Full Judgment Text
IN THE HIGH COURT OF DELHI
Writ Petition (Civil) No. 7728/2007 & CM No. 14721/2007
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Judgment reserved on : 15 November, 2007
Date of decision: December 26, 2007
South Delhi Medicos & Ors. ... Petitioner
through: Mr. Valmiki Mehta, Sr. Adv. with Mr. B. K.
Dash and Mr. S. Palo, Advs.
VERSUS
New Delhi Municipal Council & Ors. ....Respondents
through: Ms. Anjana Gosain and Mr. Rajesh
Mahajan, Advs. for the NDMC/respondent
no. 1
Mr. Dhruv Madan with Mr. Atul Y. Chitale,
Advs. for the respondent no. 2
Ms. Jyoti Singh with Mr. Ankur Chibber, Advs.
for the GNCT of Delhi/respondent no. 3
AND
Writ Petition (Civil) No. 7709/2007 & CM No. 14695/2007
Pioneer Medicos & Ors. ... Petitioner
through: Mr. Rajiv Bajaj, Adv.
VERSUS
New Delhi Municipal Council & Ors. ....Respondents
through: Ms. Anjana Gosain and Mr. Rajesh Mahajan,
Advs. for the NDMC/respondent no. 1
Mr. Dhruv Madan with Mr. Atul Y. Chitale,
Advs. for the respondent no. 2
Ms. Jyoti Singh with Mr. Ankur Chibber, Advs.
for the GNCT of Delhi/respondent no. 3
CORAM:
HON'BLE MS. JUSTICE GITA MITTAL
1. Whether reporters of local papers may be allowed to
see the Judgment? Yes
2. To be referred to the Reporter or not? Yes
3. Whether the judgment should be reported in the
Digest? Yes
W.P.(C) Nos.7709 & 7728/2007 page 1 of 36
GITA MITTAL, J
1. These two writ petitions raise similar questions of law and fact
and consequently are being disposed of by this common judgment .
2. The writ petitions were filed against the New Delhi Municipal
Council created under the provisions of the New Delhi Municipal
Council Act, 1994 and performing functions thereunder.
3. It is necessary to consider certain essential facts leading up to
the filing of the writ petitions which are noticed hereafter. So far as
the writ petitioner in W.P.(C) No. 7728/2007 is concerned, on or
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about 20 February, 1986 the NDMC had allotted a kiosk to the
petitioner no. 1 – South Delhi Medicos in the year 1987. Allotment of
this kiosk was transferred to the sole name of the petitioner no. 2 –
Ms. Shashi Bala Gupta, by a letter of allotment bearing no.
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D/212/Estate dated 31 January, 2006 on terms and conditions set
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out in the licence deed executed between the parties on 20 February,
1986. It is an admitted position that the licence granted to the
petitioner was for the purposes of running the trade of 'chemist' in the
name of M/s South Delhi Medicos, the petitioner no.1 in the kiosk in
question. It was so stated in the licence agreement. The period of
st st
the licence in the agreement was from 31 July, 2004 to 31 March,
2011.
4. There is no dispute that these petitioners are occupying the
kiosks in terms of such licence granted to them and are running their
W.P.(C) Nos.7709 & 7728/2007 page 2 of 36
chemist trade therein. The petitioner no. 1 has been granted a drug
licence to carry on the retail and wholesale trade of drugs by the
licencing authority of the Government of NCT of Delhi in accordance
with the Drugs & Cosmetics Act of 1940 and the Drugs & Cosmetics
Rules, 1945 since the year 1990. This licence has been renewed from
time to time in accordance with the applicable statute and rules
thereunder. There is no dispute that the petitioner has a current
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licence which is valid up to 24 August, 2009.
The South Delhi Medicos has been so carrying on trade for the
last 15 years.
5. So far as the writ petitioner in W.P.(C) No. 7709/2007 is
concerned, M/s Pioneer Medicos, the petitioner has filed this writ
petition through its partner Shri Arun Gandhi. It has been pointed
out that his late father Shri R.N. Gandhi was allotted the kiosk
bearing no. S-52 at Safdarjung Hospital main gate, New Delhi-110029
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on 1 March, 1973 for the purposes of selling tea and tobacco
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products and allotted space of 77 sq. fts. By a letter dated 7
September, 1991, the NDMC permitted his sons, Shri Ashok Gandhi
and Shri Arun Gandhi to cover the open tehbazari space of 18 sq. ft.
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by the side and 25 November, 1991. This was followed by a letter of
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31 May, 1990 whereby permission was given to Mr. Ashok Gandhi
and Mr. Arun Gandhi to use the space, measuring 6 ft x 3 ft (i.e. 18 sq.
feet) by the side of the kiosk, on tehbazari. According to the
W.P.(C) Nos.7709 & 7728/2007 page 3 of 36
petitioner, 95 sq. ft of space was originally allotted to him. He has
also paid increased licence fee when the area was increased and has
been running the trade of chemist since 1991 when the NDMC
permitted this change. It would thus appear that this petitioner is
carrying on the chemist trade for the last 16 years for which he has
valid licence from the competent authority of the Government of NCT
of Delhi under the Drugs and Cosmetic Rules, 1945.
6. This writ petition has been necessitated as, the land on which
these kiosks are constructed, is required by the respondents on
account of a project of the Delhi Metro Rail Corporation Ltd. It
appears that a total of about 40 shops/stalls/kiosks situated near the
Safdarjung Hospital and the All India Institute of Medical Sciences
are effected by the project of the Delhi Metro Rail Corporation Ltd.
which is to be executed.
7. Upon learning of the project, the South Delhi Medicos and
Shashi Bala Gupta of their own accord approached the Chairperson of
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the NDMC by a representation which was served on 31 January,
2007 pointing out that the grant of licence under the Drugs &
Cosmetics Rules, 1945 was governed by Rule 64; that on account of
an amendment effected to the rule in 1987, in order to run the trade
of chemist, the premises are required to be located on a carpet area of
15 sq. mtrs. with the minimum height of 9 ft of the premises, also
prescribed by the authorities. The petitioners pointed out that prior
W.P.(C) Nos.7709 & 7728/2007 page 4 of 36
to the amendment of 1987, there was no such prescription. The
amended rule 64, however, contains a saving clause in respect of
premises wherein a licence to run the trade of chemist had been
issued prior to the amendment.
8. The licence in favour of the petitioners in both the writ petitions
was being renewed in respect of the premises allotted to them, only
on account of their possessing a licence prior to the amendment of
1987 by virtue of the saving clause contained in the amended
statutory rule. In the representation, the petitioners stated that value
service was being rendered by them to the patients of the two
hospitals and consequently, if they were required to relocate, the
requirement of the Drugs & Cosmetics Act and Rules, 1945 was
required to be kept in mind by the respondents.
9. The petitioners also requested that they be given an appropriate
opportunity to explain their contentions to the authorities before a
final decision was taken in the matter.
10. Smt. Shashi Bala Gupta (petitioner no. 2 in W.P.(C) No.
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7728/2007) also addressed a representation dated 9 February, 2007
to the Delhi Metro Rail Corporation Ltd. which is respondent no. 2
herein. The Delhi Metro Rail Corporation Ltd. ('DMRC' for brevity)
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had immediately responded to the petitioner by a letter of 28
February, 2007 which stated that :-
“ xxxx The shops are being shifted temporarily for
construction of Metro Station and will be reinstalled
W.P.(C) Nos.7709 & 7728/2007 page 5 of 36
back after the completion of work. The size of
temporary shops will be finalised mutually by NDMC
& DMRC Ltd. Hence you are requested to approach
the concerned authority i.e. NDMC for this issue.”
(Emphasis supplied)
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11. The petitioner made a further representation on 22 June,
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2007. However by a letter dated 1 August, 2007 the petitioner was
informed that the NDMC would not be able to increase or change the
size of the unit.
12. So far as the Pioneer Medicos (W.P.(C) No. 7709/2007), is
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concerned, it had addressed a representation on 27 August, 2007
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and 3 October, 2007 to the NDMC informing it about the statutory
requirement of the Drugs & Cosmetics Rules, 1945 as amended
whereunder a minimum carpet area of 108 sq. ft or 10 sq. mtr was
required to run a chemist shop and that it was willing to pay licence
fees at the current market rate for the additional area.
13. The petitioners have submitted that the NDMC cannot
dispossess them from the kiosks/shops allotted to them and compel
relocation to such premises which would not be in conformity or in
compliance with the amended rule 64 of the Drugs & Cosmetics Rule
1945 thereby depriving them of their livelihood inasmuch as the
competent authority under the Drugs & Cosmetics Rule has stated
that it would not be in a position to give a licence to the petitioner in
case the premises to which the petitioners were relocated, were not of
the prescribed size.
