Full Judgment Text
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CASE NO.:
Appeal (civil) 2339 of 2002
PETITIONER:
STATE OF U.P. AND OTHERS
Vs.
RESPONDENT:
DAULAT RAM GUPTA
DATE OF JUDGMENT: 22/03/2002
BENCH:
V.N. Khare & Ashok Bhan
JUDGMENT:
[(with C. A No. 2340/2002 (@ S.L.P (Civil) No. 13106/2001, C.A. No 2341/2002 @ S.L.P (Civil)
No. 473/2002, C.A. No 2342/2002 @
S.L.P (Civil) No. 2908/2002 and S.L.P (Civil) Nos. 5082/2002,
5085/2002, 5087/2002, 5089/2002, 5091/2002, 5092/2002, 5094/2002
and 5095/2002)]
J U D G M E N T
V. N. KHARE, J.
Leave granted in S.L.P.(Civil) Nos. 472/2002, 473/2002, 13106/2001
and 2908/2002.
The short question which falls for our consideration in this group of
appeals is whether the State government or the Licensing Authority can
issue direction for refusal of renewal of licences granted to petty dealers
under the U.P. High Speed Diesel Oil and Light Diesel Oil (Maintenance of
Supplies and Distribution) Order, 1981 (hereinafter referred to as the
(’Statutory Order’ ) if their places of business are within a radius of five
kilometers of retail outlet run by a government oil company.
Since common question of fact and law is involved in this group of
appeals, learned counsel for the parties have advanced arguments in Special
Leave Petition (Civil) No. 472/2002. Therefore, we propose to notice the
facts which have given rise to Civil Appeal No/2002 (arising out
of S.L.P (Civil) No. 472/2002.
Earlier, the sale of Light Diesel Oil and High Speed Diesel Oil in the
State of U.P. was governed by an Act known as ’U.P. Motor Spirit, Diesel
Oil and Alcohol (Imposition of Tax) Act, 1939 enacted by provincial
legislature of the then united provinces. Subsequently, the Parliament
enacted the Essential Commodities Act, 1955 (hereinafter referred to as ’the
Act’) with a view to provide, in the interest of general public, for the control
of the production, supply and distribution of, and trade and commerce, in
certain commodities. It is not disputed that the sale of High Speed Diesel
Oil and Light Diesel Oil is one of the essential commodities which is
governed by the Act. Section 3 of the Act provides that if the Central
Government is of the opinion that it is necessary or expedient so to do for
maintaining or increasing supplies of any essential commodity or for
securing their equitable distribution and availability at fair prices, it may, by
order, provide for regulating or prohibiting the production, supply and
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distribution thereof and trade and commerce therein. Sub-section (2) thereof
provides that without prejudice to the generality of the powers conferred by
sub-section (1), an order amongst other things, may provide for regulating
by licences, permits or otherwise the storage, transport, distribution, disposal
or consumption of any essential commodity. Section 5 of the Act provides
that the Central government may, by notified order, direct that the power to
make orders or issue notifications under Section 3 shall, in relation to such
matters and subject to such conditions, if any, as may be specified in the
direction, be exercisable by a State government or any officer or such
authorities subordinate to the State government, as may be specified in the
direction.
After passing of the Act, the government of U.P. felt that in the
absence of retail outlets for sale of Diesel Oil in rural areas, the consumers,
specially the farmers have to face considerable hardship in carrying out their
agricultural operations and, therefore, it took decision to grant licences to
petty dealers in rural areas to sell Diesel Oil. It is in the aforesaid
background, the State government of U.P. framed the Statutory Order, in
exercise of power delegated to it under the Act.
The respondent herein was granted a licence for sale of Diesel Oil
under the Statutory Order. The said licence was being renewed from time to
time. On 25.11.1981, the government of U.P. by an executive order directed
that no license for retail sale of Diesel Oil granted under the Statutory Order
shall be renewed if the place of business of such licensee falls within a
radius of 5 kms. of the government run retail outlets. The said executive
order dated 25.11.1981 was challenged by means of writ petitions before the
High Court of Judicature at Allahabad. It is alleged that by a judgment and
order dated 14.5.1989, the High Court allowed the writ petition, inter alia,
holding that the impugned executive order dated 25.11.1981 placed an
unreasonable restriction on the fundamental right of the petty dealers and
that the said executive order could not be passed without hearing the
licensee affected thereby.
Aggrieved, the State of U.P. challenged the aforesaid judgment by
means of special leave petitions in this Court. However, on 16.9.1987, the
Government of U.P. issued another identical executive order imposing
similar restrictions during pendency of the special leave petitions before this
Court. This Court disposed of special leave petition No. 8742/1981 and the
connected special leave petitions in view of the fact that the impugned
executive order was superseded by a fresh executive order dated 16.9.1987,
without expressing any opinion on merits, leaving all the contentions open to
any fresh writ petition that may be filed by an aggrieved licensee before the
High Court.
