Avis International Ltd. vs Municipal Corporation Of Delhi
1996 Latest Caselaw 710 Del

JUDGMENT

Lokeshwar Prasad, J.

1. The petitioner, named above, has filed the present petition seeking quashing of order dated 8.8.96, passed by the Additional Commissioner(Engineering) of the Municipal Corporation of Delhi (hereinafter referred to as 'the MCD'), communicated by the Assistant Commissioner (Factories) vide letter dated 22.8.96 (Annexure P-18) and order dated 21.5.96 (Annexure P-19), passed by the Commercial Officer of Delhi Electric Supply Undertaking (respondent No.2).

2.1 The facts relevant for the disposal of the present petition, briefly stated, are that the petitioner company is a deemed Public Company under Section 43-A (1-A) of the Companies Act, 1956 and the petitioner was originally incorporated on 30.4.75 by the name of "AVIS International Private Ltd." The above said Company, after its incorporation, took on lease hall No.3 and hall No.5 on the 2nd and 3rd floor of the property bearing No. 8/32, Kirti Nagar Industrial Area, New Delhi vide lease deed dated 29.7.75 for the purpose of running its manufacturing unit of garments and since the inception of the tenancy had been using the second floor of the above said premises for manufacturing garments. It is averred that originally the petitioner company was granted a licence by respondent No. 1 with 50 HP. load of electricity. As the sanctioned load of 50 HP. was not sufficient to meet the requirements of the petitioner Company, the petitioner Company on 14.9.76 moved an application in the prescribed form before respondent No. 1 requesting for grant of license for an additional load of 48 HP. The officials of respondent No. 1, particularly from the office of the Factory Licensing Department inspected the premises of the petitioner and finally Assistant Commissioner (Factories) on 30.3.77 granted a new license with 98 HP. indsutrial load and the original license with 50 HP. industrial load was cancelled. As per the case of the petitioner the aforesaid license with 98 HP. load of electricity has been used and enjoyed by the petitioner Company continuously and respondent No. 1 has been renewing the aforesaid license from time to time each year on receipt of requisite license fee. It is also alleged that the license fee stand paid upto 31.3.98 and the license also stands renewed upto the above said date. 2.2 It is also the case of the Petitioner Company that on 7.4.77 the Petitioner Company obtained a 'no objection certificate' from its landlord and thereafter applied to respondent No.2 for obtaining an industrial power connection of 98 HP. in the name of the petitioner Company. On 19.5.77 the Deputy Director of Industries was requested by respondent No.2 to accord sanction for 98 HP. in favour of the petitioner Company and the Electricity Department of Delhi Administration wrote a letter dated the 30th May, 1977 to the Electrical Inspector to inspect and assess the load requirement of the petitioner Company. Thereafter the Electrical Inspector, Delhi Administration' inspected the premises of the petitioner Company and finally the Secretary (Electricity) Delhi Administration informed respondent No.2 about the sanction of 98 HP. industrial load in favour of the petitioner Company vide letter dated 23.7.77. On 16.12.77, respondent No.2 installed the industrial power meter No. 749060

in the name of the petitioner Company at 8/32, Kirti Nagar Industrial Area, New Delhi.

2.3 It is alleged that since the inception of the tenancy the petitioner Company has been carrying on the activity of manufacturing of garments at the second floor of property No. 8/32, Kirti Nagar Industrial Area, New Delhi and has been using industrial power connection in its name since 16.12.77 with 98 HP. industrial load. As per the case of the petitioner Company the erstwhile landlord of the above said premises Shri Om Prakash Ahuja expired and thereafter the legal heirs of the landlord started harassing the petitioner Company by filing suits, unlawfully withholding water supply to the tenanted premises. On 6.4.96, the landlords of the premises in question, in connivance with the respondents caused fire to the electric installation of the petitioner thereby disrupting electric supply to the premises of the petitioner Company and respondent No.2 despite the fact that there never existed any order of disconnection against the petitioner did not restore the supply of electricity to the petitioner as a result of which the petitioner Company filed a civil writ (CW 1604/96) against respondent No.2 and others praying that respondent No.2 be directed to replace the burnt meter and to restore supply of electricity to the petitioner. Respondent No.2, it is alleged, at the instance of the landlords of the petitioner Company objected to the operation of the generator set, which the petitioner Company had lawfully installed in its premises. The petitioner thereupon filed a civil miscellaneous petition (CM 3319/96 in CW 1604/96) and the learned Single Judge vide order dated 7.5.96 directed that respondent No.2 will not interfere with the operation of the generator set installed by the petitioner Company in the premises. It is alleged that respondent No.2, during the pendency of the above said writ petition and despite the fact that order dated 7.5.96 was in operation proceeded unilaterally without informing or affording any opportunity to the petitioner of being heard and with drewing the permission granted for operating the generator set. The civil writ petition (CW 1604/96) was disposed of vide order dated the 9th July, 1996 with the directions that the Superintending Engineer (Enforcement) to conclude the show cause proceedings within four weeks and respondent No.2 was restrained from interfering with the operation of the generator set. The landlord of the petitioner Company, it is alleged, also filed a civil writ petition (CW 2487/96) with the prayer that respondent No. 1 be directed to revoke the municipal licence of the petitioner Company and respondent No.2 be directed not to restore the electric supply of the premises to the petitioner. It is alleged that the above said petition was dismissed in limine vide order dated 9.7.96.

2.4 It is alleged that during the pendency of the writ petition of the petitioner, respondent No. 1 at the instance and in connivance with the landlord of the petitioner, served upon the petitioner a show cause notice dated the 24th April, 1996(Annexure P-13) asking the petitioner to show cause within seven

days of the receipt of the notice as to why the licence of the petitioner Company be not revoked for violating the terms and conditions of the licence. The petitioner firstly sought one week's time to file reply which was granted and ultimately on 8.5.96 filed the reply to the show cause. It is alleged that the office of respondents No. 1 & 3 refused to acknowledge the receipt of reply dated 8.5.96 with the result the petitioner sent a copy of the reply dated 8.5.96 by means of UPC as well. In the reply the petitioner informed respondent No. 3 that the petitioner was duly granted permission to install and operate the generator set and that the manufacturing unit was being run only on the second floor of the property by operating generator set as per the orders passed by the High Court in CW 1604/96. As per the case of the petitioner after the conclusion of the hearing on the show cause for disconnection of electricity, the petitioner preferred LPA No. 172/96 praying for restoration of electric supply. Against the judgment dated 9.7.96 in CW 2487/96 the landlord of the petitioner Company also preferred an appeal. The LPA (LPA No. 172/96), filed by the petitioner Company was disposed of by a Division Bench of this Court with the directions to respondent No.2 to restore electricity meter and power in the premises of the petitioner within 48 hours on petitioner's fulfillling certain conditions. The petitioner, on receipt of a copy of judgment dated the 20th August, 1996, on 23.8.96 approached the concerned officials of respondent No.2 at Shankar Road for the purpose of depositing the amount in compliance with the judgment dated 20.8.96, but it is alleged, the officials of respondent No.2 who are hand in glove with the landlord of the petitioner took totally indifferent attitude towards the petitioner and informed the petitioner that nothing could be done in the case as the landlord had got the licence of the petitioner revoked and cancelled by the authorities of the MCD. The officials of respondent No.2, it is alleged, told the petitioner to contact the Superintending Engineer(Enforcement). Thereafter the petitioner rushed to the office of the Superintending Engineer and submitted letter dated 23.8.96. However, the office staff of the Superintending Engineer (Enforcement) refused to accept and acknowledge letter dated 23.8.96 on the false pretext that the 'Dak Receiver' had gone/left the office and it was only on 26.8.96 that letter dated 23.8.96 was acknowledged to have been received by respondent No.2 but no action was taken by respondent No.2 to comply with the order.