W.P.(C) Nos.7709 & 7728/2007 page 6 of 36
14. In this behalf, the petitioners have placed reliance on the
representation made to the licencing authority of the Drug Control
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Department on 30 July, 2007 which was responded to by this
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department by a letter dated 10 August, 2007 wherein it has stated
thus :-
“ In this context I am to inform you that the license
for sale/stocking of drugs for sale and distribution
are granted under the provision of rule 64 to the
Drugs and Cosmetics Rule, 1945. Accordingly an
application for grant of license for retail and/or
wholesale of drugs on form 20, 21 and 20B, 21B
would be granted only if the applicant provides pucca
built premises of an area as provided under the said
rule and the same is given as under :-
1. The premises of an area not less than 10 square
meter in respect of an application for grant of license
in form 20 and/or 21 (for retail sale of drugs).
2. The premises of an area not less than 10 square
meter in respect of an application, for grant of license
in form 20B and/or 21B for (whole sale of drugs).
3. The premises of an area not less than 15 square
meter in respect of an application for grant of license
on form 20, 21, 20B, 21B (for both retail and
wholesale of drugs).”
15. So far as the relocation is concerned, the NDMC has responded
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by a communication dated 11 September, 2007 to the petitioners
application under the Right to Information Act, 2005. The petitioners
were informed that all the shops/stalls/kiosks situated on the
Safdarjung Hospital and AIIMS road would be relocated and that the
size of the shops/stalls/kiosks would be the same as per the allotted
size. The NDMC had also informed the petitioner that the
shops/stalls/kiosks shall be relocated after completion of the
W.P.(C) Nos.7709 & 7728/2007 page 7 of 36
construction at the old site by the DMRC. The criterion for allotment
at the relocation site would be the quantum licence fee in the
descending order. It was also admitted that the blue print for the
construction was not prepared by the NDMC as the construction work
is to be done by the DMRC.
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16. After receiving the response dated 10 August, 2007 from the
competent authority under the Drugs & Cosmetics Rule, 1945 and the
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letter dated 11 September, 2007 from the NDMC, the petitioner had
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again addressed a representation dated 17 October, 2007 to the
NDMC requiring it to take a relook at the matter. This writ petition
has been filed by the petitioners only thereafter complaining
infringement of its fundamental rights under Article 14, 19(1)(g) and
Article 21 of the Constitution of India. It has further been contended
that the insistence on the part of the NDMC to relocate the petitioner
to a shop of the same size as occupied by it to undertake the chemist
trade fails to consider the statutory requirement and is unreasonable,
arbitrary and wholly illegal. The petitioners have pointed out several
vacant spaces which were available wherein such shops of sufficient
area could have been relocated. Reliance is placed on the
representation to the petitioner that the petitioners would be
relocated to the original site after the project of the Delhi Metro Rail
Corporation Ltd. is over.
17. The writ petition as originally filed did not implead the Delhi
W.P.(C) Nos.7709 & 7728/2007 page 8 of 36
Metro Rail Corporation Ltd. as a party. The project in question was
being undertaken by the Delhi Metro Rail Corporation Ltd. and
having regard to the nature of issues raised, it was deemed necessary
to implead the DMRC as a party/respondent no. 2. Accordingly,
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orders to this effect were passed on 24 October, 2007. Thereafter in
view of the submissions made with regard to the Drugs & Cosmetics
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Rules, 1945, by orders passed on 2 November, 2007, the competent
authority in the Drugs Control Department of the Government of
NCT of Delhi was also directed to be impleaded as a party/respondent
no. 3. Counter affidavits were filed by the respondent no. 1 and the
respondent no. 3. The DMRC has placed reliance on communications
received by it from the NDMC by it which have been placed before the
court during hearing. Counsels for the parties have been heard.
18. Ms. Anjana Gosain and Mr. Rajesh Mahajan, learned counsels
for the NDMC, have submitted at length that the petitioners have no
vested right to allotment; that a considered decision has been taken to
temporarily shift the allottees of 40 kiosks/shops inasmuch as the site
was required for the DMRC for construction of a metro station; that a
meeting was held in the chamber of the Secretary, NDMC for
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consideration of the matter of shifting on 23 July, 2007 when it was
decided that the area originally mentioned in the original licence file
would be allotted to the licencee at the relocation site being
constructed by the Delhi Metro Rail Corporation. The NDMC has
W.P.(C) Nos.7709 & 7728/2007 page 9 of 36
further contended that the relocation to this site is not permanent in
nature and that after completion of the construction of the metro
station at the site in question, the licencee would be
reshifted/reinstalled to the original site in question.
19. In this background, it has been contended that the NDMC
cannot be required to make any exception so far as the petitioners in
these writ petitions are concerned for the reason that if their request
was favourably considered by the NDMC or by the DMRC, it would
amount to allotment of a shop having a size of approximately three
times of the existing kiosks and that such allotment would open a
Pandora's box of similar representation by similarly placed
occupiers/licencees.
20. Having heard learned counsel at length and having given my
considered thought to the respective contentions, I find that so far as
allotment of the kiosks/space allotted by the NDMC is concerned, the
same is for a specific trade. So far as the two writ petitioners are
concerned, it is an admitted position the kiosks allotted to them are
required to be utilised for carrying on the trade of chemist in these
premises with the permission of the NDMC. The writ petitioner in
W.P.(C) No. 7728/2007 is so carrying on the chemist trade in these
premises for the last 15 years while the writ petitioners in W.P.(C) No.
7709/2007 are carrying on this trade for more than 19 years in
premises allotted by the NDMC.
W.P.(C) Nos.7709 & 7728/2007 page 10 of 36
21. It is also an admitted position by the NDMC that so far as the
40 kiosks/units which are to be relocated are concerned, there is only
one more unit carrying on chemist trade which would be similarly
placed as the petitioner. It is noteworthy that some other chemists
out of these units are being relocated to sites which meet the
requirements under the Drugs & Cosmetics Rules, 1945 as amended.
22. I find that the petitioner has been making representations not
on account of any whimsical demand for more space but on account
of the statutory compliance which is required to be satisfied. The
remaining persons who are being relocated do not carry on such trade
wherein there is any statutory stipulation of size of the premises by
the licencing authorities. For this reason, a plea of hostile
discrimination would not be available to other persons carrying on
other trades in the facts and circumstances of the case. Thus the
argument of the NDMC that in case these petitioners were given
relief, it would open a Pandoras box, is wholly without basis and is
unjustified.
23. It now becomes necessary to consider the validity of the claim of
the petitioners. The NDMC has set up a plea that the petitioners in
W.P.(C) No. 7728/2007 have no right in the kiosks in question for the
reason that they are not the allottees. In the counter affidavit filed
under the signatures of Shri Ashok Choudhary, Joint Director
(Estate), NDMC, the NDMC has stated that the South Delhi Medicos
W.P.(C) Nos.7709 & 7728/2007 page 11 of 36
is a stranger to the knowledge of the respondent as the same was not
a legal entity. I find that the licence deed was executed between the
NDMC and petitioner no. 2. Such deed clearly states that the licence
has been granted to enable the petitioner no. 2 Smt. Shashi Bala
Gupta to carry on business under the name and style of South Delhi
Medicos.
24. Mr. Valmiki Mehta, learned senior counsel for the petitioners in
W.P.(C) 7728/2007 has taken a strong exception to this objection. It
is further pointed out that the kiosk was even transferable. Reliance
has been placed on a copy of the Council's resolution no. 6 of the
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ordinary adjourned Council meeting filed on 18 March, 1999. In this
meeting, the Council considered the estate policy/guidelines for
'dealing with estate matters'. There were detailed deliberations on
the need for having a uniform policy of increase in licence fee on
renewals in the municipal market/office complexes and also revision
of the 'subletting rates on partnership/subletting basis as the rates
approved by the NDMC through its various resolutions, are on the
lower side as compared to the value of these properties and business
viability of these markets.'
25. In this behalf the Council noted the recommendations of the
committee which were approved by the Chairman. To the extent
relevant, these recommendations which were approved by the council
in this meeting read thus :-
W.P.(C) Nos.7709 & 7728/2007 page 12 of 36
“xxxxxx
3. Policy on transfers.
i) to be freely allowed (except in case of reserved
categories).
ii) on date of entry/deletion of partnership 30%
enhancement in licence fee. After amalgamation with
the original amount annual enhancement @ 70%.
iii) Policy at Annexure in case of rehabilitation
markets as the base rate with annual increase @ 70%
(see pages 56-58).
iv) Dependent family members to be permitted
without any enhancement in licence fee. Other blood
relations allowed with 30% enhancement.
v) Legal heirs only after death without any cost.
vi) Multiple transfers in cases where the request of
the transfer of allotment from the first allottee is not
regularised and the subsequent subletting is made, the
same should also be regularised by forfeiting the
amount of security deposits required to be deposited by
sublettee at the time of each subletting and the entire
amount as payable at each partnership would be
payable by the present sublettee on its regularisation.
4. Renewals
in the case of shops/stalls/kiosks/tharas/office
units/restaurants etc. he licence will be removed for a
period of 10 years on year to year basis subject to
enhancement in licence fee at the uniform rate by 7%
per annum.
