M/S. Suresh Kumar Gupta vs State Nct Of Delhi & Anr.
2014 Latest Caselaw 135 Del

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*        IN THE HIGH COURT OF DELHI AT NEW DELHI

+        W.P.(C) 8605/2007 & CM.No.16220/2007

%                                        Judgment delivered on 08.01.2014

         M/S SURESH KUMAR GUPTA                  ..... Petitioner
                  Through: Mr.Sanjeev Kumar, Advocate

                      versus

         STATE NCT OF DELHI & ANR                 ..... Respondent
                  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. Necessary facts for disposal of this petition are that on 04.01.1977 authorization to operate Fair Price Shop No.4118 in Circle No.39 was issued in the name of M/s.Suresh Kumar Gupta, through its proprietor Sh.Suresh Kumar.

2. On an inspection carried out by Enforcement Branch of Food and Civil Supplies Department on 02.09.1994, after a gap of over 10 years, certain irregularities were detected, consequent thereto a complaint was lodged on 03.10.1994, resulting in registration of FIR No.355/1994 under section 7 of the Essential Commodities Act, at Police Station Dabri. This also led to issuance of suspension-cum-show cause notice on 17.10.1994. By an order dated 25.11.1994, Assistant Commissioner (South-West) was pleased to revoke the order of suspension, after forfeiting the security amount to the state and restored the authorization of the Fair Price Shop.

3. In the criminal proceedings initiated on 12.09.1996 Sh.Suresh Kumar was

convicted by the court. Sh.Suresh Kumar expired on 03.04.2003 and consequent to his death on an application made by his son Rajesh Kumar (the present proprietor of the petitioner) on 31.07.2006 a fresh authorization was issued in his favour. On 10.09.2007 a show cause notice was issued to the petitioner directing him to appear before respondent no.2. On 15.09.2007 the petitioner appeared and filed his reply to the show cause notice. Dissatisfied with the explanation rendered by the petitioner, an order of cancellation was passed on 25.10.2007, which resulted in filing of the present writ petition.

4. It is submitted by counsel for the petitioner that once the respondents had issued show cause notice-cum-suspension memo dated 17.10.1994 and after due hearing a penalty of forfeiture of security amount was imposed, 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 10.9.2007 and cancellation order dated 25.10.2007 are liable to be quashed, as firstly the action initiated has become stale; and secondly, violation, if any, stands condoned as licence was renewed subsequently for 11 years and moreover in the name of the present proprietor of the petitioner.

5. Mr.Salwan, counsel for the respondent submits that once the father of the present proprietor had committed breach and was convicted, the respondents were bound to cancel the licence of the petitioner in terms of 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, 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 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 the license was granted to the father of the present proprietor to run a Fair Price Shop in the year 1977. The father of the present proprietor was convicted in the year 1996. 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 the licence

was renewed from time to time in favour of the previous licence holder and subsequently the authorization of petitioner firm was transferred to the present proprietor. It was only after a gap of 11 years after the conviction of previous licence holder, show cause notice dated 10.9.2007 for cancellation of the Fair Price Shop was issued and the licence was cancelled vide order dated 25.10.2007 as according to the respondent, previous licensee 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 for more than 11 years. In my view no action lies against the present licence holder for the act committed by the previous licence holder. Even otherwise having not taken action for 11 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 11 years, the respondents are estopped from taking action against the petitioner 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. Moreover, the respondents by agreeing to transfer the licence in the name of the present proprietor of the petitioner firm, have condoned the act of the previous licencee of the petitioner firm, hence, the licence of the present proprietor of the petitioner firm 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 licence holder 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 license 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 license in the name of present licence holder has given him a reasonable cause to believe that a right has accrued in his favour. Accordingly, the impugned show cause notice dated 10.9.2007 and cancellation order dated 25.10.2007 are quashed.

15. Rule is made absolute. The petition and the application stand disposed of in above terms. Parties shall bear their own costs.

G.S. SISTANI, J.

JANUARY 08, 2014 'ssn'