2.5 It is alleged that on 27.8.96 the petitioner Company received a letter dated 22.8.96 (Annexure P-18), sent by respondent No.3, thereby intimating the petitioner that the licence of the petitioner Company has been revoked and cancelled by the Additional Commissioner (Engineering) vide order dated 8.8.96. It is also alleged that no copy of the alleged order dated 8.8.96 had been sent or served upon the petitioner. It is further alleged that after the passing of the order of revocation and cancellation of licence the respondents at the instance of the landlords, have stopped the working of the manufacturing unit of the petitioner and respondents 1 & 2 have also stopped the operation of the generator set by the petitioner on the ground that the permission granted for operating the generator set has since been withdrawn vide letter dated 21.5.96 (Annexure P-19).

2.6 It is alleged that on an earlier occasion also respondent No. 1 had issued a show cause notice dated 27.1.87 inter alia on the ground that the petitioner Company was found functioning the trade on the first and second floor of the premises in addition to the trade sanctioned at the ground floor. A reply to the above said show cause notice was sent and after perusing the reply and the record the show cause proceedings against the petitioner Company were dropped. As per the case of the petitioner the order/letter(Annexure P-18) revoking and cancelling the municipal licence of the petitioner as well as order dated 21.5.96 (Annexure P-19), passed by respondent No.2 are null and void, against the principles of natural justice and contrary to record and the show cause notice. It has been prayed that the same may be quashed and a writ/order and/or direction in the nature of mandamus be issued thereby directing the respondent to restore the municipal licence of the petitioner Company for the purpose of carrying on its business of manufacturing garments at premises No. 8/32, Kirti Nagar Industrial Area, New Delhi. The petitioner Company has also prayed for quashing of order dated 21.5.96 (Annexure P-19) passed by respondent No.2 withdrawing the permission to operate generator set installed by the petitioner Company in its premises situated at 8/32, Kirti Nagar Industrial Area, New Delhi.

3. Notice of the petition was issued to the respondents. However, counter affidavit has been filed only on behalf of respondents 1 & 3 by Shri N.K. Sharma, Assistant Commissioner (Factories) of MCD. No counter affidavit in reply has been filed on behalf of respondent No.2 DESU. In the counter affidavit filed on behalf of respondents 1 & 3, it is stated that as the petitioner was found running the trade in violation of the terms and conditions of licence, the petitioner was served with a show cause notice and the petitioner failed to submit any reply and, therefore, the licence of the petitioner was revoked by Shri V.S. Sharma, Additional Commissioner (Engineering) who has been delegated with the powers under Section 491 of the Delhi Municipal Corporation Act, 1957 (hereinafter referred to as 'the Act'). In the counter affidavit filed on behalf of respondents 1 & 3, it has been admitted that the licence was granted by the respondent MCD in the name of "AVIS International Private Ltd.". It is also admitted in the reply that the petitioner had moved an application for additional load of 48 HP. EM. It is also admitted in the reply that the petitioner has paid the licence fee upto 31.3.98. The allegations of connivance of the respondents with the landlord are specifically denied. It is denied that there was any collusion between the staff of the above said respondent with the landlord. It is stated in the reply affidavit that on inspection of the factory made by the Inspector of respondents 1 & 3,

it was found that the petitioner had violated the terms and conditions for grant of licence and, therefore, the licence of the petitioner has been validly revoked. In the reply affidavit the allegation that the officials of the respondent refused to acknowledge the reply of the petitioner has been denied and it is stated that the petitioner instead of choosing more authentic and reliable mode of postage, has chosen to post the reply by UPC which is conveniently manageable. The factor of the issuance of a show cause notice on 27.1.87 is admitted in the reply affidavit. Respondents 1 & 3 in the above said reply affidavit have stated that the licence was granted in favour of M/s Avis International (P) Limited whereas the trade was found running in the name of Avis International Ltd. and that the petitioner never approached the respondents to get the change of name effected in the licence. The respondents in the reply affidavit have further contended that in terms of Factory Licencing Policy of the Delhi Municipal Corporation, no licence for manufacturing unit is allowed other than on the ground floor and, therefore, no direction under Article 226 of the Constitution of India can be issued for restoration of the licence as the relief sought for by the petitioner is in contravention of the provisions of law. It is also stated that no judicial review lies in so far as the revocation order is concerned which has been passed in accordance with law. It has been stated in the reply affidavit that the present petition filed by the petitioner be dismissed with costs.

4. An application (CM 6017/96) under Order I Rule 10 read with Section 151 of the Code of Civil Procedure, 1908 was filed on behalf of M/s Jawahar Mal and Sons, Cold Storage & Industries (a registered partnership firm) through its partner Shri Sanjay Ahuja for impleadment in the present proceedings. After hearing the learned counsel for the applicant, the learned counsel for the petitioner, the learned counsel for the respondent MCD and the learned counsel for the respondent DESU this Court vide order dated 1.10.96 refused to accede to the above request of the applicant for impleadment. However, in the interest of justice the applicant was given the liberty to address the Court during the hearing of the writ petition.

5. The learned counsel for the respondent MCD with the leave of the Court, on 4.10.96 placed on record an affidavit signed and sworn on behalf of the respondent MCD by one Shri Banarasi Dass, an official of MCD enclosing therewith a copy of order dated 8.8.96 passed by the Additional Commissioner (Engineering) of the Municipal Corporation of Delhi.

6. I have heard the learned counsel for the parties at length including the learned counsel for the applicant in CM 6017/96 and have also carefully gone through the documents/material on record. In the light of the challenges laid to the impugned orders of the respondents and the contentions advanced at the Bar I formulate the questions arising for decision in the petition as under:-

1. Whether the petitioner's licence, bearing MCL No. 81091 granted under Section 416 & 417 of the Act has been revoked lawfully by the respondents 1 & 3?

2. Whether the respondents before passing the impugned orders have followed the principles of natural justice? If not to what effect?

3. Whether the licence in question, obtained by the petitioner under Section 416 & 417 of the Act, was void ab initio and nullity in the eyes of law and no notice was required before cancelling / revoking the same?

4. Whether the petitioner did not submit any reply to the show cause notice dated the 24th April, 1996 (Annexure P-13) and whether the reply to the show cause purported to have been filed on behalf of the petitioner dated the 8th May, 1996 (Annexure P-14) stated to have been sent under Certificate of Posting is a forged document? If so to what effect?