7. Permissibility in change of trade.
i) no trade in the negative list shall be permitted.
Negative list to be notified within a month after
approval of the Chairman.
ii) list where licence is required under any
prevailing legislation to be permitted only after licence
is legally obtained and additionally NDMC's
permission is taken on availability of space and safety
factors.
iii) Where Council has decided in public interest that
a market or a portion of market is meant for any
W.P.(C) Nos.7709 & 7728/2007 page 13 of 36
specific trade, no change will be allowed.
iv) changes will be freely permitted amongst the
trades which are not listed in the noticed negative list
or where licence is not mandatory.”
In view of the above policy there is therefore substance in the
submissions on behalf of the petitioner.
The objection taken by the NDMC that the petitioners are not
valid allottees is wholly misconceived. Apart from the licence deed
noticed above, in fact in the light of the policy decisions of the NDMC,
such objections could not have been possibly taken.
26. It is the case of the NDMC before this court that the relocation
is temporary. As a result of this relocation and restoration to the
original site, no other person is effected on account of intervention of
any statutory rules.
27. My attention has been drawn to the requirement of the Drugs &
Cosmetics Rules 1945 as amended in 1987. Ms. Jyoti Singh, learned
counsel appearing for the Government of NCT of Delhi, has placed
the rule prior to its amendment and thereafter before this court.
Perusal of the rule 64, prior to its amendment in 1987 would show
that there was no prescription of the carpet area of the premises
which an applicant was required to possess for grant of an
appropriate licence.
28. It is an admitted position that the Rule was amended in 1987.
After this amendment, the Rule reads thus :-
“Rule 64. Conditions to be satisfied before a licence
W.P.(C) Nos.7709 & 7728/2007 page 14 of 36
in [Form 20, 20B, 20F, 29G, 21 or 21-B is granted –
(1) A licence in [Form 20, 20B, 20F, 20-G, 21 or 21-
B] to sell, stock exhibit [or offer for sale, or distribute
drugs shall not be granted or renewal] to any person
unless the authority empowered to grant the licence is
satisfied that the premisses in respect of which the
licence is to eb granted are adequate, equipped with
proper storage recommodation for preserving the
properties of the drugs to which the licence applies
and are in charge of a person competent in the
opinion of the licensing authority to supervise and
control the sale, distribution and preservation of
drugs :
Provided that in the case of a pharmacy a licence
in Form 20 or 21 shall not be [granted or renewed]
unless the licensing authority is satisfied that the
requirements prescribed for a pharmacy is not
operating such licence maybe [granted or renewed] to
a chemist and druggiest].
(2) In granting a licence under sub-rule (1) the
authority empowered to grant it shall have regard -
(i) to the average number of licences granted
during the period of 3 years immediately preceding
and
(ii) to the occupation, trade or business ordinarily
carried on by such applicant during the period
aforesaid :
Provided that the licensing authority may refuse
to grant or renew a licence to any applicant or licensee
in respect of whom it is satisfied that by reason of his
conviction of an offence under the Act or these rules,
or the previous cancellation or suspension of any
licence granted or renewed thereunder, he is not a fit
person to whom a licence should be granted under
this rule. Every such order shall be communicated to
the licensee as soon as possible.
[Provided further that in respect of an applicant
for the grant of a licence in Form 20-B or Form 21-B
or both, the licensing authority shall satisfy himself
that the premises in respect of which a wholesale
licence is to be granted are :-
(i) of an area of not less than ten square metres ; and
(ii) in the charge of a competent person, who
(a) is a registered pharmacist, or
(b)has passed the Matriculation Examination or its
equivalent with four years experience in dealing with
W.P.(C) Nos.7709 & 7728/2007 page 15 of 36
drugs].
( c) holds a degree of a recognised University with
one year's experience in dealing with drugs :|
[Provided also that --
(i) in respect of an application for the grant of a
licence in Form 20 or Form 21 or both, the licencing
authority shall satisfy itself that [the premises are of
an area] of not less than 10 square meters, and
(ii) in respect of an application for the grant of a
licence --
(A) in Form 20 or Form or both, and
(B) in Form 20B or Form 21B or both,
the licencing authority shall satisfy itself that the
premises are of an area not less than 15 square
meters:
Provided also that the provisions of the
preceding proviso shall not apply to the premises for
which licences have been issued by the licensing
authority before the commencement of the Drugs and
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Cosmetics (1 Amendment) Rules, 1997.]
[(3)]. Any person who is aggrieved by the order passed
by the licencing authority in sub-rule (1) may, within
30 days from the date of the receipt of such order,
appeal to the State Government and the State
Government may, after such enquiry into the matter
as it considers necessary and after giving the appellant
an opportunity for representing his views in the
matter, make such order in relation thereto as it
thinks fit.”
Therefore, after the amendment of 1987 coming into force, in
order to be entitled to the licence in respect of an application for grant
of a licence in form 20 or form 21 or both, a person is required to
satisfy the conditions laid therein. The same position subsists when
applying for a licence in form 20B or form 21B. The licencing
authority is required to satisfy itself that the premises are of an area
not less than 15 sq. mtrs. The amended rule 64 also contains a
W.P.(C) Nos.7709 & 7728/2007 page 16 of 36
proviso that these conditions shall not apply to the 'premises for
which licences have been issued by the licencing authority before the
commencement of the Drugs & Cosmetics (First Amendment) Rules,
1992.'
29. Ms. Jyoti Singh, learned counsel for the office of the Drugs
Controller & Licencing Authority of the Government of NCT of Delhi
has pointed out that inasmuch as the petitioners were satisfying the
applicable requirements at the time of grant of original licence, they
were granted such licence which, after the amendment, has been kept
renewed in view of the above proviso. It has further been pointed out
that it is an admitted position that the premises which are occupied
by the petitioners are measuring less than 15 sq. mtrs.
30. Reliance is also placed on policy decision of the concerned
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authorities dated 15 December, 2003 on adequacy of the premises
under rule 62B and rule 64 of the Act. It was clarified under this
policy decision that so far as adequacy of the premises was concerned,
the premises should be pucca built and should have the minimum
carpet area prescribed in the rules. This policy decision also requires
that the height of all rooms shall not be less than 2.75 mtrs measured
from the surface of the floor to the lowest point of the ceiling.
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31. By another decision taken by the drug authorities on 20
January, 2000, it has been directed that, for grant of the wholesale
drug licence, the area required should be in the same room or in
W.P.(C) Nos.7709 & 7728/2007 page 17 of 36
adjoining rooms on the same floor.
32. The primary argument on behalf of the authorities under the
Drugs & Cosmetics Act before this court is that the statutory licence is
granted against premises. Upon relocation, the authority would be
required to consider grant of licence against a new premises which
cannot be treated as a renewal of the existing licence in favour of the
petitioner. It is thus contended by Ms. Jyoti Singh, learned counsel,
that in case the relocated site does not meet the requirement of the
area prescribed under the amended rule 64, the respondent no. 3
would not be in a position to grant the licences to the petitioner
inasmuch as no relaxation to these conditions is permissible.
33. Learned counsel submits that even if the petitioners were to be
relocated back to the same site as occupied by them at present after
completion of the DMRC project, they would be required to apply
afresh under the statutory act and rules. In such eventuality also the
respondents would be required to meet the conditions laid in the
amended rule 64. In case the premises which were allotted to them
were not of such area as prescribed under the statutory rules, the
respondent no. 3 would not be in a position to grant the licence to the
petitioner.
34. The admitted position which thus emerges on record is that the
respondent no. 1 is effectuating relocation for the same trade and for
the same area which has been licenced to the different allottees. It is
W.P.(C) Nos.7709 & 7728/2007 page 18 of 36
also an admitted position, that on account of the amendment to the
rules, upon relocation the chemist trade cannot be carried out in the
proposed relocation sites contemplated by the NDMC for these
petitioners. Such chemist trade would also not be legally permissible
in the premises to which the NDMC proposes to restore the
petitioners, upon completion of the project.
35. The petitioners had approached the NDMC at the earliest. In
W.P.(C) No. 7728/2007, the first representation made by the
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petitioner was dated 31 January, 2007 which was much before the
NDMC and the Delhi Metro Rail Corporation Ltd. had formulated or
finalised any plans towards the construction.
The NDMC has placed before this court the minutes of its
meetings wherein it has considered the issue of this relocation. It
appears that the Chairperson of the NDMC had constituted a
committee comprising of the Secretary, Director (Estate) and the
Additional Financial Advisor for relocation of the units.
36. The estate department of the NDMC had proposed shifting of
the shops/stalls/kiosks on the principal that the licencee paying the
highest licence fee per square feet would be relocated nearest to the
Safdarjung Hospital. It was the proposal of the estate department
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which was considered by this three member committee on 23 July,
2007, when it decided that the area mentioned in the files only would
be allotted. This committee also noticed the decision of the
W.P.(C) Nos.7709 & 7728/2007 page 19 of 36
Chairperson of the NDMC permitting clubbing of sites by the
licencees. The authorities were of the view that the
shifting/relocation of the licencees is an administrative matter. This
decision was therefore placed before the New Delhi Municipal
Council only for its information.
