Sohanlal Gupta vs Collector, Raipur and another

A. P. Sen, J.

By this application under Articles 226 and 227 of the Constitution, the petitioner seeks a writ of certiorari for quashing an order made by the Collector, Raipur, on 16th May 1964 under rule 27 of the Central Provinces and Berar Stamp Rules, 1942 (hereinafter referred to as the rules), revoking his licence as a stamp vendor.

The fasts leading to this petition, shortly stated, are these. During an inspection held on 16th April i964, the Inspector of Stamp licences, Baloda-Bazar Circle, discovered that the petitioner was not displaying a sign-board as required by rule 48 of the Rules and further that he had remained absent without leave from the head-quarters from 26th February 1964 to 6th March 1964 causing inconvenience to the litigant public. He accordingly served a charge-sheet on the petitioner and secured his explanation. The petitioner admitted the breach of rule 48, but explained his absence by stating that he had sent an application for leave while leaving for his village to perform the barai of his brother. This application was, however, not traceable on the record of the District Excise Officer. It will thus be seen that the charges were never seriously denied. On 27th April 1964, the Inspector made a report against the petitioner to the District Excise Officer recommending cancellation of his stamp-vendor''s licence. This report was forwarded by the District Excise Officer to the Collector with an endorsement that there were a number of criminal cases pending against him. Eventually, by the order impugned, the Collector directed a, revocation of the licence. Admittedly, the petitioner was not given any hearing. Thereafter, he unsuccessfully applied for a review of the order. He had a full and reasonable opportunity of being heard. The fact that he was implicated in a number of criminal cases was not denied, but it was stated that the charges were false and of a trifling nature. It was further asserted that a single breach of rule 48 would not justify a cancellation of the licence As regards his absence, the petitioner furnished a copy of the application for leave sent by him under certificate of posting. The Collector, however, refused to reopen the question holding that he was of the view that the petitioner was not a fit and proper person to hold the licence.

The learned counsel appearing on behalf of the petitioner assails the revocation order mainly on two grounds. He first contends that there was a breach of the principles of natural justice. He urges that the function of cancelling or revoking a licence, which the Collector exercises under rule 27 of the Rules, is a quasi -judicial act. Thus, there was a "duty to hear". Lastly, the contention of the learned counsel was that rule 27, under which the Collector was acting, conferred an absolute and unfettered power of revocation which was untrammelled by any condition, and the rule was ultra vires the Government. In support of this contention, reliance is placed on Dwarka Prasad Laxmi Narain Vs. The State of Uttar Pradesh and Others, .

Having heard the counsel, we are unable to accept the contention raised in support of the petition. It is BOW well settled that, while considering the question of breach of the principles of natural justice, the Courts should sot proceed as if there are any inflexible rules of natural justice of universal application, such case depends on its OWD circumstances. Rules of natural justice vary with the varying constitutions of statutory bodies and the rules prescribed by the Legislature under which they have to act [See New Prakash Transport Co. Ltd. Vs. New Suwarna Transport Co. Ltd., . and Bharat Barrel and Drum Mfg. Co. Vs. L.K. Bose and Others, .]. There is nothing in the language of rule 27 of the Rules to suggest that, in making an order of revocation, the Collector is obliged to act judicially. 1 he order passed under that Rule is not open to appeal or revision. An order cancelling or revoking a licence, there fore, is only an administrative or executive order and is not open to review by a writ of certiorari. There is no his between the Collector and the person whose licence is sought to be revoked. The power of revocation is not subject to any pre-condition. There is no provision requiring a notice to the person affected to show cause against the proposed revocation of the Collector. That must be so having regard to the fact that a stamp-vendor''s licence creates no right but is merely a privilege.

The trend of judicial opinion is to regard the function of depriving a man of his licence as a purely administrative act. In Nakkuda Ali v, Jayaratne ILR 1951 AC 66 the Judicial Committee of the Privy Council observed;

In truth, when he cancels a licence, he is not determining a question; he is taking executive action to withdraw a privilege.

