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Judgment
Government Order No. 27CAPD of 2007 dated 13.02.2007, has the effect of cancelling Kerosene Oil License of the Members of the
petitionerAssociation.
PetitionerAssociation has called the said Government Order in question inter alia on the grounds that the it suffers from lack of application of
mind, in as much as respondents have not individually considered the cases of the members of petitionerAssociation and have not afforded an
opportunity of hearing to each of the license holders. It is pleaded in the writ petition that the allegations on which the impugned order has been
passed, are not supported by any material or evidence, neither any survey on scientific lines has been conducted to sustain such factual findings. It
is also pleaded that respondents while passing the impugned order have clubbed unequal's, which renders the impugned order arbitrary and
discriminatory violating the constitutional guarantees available to the petitioner under Articles 14 and 19 of the Constitution of India. It is further
pleaded that grounds on which impugned order has been passed are non existent. It is also pleaded the none of the terms and conditions of the
licence have been violated by any of the member of the petitionerAssociation.
On notice, respondents appeared. Counter affidavit is filed.
Counter affidavit is more or less based on the averments contained in the order impugned in the writ petition.
Heard learned counsel for parties. Considered the matter.
Learned counsel for petitionerAssociation while referring to the grounds mentioned in the impugned order stated that before coming to any
conclusion, it was duty cast on the respondents to put the petitioners on notice. Learned counsel further submitted that respondents having failed to
comply with the minimum requirement of principles of natural justice, thus, impugned order stands vitiated. Learned counsel further submitted that
the members of the petitionerAssociation are valid licence holders, which licences have been issued to them in accordance with the mandate of
rules notified vide SRO No. 79 of 1974 dated 25.02.1974 which rules are called J&K Kerosene Oil (Licensing) Order, 1974 (for short ""order of
1974""). Learned counsel also made a pointed reference to proviso to Rule 7 of the order of 1974 and submitted that in view of the rules made by
the respondents themselves, before passing the impugned order, they were duty bound to give a reasonable opportunity to the members of the
petitioner association to state their case. Learned counsel also submitted that the impugned order suffers from lack of application of mind, in as
much as, the respondents have not identified as to on which ground the license of the individual license holders has been cancelled. Learned
counsel referred to and relied upon the judgment of the Hon'ble Supreme Court in case titled ""Onkar Lal Bajaj and ors. (Appellants) vs. Union of
India and anr. (Respondents)"" reported in (2003) 2 SC 673. In the said case, the allotments of the retail outlets distributorship and dealership of
petroleum products were cancelled, on the basis of newspapers report. The Hon'ble Supreme Court held that the action of the authority therein to
be arbitrary and discriminatory and struck down the action of the authorities concerned.
Learned counsel for respondents submitted that some of the Kerosene Oil license holders are not functioning properly and were selling the
Kerosene oil allotted to them on the basis of license issued to them in black market. Learned counsel further submitted that Division Bench of this
Court in one of the cases, on the allegations that the Kerosene Oil is being mixed with Petrol and Diesel, issued certain directions to the
respondentState which persuaded the respondents to constitute a committee to look into the matter. Learned counsel also referred to AnnexureA
of the counter affidavit to state that a general public notice was issued is daily newspaper for the information of the public in general and the
concerned in particular to convey/any relevant information with regard to the existence/genuiness and working of Kerosene Oil Depots. The said
public notice is reproduced as under:
Government of Jammu and
Kashmir
Consumer Affairs and Pubic
Distribution Department
Civil Secretariat.
I, J. L. Bhat (KAS), Chairman of the Committee constituted vide Government Order No. 17CAPD of 2007 dated 25.01.2007 do hereby notify
for the information of the general public that the Department of the CAPD, Jammu has initiated an enquiry about genuineness of Kerosene Oil
dealers in Jammu City in view of various Complaints regarding black marketing, Hording/ Profiteering of K. Oil in order to stream line the
distribution system of K. Oil in the city and facilitate the enquiry smoothly, the public in general and the concerned in particular are requested to
convey any relevant information and with regard to the existence/ genuineness and working of the K. Oil Depots as per list appended as
Annexure'A' to the undersigned within five days from the date of issuance of this notification during office hours.
No. CAPD/PSAS/204/06 Sd/(J. L. Bhagat)
Dated: 03/02/2007
Addl. Secretary to Government
CAPD Deptt/ Chairman
Learned counsel for respondents further submitted that in pursuance of the enquiry conducted, more than 700 Kerosene licenses were
cancelled. He further submitted that department is catering to the requirements of the consumers. Learned counsel also submitted that a criminal
case is pending investigation against the petitioners (herein) for the alleged black marketing of the Kerosene Oil. Learned counsel further submitted
that as the members of the petitionerAssociation would sell Kerosene Oil in the black market, it was for these reasons that their licenses have been
ordered to be cancelled. Learned counsel further submitted that members of the petitionerAssociation have violated the terms and conditions of the
license.