37. It is noteworthy that the committee had also noticed that the 40
shops which are to be relocated were providing services to the
patients/attendants, patients and employees working in these
hospitals/institutions and that they were being relocated within 125-
150 mtrs.
38. The NDMC has also disputed the contention of the petitioner in
W.P.(C) No. 7709/2007 that it was earlier allotted an area of 77 sq. ft.
Before this court it has been urged that the original area allotted to
the predecessor in interest of the petitioner was only 59 sq. ft and
upon the increased area of 18 sq. ft permitted on tehbazari in 1991,
the area in its possession became 77 sq. ft.
39. It is necessary to now consider the facts relating to the
construction with regard to the shops/kiosks at the relocation sites.
The DMRC had informed the petitioner Mrs. Shashi Bala Gupta on
th
28 February, 2007 that the size of the temporary shops would be
finalised mutually by the NDMC and the Delhi Metro Rail
Corporation Limited. It had requested the petitioner to approach the
NDMC on this issue. As noticed above, the three member committee
W.P.(C) Nos.7709 & 7728/2007 page 20 of 36
of the NDMC took the decision that the allottees would be allotted
shops of the same size as per the allotment which existed on the files.
40. Mr. Dhruv Madan, learned counsel appearing for the Delhi
Metro Rail Corporation Ltd. before this court, has filed two letters
th th
dated 24 July, 2007 and 27 September, 2007 received by the
DMRC from the New Delhi Municipal Council. By the letter dated
th
24 July, 2007, the NDMC had conveyed the list of
shops/kiosks/stalls for relocation in the descending order and had
also intimated the area as indicated in the list which was enclosed. A
th
modified list was sent to the DMRC with the letter dated 27
September, 2007.
41. The final list issued by the NDMC to the DMRC - respondent
no. 2 shows that the NDMC has permitted clubbing of two shops in
the list. This list also contains relocation of three premises for
carrying on the trade of chemist to premises having the area which is
between 133.37 to 157 sq. ft. One Bhutani Medicos which was
occupying two units, being nos. 38 and 39 each measuirng 69.18 sq.
feet has been permitted clubbing, thereby bringing its total area to
138.36 sq. feet. 37.
At the same time, so far as the petitioner in W.P.(C) No.
7709/2007 is concerned, this writ petitioner has been informed that
it would be relocated in an area of 77 sq. ft. So far as the writ
petitioner in W.P.(C) No. 7728/2007 is concerned the NDMC has
W.P.(C) Nos.7709 & 7728/2007 page 21 of 36
informed that it would be relocated on an area of 66 sq. ft only.
42. It now becomes necessary to consider the argument on behalf of
the NDMC that the area allotted on the file is sacrosanct and has to be
so maintained. The argument is that consequently, the stand taken
by the NDMC stand before this court is irrational, arbitrary and illegal
as the petitioners are being relocated with continuity of trade to
premises of such dimensions for which they would not be given the
licence. The petitioners point out that accepting the statutory
mandate of these statutory rules, the NDMC increased the area of
four chemist shops in the AIIMS subway as they did not satisfy the
size stipulation.
43. The NDMC has answered this contention substantially
admitting the facts pleaded by the petitioner. It is stated that in the
year 1998-99, NDMC built 16 shops in the subway at
AIIMS/Safdarjung Hospital out of which the shop nos. 1, 8, 9 and 16
had been reserved for the chemist trade. The shop nos. 1, 9 and 16
were allotted after inviting tenders for the same for this purpose.
These shops were having carpet area of 97.48 sq. ft. each. After the
allotment of these shops, it was brought to the notice of the NDMC
that the area of the shops was less than the carpet area required
under the Drugs & Cosmetics Rules, 1945 for running a chemist shop.
NDMC has stated, that for this reason it increased the area of the
shop no. 1 by 11.56 sq. ft; and, of the shop no. 9 by 8.37 sq. ft by
W.P.(C) Nos.7709 & 7728/2007 page 22 of 36
removing the partition wall. So far as shop no. 8 is concerned, it is
stated that as allotments had not been finalised, therefore, tenders
were invited afresh in respect of the shop in 1999 for an increased
carpet area of 145.63 sq. ft.
44. Ms. Anjana Gosain, learned standing counsel for the NDMC,
has urged at great length that the allottees of these shop nos. 1, 8, 9
and 16 are paying a huge amount as licence fee for these shops and
that no parity can be drawn between them and the petitioners.
Reliance has also been placed on Section 141 of the NDMC Act to
contend that the consideration for any immovable property which
may be sold, leased or otherwise transferred by the NDMC shall not
be less than the value at which such immovable property could be
sold, leased or otherwise transferred in normal and fair competition.
45. From the correspondence noticed above, and in view of the
submissions made by the respondent nos. 1 and 2 before this court, it
is evident that the shops in question are not ready for occupation
even as yet. The petitioner has handed over in court rough site plans
pointing out several locations wherein space is available so that the
respondents can make appropriate provision for the proposed
chemist shops/kiosks of such area as is required under the rules for
relocation of the petitioners.
46. The last argument on behalf of the NDMC was to the effect that
the petitioners have no right to relocation site. Certainly this could
W.P.(C) Nos.7709 & 7728/2007 page 23 of 36
have been validly contended if the NDMC did not have a scheme for
relocation. It has decided to relocate the 40 shops in public interest
in view of the services being rendered by them. It has made a
considered decision to effect such relocation and to bring the allottees
back to the original site on completion of the project. The NDMC has
also identified the allottees including these petitioners for relocation
when it has sent the list to the respondent no. 2 as well. The NDMC
allots these kiosks and permits a specific business/trade therein. The
allottee is not permitted to carry on any other trade. The impact of
these stipulations is really relocation of the business/trade of the
allottees.
47. As a statutory authority the NDMC is bound to comply with
statutory mandate. It is as much bound by provisions of the Drugs &
Cosmetics Act of 1940 and Rules thereunder, as the petitioners and
other respondents. Its scheme of relocation of the trade of chemists is
consequently required to abide by the statutory provisions. Looked at
from these aspects, it is not open to the NDMC to contend that the
petitioners would have no enforceable right to relocation of its
business in an appropriate premises.
48. The NDMC has contended that the DMRC in all fairness has
formulated a scheme for relocation of such persons who are required
to be displaced on account of the Metro Rail Corporation project.
While the project is in public interest, such a scheme for their
W.P.(C) Nos.7709 & 7728/2007 page 24 of 36
relocation is formulated only to further the ends of public interest so
that none suffers by any displacement on account of the project.
49. Law respects juridical possession. It is well settled that even an
owner of the property, under law can resume possession after the
expiry or earlier termination of the allotment only by due course of
law. The state or its instrumentalities are not in any higher or better
position. Certainly the petitioners cannot be removed by an
administrative or executive order or merely by termination of the
allotment. (Ref:- Anamallai Club vs. Government of Tamil
Nadu & Ors. (1997) 3 SCC 169; State of U.P. vs. Maharaja
Dharmender Prasad Singh (1989) 2 SCC 505 (SCC pgs 516,
17 paras 30, 31); Bishan Das v. State of Punjab (1962) 2 SCR
69 pg. 79, 80 = AIR 1951 SC 1570; Midnapur Zamindary Co.
Ltd. vs. Kumar Naresh Roy AIR 1924 PC 144) .
50. Due course of law in each particular case means such exercise
of the powers by a duly constituted tribunal or court in accordance
with the procedure established by law under such safeguards for the
protection of private rights. It would imply the right of the person
affected thereby to the present before the tribunal; to be heard, by
testimony or otherwise, and, to have the right determination of the
controversy by proof, every material fact which bears on the question
of fact or liability be conclusively proved or presumed against him. It
has been so laid down in East India Hotels Ltd. vs. Syndicate
W.P.(C) Nos.7709 & 7728/2007 page 25 of 36
Bank 1992 Supp. (2) SCC 29 (paras 29, 30 & 32) .
51. The statutory prescription for eviction of unauthorised
occupants of public premises is to be found in the Public Premises
(Eviction of Unauthorised Occupants) Act, 1972. The state has also
available to it the right to statutorily acquire other property as is
required for a pubic purpose under the scheme of compulsory
acquisition provided under the Land Acquisition Act.
There is no dispute that the premises in question are public
premise. At the same time, the NDMC could oust these petitioners
from their occupancy only by following due process of law and taking
appropriate remedy. Even if proceedings were initiated under the
Public Premises (Eviction of Unauthorised Occupants) Act, 1972, it
would be still take longer than if the occupants agreed to the
relocation. Such delays not only frustrate project aspirations but also
grossly exaggerate the costs involved.
52. Even the process of compulsory land acquisitions of private
properties under the provisions of the Land Acquisition Act is
normally time consuming as the persons on the land take recourse to
protracted litigation to protect their occupation.