5. What is the scope of judicial review over the impugned action of the respondents?

6. Whether the impugned action of the respondents is vitiated by malafides?

QUESTION -1

7.1 It is not in dispute that Avis International private Ltd. was granted a licence by the respondent MCD under Section 416 & 417 of the Act. It is also not in dispute that the above said licence has been used and enjoyed by the above said Company continuously and the respondent MCD has been renewing the same from time to time each year on receipt of the requisite licence fee and that the same stands renewed upto 31.3.98. Such a licence in terms of the provisions contained in the Act can be revoked/cancelled in terms of the provisions contained in Section 430 of the Act, which pa reads as under:-

"Signature, conditions, duration, suspension revocation, etc., of licences and written permissions

(1) Whenever it is provided in this Act or any bye-law made thereunder that a Licence or a written permission may be granted for any purpose, such licence or written permission shall be signed by the Commissioner or by the officer empowered to grant the same under this Act or the bye-law made thereunder or by any municipal Officer authorised by the Commissioner or such officer in this behalf and shall specify in addition to any other matter required to be specified under any other provision of this Act or any provision of any bye-law made there under

(a) the date of the grant thereof;

(b) the purpose and the period (if any) for which it is granted;

(c) restrictions or conditions, if any, subject to which it is granted;

(d) the name and address of the person to whom it is granted; and

(e) the fee, if any, paid for the licence or written permission.

(2) Except as otherwise provided in this Act or any bye-law made thereunder, for every such licence or written permission a fee may be charged at such rate as may from time to time be fixed by the Commissioner with the sanction of the Corporation and such fee shall be payable by the person to whom the licence or written permission is granted.

(3) Save as otherwise provided in this Act or any bye-law made thereunder any licence or written permission granted under this Act or any bye law made thereunder may at any time be suspended or revoked by the Commissioner or by the officer by whom it was granted, if he is satisfied that it has been secured by the grantee through misrepresentation or fraud or if any of its restrictions or conditions has been infringed or evaded by the grantee, or if the grantee has been convicted for the contravention of any of the provisions of this Act or any bye-law made thereunder relating to any matter for which the licence or permission has been granted.

PROVIDED that-

(a) before making any order of suspension or revocation reasonable opportunity should be accorded to the grantee of the licence or the written permission to show cause why it should not be suspended or revoked;

(b) every such order shall contain brief statement of the reasons for the suspension or revocation of the licence or the written permission.

(4) When any such licence or written permission is suspended or revoked, when the period for which the same was granted has expired, the grantee shall, for all purposes of this Act or any bye-law made thereunder, be deemed to be without a licence or written permission until such time as the order suspending or revoking the licence or written permission is rescinded or until the licence or written permission is renewed.

(5) Every grantee of any licence or written permission granted under this act shall at all reasonable time, while such licence or written permission remains in force, if so required by the Commissioner or the authority by whom it was granted, produce such licence or written permission".

7.2 From a plain reading of the above provisions it is apparent that before making any order of suspension or revocation of a licence, issued under the

provisions of the Act or any bye-law made thereunder, a reasonable opportunity has to be afforded to the grantee of the licence to show cause why it should not be suspended or revoked and such order suspending or revoking the licence has to contain brief statement of reasons for the suspension or revocation of the licence. In the present case it has to be seen as to whether the respondents have followed the procedure as laid down in section 430 of the Act while revoking the licence in question of the petitioner.

7.3 The learned counsel for the respondent MCD, during the course of arguments submitted that as the licence in question was void ab initio and a nullity in the eyes of law no show cause notice, before revoking the same, was necessary. It was further submitted by him that however in compliance with the above said provisions of the Act a show cause notice was issued to the petitioner and as no reply was received from the petitioner, the licence of the petitioner was revoked by the Additional Commissioner (Engineering) of the Municipal Corporation of Delhi vide order dated 8.8.96, communicated to the petitioner vide letter dated 22.8.96 (Annexure P-18). The show cause notice dated the 24th April, 1996 (Annexure P-13) given under Section 430 of the Act by the respondent to the petitioner, which has formed the basis of the impugned action in revoking the licence of the petitioner, reads as under:-

"Whereas M/s Avis International Pvt. Ltd. was granted Municipal License for running the trade of Garments at 2nd floor with 98 HPEM at property No. 8/32(2nd floor_ Kirti Nagar Industrial Area, New Delhi.

And whereas the inspection of your unit was carried out on 23.4.96 by the officials of the Factory Licensing Department and it was found that the trade of Garments was also found running at 3rd floor whereas the license for Mfg. of Garments was granted for 2nd floor only. The details of the machines found running with Generator of 60 HPEM approximately at 3rd floor without any permission/sanction of the Competent Authority is as under:-

1. Sewing machines = 471 /2 HP = 23.5 HP

2. Cloth cutting machine = 2 1/2 HP = 1.0 HP.

Total 24.5 HP

And whereas during the course of inspection it was found that first floor of the property is being used for offices partly under the possession of M/s Avis International Ltd. and partly under the possession of M/s Jawahar Mal & Sons Cold Storage & Industries. During the course of inspection it also come to notice that the license was granted in the name of M/s Avis International Pvt. Ltd., whereas the trade is being run in the name of M/s Avis International Ltd., which is in violation of the terms and conditions for grant of license.

You are hereby served with this show cause notice to show cause within 7 days of the receipt of thereof, as to why the license be not revoked for violating the terms and conditions for grant of license as

stated hereinabove. In case no reply has been received within the stipulated period then it will be presumed that you have nothing to say in this regard and license shall be revoked without any further notice to you. However, if any, written or oral submission is to be made, the same may be made between 11.00 A.M. to 12.00 noon on any working day."

7.4 From a perusal of the above said "show cause notice" it is apparent that the same is based on an inspection carried out by the officials of the Factory Licensing Department of the respondent MCD on' 23.4.96. The above said 'Inspection Report', annexed with the counter as Annexure-G (at pages 144 & 145 of the paper book) runs as under:

"As per instruction of A.O(Factories) a joint inspection of premises No. 8/32, Kirti Nagar Industrial Area has been conducted today on 23.4.96 at 11.00 A.M. The report is submitted as under:-

M/s Avis International Pvt. Ltd. is running a garments factory in the above mentioned premises with a power load of 98 HPs which stands sanctioned by the Factory Licensing Department at 2nd floor.

During the course of inspection it was observed that G.F of the above said premises is in the possession of M/s Jawahar Mal & Sons, Cold Storage & Industries who holds the Municipal License vide No. 80402 for running the trade of Cold Storage with 160 HPs. The representative of the Cold Storage, Mr. Y.P. Puri, Manager handed over copy of the above said License renewed upto 31.3.95 but as per his version the license in question has been renewed upto 31.3.98.

2. F.F.: It is partly under the possession of Cold Storage and partly under the possession of M/s Avis International pvt. Ltd. for the purpose of Offices.