There is no dispute about the fact that member of the petitionerAssociation were license holders which were issued by the competent authority
in accordance with the Order of 1974.
The right to carry on trade business, occupation is a fundamental right guaranteed under Article 19(l)(g) of the Constitution of India as applicable
to the State of J&K.
The State, however, has power to place reasonable restrictions on the exercise of such fundamental right in terms of clause 6 of Article 19 of
the Constitution of India by making law.
The State has made law called Essential Commodities Act, 1955, to place reasonable restrictions on the exercise of fundamental rights
guaranteed under Article 19 of the Constitution of India. In terms of Section 3 of the Essential Commodities Act 1955, Government vide SRO 79
of 1974 dated 25.02.1974 issued the order namely Jammu and Kashmir Kerosene Oil (Licensing) Order, 1974.
The order of 1974 contains the complete procedure for issuance of license for dealing in Kerosene Oil as also for suspending/cancelling said
licenses. Rule 7 of the Order of 1974 provides that no stockiest, dealer or a retail dealer shall contravene any of the terms or conditions ofthe
licence or the directions issued under clause 13 or any provision of this order. It further provides that if any stockiest, dealer or a retail dealer
contravenes any of the said terms and conditions or any provision of this order, then without prejudice to any other action that may be taken
against the licensee his licence may be cancelled or suspended by order in writing by the licensing authority.
The proviso appended to the rule 7 of the order 1974 provides that no order shall be made under this clause unless a reasonable opportunity
of stating his case and of being heard against the proposed cancellation or suspension of the license is provided to the concerned. Rule 7 referred
to above, is reproduced as under:
Contravention of the terms and conditions of licence or Directions:
No stockiest, dealer or a retail dealer shall contravene any of the terms or conditions of the licence or the directions issued under clause 13 or any
provision of this Order, and if any stockiest, dealer or a retail dealer contravenes any of the said terms, conditions or any provision of this order,
then without prejudice to any other action that may be taken against the licensee his licence may be cancelled or suspended by order in writing by
the Licensing authority.
Provided that no order shall be made under this clause unless the stockiest, dealer or retail dealer, as the case may be, has been given a reasonable
opportunity of stating his case and of being heard against the proposed cancellation or suspension of the license.
In the present case, it is revealed by the impugned order that a committee was constituted to streamline and rationalize the procedure for
allotment of Kerosene Oil and its distribution in Jammu District within the municipal limits of Jammu. It is also alleged in the impugned order that
some of the Kerosene Oil Depots are only shown on papers. Interim report of the committee constituted intimated that 616 Kerosene Oil depots
are not functioning properly. It is on the basis of these reports that the licenses of the members of the petitionerAssociation have been ordered to
be cancelled.
The question that has come up for consideration of this Court and begs answer is as to whether without identifying the Kerosene Oil dealers
who according to respondents have violated the terms and conditions of the license and who were functioning only on papers and or/were not
functioning properly, could the impugned order be passed. The allegations contained in the impugned order are not only stigmatic, but penal in
nature, is as much as, in consequence thereof, the licenses of the member of the petitionerAssociation have been cancelled. The impugned order
does not any where show that any of the individual license holders has been put on notice informing him/them about the nature of allegations against
them. The impugned order on this short count, being violative of principal of natural justice, is rendered void abintio and deserves to be quashed.
However, in order to further show that impugned order is unreasonable and arbitrary, it has to be mentioned that no effort has been made by
the respondents to consider the case of the members of the petitionerassociation individually. There could be allegations against some persons of
one nature and against some persons of a different nature and may be that there would not be any allegations against some of the members of the
petitionerAssociations. Respondent have neither referred to specific allegations against any of the licence holders in the impugned order nor have
they stated that who was license holder, holding the license on paper alone and which of license holders were not functioning properly. The
impugned order is not only non descriptive but is vague as well. Nothing can be comprehended by a reasonable person from such an order.
The order on this count also is rendered arbitrary and violative of the guarantees as contained in Article 14 of the Constitution of India. The
order deserves to be quashed on one more count viz. the proviso appended to Rule 7 of the order of 1974 provided that before proposing action
for cancellation of the license, a reasonable opportunity of hearing has to be afforded. The impugned order is silent about the compliance of the
above said provision. Respondents, thus, have violated their own rules,
For the above stated reasons, this petition is allowed. By issuance of writ of Certiorari, impugned order, so far as it pertains to members of the
petitionerAssociation is quashed. Respondents are given liberty to initiate action against individual members of the petitionerAssociation and pass
appropriate orders in accordance with law after giving them reasonable opportunity of hearing.