Thus, by such schemes of relocation, the project implementing
authority is saved of the exorbitant cost of land acquisition and the
delays which result in completing the process. The respondents are
simultaneously saved from protracted eviction proceedings.
W.P.(C) Nos.7709 & 7728/2007 page 26 of 36
Equally important, additionally there is no displacement of the
persons whose premises are temporarily required for the purposes of
completion of the project. In the instant case, the petitioners have
very fairly agreed to be relocated in principle.
53. As noticed hereinabove, the decision to relocate the petitioner is
an administrative decision taken by the three member committee
which was placed before the council for information. The NDMC has
on an earlier occasion recognised the fact that in order to run a
chemist trade, it is necessary to comply with the Drugs & Cosmetics
Rules, 1945 as amended. It is an admitted position by the NDMC that
it has permitted the petitioners to carry on the chemist trade. The
petitioners are so conducting their business for over fifteen years.
They are being relocated for carrying on the same trade despite the
knowledge of the NDMC that the petitioner cannot be granted a drug
licence for running the chemist shop in the size of the shop to which
they are being relocated.
54. The NDMC has recognised this fact on an earlier occasion when
it has increased the size of shop no. 1, 9 and 16 in the subway between
AIIMS and Safdarjung Hospital.
55. The NDMC was fully aware of the requirement which has been
framed under statute. It has also granted the licence to the petitioner
to carry on the trade of chemist at the kiosk in question. It has stated
that the petitioner is required to carry on the same trade and would
W.P.(C) Nos.7709 & 7728/2007 page 27 of 36
be relocated to the original site after completion of the project to
carry on the same trade. In this background it certainly cannot
mandate reloction to a premises wherein such a trade cannot be
occupied.
56. The relocation policy has been carved out in public interest.
Such policy has to be rational, reasonable and fair. Whether by
tender or auction or by allotment on licence, the same is only one out
of the many modes of allotment of the immovable property by the
NDMC. Section 141 has merely mandated that such property would
be transferred on values as would be arrived at any normal and fair
competition.
57. So far as the additional area is concerned, the petitioners before
this court have fairly contended that they are willing to pay such rates
as could be fetched by the NDMC in normal and fair competition.
This was also stated by the petitioners in the various representations
made to the NDMC.
The offer of the petitioner in fact supports the spirit,
intendment and purpose of Section 141 of the statute.
rd
58. The decision of the committee arrive at on 23 July, 2007 fails
to consider the requirement of the Drugs & Cosmetics Rules, 1945 or
the aforenoticed facts. Such facts were certainly material and
relevant for arriving at a considered and fair decision. More so
having regard to the admitted action of the NDMC in deciding to
W.P.(C) Nos.7709 & 7728/2007 page 28 of 36
increase the size of the shop nos. 1, 9 and 16 in view of the
amendment to the rule. The NDMC has also not considered the
offer made by the petitioners to pay the current market rates which
may be prevalent towards the increase in area which may be
necessary.
59. The NDMC is a statutory authority and certainly is bound to act
reasonably and fairly. The NDMC has recognised the need for such
chemist shops. It is for this reason that it has permitted these
petitioners to carry on the trade of chemist. Additional chemists
have been permitted thereafter. The NDMC has thus accepted the
fact that the petitioners are rendering valuable service in public
interest. The Safdarjung Hospital is known to be the largest hospital
in the city. Thousands of patients visited these hospitals every single
day. There are huge wards wherein patients are admitted. Certainly
the requirement of the chemists near the two hospitals i.e. the All
India Institute for Medical Sciences and Safdarjung Hospital, which
are the major hospitals in the city, cannot be contended to be
unnecessary or not in the interest of the patients and public. It is
evident that the respondents are implementing the scheme for
relocation so far as the chemists are concerned, for this reason alone.
It is also the respondent no. 1's contention that the relocation is for
the same area and for the same trade which is being carrying on by
these petitioners for 15 years and 19 years respectively.
W.P.(C) Nos.7709 & 7728/2007 page 29 of 36
60. In the instant case, the NDMC is relocating the allottees to
premises of different measurements based on the area allotted to
them. In the case of the other chemists noticed above, it has
admittedly complied with the statutory mandate and increased the
area of the kiosks. The scheme of relocation does not postulate
shops/kiosks of identical sizes.
61. In this background, fully knowing the requirement of the Drugs
& Cosmetics Rules, 1945, the NDMC cannot require the petitioners to
be relocated to a premises wherein they would become disentitled to
the licence under the applicable rules. The NDMC is as much
required to comply with the mandate of applicable rules under the
Drugs & Cosmetics Act of 1940 as the petitioners and other
respondents are.
62. As per the list submitted by the NDMC to the Delhi Metro Rail
th
Corporation Ltd. with its letter dated 27 September, 2007, so far as
the chemist trade is concerned the respondents have permitted such
clubbing to M/s Bhutani Medicos which had been allotted nos. 38
and 39. According to the NDMC, the covered area of each of these
units is only 69.18 sq. feet. and this concern would be able to satisfy
the requirement of the amended rule under the Drugs & Cosmetics
Rules, 1945 only on account of the clubbing whereby its total area
would admittedly become 138 sq. feet.
63. It is well settled that actions of the State, its instrumentalities
W.P.(C) Nos.7709 & 7728/2007 page 30 of 36
and public authorities or of persons whose actions bear the insignia of
public law element or public character are amenable to judicial review
and that legality of such actions would be tested upon the anvil Article
14 of the Constitution.
64. The Court has defined the contours of the public law remedy as
intervention in exercise of the judicial review power where the actions
of State or its agencies bearing the imprint of public interest element,
can be examined. It is trite that non-arbitrariness and fairness are
considered as such cornerstones of the principle of equality which
form the immutable legal behavioral standard. Every action, policy or
even change of policy in the realm of activity of the State or its
instrumentality therefore, has to be informed, fair and non-arbitrary.
In appropriate cases, actions informed by reason may be
questioned as arbitrary in proceedings under Article 226 (Ref. AIR
1979 SC 1628 R.D. Shetty v. International Airports
Authority of India; AIR 1980 SC 1992 Kasturi Lal v. Lakshmi
Reddy; AIR 1991 SC 537 Kumari Srilekha Vidyarthi; AIR
1990 SC 1031 Mahabir Auto Store v. Indian Oil Corporation;
1994 (6) SCC 651 Tata Cellular v. UOI and 144 (2007) DLT
824 C.P. Mittal v. UOI & Anr.)
65. It is well settled that policy decision taken in exercise of
executive power must be made fairly and applied uniformly and not
give the impression that it was done arbitrarily or by any ulterior
W.P.(C) Nos.7709 & 7728/2007 page 31 of 36
criteria. The Apex Court was called upon to examine a decision to
change a policy in its pronouncements reported at (2003) 4 SCC
579 UOI vs. International Trading Company and laid down
the principles thus :-
“While the discussion to change the policy in
exercise of the executive power when not trampled
by any statute or rule, is wide enough, what is
imperative and implicit in terms of Article 14 is that
a change in policy must be made fairly and should
not give he impression that it was done arbitrarily or
by any ulterior criteria. The wide sweep of Article 14
and the requirement of every State action qualifying
for it validity on this touchstone irrespective of the
fields of activity of the State is a expected tenet. The
basic requirement of Article 14 is a fairness in action
of the State and non-arbitrariness in essence and
substance is the heartbeat of fair play.”
66. In this behalf it would also be appropriate to consider the
observations of the Apex Court in JT 2004 (10) SC 500 Bannari
Amman Sugars Ltd. Vs. Commercial Tax Officer & Ors .,
wherein it was held thus :
“9. While the discretion to change the policy in
exercise of the executive power, when not trammelled
by any statute or rule is wide enough, what is
imperative and implicit in terms of Article 14 is that a
change in policy must be made fairly and should not
give impression that it was so done arbitrarily or by
any ulterior criteria. The wide sweep of Article 14 and
the requirement of every State action qualifying for its
validity on this touchstone irrespective of the field of
activity of the State is an accepted tenet. The basic
requirement of Article 14 is fairness in action by the
State, and non-arbitrariness in essence and substance
is the heart beat of fair play. Actions are amenable, in
the panorama of judicial review only to the extent that
the State must act validly for discernible reasons, not
whimsically for any ulterior purpose. The meaning
W.P.(C) Nos.7709 & 7728/2007 page 32 of 36
and rule import and concept of arbitrariness is more
easily visualised than precisely defined. A question
whether the impugned action is arbitrary or not is to be
ultimately answered on the facts and circumstances of
a given case. A basic and obvious test to apply in such
cases is to see whether there is any discernible
principle emerging from the impugned action and if so,
does it really satisfy the test of reasonableness.”
67. In (1994) 2 SCC 729 State of U.P. v. U.P. University
Colleges Pensioners' Association, the court had held that it is
only if a policy decision was unreasonable or against public interest
that the same could be subjected to a judicial review.