3. 2nd floor: It is being used by M/s Avis International Pvt. Ltd. for manufacturing of garments (cotton jeans) with undermentioned machines:-

1. Sewing machines= 7 Nos.xl/2 HPs.

2. Button Hole machine = 1x1 HP

3. I Grinder = 1x1 HP

4. Electric Power Presses= 8x1100 Watts.

Total = 15 HPs

4. 3rd floor

1. Sewing machines = 47x1/2HP= 23.5 HPs

2. Cloth Cutting machine= 2x1/2= 1.0 HPs

Total = 24.5 HPs

Grand Total 39.5 HPs

During the course of inspection it was noticed that the licensee was found running trade with generator installed at 3rd floor. On enquiries from Mr. S.K. Tiwari, Manager of Avis International Pvt. Ltd. It came to light that at present the firm is working in the capacity of M/s Avis International Ltd.

From the perusal of the license file it reveals that the said license stands renewed upto 31.3.98 which issued in favour of M/s Avis International Pvt. Ltd. for manufacturing of garments with 98 HPs only for second floor of the said premises.

In view of the above it is clear that M/s Avis International Pvt. Ltd. violated the terms and conditions of the above said license by change of constitution of the firm and running the trade other than the sanctioned floor i.e. from 2nd floor including 3rd floor. In view of the above if approved a show cause notice be issued to the firm M/s Avis International Pvt. Ltd. to show cause as to why his license be not revoked for violating the terms and conditions of the Municipal License."

7.5 From the above said two documents i.e. the inspection report dated the 23rd April, 1996 of the officials of the Factory Licensing Department and the show cause notice dated the 24th April, 1996 it is apparent that the officials of the Factory Licensing Department while inspecting the unit of the petitioner on 23.4.96 noticed only two violations of the terms and conditions of the licence of the petitioner, namely, (i) change of the constitution of the firm and (ii) running the trade on the floors other than the sanctioned floor.

7.6 As regards the alleged violation at (i) above regarding the change of the constitution of the firm the order dated 20.8.96 passed by the Division Bench of this Court in LPA No. 172/96 entitled Avis International Ltd. v. DESU & others (Annexure P-16) is of utmost significance and the portion relevant of the above said order, for resolving the present controversy reads as under:-

"So far misuser charges in the sum of Rs 3,70,296.36 for sub-letting are concerned, we are of the opinion that there was no sub- letting in view of the fact that the private limited company has been deemed to be a public limited company under Section 43. The same entity having been so got converted, there is no question of sub-letting by one entity to another entity."

7.7 Besides the above findings of the Division Bench of this Court, the learned counsel for the respondent MCD in all fairness on 4.10.96 conceded that in the present proceedings he was not pressing the above point. The above admission on the part of the learned counsel for the respondent MCD, made by him on 4.10.96, in so far as the above issue, relating to the change of name of the petitioner firm is concerned, clinches the issue finally and the same, in the given facts and circumstances of the case, as explained above, in

my opinion, legally speaking cannot form the basis for the revocation of the license in question.

7.8 As already stated, a licence issued under the provisions of the Act, as in the present case, can be revoked only by following the procedure laid down in Section 430(3) of the Act which provides for affording a reasonable opportunity to the grantee before making an order of revocation and also provides that such an order shall contain a brief statement of reasons for such revocation. In other words the order revoking the licence has to be based on the 'show cause notice', issued to grantee (licencee) asking him to show cause as to why the licence should not be revoked. The case of the petitioner is that the order dated the 8th August, 1996, passed by the Additional Commissioner (Engineering), communicated to the petitioner vide letter dated 22.8.96, has not been communicated to the petitioner. It was on 4.10.96 that the learned counsel for the respondent MCD, with the leave of the Court, has placed on record an affidavit signed and sworn by one Shri Banarasi Dass on behalf of the MCD enclosing therewith a copy of order dated 8.8.96 purported to have been passed by the Additional Commissioner(Engineering). The same reads as under:-

"I have carefully gone through the file and the brief facts of the case are that:-

That a show cause notice was issued to M/s Avis International Pvt. Ltd., on 24.4.96 which is available at page 48/C of the file.

That M/s Avis International Pvt. Ltd. was granted Mpl. Licence for running the trade of garments at Second Floor with 98 HPEM P.No. 8/32, Kirti Nagar Industrial Area, Delhi. At the time of inspection carried out on 23.4.96 by the official of the Factory Licensing Deptt. it was found that the trade of garment was also run at Third floor, though the licence was granted for Second Floor only.

It was also found, during the course of site inspection that the First Floor of the property is also being used by Ms Avis International (P) Ltd., and partly under the possession of M/s Jawahar Mal & Sons Cold Storage and Industries. During the course of inspection it was also come to notice that the licence was granted in the name of M/s Avis International (P) Ltd., whereas the trade is being run in the name of Avis International Ltd., which is in violation of the terms and conditions for grant of licence. The licencee has not submitted any reply. However, the site inspection was again made on 28.6.96 and the F.I. vide his report (which is available on page 16/N of the file) informed that the trade is running at Second Floor., but the licencee has not responded to our show cause notice, therefore, the licence of the licencee may kindly be revoked. The licencee is running the trade in the name of M/s Avis International Ltd., whereas the licence was granted in the name of M/s Avis International Pvt. Ltd., the licencee has not been applied for change of name, therefore, the licence of the licencee may kindly be revoked."

7.9 In the first place the above said document, filed alongwith the affidavit of said Shri Banarasi Dass, purporting to be a copy of an order passed by the Additional Commissioner (Engineering) MCD dated the 8th August, 1996 cannot be stated to be an order in true sense because of the language in which the same is couched more particularly the last two lines wherein it is stated that "the licence of the licencee may kindly be revoked". There can be no denial of the fact that the Additional Commissioner (Engineering) while passing such like orders, acts in a 'quasi-judicial' capacity and, therefore, such like orders besides being couched in proper language have also to indicate the source of power under which such an order is being passed by such an authority. No where the above said order states that the Additional Commissioner (Engineering), the authority competent to pass such an order, as per the case of the respondents, has passed the impugned order under Section 430 of the Act. No where in the above said order there is a positive finding to the effect that the concerned competent authority, duly clothed with a proper legal authority, has taken a decision for the revocation of the licence in question in exercise of the powers conferred under Section 430 of the Act. The document in question simply speaks of a 'recommendation' for the revocation of the licence. From a perusal of the document annexed with the affidavit it is not apparent as to who is the author of the document making the recommendations for the revocation of the licence and as to whether the recommendations for the revocation of the licence in question were finally approved by the concerned competent authority by a speaking order in consonance with the provisions contained in Clause (b) of sub-section (3) of Section 430 of the Act.

7.10 As already stated the order dated the 8th August, 1996 passed by Additional Commissioner (Engineering) of the respondent MCD was communicated to the petitioner by the respondent MCD vide letter dated 22.8.96 (Annexure P-18). The above said letter dated the 22nd August, 1996 (Annexure P-18), communicating the order dated the 8th August, 1996, passed by the Additional Commissioner (Engineering) reads as under:-

"Whereas you were granted MCL bearing No. 81091 u/s 416 and 417 of the DMC Act, 1957 for running the trade of Mfg. of Garments with 98 HPEM at 8/32, Kirti Nagar Industrial Area, new Delhi-110015.

