Rikhab Chand Prop. of M/S J.N.U. Campus Store v. The Govt. of NCT of Delhi

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 Mr.NitinSehgal,Advocate Tl-IEASSISTANCECOMMISSIONERFOOD &SUPPLIES Mr.Sushi!DuttSalwanand Mr.Neeraj fchaudhary,Advocatesfor respondents [2] W.P.(C)5157/2008&CM-No.9860/2008 AGGARWALSTORE Mr.PradeepGuptaand Mr.SureshBharti, Advocates for petitioner GOVT. OFNCT OF DELHI& A.NR Mr.SushilDuttSalwanand Mr.Neeraj Chaudhary,Advocatesfor respondents [3] W.P.(C)8386/2007& CM,No.15850/2007 MAHENDER KUMAR Mr.AnuragMangla,Advocate GOVT. OF N.C.T. OF DELHI & ORS. Mr.SushilDuttSalwanand Mr.Neeraj Chaudhary,Advocates for respondents [4] W.P.(C) 8478/2007 SHOBHAKUMARI ' Mr.Sanjay Goel, Advocate. W.P.(C)948/2008&ors. " Page1of16 THE GOVT. OF NCT OF DELHI&ORS Through; Mr.SushilDuttSalwanandMr.Neeraj Chaudhary,Advocatesfor respondents [5] W.P.(C)8554/2007 ASHOKPROVISIONSTORE Mr.PradeepGuptaand Mr.SureshBharti, . Advocates for the petitioner. GOVT. OF N.C.T.OF DELHI&ORS. Mr.SushilDuttSalwanand Mr.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.SushilDuttSalwanandMr.Neeraj Chaudhary,Advocatesfor respondents [7] W.P.(C)8634/2007 , smv STORE Mr.PradeepGuptaand Mr.SureshBharti, Advocates for the petitioner. . GOVT. OF N.C.T.OF DELHI&ORS. Mr.SushilDuttSalwanandMr.Neeraj Chaudhary,Advocatesforrespondents [8] W.P.(C)8635/2007 KANTADEVI , ' ' Mr.PradeepGuptaandMr.SureshBharti, Advocates for the petitioner. W.P.(C)948/2008&ors. Page2of16 GOVT. OF N.C.T. OF DELIH & ORS. • Mr.SushilDuttSalwanandMr.Neeraj Chaudhary, Advocates for respondents [9] W.P.(C)9456/2007& CM.No.17820/2007 AGGARWAL STORE Mr.PradeepGuptaandMr.SureshBharti, Advocates for the petitioner. GOVT. OF NCT OF DELHI & ORS Mr.SushilDutt Salwanand Mr.Neeraj Chaudhary, Advocates for respondents [10] W.P.(C) 9616/2007 & CM.No.18087/2007 RIKTIAB CHAND PROP. OF M/S J.N.U. CAMPUS STORE Mr.Sanjay Goel, Advocate THE GOVT. OF NCT OF DELHI 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 Through; Mr.SushilDuttSalwanandMr.Neeraj Chaudhary,Advocatesfor respondents [13] W.P.(C)8714/2007&CM.No.16430/2007 DEVINDERGOEL GOVT. OF NCT OF DELHI & ORS Mr.SushilDuttSalwanand Mr.Neeraj Chaudhary,Advocates for respondents [14] W.P.(C) 8646/2007 JANTA STORE Mr.PradeepGuptaand Mr.SureshBharti, Advocates for the petitioner. GOVT. OF N.C.T. OF DELHI & ORS. Mr.SushilDutt SalwanandMr.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 Through; Mr.SushilDutt SalwanandMr.Neeraj Chaudhary, Advocates for respondents [16] W.P.(C)8264/2007& CM.No.15614/2007 ANIL KUMAR MISHRA W.P.(C)948/2008&ors. Page4of16 Through; Mr.S.K.Chaudhary,Advocate. GOVT. OF N.C.T.OF DELHI&ORS. Mr.SushilDuttSalwanandMr.Neeraj Chaudhary,Advocatesfor respondents [17] W.P.(C)8046/2007&CM.No.15855/2007 SUMERCHANDMOHANLAL Mr.SanjeevKumarGupta,Adv. GOVT. OF NCT OF DELHI Mr.SushilDuttSalwanandMr.Neeraj Chaudhary,Advocatesfor respondents [18] W.P.(C)262/2008&CM.No.506/2008 H[ Mr.AnilKumarJangra,Adv. SHRI SHERSNGH GOVT. OF NCT OF DELHI&ORS Mr.SushilDuttSalwanand Mr.Neeraj Chaudhary,Advocatesfor respondents [19] W.P.(C)8523/2007 MEHARCHANDBAL KISHORE Mi'.PradeepGuptaand Mr.SureshBharti, Advocates for the petitioner. GOVT. OF NCT OF DELHI &ORS 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. Mr.SanjayGoel,Adv. GOVT. OF N.C.T.OF DELHI&ORS. Mi-.SushilDuttSalwanandMr.Neeraj Chaudhary,Advocatesfor respondents [21] W.P.(C)8644/2007 RAM CHANDERPAWAR Mi-.NitinSehgal,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.Nitin Sehgal,Adv. ASSISTANT COMMISSIONER FOOD AND SUPPLIES DELHI AND ANR Mr.SushilDuttSalwanandMr.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. ^''Z [24] W.P.(C) 5505/2008&CMAPPL. 11408/2009 DAYA PRAKASH GUPTA Through; Mi*. SanjayMishra,Advocate STATE AKDORS. Mr.SushilDuttSalwanandMr.Neeraj Chaudhary,Advocatesforrespondents [25] W.P.(C)8645/2007 RADHEYSHYAMANAND Mr.PradeepGuptaandMs.SoniaSharma, Advocates for petitioner GOVT. OF N.C.T. OF DELHI AND ORS. Mr.SushilDuttSalwanandMr.Neeraj Chaudhary,Advocatesfor respondents [26] W.P.(C)530/2008 CHUNI LAL 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 ••••• Petitioner 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 ^Tr A AT TILAK RAJ ^ 1 Aj + Mr.SanjayGoel,Advocate GOVT. OFN.C.T. OFDELHI AND ORS Mr.SushilDuttSalwanandMr.Neeraj Chaudhary,Advocatesfor respondents CORAM: HON'BLEMR. JUSTICEG.S.SISTANI G.S STSTANT.'.T.(ORAL)