68. In the instant case the respondents have recognised the need of
chemist shops especially having regard to the large number of
patients visiting the hospitals. For this reason, both the petitioners
were permitted to change the trade to run chemist shops for over a
decade. Over a period of time, it can be presumed that having regard
to increase in the requirement of the chemist shops, additional
chemist shops were admittedly constructed and allotments made by
the respondents. No submission to the contrary has been placed
before this court and it would appear that the petitioners who are in
location in public interest
the trade of chemist shop are required at the
as well.
69. The petitioners have valid allotments and the statutory licences
as on date. If they continue at the same site where they are located
today, there is no impact on their business at all. They are being
required to be relocated at the instance of the respondents for the
W.P.(C) Nos.7709 & 7728/2007 page 33 of 36
purposes of expeditious execution of another project. The NDMC has
stated that it has no proposal to permanently relocate them and has
proposed to relocate the petitioners to the existing site upon
completion of the project. By such action of the respondents, the
rights of the petitioners shall be adversely impacted and also there is
no compliance of the statutory requirements.
70. The respondents have not placed any material or rational for
implementing its relocation policy in such manner even though it has
moulded earlier allotments to ensure statutory compliance. No
reasons of economics or any other exigencies have been taken or
placed. The Delhi Metro Rail Corporation has also submitted that it
is bound by the decisions taken by the NDMC and would be willing to
implement any directions made to it. Examined in this background,
it would clearly appear that the action of the respondents is irrational
and arbitrary and would therefore be subject to judicial review.
71. The DMRC is constructing the premises for the NDMC and has
raised no objection to construction of bigger premises. It is
constructing kiosks of such area as notified by the NDMC. None of
the respondents has urged that space is not available or that there is
any other technical reason which could prohibit construction of the
larger premises.
The only explanation given by the NDMC for not doing so is
that the same would open a Pandora's box.
W.P.(C) Nos.7709 & 7728/2007 page 34 of 36
As discussed hereinabove, this submission has no basis.
72. It is trite that the state in all its activities must act fairly and
cannot act arbitrarily. Equity and good conscience should be at the
core of all state functions. It is now well settled that every executive
action which operates to the prejudice of a person must have the
sanction of law. In (2003) 1 SCC 591 Hindustan Times v. State
of U.P ., the Apex Court had held that the respondents being a state
cannot, in view of the equality doctrine contained in Article 14 of the
Constitution of India, resort to the theory of 'take it or leave it'.
For all the foregoing reasons it has to be held that the
petitioners can be relocated only to a premises which would meet the
requirements of the amended rule 64 of the Drugs & Cosmetics Rules,
1945.
73. In the light of the discussion there is merit in the contentions of
st
the petitioner. The letter dated 1 August, 2007 to the extent that it
refers to the petitioners is therefore set aside and quashed. It is held
that the allottees running a chemist trade could be relocated only to
premises which would meet requirements of the amended rule 64 of
Drugs & Cosmetics Rules 1945 and it is so directed.
It shall be for the respondent nos. 1 and 2 to work out the best
manner in which the statutory requirements are complied with.
The petitioners shall remain bound by the offer made by them
to pay the market rate towards the area which would be in excess of
W.P.(C) Nos.7709 & 7728/2007 page 35 of 36
the area, which they are occupying at present. So far as the area
occupied at present is concerned, the petitioner would be required to
pay the same rate as the others. It shall be for the NDMC to
determine the same and to inform the petitioners of the decision
taken at the earliest.
th
The interim orders passed on 24 October, 2007 shall continue
to operate till implementation of the above directions.
These writ petitions are allowed in the above terms.
(GITA MITTAL)
JUDGE
December 26, 2007
kr
W.P.(C) Nos.7709 & 7728/2007 page 36 of 36
Writ Petition (Civil) No. 7728/2007 & CM No. 14721/2007
th
Judgment reserved on : 15 November, 2007
Date of decision: December 26, 2007
South Delhi Medicos & Ors. ... Petitioner
through: Mr. Valmiki Mehta, Sr. Adv. with Mr. B. K.
Dash and Mr. S. Palo, Advs.
VERSUS
New Delhi Municipal Council & Ors. ....Respondents
through: Ms. Anjana Gosain and Mr. Rajesh
Mahajan, Advs. for the NDMC/respondent
no. 1
Mr. Dhruv Madan with Mr. Atul Y. Chitale,
Advs. for the respondent no. 2
Ms. Jyoti Singh with Mr. Ankur Chibber, Advs.
for the GNCT of Delhi/respondent no. 3
AND
Writ Petition (Civil) No. 7709/2007 & CM No. 14695/2007
Pioneer Medicos & Ors. ... Petitioner
through: Mr. Rajiv Bajaj, Adv.
VERSUS
New Delhi Municipal Council & Ors. ....Respondents
through: Ms. Anjana Gosain and Mr. Rajesh Mahajan,
Advs. for the NDMC/respondent no. 1
Mr. Dhruv Madan with Mr. Atul Y. Chitale,
Advs. for the respondent no. 2
Ms. Jyoti Singh with Mr. Ankur Chibber, Advs.
for the GNCT of Delhi/respondent no. 3
CORAM:
HON'BLE MS. JUSTICE GITA MITTAL
1. Whether reporters of local papers may be allowed to
see the Judgment? Yes
2. To be referred to the Reporter or not? Yes
3. Whether the judgment should be reported in the
Digest? Yes
W.P.(C) Nos.7709 & 7728/2007 page 1 of 36
GITA MITTAL, J
1. These two writ petitions raise similar questions of law and fact
and consequently are being disposed of by this common judgment .
2. The writ petitions were filed against the New Delhi Municipal
Council created under the provisions of the New Delhi Municipal
Council Act, 1994 and performing functions thereunder.
3. It is necessary to consider certain essential facts leading up to
the filing of the writ petitions which are noticed hereafter. So far as
the writ petitioner in W.P.(C) No. 7728/2007 is concerned, on or
th
about 20 February, 1986 the NDMC had allotted a kiosk to the
petitioner no. 1 – South Delhi Medicos in the year 1987. Allotment of
this kiosk was transferred to the sole name of the petitioner no. 2 –
Ms. Shashi Bala Gupta, by a letter of allotment bearing no.
st
D/212/Estate dated 31 January, 2006 on terms and conditions set
th
out in the licence deed executed between the parties on 20 February,
1986. It is an admitted position that the licence granted to the
petitioner was for the purposes of running the trade of 'chemist' in the
name of M/s South Delhi Medicos, the petitioner no.1 in the kiosk in
question. It was so stated in the licence agreement. The period of
st st
the licence in the agreement was from 31 July, 2004 to 31 March,
2011.
4. There is no dispute that these petitioners are occupying the
kiosks in terms of such licence granted to them and are running their
W.P.(C) Nos.7709 & 7728/2007 page 2 of 36
chemist trade therein. The petitioner no. 1 has been granted a drug
licence to carry on the retail and wholesale trade of drugs by the
licencing authority of the Government of NCT of Delhi in accordance
with the Drugs & Cosmetics Act of 1940 and the Drugs & Cosmetics
Rules, 1945 since the year 1990. This licence has been renewed from
time to time in accordance with the applicable statute and rules
thereunder. There is no dispute that the petitioner has a current
th
licence which is valid up to 24 August, 2009.
The South Delhi Medicos has been so carrying on trade for the
last 15 years.
5. So far as the writ petitioner in W.P.(C) No. 7709/2007 is
concerned, M/s Pioneer Medicos, the petitioner has filed this writ
petition through its partner Shri Arun Gandhi. It has been pointed
out that his late father Shri R.N. Gandhi was allotted the kiosk
bearing no. S-52 at Safdarjung Hospital main gate, New Delhi-110029
st
on 1 March, 1973 for the purposes of selling tea and tobacco
th
products and allotted space of 77 sq. fts. By a letter dated 7
September, 1991, the NDMC permitted his sons, Shri Ashok Gandhi
and Shri Arun Gandhi to cover the open tehbazari space of 18 sq. ft.
th
by the side and 25 November, 1991. This was followed by a letter of
st
31 May, 1990 whereby permission was given to Mr. Ashok Gandhi
and Mr. Arun Gandhi to use the space, measuring 6 ft x 3 ft (i.e. 18 sq.
feet) by the side of the kiosk, on tehbazari. According to the
W.P.(C) Nos.7709 & 7728/2007 page 3 of 36
petitioner, 95 sq. ft of space was originally allotted to him. He has
also paid increased licence fee when the area was increased and has
been running the trade of chemist since 1991 when the NDMC
permitted this change. It would thus appear that this petitioner is
carrying on the chemist trade for the last 16 years for which he has
valid licence from the competent authority of the Government of NCT
of Delhi under the Drugs and Cosmetic Rules, 1945.