Whereas on site inspection, it was found by the field staff of the Factory Licencing Deptt. that manufacturing/factory was running at First, Second and Third Floors and you have no space at Ground Floor. Whereas you have obtained the said licence by mis- representation and by hiding true facts that you do not have any space at Ground Floor. The licence is in the name of Avis International pvt. Ltd. now this factory do not exist at site. On site inspection, it was found that on disconnection of electricity you have started running the factory by using three phase Generator of 40 KVA installed at

Third Floor which is against rules, and is causing noise, vibrations, smoke, heat and create nuisance to the occupants of the building and which can cause accident.

Whereas as per procedure no factory unit can be allowed to carry on the industrial/manufacturing activity except on the Ground floor. The licence was void ab initio and a nullity u/s 416 & 417 of the DMC Act as the same was obtained by mis- representation and concealment of true facts.

Whereas you have been served with a show cause notice to reply why the licence granted to you should not be revoked and cancelled, but no reply has been received till date. Consequent thereof, the Additional Commissioner (Engineering) vide his orders dt. 8.8.96 revoked the licence with immediate effect u/s 430(3) of the DMC Act 1957.

You are hereby directed to stop the manufacturing/industrial activities forthwith at 8/32, Kirti Nagar Industrial Area, New Delhi, failing which prosecution action will be taken against you."

7.11 . Keeping in view the spirit of the provisions of Section 430(3) of the Act and also the principles of equity, fair play and natural justice the three documents i.e. the show cause notice, the impugned order and communication communicating the impugned order have to be in conformity with each other and not at variance. However, in the instant case, as would be evident from the above said three documents i.e. the show cause notice, the impugned order and the letter dated 22.8.96, communicating the impugned order of the Additional Commissioner (Engineering) MCD that the above said three documents are at variance and as such it cannot be stated that the statutory authority while revoking the licence of the petitioner has complied with the statutory provisions contained in Section 430(3) of the Act both in letter & spirit and the impugned order dated the 8th August, 1996, as communicated vide letter dated 22.8.96, therefore, on the above ground alone cannot sustain the test of judicial scrutiny.

QUESTION - 2

8.1 The phrase 'natural justice' is not capable of static and precise definition. However, a duty to act fairly, i.e. in consonance with the fundamental principles of substantive justice, is generally implied, irrespective of the fact whether the power conferred on a statutory body or tribunal is administrative or quasi-judicial. Rules of 'natural justice' are not embodied rules. Being means to an end and not an end in themselves it is not possible to make an exhaustive catalogue of such rules but there are two fundamental maxims of natural justice viz. (i) audi alteram partem and (ii) nemo judex in causa sua or nemo debet esse judex in propria causa.

8.2 The Audi Alteram Partem rule has many facets, two of them being (a) notice of the case to be met; and (b) opportunity to explain.

8.3 In S.N. Mukerjee v. UOI : their lordships of the Supreme Court have held that the object underlying rules of natural justice is to prevent miscarriage of justice and secure fair play in action. It is a fundamental rule of law that no decision should be taken which will affect the rights of any person without first giving him an opportunity of putting forward his case. As per settled law a strict adherence to the rules of natural justice is required where a public authority as in the present case has to deal with the rights of the public. In Charan Lal Sahu v. UOI their lordships have held that principles of natural justice are integrally embedded in our constitutional framework and their pristine glory and primacy cannot and should not be allowed to be submerged by the exigencies of particular situations or cases. In Liberty Oil Mills and Ors. v. UOI and Ors. their lordships have held that it is not permissible to interpret any statutory instrument so as to exclude natural justice, unless the language of the instrument leaves no option to the Court. Procedural fairness embodying natural justice is to be implied whenever action is taken affecting the rights of the parties. In case K.L. Tripathi v. State Bank of India and Ors. their lordships of the Supreme Court have held that all actions against the affected party which involve penal or adverse consequences must be in accordance with the principles of natural justice.

8.4 As already stated one of the maxims (c)f natural justice is the rule of 'Audi Alteram Partem'. In case Neelima Misra v. Harinder Kaur Paintal their lordships of the Supreme Court have held that an administrative order which involves civil consequences must be made consistently with the rule expresses in the Latin Maxim Audi Alteram Partem which means that the decision maker should afford to any party to a dispute an opportunity to present his case. The person concerned must be informed of the case against him and the evidence in support thereof and must be given a fair opportunity to meet the case before an adverse decision is taken.

8.5 As per settled law, the 'audi alterant partem' rule in its fullest amplitude, means that a person against whom an order to his prejudice may be passed should be informed of the allegations and charges against him, be given an opportunity of submitting an explanation thereto, has the right to know the evidence, both oral or documentary, by which the matter is proposed to be decided against him and to inspect the documents which are relied upon for the purpose of being used against him, to have the witnesses who are to give evidence against him and to inspect the documents which are relied upon for the purpose of being used against him, to have the witnesses who are to give evidence against him, examined in his presence and have the right to cross-examine them, and to lead his own evidence, both oral and documentary, in his defense. The process of a fair hearing need not, however, conform to the

judicial process in a court of law, because judicial adjudication of causes involves a number of technical rules of procedure and evidence which are unnecessary and not required for the purpose of a fair hearing within the meaning of audi alteram pattern rule in a quasi-judicial or administrative inquiry (Union of India v. Tulsi Ram Patel )

8.6 In case Harbhajan Singh Dhalla v. Union of India their lordships of the Supreme Court have held that if the administrative authorities are enjoined to decide the rights of the parties it is essential that such administrative authority should accord fair and proper hearing to the person to be affected by the order and give sufficiently clear and explicit reasons and such reasons must be based on relevant material factors objectively considered.

8.7 In the light of the legal position noticed hereinabove it is clear that the power conferred on the respondents in discharge of their administrative functions, though administrative in nature, but is coupled with the duty to act 'fairly' in public interest and the same has to be exercised consistently with the principles of 'natural justice' otherwise any action taken by the above said authorities, affecting the rights of any person is liable to be struck down.

