedagainstthe authorisationyiicenceholder. Reply to the show cause noticewas submittedand hearingwas grantedby the Department. Upon hearing,"the AssistantCommissioner,Food and Suppliespassedan order W.P.(C)948/2008& ors. dated 25.4.1997 forfeiting entire security amount of Rs,500/- and tliereafterrestoredthe licenceofthe petitioner. Afterpassingofthe order, the AssistantCommissionerdid not resort to any further penal action againstthepetitionerfor cancellationofthe fairpriceshop. Thereafter,the petitionercontinuedto caiTyon its businesson the basisoflicencegi'anted by therespondent,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/-. Intheyear2007,afteragap ofmorethan 10 years,afresh show causenoticewas issuedon 10.9.2007callmgupon thepetitionerto showcauseasto why the licencebe notcancelled.

¶5After hearing, by an impupiedorder dated 1,2.2008the hcence of the petitionerhas beencancelled. It is acommoncase ofthe petitionersthat the impugnedorder of cancellationpassed by the respondentis unfair, unjustandcontraryto lawand Uableto be setaside.

¶6Counsel for the petitioners farther 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,Idirectthat he shall be releasedon enteringinto apersonalbond mthe sum of Rs 5000/-withasecurityoflikeamountand to appearand receive sentencewithinaperiodof1yearswhenevercalledupon to do so and duringtimeto keep peaceand be ofgoodbehaviour. Accused, SurinderKumar shall also pay Rs.SOOA as costs of proceedings. This shouldnot affectoperationofF.P.S."

¶8It is submittedby counselfor thepetitionersthat oncetherespondentshad W.P.(C)948/2008& ors. Vo 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 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 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 licencee or 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 prejudiceto the provisionsof sub-clause 1 if the Commissioner is satisfied that the licensee has contravened any of the tenns 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.P.(C)948/2008&ors. ^"8^10of16

(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,if any, filed againstsuch convictionis dismissedand whereno suchappealisfileduntilthe 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.- 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. "

¶11Counselfor the respondentsubmitsthat the delay is procedural,as in the period of 18 years, 24 Assistant Commissioners'had been transferredin one zone, and in another zone 12 Assistant Commissioners were transfeiTed in 10 years. W.P.(C) 948/2008&ors. Page11 of 16

¶12In responseto the above,the counselfor the petitionersstatedthatin case the respondentswere to relyuponClause6ofDelhiKeroseneOil (Export and Price)ControlOrder 1962 and Clause7ofthe orderdated 12.1.1981, the same should have 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 (Exportand Price) ControlOrder 1962 and Clause7 ofthe Order dated 12.01.1981which would deem to have been given up by the respondents,by virtueoftheir conduct;and on the contrary,vestedrights have been createdin favour of the petitionersby continuousrenewal of licenses,whichcannotbetakenaway at this 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 cancellationof the Fair Price Shop/KODswas issued and the licences were cancelled as accordingto the respondent,petitionershad incurreda disqualificationhavingbeen convictedby a criminalcourt, in terms of the 1962 and 1981 Orders.

¶15Admittedly,action was taken by the AssistantCommissioneragainstthe petitionersand a penalty of forfeitureof securityamount was imposed. No furtheractionagainstthe petitionerswas taken for more than a period fV.F.(C) 948/2008&ors. 12of16 ,s of 10 years. Thus in my viewhavingnottakenactionfor 10 yearsand on the contraryhavingrenewedlicencesof the petitionerswould amountto condoningthe acts ofthe wrong doer; and after 10 years,the respondents are estoppedfrom takingactionagainstthe petitionershavmgwaivedoff their rights by their own conduct, and the respondentsby their own act have condonedthe 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.InHarcourtv. WhiteSr.JohnRommillysaid: "It is important to distinguish mere negligence and acquiesce. Therefore,acquiescenceis onefactofdelay.Iftheplaintiffstoodby Imowinglyand 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 completedefence as was laiddown in Mouson (J.G.) & Co. v. Boehm. The acquiescence must be such as to lead to the inferenceofa licenseto create a new rightin the defendantas was laiddown in Rodgersv. Nowill.

¶17Accordingly,the respondentshave not only sleptover its rightsand, thus, waivedit but also by agreeingto transferthe licensesin the name ofthe W.P.(C) 948/2008&ors. 13 of16 petitionershave reasonablyand fairlygivenarightto petitioners.Further, the respondentsin the presentpetitionshave givenareasonablebeliefto the petitionersthattheirrightsandtitleis 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 administrativeactionlicenceof authorizationis also to be cancelled,then the respondent/departmentwouldhave been well withinits rights to take appropriateaction within a reasonableperiod of time. Whereas in the presentcases,the departmentin many caseshas onlytakenadministrative • actionand passedordersofforfeitureofsecuritydeposit,but decidednot to take extremeactionof cancellationof licence.At this belatedstage,the actionofthe respondenthas become stale and more so the authorization of person who was actually convicted has 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 naiTation of 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 incuiTed the disqualificationofgrantoflicense/authorizationdue to conviction,as it is settledlaw 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: W.P.(C) 948/2008 & ors. ''....WhileSection 12 of the PO Act states that the personfound guiltyofan offenceand dealtwith underSection3 or4 ofthe PO Act shall not suffer disqualification, if any, attached to the convictionofan offenceunder 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 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 published acts, in some cases, were never committed by the present license holders. A party is bound to act reasonablymore so a statutory,authority.The authoritywas under a duty to act reasonably and without prejudice to the rights of the petitioners. Given that the authorityhas 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 f 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 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. Page 15 of16 decided unaffected by the 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) 9502/2007 TILAK RAJ Through: Mr.Sanjay Goel, Advocate GOVT. OF N.C.T. OF DELHI AND 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^ 'ssn'