6. This writ petition has been necessitated as, the land on which
these kiosks are constructed, is required by the respondents on
account of a project of the Delhi Metro Rail Corporation Ltd. It
appears that a total of about 40 shops/stalls/kiosks situated near the
Safdarjung Hospital and the All India Institute of Medical Sciences
are effected by the project of the Delhi Metro Rail Corporation Ltd.
which is to be executed.
7. Upon learning of the project, the South Delhi Medicos and
Shashi Bala Gupta of their own accord approached the Chairperson of
st
the NDMC by a representation which was served on 31 January,
2007 pointing out that the grant of licence under the Drugs &
Cosmetics Rules, 1945 was governed by Rule 64; that on account of
an amendment effected to the rule in 1987, in order to run the trade
of chemist, the premises are required to be located on a carpet area of
15 sq. mtrs. with the minimum height of 9 ft of the premises, also
prescribed by the authorities. The petitioners pointed out that prior
W.P.(C) Nos.7709 & 7728/2007 page 4 of 36
to the amendment of 1987, there was no such prescription. The
amended rule 64, however, contains a saving clause in respect of
premises wherein a licence to run the trade of chemist had been
issued prior to the amendment.
8. The licence in favour of the petitioners in both the writ petitions
was being renewed in respect of the premises allotted to them, only
on account of their possessing a licence prior to the amendment of
1987 by virtue of the saving clause contained in the amended
statutory rule. In the representation, the petitioners stated that value
service was being rendered by them to the patients of the two
hospitals and consequently, if they were required to relocate, the
requirement of the Drugs & Cosmetics Act and Rules, 1945 was
required to be kept in mind by the respondents.
9. The petitioners also requested that they be given an appropriate
opportunity to explain their contentions to the authorities before a
final decision was taken in the matter.
10. Smt. Shashi Bala Gupta (petitioner no. 2 in W.P.(C) No.
th
7728/2007) also addressed a representation dated 9 February, 2007
to the Delhi Metro Rail Corporation Ltd. which is respondent no. 2
herein. The Delhi Metro Rail Corporation Ltd. ('DMRC' for brevity)
th
had immediately responded to the petitioner by a letter of 28
February, 2007 which stated that :-
“ xxxx The shops are being shifted temporarily for
construction of Metro Station and will be reinstalled
W.P.(C) Nos.7709 & 7728/2007 page 5 of 36
back after the completion of work. The size of
temporary shops will be finalised mutually by NDMC
& DMRC Ltd. Hence you are requested to approach
the concerned authority i.e. NDMC for this issue.”
(Emphasis supplied)
nd
11. The petitioner made a further representation on 22 June,
st
2007. However by a letter dated 1 August, 2007 the petitioner was
informed that the NDMC would not be able to increase or change the
size of the unit.
12. So far as the Pioneer Medicos (W.P.(C) No. 7709/2007), is
th
concerned, it had addressed a representation on 27 August, 2007
rd
and 3 October, 2007 to the NDMC informing it about the statutory
requirement of the Drugs & Cosmetics Rules, 1945 as amended
whereunder a minimum carpet area of 108 sq. ft or 10 sq. mtr was
required to run a chemist shop and that it was willing to pay licence
fees at the current market rate for the additional area.
13. The petitioners have submitted that the NDMC cannot
dispossess them from the kiosks/shops allotted to them and compel
relocation to such premises which would not be in conformity or in
compliance with the amended rule 64 of the Drugs & Cosmetics Rule
1945 thereby depriving them of their livelihood inasmuch as the
competent authority under the Drugs & Cosmetics Rule has stated
that it would not be in a position to give a licence to the petitioner in
case the premises to which the petitioners were relocated, were not of
the prescribed size.
W.P.(C) Nos.7709 & 7728/2007 page 6 of 36
14. In this behalf, the petitioners have placed reliance on the
representation made to the licencing authority of the Drug Control
th
Department on 30 July, 2007 which was responded to by this
th
department by a letter dated 10 August, 2007 wherein it has stated
thus :-
“ In this context I am to inform you that the license
for sale/stocking of drugs for sale and distribution
are granted under the provision of rule 64 to the
Drugs and Cosmetics Rule, 1945. Accordingly an
application for grant of license for retail and/or
wholesale of drugs on form 20, 21 and 20B, 21B
would be granted only if the applicant provides pucca
built premises of an area as provided under the said
rule and the same is given as under :-
1. The premises of an area not less than 10 square
meter in respect of an application for grant of license
in form 20 and/or 21 (for retail sale of drugs).
2. The premises of an area not less than 10 square
meter in respect of an application, for grant of license
in form 20B and/or 21B for (whole sale of drugs).
3. The premises of an area not less than 15 square
meter in respect of an application for grant of license
on form 20, 21, 20B, 21B (for both retail and
wholesale of drugs).”
15. So far as the relocation is concerned, the NDMC has responded
th
by a communication dated 11 September, 2007 to the petitioners
application under the Right to Information Act, 2005. The petitioners
were informed that all the shops/stalls/kiosks situated on the
Safdarjung Hospital and AIIMS road would be relocated and that the
size of the shops/stalls/kiosks would be the same as per the allotted
size. The NDMC had also informed the petitioner that the
shops/stalls/kiosks shall be relocated after completion of the
W.P.(C) Nos.7709 & 7728/2007 page 7 of 36
construction at the old site by the DMRC. The criterion for allotment
at the relocation site would be the quantum licence fee in the
descending order. It was also admitted that the blue print for the
construction was not prepared by the NDMC as the construction work
is to be done by the DMRC.
th
16. After receiving the response dated 10 August, 2007 from the
competent authority under the Drugs & Cosmetics Rule, 1945 and the
th
letter dated 11 September, 2007 from the NDMC, the petitioner had
th
again addressed a representation dated 17 October, 2007 to the
NDMC requiring it to take a relook at the matter. This writ petition
has been filed by the petitioners only thereafter complaining
infringement of its fundamental rights under Article 14, 19(1)(g) and
Article 21 of the Constitution of India. It has further been contended
that the insistence on the part of the NDMC to relocate the petitioner
to a shop of the same size as occupied by it to undertake the chemist
trade fails to consider the statutory requirement and is unreasonable,
arbitrary and wholly illegal. The petitioners have pointed out several
vacant spaces which were available wherein such shops of sufficient
area could have been relocated. Reliance is placed on the
representation to the petitioner that the petitioners would be
relocated to the original site after the project of the Delhi Metro Rail
Corporation Ltd. is over.
17. The writ petition as originally filed did not implead the Delhi
W.P.(C) Nos.7709 & 7728/2007 page 8 of 36
Metro Rail Corporation Ltd. as a party. The project in question was
being undertaken by the Delhi Metro Rail Corporation Ltd. and
having regard to the nature of issues raised, it was deemed necessary
to implead the DMRC as a party/respondent no. 2. Accordingly,
th
orders to this effect were passed on 24 October, 2007. Thereafter in
view of the submissions made with regard to the Drugs & Cosmetics
nd
Rules, 1945, by orders passed on 2 November, 2007, the competent
authority in the Drugs Control Department of the Government of
NCT of Delhi was also directed to be impleaded as a party/respondent
no. 3. Counter affidavits were filed by the respondent no. 1 and the
respondent no. 3. The DMRC has placed reliance on communications
received by it from the NDMC by it which have been placed before the
court during hearing. Counsels for the parties have been heard.
18. Ms. Anjana Gosain and Mr. Rajesh Mahajan, learned counsels
for the NDMC, have submitted at length that the petitioners have no
vested right to allotment; that a considered decision has been taken to
temporarily shift the allottees of 40 kiosks/shops inasmuch as the site
was required for the DMRC for construction of a metro station; that a
meeting was held in the chamber of the Secretary, NDMC for
rd
consideration of the matter of shifting on 23 July, 2007 when it was
decided that the area originally mentioned in the original licence file
would be allotted to the licencee at the relocation site being
constructed by the Delhi Metro Rail Corporation. The NDMC has
W.P.(C) Nos.7709 & 7728/2007 page 9 of 36
further contended that the relocation to this site is not permanent in
nature and that after completion of the construction of the metro
station at the site in question, the licencee would be
reshifted/reinstalled to the original site in question.
19. In this background, it has been contended that the NDMC
cannot be required to make any exception so far as the petitioners in
these writ petitions are concerned for the reason that if their request
was favourably considered by the NDMC or by the DMRC, it would
amount to allotment of a shop having a size of approximately three
times of the existing kiosks and that such allotment would open a
Pandora's box of similar representation by similarly placed
occupiers/licencees.
20. Having heard learned counsel at length and having given my
considered thought to the respective contentions, I find that so far as
allotment of the kiosks/space allotted by the NDMC is concerned, the
same is for a specific trade. So far as the two writ petitioners are
concerned, it is an admitted position the kiosks allotted to them are
required to be utilised for carrying on the trade of chemist in these
premises with the permission of the NDMC. The writ petitioner in
W.P.(C) No. 7728/2007 is so carrying on the chemist trade in these
premises for the last 15 years while the writ petitioners in W.P.(C) No.
7709/2007 are carrying on this trade for more than 19 years in
premises allotted by the NDMC.