8.8 With the above said statement of law I now revert to the facts of the case at hand. In so far as the impugned order dated the 8th August, 1996 passed by the Additional Commissioner (Engineering) is concerned, the position, as already stated is that the above said order is not in conformity with the show cause notice dated the 24th April, 1996 (Annexure P-13). Even the letter dated the 22nd August, 1996 (Annexure P-18), purporting to communicate the above said order is not in conformity with the impugned order itself. If the show cause notice dated the 24th April, 1996, the impugned order dated the 8th August, 1996, and letter dated 22nd August, 1996 are read together the only inference which can reasonably be drawn is that the authority passing the impugned order has not followed the principles of natural justice and the rule of audi alteram partem. As regards the other impugned order dated the 21st May, 1996 (Annexure P-19), passed by the Commercial Officer of respondent No.2 withdrawing the permission for the operation of the generator set by the petitioner, the position is that no counter/reply to the show cause has been filed on behalf of respondent No.2 though sufficient opportunities were given to the said respondent for the aforesaid purpose. In the petition the petitioner has made a specific allegation, alleging that the impugned order dated the 21st May, 1996 has been passed against the principles of natural justice as the officer concerned of respondent No.2 has not even cared to inform or to afford an opportunity to the petitioner of being heard and the impugned order has been made at the back of the petitioner. The above averment of the petitioner, made by him in the petition have gone on record unrebutted and unchallenged. In the presence of the above facts, the submission of the learned counsel for the petitioner that the impugned order dated the

21st May, 1996 is in violation of the principles of natural justice does not appear to be without substance.

8.9 In view of the above discussion, in my opinion, the impugned orders have been passed by the respondents without following the principles of natural justice and as such the same cannot sustain the test of judicial scrutiny, .pl 11.5"

QUESTION - 3

9.1 The learned counsel for respondents 1 & 3 during the arguments submitted that the licence in question, obtained by the petitioner, was void abinitio, being in contravention of the Licencing Policy of the respondents (copy annexed with the counter and marked as Annexure-E) because in terms of the above said policy no manufacturing unit, running the trade of garments, could have been allowed to function on any floor of the building other than ground floor. It was further submitted by him that as the licence in question was no notice was necessary/required before revoking the same and the concerned authorities of the respondent MCD were fully justified in intimating the petitioner vide letter dated 22.8.1996 that the licence, which was void-ab-initio, had been revoked.

9.2 In my opinion, the above submission of the learned counsel for the respondent MCD is without any substance. On a perusal of document (Annexure E - at pages 139-142 of the paper book) it is apparent that the above said document under the heading "LICENSING POLICY OF DELHI MUNICIPAL CORPORATION (FACTORY LICENSING DEPARTMENT)", is decidedly an 'Appendix' to some document which fact is evident from the heading of the document itself and as such the same cannot be read in isolation for its true meaning intent, scope and applicability unless it is shown to the satisfaction of the Court that the same relates to a document which is relevant and applicable to the present case. This unfortunately has not been done and in the absence of the same it is some what difficult to believe that the above said guidelines, as contained in the above said document (Annexure-E) and relied upon by the respondent MCD, for the purpose of revoking the licence in question, are in fact applicable to the present case. Moreover, it is no where explained as to when the above said Licensing Policy (Annexure -E at pages 139-142 of the paper book) actually came into force.

9.3 It is also not in dispute that the licence in question was granted in favour of M/s Avis International Private Ltd. by the respondent MCD under Section 416 & 417 of the Act and the respondent MCD itself had issued a show cause notice under Section 430 of the Act which fact is evident from the show cause notice (Annexure P-13) itself. Above all, in view of the legal position already explained and also keeping in view the principles of natural justice it was obligatory on the part of the concerned competent authority of the respondent MCD to have issued a show cause notice before revoking the licence in question and any action taken without issuing a show cause notice, as provided under Section 430 of the Act, is not tenable in the eyes of law. Thus the submission of the learned counsel for the respondent MCD that as the licence was void-ab-initio, no notice before revoking the same was required, in my opinion, is not sustainable in the eyes of law and, therefore, has to be rejected.

QUESTION - 4

10.1 The case of the petitioner is that the petitioner submitted a reply to the show cause notice dated the 24th April, 1996(Annexure P-13) on 8.5.96 whereas the case of the respondent MCD is that no rely to the above said show cause was given by the petitioner despite opportunity being given. During the course of arguments the learned counsel for the respondent MCD submitted that the communication dated the 8th May, 1996 (Annexure P-14),. purporting to be a reply to the show cause notice dated the 24th April, 1996 is a forged and fabricated document, introduced by the petitioner at a later stage only with a view to cover up the lapse and to misguide and mislead the Court in the present proceedings. He further submitted that in fact no reply was given by the petitioner to the above said show cause notice dated the 29th April, 1996 issued by the concerned competent authority of the respondent MCD. The learned counsel for the respondent MCD in support of his above contention, submitted that the petitioner deliberately chose to sent the above said reply to the show cause 'under Certificate of Posting' and that too from a far off post office situated at Ramesh Nagar and not from the nearest post office. It was submitted by him that the petitioner chose the above mode of sending the reply by UPC because the same could have been conveniently managed and as such no reliance can be placed oh the same. The learned counsel for the respondent MCD in support of his above contention placed reliance on a decision of Punjab & Haryana High Court in case Shri Sham Lal Gupta v. Hamco Industries(P) Ltd. .

10.2 The above contention of the learned counsel for the respondent MCD has failed to impress me because the petitioner in para 12 of the petition has stated that he filed reply to the show cause notice on 8.5.96 and since the office of respondents 1 & 3 refused to acknowledge the receipt of rely dated 8.5.96 the petitioner sent the reply dated 8.5.96 by means of UPC as well on 8.5.96 itself. With a view to satisfy myself I directed the respondent MCD to produce the relevant original records relating to processing the reply purported to have been sent by the petitioner under U.P.C. which the respondent MCD did produce before this Court for perusal. From a perusal of the original records, produced by the respondent MCD it is apparent that a copy of reply dated 8.5.96 to show cause notice dated 24.4.96 was lying in the office of the respondent MCD though in a different branch where the same was stated to have been received on 13.8.96. With a view to ascertain as to when the

reply dated 8.5.96 was actually received in the office of the respondent MCD, specific directions were given to the counsel for the respondent MCD to produce the original records including the notings indicating the date and the manner in which the above said communication (reply dated 8.5.96) was received and thereafter processed in the office of the respondent MCD. Despite specific directions the original records relating to the receipt and processing of the above said document were not produced. The copy of the reply dated 8.5.96, purported to have been received on 13.8.96 was produced in the Court alongwith other documents with a covering note sheet dated the 8th October, 1996, signed by one Shri Banarasi Dass stating that the above said document was received from the petitioner on 13.8.96. In the absence of original records, which has not been produced by the respondent MCD, it is some what difficult to believe the assertion of the learned counsel for the respondent MCD that no such document was received in the office of the respondent MCD on 8.5.96 as alleged by the petitioner. The above aspect is significant in view of the fact that the functioning of the respondent MCD is not 'individual' but 'institutional' where regular records are maintained for all in coming and out going Dak/Letters/Communications.

10.3 Moreover, in view of the earlier discussion and in view of the finding in respect of questions 1,2 & 3 the above aspect as to whether any reply to the show cause was given by the petitioner or not, looses all significance because even if the reply dated the 8th May, 1996 (Annexure P-14) is altogether ignored even then the impugned action taken by the respondent MCD is not sustainable in the eyes of law.

QUESTION - 5

11.1 The learned counsel for the respondents submitted that the petition of the nature, as the present one, deserves to be rejected and dismissed at its very threshold in as much as the impugned orders/actions were taken by the concerned competent authorities within the scope of statutory authority conferred on them and as such the decisions taken by them and impugned in the present writ petition are not amenable to the scrutiny by this Court.

