Joshi Store vs Govt. Of Nct Of Delhi & Ors.
2014 Latest Caselaw 134 Del

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*       IN THE HIGH COURT OF DELHI AT NEW DELHI

+       W.P.(C) 8695/2007
%                                         Judgment delivered on 08.01.2014
        JOSHI STORE                                         ..... Petitioner
                 Through :         Mr. R.P. Luthra, Mr. Harjeet Singh and
                                   Mr. Rahul Singh, Advs.
                        versus

        GOVT. OF N.C.T. OF DELHI & ORS.          ..... Respondents
                 Through: Mr.S.D. Salwan and Ms.Latika Dutta, Advs
        CORAM:
                    HON'BLE MR. JUSTICE G.S.SISTANI
G.S.SISTANI, J. (ORAL)

1. Rule. With the consent of counsel for the parties, present petition is set down for final hearing and disposal.

2. Necessary facts for disposal of this petition are that the petitioner, M/s Joshi Store, is stated to be the holder of Licence No.7216 in respect of a Fair Price Shop being operated from the premises bearing no.A-147, New Ashok Nagar, Delhi. At the time of allotment/authorization of Fair Price Shop in the year 1987, the petitioner, M/s Joshi Store, was under the proprietorship of Mr.Mathura Dutt Joshi, who died on 10.2.2000. Consequent to his demise his son Mr. Kailash Chander Joshi, stepped into the shoes of his father and took over the affairs of M/s Joshi Store. On 28.5.2004, necessary authorization in the form of 'Form C' in favour of Mr. Kailash Chander Joshi was issued by respondent no.2. Thereafter, the licence of the petitioner was renewed from time to time and lastly till 5.7.2009.

3. It is submitted by learned counsel for the petitioner that after the affairs of the firm were taken over by Mr. Kailash Chander Joshi there had been no

complaints/violations, whatsoever. In the month of August, 2007, the proprietor of the petitioner firm, Mr. Kailash Chander Joshi, was served with a Show Cause Notice dated 17.8.2007 on the basis of conviction of his father, Mr.Mathura Dutt Joshi, in the year 1995 under the Essential Commodities Act. In reply to the said show cause notice, the stand taken was that after taking over the affairs of M/s Joshi Store by Mr.Kailash Chander Joshi (the present proprietor), there had been no conviction/violation, and Mr.Kailash Chander Joshi had no knowledge regarding conviction of his father. Since the reply was not found satisfactory, by an order dated 1.9.2007 licence/authorization of the Fair Price Shop was cancelled.

4. The first argument of counsel for the petitioner is that the previous proprietor of petitioner firm was convicted in the year 1995, hence, the petitioner cannot be punished twice for the same offence. The second argument of counsel for the petitioner is that the show cause notice dated 17.8.2007 and cancellation order dated 1.9.2007 are liable to be quashed, as firstly the action initiated has become stale; and secondly, violation, if any, by the father of the present proprietor stands condoned, as licence was renewed subsequently for 12 years and more.

5. Mr.Salwan, learned counsel for the respondent submits that once the father of the present proprietor had committed breach and was convicted, the respondents were well within their rights to take action as per Clause 7 of the 1981 Order dated 12.01.1981, i.e. Delhi Specified Articles (Regulations of Distribution) Order, 1981 which reads as follows:

"7. Cancellation of authorization upon Conviction.- Notwithstanding anything contained in this clause where an authorized wholesaler or a fair price shop holder has been convicted by a court of law in respect of contravention of any of the provisions of this Order or any other order made under

Section 3 of the Essential Commodities Act, 1955 (10 of 1955), the Deputy Commissioner may, by order, in writing cancel his authorization forth with :

Provided that where such conviction is set aside in appeal or revision the Deputy Commissioner may on application by the person whose authorization has been cancelled re-issue the authorization to such person."

6. Counsel for the respondent submits that the delay is procedural, as in the period of 18 years, 24 Assistant Commissioners had been transferred in one zone, and in another zone 12 Assistant Commissioners were transferred in 10 years.