In the year 1988, the petty dealers who had licences under the
Statutory Order and which were not being renewed in view of the executive
order dated 16.9.1987, filed another fresh set of writ petitions challenging
the executive order dated 16.9.1987. On 7.3.1995, a Division Bench of
Allahabad High Court in the case of Daulat Ram Gupta vs. State of U.P. and
others 1996 ALJ, 212 allowed the writ petitions and quashed the executive
order dated 16.9.1987. Despite the said decision, the government issued
another executive order in 1997 on the same pattern and lines which was
earlier set aside by the High Court. The said executive order of 1997 came
to be superseded by another order dated 4.1.2001. Paras 1 & 2 of the order
runs as under:
"1. The object and aim of the government is that
arrangement be made with respect to those places, which
are far away from regular diesel retail outlet of oil
companies, that their demands be met conveniently from
the adjoining places and for the sake of it the petty
dealers of high speed diesel be appointed in the districts
under the provisions of Uttar Pradesh High Speed Diesel
Oil (Maintenance of Supply and Distribution) Order,
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1981.
2. Regular diesel retail outlet fully fulfils the need of
the consumers in all the directions and even it remains
financially autonomous too. Therefore, petty diesel
dealers be appointed at the place more than the distance
of 5 k.m. through road from the regular diesel retail
outlet (away from national highway and national road).
Although the said executive order did not provide for refusal to renew
licence granted under the Statutory Order, yet curiously enough, the District
Supply Officer, Bareilly, by letter dated 1.3.2001 informed the respondent
herein that since his retail outlet of Diesel Oil falls within a radius of 5 kms.
of a retail outlet run by the government oil company, therefore his licence
for retail vend of Diesel Oil shall not be renewed. It is against the said
order, the respondent herein filed a petition under Article 226 of the
Constitution before the High Court. The High Court relying upon the
decisions in Daulat Ram Gupta vs. State of U.P. & Ors (supra) and in Writ
Petition No. 10574/2001 decided on 22.3.2001 set aside the order refusing to
renew the licence and directed the appellants herein to entertain and consider
the respondent’s application for renewal of licence, irrespective of the
alleged aforesaid restrictions contained in the government order dated
4.1.2001. Consequently, the Writ Petition was allowed, and it is against the
said judgment and order of the High Court, the State of U.P. has preferred
these appeals and special leave petitions.
Learned counsel appearing for the appellant assailed the impugned
judgment, inter alia, on the ground that under sub-clause (6) of Clause 16 of
the Statutory Order, it is permissible for the State government to issue an
executive order or direction for non-renewal of licence of any petty dealer if
his place of business falls within a radius of 5 kms. of a retail outlet of a
government run oil company. Learned counsel appearing for the respondent
supported the judgment of the High Court.
On the argument of learned counsel for the parties, the question that
arises for consideration is whether the District Supply Officer could refuse to
renew the licence granted under the Statutory Order, if the licensee’s place
of business falls or situated within a radius of 5 kms. of the retail outlet of a
government run oil company.
It is not disputed that the method of grant of licence as well as the
conditions of licence and its renewal are provided in the Statutory Order
framed under the Essential Commodities Act. Clause 2(d) of the Statutory
Order provides that ’dealer’ means a person engaged in the business of
purchase, sale or storage for sale of High Speed Diesel Oil or Light Diesel
Oil or both but does not include an oil company. Clause 2(h) of the
Statutory Order provides that the ’licensee’ means a dealer holding a licence
granted under the provisions of this Order. Clause 4 of the Statutory Order
further provides that for grant or renewal of a licence an application in Form
’B’ attached to the Order, shall be given to the Licensing Authority. Every
licence granted or renewed under this Order shall be in Form ’C’ and shall
be subject to the conditions specified therein. Clause 8 of the Statutory Order
further provides that the Licensing Authority may, for reasons to be recorded
in writing, suspend or cancel any licence if it is satisfied that the licensee has
contravened any provisions of this order or the conditions of the licence or
any direction issued thereunder. It is not disputed that the respondent was
granted licence under the Statutory Order. Form ’B’ attached to the
Statutory Order does not show that the licence to vend Diesel Oil can be
refused if the applicant has place of business within the radius of 5 kms. of a
retail outlet. Similarly, neither Clause 4 nor Form ’C’ attached to the
Statutory Order provides that no licence shall be renewed if the place of
business of a licencee falls within a radius of 5 kms. of a government retail
outlet.
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It is, therefore, manifest from the provisions of the Statutory Order
that in so far as conditions of grant of licence for sale of Diesel Oil and its
renewal are concerned, the Statutory Order is a complete code in itself and
there is no provision in the Statutory Order under which a Licensing
Authority could refuse to renew a licence if licensee’s place of business falls
within a radius of 5 kms. of a government run retail outlet.