11.2 In so far as the above aspect is concerned, I would first examine the nature of power exercised by the concerned competent authority of the respondent MCD, the principles of law governing the exercise of such power and the scope of judicial review or judicial control on the action of the above said authority and thereafter would revert back to the facts of the present case.

11.3 Section 430 of the Act does not law down any specific guidelines for the exercise of statutory power vested thereby except that before making any order of revocation a reasonable opportunity has to be given to the licencee and every such order shall contain brief statement of the reasons for the revocation of the licence. No other guidelines for the exercise of statutory power

are to be found in the rules or in the bye-laws and the matter is left to the realm of discretion. The Legislature has reposed the confidence in the Commissioner MCD which in view of the delegation stands vested in the Additional Commissioner (Engineering).

11.4 What the law expects from such statutory functionary? How has he to exercise the discretionary power vested in him?

11.5 De Smith in 'Judicial Review of Administrative Action' states-

"Discretionary powers must be exercised for the purposes for which they were granted; relevant considerations must be taken into account and irrelevant considerations disregarded; they must be exercised in good faith and not arbitrarily or capriciously. If the repository of the power fails to comply with these requirements it acts ultra vires."

11.6 In Mahesh Chander v. Regional Manager UPFC, their Lordships have held:-

"Every wide power, the exercise of which has far-reaching repercussion, has inherent limitation on it. It should be exercised to effectuate the purpose of the Act. In legislations enacted for general benefit and common good the responsibility is far graver. It demands purposeful approach. The exercise of discretion should be objective, test of reasonableness is more strict. The public functionaries should be duty conscious rather than power charged. Its actions and decisions which touch the common man have to be tested on the touchstone of fairness and justice. That which is not fair and just is unreasonable. And what is unreasonable is arbitrary. An arbitrary action is ultra vires. It does not become bonafide and in good faith merely because no personal gain or benefit to the person exercising discretion should be established. An action is mala fide if it is contrary to the purpose for which it was authorised to be exercised. Dishonesty in discharge of duty vitiates the action without anything more. An action is bad even without proof of motive or dishonesty, if the authority is found to have acted contrary to reason."

11.7 What is the scope of judicial review. Very recently in Tata Cellular v. Union of India , their Lordships have held:-

"The judicial power of review is exercised to rein in any unbridled executive functioning. The restraint has two contemporary manifestations. One is the ambit of judicial intervention; the other covers the scope of the court's ability to quash an administrative decision on its merits. These restraints bear the hallmarks of judicial control over administrative action. Judicial review is concerned with reviewing not the merits of the decision in support of which the application for judicial review is made, but the decision-making process itself. It is thus different from an appeal. When hearing an appeal,

the court is concerned with the merits of the decision under appeal. Since the power of judicial review is not an appeal from the decision, the Court cannot substitute its own decision. Apart from the fact that the Court is hardly equipped to do so, it would not be desirable either where the selection or rejection is arbitrary, certainly the Court would interfere. It is not the function of a judge to act as a super board, or with the zeal of a pedantic schoolmaster substituting its judgment for that of the administrator."

11.8 In H.B. Gandhi, Excise & Taxation Officer- cum-Assessing Authority, Karnal and Ors. v. Gopinath & Sons and Ors., 1992 Supp(2) SCC 312, their Lordships have held:-

"Judicial review is not directed against the decision but is confined to the decision making process. Judicial review cannot extent to the examination of the correctness or reasonableness of a decision as a matter of fact. The purpose of judicial review is to ensure that the individual receives fair treatment and not to ensure that the authority after according fair treatment reaches, on a matter which it is authorised by law to decide, a conclusion which is correct in the eyes of the Court. Judicial review is not an appeal from a decision but a review of the manner in which the decision is made. It will be erroneous to think that the Court sits in judgment not only on the correctness of the decision, making process but also on the correctness of the decision itself."

11.9 Without multiplying the authorities, suffice it to refer S. Ramachandra Raju v. State of Orissa, ; State of U.P. v. Maharaja Dharmander Prasad Singh etc., ; Shri Sitaram Sugar Company Ltd. and Anr. v. Union of India and Ors., .

11.10 Still I would like to take a note of two more decisions before reverting to the case at hand.

11.11 In Ex. Naik Sardar Singh v. Union of India & Ors., [(AIR 1992 SC 417) Pr.5], the following statement of law, made by Lord Diplock in Civil Service Unions v. Minister for Civil Service, [(1984) 3 All E.R. 935], was cited with approval:-

"Judicial review has I think developed to a stage today when, without reiterating any analysis of the steps by which the development has come about, one can conveniently classify under three heads the grounds on which administrative action is subject to control by judicial review. The first ground I would call 'illegality', the second 'irrationality' and the third 'procedural impropriety!"

11.12 In State of West Bengal v. Atul Krishna Shaw and Anr. , their Lordships have so stated the law (vide para 7):-

"If the quasi-judicial tribunal had appreciated the evidence on record and recorded the findings of fact, those findings are binding on

Supreme Court or the High Court. By process of judicial review they cannot appreciate the evidence and record their own findings of fact. If the findings are based on no evidence or based on conjectures or surmises and no reasonable man would on given facts and circumstances come to the conclusion reached by the quasi- judicial authority on the basis of the evidence on record, certainly the High Court would oversee whether the finding recorded by the authority is based on no evidence or beset with surmises or conjectures."

11.13 In the context of observance of principles of natural justice, the distinction between administrative orders and orders passed in exercise of quasi-judicial power is obliterating fast. Even an administrative order entailing adverse civil consequences has to comply with rules of natural justice. In Shri D.K. Yadav v. J.M.A. Industries Ltd. , their Lordships of the Supreme Court have held:-

"The cardinal point that has to be borne in mind, in every case, is whether the person concerned should have a reasonable opportunity of presenting his case and the authority should act fairly, justly, reasonably and impartially. It is not so much to act judicially but is to act fairly, namely, the procedure adopted must be just, fair and reasonable in the particular circumstances of the case. In other words application of the principles of natural justice that no man should be condemned unheard intends to prevent the authority to act arbitrarily affecting the rights of the concerned person.

It is a fundamental rule of law that no decision must be taken which will affect her an opportunity of putting forward his/her case. An order involving civil consequences must be made consistently with the rules of natural justice."

11.14 Raj Restaurant and Anr. v. Municipal Corporation of Delhi is a direct authority for the proposition that the minimum principles of natural justice and opportunity to show cause must be complied with before taking a decision refusing the license or cancelling or revoking the same; else it would be void. Law is legion on the point that such matters in the area of trade and commerce are governed by Audi Alteram Partem Rule (See North Bihar Agency v. State of Bihar, ; State of Punjab v. Ajudhia Nath, ; Mahavir Prasad v. State of U.P., ; Sinha Govindji v. The Dy. Chief Controller of Imports & Exports , addrass and Ors.. [(1962) 1 SCJ 93]; & City Corner v. Personal Assistant to Collector, .