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

¶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 sincethe year 1987. On

19.3.1997,the shopwas visitedandinspectedby officialsofdepartmentof respondentand some irreguferitieswerefound. Ashowcausenotice-cum-suspension memo dated 3;i:.3.1997 was issued by the then Assistant Commissionerfor violation,as mentionedand simultaneouslyan FIR was lodgedagainstthe authorisation/licenceholder. Reply to the show cause noticewas submittedand hearingwas grantedby the Department. Upon hearing,the AssistantCom|iiissioner,Food and Suppliespassedan order l>, W.P.(C) 948/2008& ors. dated 25.4.1997 forfeiting entire security amount of Rs.500/- and thereafterrestoredthe licenceofthe petitioner. Afterpassingofthe order, the Assistant Commissionerdid not resort to any ftarther penal action againstthepetitionerfor cancellationofthe fairpriceshop. Thereafter,the petitionercontinuedto carryon its businesson the basisoflicencegranted 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,though convicted,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 impugnedorder of cancellationpassed by the respondentis unfair, unjustand contraryto law and liableto be setaside.

¶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 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 5000/-withasecurityoflike 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 affectoperationofF.P.S."

¶8It is submittedby counselfor the petitionersthatoncethe respondentshad W.P.(C) 948/2008 & ors. 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 renewed subsequentlyfor 10years 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 tenns 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 suspendedby orderiri writingby 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 tenns 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 cancellationby order in writing cancel his licence and shall forward a copy thereof to the licensee. W.P.(C) 948/2008&ors. Page10of16

(3) Notwithstandinganything 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 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 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.- 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 conti^aventionof any of theprovisions 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 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 petitionersstatedthat in case the respondentswereto relyupon Clause6ofDelhiKeroseneOil (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 estoppedfrom relying on Clause 6 ofDelhi KeroseneOil (Exportand.Price)ControlOrder 1962 and Clause7 ofthe Order dated 12.01.1981whichwould 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 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 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 thfe Fair Price Shop/KODswas issued and the licences were cancelled as ^accordingto the respondent,petitionershad incurredadisqualificationheavingbeen convictedby acriminalcourt, in tenns of the 1962 and 1981 Orders.

¶15Admittedly,action was taken by the AssistantCommissioneragainstthe petitionersand a penaltyofforfeitureofsecurityamount was imposed. No furtheractionagainstthe petitionerswas takenfor more than a period ! W.P.(C)948/2008&ors. ' of 10 years. Thus mmy viewhavingnottakenactionfor 10 years and 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 changing their position.

¶16It is settledlaw thata statutoryauthorityis 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. 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 Harcourt v. WhiteSr.John Rommillysaid: It is important to distinguish mere negligence and acquiesce." Therefore,acquiescenceis onefactofdelay.Iftheplaintiffstoodby , knowinglyand let the defendantsbuildup an important'trade 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 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 rightin the defendantas was laiddown in Rodgersv. Nowill.

¶17Accordingly,the respondentshave not only sleptover its rightsand, thus, waivedit but also by agreeingto transferthe licensesinthe name of the W.P.(C) 948/2008 & ors. 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 Imowledge 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/departmentwould have been well withinits rightsto take appropriateaction within a reasonableperiod of time. Whereas in the presentcases,the departmentin many caseshas onlytakenadministrative action,and passedordersofforfeitureofsecuritydeposit,but decidednot to take extremeactionof cancellationof licence.At this belatedstage,the actionofthe 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 naiTation of facts would show that the departmenthas been extremely careless and casual in enforcingthe terms of the license, in accordance with law, and, thus,respondents'actioncannotbe sustained.

¶19Moreover, in my view the petitioners have not incurred the disqualificationofgrantofhcense/authorizationdue to conviction,as it is settled law that a person releasedon probationunder Section 12 of the Probationof OffendersAct shall not suffer any disqualification. In the case of Gulzar v. State of M.P., (2007) 1 SCC 618, it has been.heldas under: fV.P.(C) 948/2008 & ors. ''....While Section 12 of the PO Act states that the personfound guiltyofan offenceand dealtwith underSection3 or 4 ofthe PO Act shall not suffer disqualification, if any, attached to the convictionofan ojfenceunder 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 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 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 reasonableperiod of time and by agreeingto renew the licenses in the name of petitionershave 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 impugnedorders of show causenotices/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.9502/2007shall be W.P.(C)948/2008&ors. Page15of16 '\ decided unaffected by the orders passed by this court in the present proceedings. G.S. sistaniTx DECEMBER 17, 2013 'ssn' fV.F.fQ 948/2008 & ors.

/ * IN THE HIGH COURT OF DELHI AT NEW DELHI % Judgment Delivered on: 17.12.2013 + 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 DELHI 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' -r.