Umesh Ram vs The State of Bihar

Dr. Ravi Ranjan, J.—I have heard learned counsel for the petitioner and the State. Petitioner seeks quashing of the order dated 17.08.2007 passed by the Sub Divisional Officer-cum-Licensing Authority, Bettiah Sadar by which his licence granted for running a P.D.S. shop has been cancelled on account of pendency of a case u/s 7 of the Essential Commodities Act. Petitioner also challenges the order dated 22.08.2008 passed by the Collector dismissing the appeal on being time barred.

Learned counsel raises a short question for consideration in this case. It is submitted that there is statutory requirement under Clause-7(iv) of the Public Distribution System (Control) Order, 2001 (hereinafter referred to as the "Control Order") for granting reasonable opportunity to the licensee to present his case if any action is to be taken under Clause-7(ii) either for suspending the licence or for its cancellation.

It is contended that in the present case, no opportunity by issuing any show cause notice to the petitioner was ever given and directly on the basis of the fact that a case was lodged against the petitioner u/s 7 of the Essential Commodities Act, his licence has been cancelled.

Learned counsel raises another question that there is no provision in the Control Order to cancel the licence on account of pendency of a case u/s 7 of the Essential Commodities Act though, at the relevant point of time, there was a provision for keeping the licence in suspension till a period such case is not finally decided by a court of competent jurisdiction. Learned counsel for the petitioner refers the provisions contained in Clause-7(iii) of the Control Order in this regard.

Learned counsel appearing for the State submits that a show cause notice could not be issued to the petitioner for the reason that he was in custody during the concerned period.

The aforesaid contention raised on behalf of the State is noted only to be rejected. The period of incarceration cannot be made an excuse by the State Authority for not following the principle of natural justice and also the statutory requirement under Clause-7(iv) of the Control Order which clearly lays down that the order of cancellation of licence can only be passed after granting reasonable opportunity to the licensee to place his case. Secondly, there is no provision in the Control Order that filing of a criminal case u/s 7 of the Essential Commodities Act would also mean that the licence of the petitioner is to be cancelled. Of course, there is provision under the Control Order that, as a consequence of conviction of the licensee in such case, the licence would be liable to be cancelled by passing an order in writing. However, in case such conviction is set aside in appeal or revision then again that has to be restored.

In view of the admitted position, in my considered opinion, the impugned orders are not sustainable in law and as such both the orders passed by the Licensing Authority contained in Annexure-2 as well as the appellate order as contained in Annexure-3 are quashed and set aside. Accordingly, this application stands allowed.