11.15 De Smith's Judicial Review of Administrative Action (4th edition) states:-

"A matter is usually held to be one of degree (and therefore of fact) if it is one on which reasonable men may arrive at discrepant conclusions on the evidence before them." (page 131)

"The vaguer the statutory standard, the more closely does a determination that the facts found conform or do not conform to that standard approximate to an exercise of discretion and choice rather than a finding of fact. What are to be judges questions of fact and degree (as opposed to questions of law) are often to the layman matters of personal opinion. It does not follow, however, that either the judge or the layman will regard every determination of such a question as unassailable." (page 131)

"If the drawing of an inference or the application of a statutory term is held or assumed to be a matter of fact (or fact and degree) for the "tribunal" of first instance, a Court may still hold that the decision is erroneous in point of law if.......the inference or conclusion is one that no reasonable body of persons properly instructed in the law could arrive at (as where the evidence, including the tribunal's own expert knowledge, and primary facts point unmistakably to a different conclusion). If the formulation is slightly changed, and it is said that an error of law exists whenever the conclusion is one to which the competent authority cannot reasonably come on the evidence adduced, the scope of judicial review is potentially extended." (p.137)

11.16 To what extent the finding would remain a finding of fact within the exclusive domain of the authority and on what limit being crossed it would be vulnerable to the Judicial Review? HWR Wade in Administrative Law (6th Edition) (PP 319-320) states:-

"Findings of fact are the domain where a deciding authority or tribunal can fairly expect to be master in its own house."

"But the limit of this indulgence is reached where findings are based on no satisfactory evidence at all. It is one thing to weigh conflicting evidence which might justify a conclusion either way. It is another thing altogether to make insupportable findings. This is an abuse of power and may cause grave injustice. At this point, therefore, a court is disposed to intervene."

"No evidence does not mean only a total dearth of evidence. It extends to any case where the evidence, taken as a whole, is not reasonably capable of supporting the findings; or where, in other words, no tribunal could reasonably reach that conclusion on that evidence. This 'no evidence' principle clearly has something in common with the principle that perverse or unreasonable action is unauthorised and ultra vires."

"To find facts on no evidence is to err in law."

11.17 It, therefore, follows that I would not interfere with the impugned order of the Additional Commissioner (Engineering), MCD even if convinced of the possibility of a different conclusion being arrived at on the same evidence or because a different decision would have been a better one. All that is permissible is to see whether the decision is vitiated by irrationality, illegality and/or procedural impropriety?

11.18 In the light of the legal principles, noticed hereinabove, it is clear that the power conferred on Commissioner, MCD [(delegated to Additional Commissioner(Engineering)] to revoke a license is a quasi-judicial power. It is coupled with a duty to act fairly in public interest. The power has to be exercised consistently with the principles of natural justice. The decision taken is open to judicial review on grounds of illegality, irrationality and procedural impropriety.

11.19 With the above said statement of law, I now revert to the facts of the case at hand.

11.20 According to the petitioner since the inception of tenancy i.e. w.e.f. 29/7/75 the petitioner company is running its manufacturing unit of garments at 8/32, Kirti Nagar Industrial Area and for that purpose is having a valid licence bearing No. 81091 issued by the respondent MCD which is valid till 31.3,98. The petitioner company is also having a permission from respondent No.2 for operating the generator set. In my opinion, in view of the legal position explained above the concerned authorities of the respondents were under an obligation to satisfy this Court that while passing the impugned orders they have acted fairly in public interest and have followed the principles of natural justice and complied with all the statutory requirements. As already discussed in detail the concerned functionaries of the respondents, while taking the impugned action, have neither followed the principles of natural justice nor the statutory requirement in the case of respondent MCD and thus the impugned orders are open to judicial review.

QUESTION - 6

12.1 The contention of the petitioner in the present writ petition is that the impugned action against the petitioner has been taken by the concerned functionaries of respondent No. 1 at the instance and in connivance with the landlord of the petitioner. It was submitted by the learned counsel for the petitioner that as the concerned functionaries of respondent No. 1 have taken the impugned action against the petitioner not in good faith i.e. in due discharge of their duties but have acted at the instance and in connivance with the landlord of petitioner with ulterior motive and, therefore, the impugned action taken by the functionaries of respondent No. 1 suffers from the vice of malafides and is liable to be struck down on this count alone.

12.2 What is 'malafides' as understood in Administrative Law? 'Malafides' or 'bad faith' means dishonest intention or corrupt motive. In Jaichand Lal v. State of West Bengal, malafides, in the context of exercise of statutory power, has been so defined by their Lordships:-

"A malafide exercise of power does not necessarily imply any moral turpitude as a matter of law. It only means that the statutory power is exercised for purposes foreign to those for which it is in law intended. In other words, the power conferred by the statue has been utilized for some indirect purpose not connected with the object of the statute or the mischief it seeks to remedy."

12.3 The allegation of malafides has to be proved. In E.P. Royappa v. State of Tamilnadu and Anr. , their Lordships of the Supreme Court refused to declare the action 'malafide' as 'suspicion could not take the place of proof and "proof needed here is high degree proof". Burden of establishing 'malafides' is very heavy on the person who alleges it. More serious the allegation, higher the degree of credibility of proof demanded by the Court. 'Malafides' if not discernible from the impugned order, must be shown to exist either by direct evidence or clinching circumstantial evidence. In Barium Chemicals Ltd. v. Company Law Board and Ors., , their Lordships have appreciated the difficulty of proving an allegation as to bad faith or indirect motive or purpose except on clear proof thereof. In Rajender Rai v. UOL and in M. Sankaranarayanan v. State of Karnataka and Ors., , their Lordships have pointed out that inference as to malice must be based on factual matrix which cannot remain in the realm of insinuation, surmise, conjecture or vague suggestions. Suffice it to observe that difficulty of proof cannot dispense with necessity of proof.

12.4 If the above criterion is applied to the case in hand then on the basis of material available on record it cannot be held that the concerned functionaries of the respondents have exercised their power malafide or for extraneous reasons. While taking the impugned actions they may have acted erroneously but it cannot be held that they acted in a malafide manner or there has been colourable exercise of power on their part.

13. To sum up, this Court is of the opinion that impugned orders passed by the respondents though not vitiated by malafides yet in view of the position already explained the same cannot sustain the test of judicial scrutiny and are liable to be quashed.

14. For the foregoing reasons, the petition is allowed and the impugned order dated the 8th August, 1996, passed by the Additional Commissioner (Engineering) and communicated by Assistant Commissioner(Factories) vide letter dated 22.8.96 (Annexure P-18), revoking the licence of the petitioner and order dated 21.5.96 (Annexure P-19), passed by the Commercial Officer of DESU (respondent No.2) are hereby set aside. However, the respondents are given the liberty to serve a fresh show cause notice on the same grounds, affording a reasonable opportunity of hearing to the petitioner consistently with the observations made hereinabove. The petition stands disposed of accordingly. In the facts and circumstances of the case the parties are left to bear their own costs.