Coming to the main argument as to whether such an order or direction
could be issued either by the State government or Licensing Authority under
sub-clause (6) of Clause 16 of the Statutory Order, it is necessary to look
into the provisions of sub-clause (6) of Clause 16 of the Statutory Order
which runs as under:
"(6) Every dealer shall comply with the general or special
directions not inconsistent with this order that may be
given to him in writing by the State Government, the
Commissioner, Food and Civil Supplies or the Collector
for the purpose of giving effect to the provisions of this
Order and any contravention of such directions shall be
deemed to a contravention of this Order."
A perusal of sub-clause (6) shows that it enables the making of an
order or issuing of direction by the executive. In exercise of that power, the
State government, the Commissioner, Food and Civil Supplies or the
Collector are empowered to issue a general or special direction to any dealer,
which is not inconsistent with the provisions of the Statutory Order, only for
giving effect to the provisions of the Statutory Order. Thus, there are two
restrictions on the power of the State government or a Licensing Authority
while issuing a general or special direction firstly, such a direction should
not be inconsistent with the Statutory Order and secondly, such direction can
be issued only for purposes of giving effect to the provisions of the Statutory
Order. In that view of the matter any direction issued under sub clause (6)
of Clause 16 must show that it complies with the description of delegation of
power to issue directions.
In Black’s Law Dictionary the expression ’inconsistent’ means
lacking consistency; not compatible with. Viewed in this light, the nature
and extent of power the State government or a Licensing Authority
possessed under sub-clause (6) is to issue directions only in conformity with
the Statutory Order. In other words, the direction so issued by the State
government or Licensing Authority must be compatible with the provisions
of the Statutory Order. The State Govt. or the Licensing Authority in the
exercise of delegated powers to issue direction cannot make provisions
which are inconsistent with the Statutory Order. Since the power to issue
directions by the State government or any other specified authorities must
not be inconsistent with the Statutory Order, any direction issued if found
not in conformity with the provisions of the Statutory Order, the same must
be held to be beyond the enabling provisions of the Statutory Order. It must
be remembered that the power to issue directions is derived from sub-clause
(6) of Clause 16 of the Statutory Order and a delegatee on whom such a
power is conferred is required to act within the framework of the authority
conferred by the Statutory Order. Since the direction issued by the
Licensing Authority that the licence of the respondent shall not be renewed
on the premise that his place of business falls within a radius of 5 kms. of
retail outlet of a government run oil company being not in conformity with
the provisions of the Statutory Order, it must be held to be inconsistent to the
provisions of the Statutory Order.
Coming to the second restriction on the power of the State
government or the specified authorities, the provisions empowering them to
issue directions to dealers could be exercised only to give effect to the
provisions of the Statutory Order and further to effectuate the object behind
the Statutory Order if the object is discernable in the Statutory Order. The
nature of directions which could be issued under the enabling provisions
contained in sub-clause (6) of Clause 16 of the Statutory Order, is only for
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purposes of giving effect to the Statutory Order and not otherwise. The
conditions of grant of licence and its renewal are the essential features of the
Statutory Order and in guise of issuing directions, the State government or a
Licensing Authority cannot supplant the provisions of the Statutory Order,
but can supplement it only with a view to give effect to the provisions of the
Statutory Order. The State government or the Licensing Authority while
giving effect to the provisions of the Statutory Order is not authorised to
amend the Statutory Order by issuing directions. Once the enabling
provisions restrict the power of issuing direction only for giving effect to the
provisions of the Statutory Order, the nature and extent of direction which
the State government or any authority specified therein are empowered to
issue is confined to the area which is marked out by the Statutory Order. In
the present case what we find is that the Licensing Authority while issuing
the direction that the respondent’s licence shall not be renewed on the
premise that his place of business falls within a radius of 5 kms. of a retail
outlet of government run oil company has, in fact, purported to amend the
conditions of renewal of licence granted under the Statutory Order which
was not permissible under sub-clause (6) of Clause 16 of the Statutory
Order.
We have already noticed that the provisions of the Statutory Order do
not provide for refusal to renew a licence granted under the Statutory Order,
if the place of business of a licensee falls within a radius of 5 kms. of a
government run retail outlet. Further, the Statutory Order neither expressly
nor by necessary implications prohibit the grant of licence to a person or
refusal to renew such a licence if the place of business of such licensee falls
within the radius of 5 kms. of a government run retail outlet. In that view of
the matter, the direction/order issued by the Licensing Authority refusing to
renew the licence of the respondent was inconsistent with the provisions of
the Statutory Order inasmuch as the same was not for purposes for giving
effect to the Statutory Order and, therefore, such a direction/order could not
have given effect to, while considering the renewal of licence of the
respondent herein.
For the aforesaid reasons, we are in agreement with the view taken by
the High Court. Consequently, we do not find any merit in these appeals
and the special leave petitions which are, accordingly, dismissed. There
shall be no order as to costs.
J.
(V. N. Khare)
J.
(Ashok Bhan)
22nd March, 2002