7. In response to the above, the counsel for the petitioner stated that in case the respondents were to rely upon Clause 7 of the order dated 12.1.1981, the same should have been invoked by them within the shortest span of time from the date of the cause of action and in any case within a reasonable period of time. It is further contended that on account of delay, the respondents are estopped from relying on Clause 7 of the Order dated 12.01.1981 which would be deemed to have been given up by the respondents, by virtue of their conduct; and on the contrary, vested right has been created in favour of the petitioner firm by continuous renewal of license, which cannot be taken away at this belated stage.

8. I have heard counsel for the parties and also perused the petition as also the annexures filed along with the petition.

9. The basic facts are not in dispute that a license was granted to the father of the present proprietor to run a Fair Price Shop. It is also not in dispute that as long as the father of the present proprietor was alive, no action was taken against him as per Clause 7 of the Delhi Specified Articles (Regulations of Distribution) Order 1981. Thereafter, licence was granted in favour of the present proprietor, who is a separate entity, and further

the said licence of the petitioner firm was renewed from time to time. It was only after a gap of more than 12 years, a show cause notice dated 17.8.2007 for cancellation of the Fair Price Shop was issued and the licence was cancelled vide order dated 1.9.2007 as according to the respondent, previous licence holder had incurred a disqualification having been convicted by a criminal court, in terms of 1981 Order.

10. Admittedly, no administrative action was taken by the respondent against the petitioner firm for more than 12 years. Thus in my view no action lies against the present proprietor of petitioner firm for the act committed by the previous licence holder. Even otherwise having not taken action for 12 years and on the contrary having renewed licence of the petitioner firm from time to time would amount to condoning the act of the wrong doer; and after 12 years, the respondents are estopped from taking action against the petitioner firm having waived off their rights by their own conduct. The Government must act in fair, just and expeditious manner. The delay and inaction on the part of the respondent has resulted in creation of valuable rights in favour of the petitioner.

11. It is settled law that a statutory authority is required to act reasonably, fairly and expeditiously. The respondents have not only slept over its right, but also there is no reasonable and plausible explanation for the gross delay, and, thus, the respondents waived their right for taking any action against the petitioner firm. Moreover, the respondents by agreeing to transfer the licence in the name of the present proprietor of petitioner firm have condoned the act of the previous licence holder of the petitioner firm; further, the respondents have given a reasonable belief to the petitioner that his right and title is good and shall not be disturbed, hence, the licence of the present proprietor cannot be cancelled for the acts of the previous licencee.

12. At this belated stage, the action of the respondent has become stale and more so the authorization of person who was actually convicted has already been transferred to another, which transfer has been carried out by the respondents department and the new proprietor/authorization holder has been continuously running Fair Price Shop for years. The above narration of facts would show that the department has been extremely careless and casual in enforcing the terms of the license, in accordance with law, and, thus, respondents' action cannot be sustained.

13. Counsel for the respondents has placed reliance upon the report of Justice Wadhwa Committee constituted by the Supreme Court of India. Due to the aforesaid facts and observations, respondents cannot at this stage get benefit of their inaction or the findings of the report.

14. In view of the aforesaid, present proprietor of the petitioner firm cannot be penalized, at this stage even more so since the published act was never committed by the present license holder. A party is bound to act reasonably more so a statutory authority. The authority was under a duty to act reasonably and without prejudice to the rights of the petitioner. Given that the authority has itself renewed the licence of the petitioner, they themselves have condoned the earlier conviction. Further by not acting within a reasonable period of time and by agreeing to renew the licence in the name of the present proprietor of the petitioner firm, has given him a reasonable cause to believe that a right has accrued in his favour. Accordingly, the impugned show cause notice dated 17.8.2007 and cancellation order dated 1.9.2007 are quashed.

15. Rule is made absolute. The petition stands disposed of in above terms.

Parties shall bear their own costs.

G.S. SISTANI, J.

JANUARY 08, 2014 'ssn'