In that case, their Lordships held that the Regulation did not require a hearing and no quasi-judicial obligation could be implied because the Textile Controller was ''withdrawing a privilege'' and hence certiorari did not lie. Lord Goddard C. J. in R. V. Metropolitan Police Commissioner (1953)2 All ER 717. stated that whenever a statute empowered an officer to take disciplinary action against another, the exercise of such power was an administrative and not a quasi-judicial Act. Their Lordships of the Supreme Court in Kishan Chand Arora Vs. Commissioner of Police, Calcutta, at p. 708. have held that an order refusing or granting a licence is an administrative order and the discretion spoken of is dependent on the subjective satisfaction of the authority to which such power is entrusted. It was, however, pointed out that, although there was no duty to act judicially, still the authority was required to act reasonably, this Court has also consistently held that an order cancelling or refusing to renew a licence is an administrative act and as such not amenable to a writ of certiorari under Article 226 of the Constitution on the ground that the licensee had not been heard by the licensing authority [See Moti Miyan Vs. Commissioner, Indore Division and Others, , Ahmadnoor Roshan Vs. State of M.P. and Others, . and Barnagar Electric Supply and Industrial Co. Ltd. Vs. State of Madhya Pradesh and Another, .].

The next and the last contention of the learned counsel challenging the vires of rule 27 of the Rules must be rejected in view of the majority decision of their Lordships of the Supreme Court in Kishan Chand Arora Vs. Commissioner of Police, Calcutta, at p. 708. In repelling the contention that section 39 of the Calcutta Police Act, 1866, was ultra vires in so far as it conferred unguided discretion to the Commissioner of Police in the matter of granting licence, Wanchoo J. (as he then was) speaking for the majority observed :

The contention on behalf of the petitioner is that the first part of section 39 confers an absolute discretion on the Commissioner to grant or refuse a licence just as he pleases and that the second part of the section merely provides for certain conditions to be imposed in case the Commissioner pleases to grant a licence. We are however of opinion that when we are judging a law passed IN 1866 to decide whether it satisfies the test of constitutionality based on Article 19(1)(g) and Article 19(6) , we should take the section as a whole and set) whether on a fair reading of the section, it can be said that there is no guidance for the Commissioner in the matter of granting or refusing licences and his power in arbitrary. If such guidance can be found on a fair reading of the section, there would be no reason for striking it down simply because it has not been worded in a manner which would show immediately that considerations arising from the provisions of Article 19(1) (g) and Article 19(6) were in mind-naturally those considerations could not be in the mind of the Legislature in 1866.

Applying the above principle to these rules framed u/s 74 of the Stamp Act, 1899, it is manifest that they are rules for regulating (a) supply and sale of stamps and stamped papers; (b) the person by whom alone such sale is to be conducted and (c) the duties and remuneration of such persons. For carrying out these objects, provision has been made in rule 25 (b) (4) for appointment by the Collector of any person or class of persons deemed by him to be fit and proper persons for the sale of stamps. The power of revocation entrusted to the Collector under rule 27 must be read in conjunction with the other rules. On a fair reading of the rule, it cannot be said that there is no guidance for the Collector in the matter of revoking or cancelling licences.

The decision in Dwarka Prasad Laxmi Narain Vs. The State of Uttar Pradesh and Others, . is clearly distinguishable on facts. In that case, their Lordships of the Supreme Court were dealing with a system of restrictions which made the exercise of a fundamental right dependent upon the uncontrolled discretion of an administrative authority. That is not the case here. No person has a right of carrying on any trade or business of vending stamps. That is a privilege of the State Government. The State may vend stamps either directly or through its agents. The grant of a licence for vend of stamps is not a right but a privilege.

The result is that the petition fails and is dismissed. The petitioner shall bear his own costs and pay out of the security amount those incurred by the respondents. The remaining amount of security shall be refunded. Hearing fee Rs. 50.