W.P.(C) Nos.7709 & 7728/2007 page 10 of 36
21. It is also an admitted position by the NDMC that so far as the
40 kiosks/units which are to be relocated are concerned, there is only
one more unit carrying on chemist trade which would be similarly
placed as the petitioner. It is noteworthy that some other chemists
out of these units are being relocated to sites which meet the
requirements under the Drugs & Cosmetics Rules, 1945 as amended.
22. I find that the petitioner has been making representations not
on account of any whimsical demand for more space but on account
of the statutory compliance which is required to be satisfied. The
remaining persons who are being relocated do not carry on such trade
wherein there is any statutory stipulation of size of the premises by
the licencing authorities. For this reason, a plea of hostile
discrimination would not be available to other persons carrying on
other trades in the facts and circumstances of the case. Thus the
argument of the NDMC that in case these petitioners were given
relief, it would open a Pandoras box, is wholly without basis and is
unjustified.
23. It now becomes necessary to consider the validity of the claim of
the petitioners. The NDMC has set up a plea that the petitioners in
W.P.(C) No. 7728/2007 have no right in the kiosks in question for the
reason that they are not the allottees. In the counter affidavit filed
under the signatures of Shri Ashok Choudhary, Joint Director
(Estate), NDMC, the NDMC has stated that the South Delhi Medicos
W.P.(C) Nos.7709 & 7728/2007 page 11 of 36
is a stranger to the knowledge of the respondent as the same was not
a legal entity. I find that the licence deed was executed between the
NDMC and petitioner no. 2. Such deed clearly states that the licence
has been granted to enable the petitioner no. 2 Smt. Shashi Bala
Gupta to carry on business under the name and style of South Delhi
Medicos.
24. Mr. Valmiki Mehta, learned senior counsel for the petitioners in
W.P.(C) 7728/2007 has taken a strong exception to this objection. It
is further pointed out that the kiosk was even transferable. Reliance
has been placed on a copy of the Council's resolution no. 6 of the
th
ordinary adjourned Council meeting filed on 18 March, 1999. In this
meeting, the Council considered the estate policy/guidelines for
'dealing with estate matters'. There were detailed deliberations on
the need for having a uniform policy of increase in licence fee on
renewals in the municipal market/office complexes and also revision
of the 'subletting rates on partnership/subletting basis as the rates
approved by the NDMC through its various resolutions, are on the
lower side as compared to the value of these properties and business
viability of these markets.'
25. In this behalf the Council noted the recommendations of the
committee which were approved by the Chairman. To the extent
relevant, these recommendations which were approved by the council
in this meeting read thus :-
W.P.(C) Nos.7709 & 7728/2007 page 12 of 36
“xxxxxx
3. Policy on transfers.
i) to be freely allowed (except in case of reserved
categories).
ii) on date of entry/deletion of partnership 30%
enhancement in licence fee. After amalgamation with
the original amount annual enhancement @ 70%.
iii) Policy at Annexure in case of rehabilitation
markets as the base rate with annual increase @ 70%
(see pages 56-58).
iv) Dependent family members to be permitted
without any enhancement in licence fee. Other blood
relations allowed with 30% enhancement.
v) Legal heirs only after death without any cost.
vi) Multiple transfers in cases where the request of
the transfer of allotment from the first allottee is not
regularised and the subsequent subletting is made, the
same should also be regularised by forfeiting the
amount of security deposits required to be deposited by
sublettee at the time of each subletting and the entire
amount as payable at each partnership would be
payable by the present sublettee on its regularisation.
4. Renewals
in the case of shops/stalls/kiosks/tharas/office
units/restaurants etc. he licence will be removed for a
period of 10 years on year to year basis subject to
enhancement in licence fee at the uniform rate by 7%
per annum.
7. Permissibility in change of trade.
i) no trade in the negative list shall be permitted.
Negative list to be notified within a month after
approval of the Chairman.
ii) list where licence is required under any
prevailing legislation to be permitted only after licence
is legally obtained and additionally NDMC's
permission is taken on availability of space and safety
factors.
iii) Where Council has decided in public interest that
a market or a portion of market is meant for any
W.P.(C) Nos.7709 & 7728/2007 page 13 of 36
specific trade, no change will be allowed.
iv) changes will be freely permitted amongst the
trades which are not listed in the noticed negative list
or where licence is not mandatory.”
In view of the above policy there is therefore substance in the
submissions on behalf of the petitioner.
The objection taken by the NDMC that the petitioners are not
valid allottees is wholly misconceived. Apart from the licence deed
noticed above, in fact in the light of the policy decisions of the NDMC,
such objections could not have been possibly taken.
26. It is the case of the NDMC before this court that the relocation
is temporary. As a result of this relocation and restoration to the
original site, no other person is effected on account of intervention of
any statutory rules.
27. My attention has been drawn to the requirement of the Drugs &
Cosmetics Rules 1945 as amended in 1987. Ms. Jyoti Singh, learned
counsel appearing for the Government of NCT of Delhi, has placed
the rule prior to its amendment and thereafter before this court.
Perusal of the rule 64, prior to its amendment in 1987 would show
that there was no prescription of the carpet area of the premises
which an applicant was required to possess for grant of an
appropriate licence.
28. It is an admitted position that the Rule was amended in 1987.
After this amendment, the Rule reads thus :-
“Rule 64. Conditions to be satisfied before a licence
W.P.(C) Nos.7709 & 7728/2007 page 14 of 36
in [Form 20, 20B, 20F, 29G, 21 or 21-B is granted –
(1) A licence in [Form 20, 20B, 20F, 20-G, 21 or 21-
B] to sell, stock exhibit [or offer for sale, or distribute
drugs shall not be granted or renewal] to any person
unless the authority empowered to grant the licence is
satisfied that the premisses in respect of which the
licence is to eb granted are adequate, equipped with
proper storage recommodation for preserving the
properties of the drugs to which the licence applies
and are in charge of a person competent in the
opinion of the licensing authority to supervise and
control the sale, distribution and preservation of
drugs :
Provided that in the case of a pharmacy a licence
in Form 20 or 21 shall not be [granted or renewed]
unless the licensing authority is satisfied that the
requirements prescribed for a pharmacy is not
operating such licence maybe [granted or renewed] to
a chemist and druggiest].
(2) In granting a licence under sub-rule (1) the
authority empowered to grant it shall have regard -
(i) to the average number of licences granted
during the period of 3 years immediately preceding
and
(ii) to the occupation, trade or business ordinarily
carried on by such applicant during the period
aforesaid :
Provided that the licensing authority may refuse
to grant or renew a licence to any applicant or licensee
in respect of whom it is satisfied that by reason of his
conviction of an offence under the Act or these rules,
or the previous cancellation or suspension of any
licence granted or renewed thereunder, he is not a fit
person to whom a licence should be granted under
this rule. Every such order shall be communicated to
the licensee as soon as possible.
[Provided further that in respect of an applicant
for the grant of a licence in Form 20-B or Form 21-B
or both, the licensing authority shall satisfy himself
that the premises in respect of which a wholesale
licence is to be granted are :-
(i) of an area of not less than ten square metres ; and
(ii) in the charge of a competent person, who
(a) is a registered pharmacist, or
(b)has passed the Matriculation Examination or its
equivalent with four years experience in dealing with
W.P.(C) Nos.7709 & 7728/2007 page 15 of 36
drugs].
( c) holds a degree of a recognised University with
one year's experience in dealing with drugs :|
[Provided also that --
(i) in respect of an application for the grant of a
licence in Form 20 or Form 21 or both, the licencing
authority shall satisfy itself that [the premises are of
an area] of not less than 10 square meters, and
(ii) in respect of an application for the grant of a
licence --
(A) in Form 20 or Form or both, and
(B) in Form 20B or Form 21B or both,
the licencing authority shall satisfy itself that the
premises are of an area not less than 15 square
meters:
Provided also that the provisions of the
preceding proviso shall not apply to the premises for
which licences have been issued by the licensing
authority before the commencement of the Drugs and
st
Cosmetics (1 Amendment) Rules, 1997.]
[(3)]. Any person who is aggrieved by the order passed
by the licencing authority in sub-rule (1) may, within
30 days from the date of the receipt of such order,
appeal to the State Government and the State
Government may, after such enquiry into the matter
as it considers necessary and after giving the appellant
an opportunity for representing his views in the
matter, make such order in relation thereto as it
thinks fit.”
Therefore, after the amendment of 1987 coming into force, in
order to be entitled to the licence in respect of an application for grant
of a licence in form 20 or form 21 or both, a person is required to
satisfy the conditions laid therein. The same position subsists when
applying for a licence in form 20B or form 21B. The licencing
authority is required to satisfy itself that the premises are of an area
not less than 15 sq. mtrs. The amended rule 64 also contains a
W.P.(C) Nos.7709 & 7728/2007 page 16 of 36
proviso that these conditions shall not apply to the 'premises for
which licences have been issued by the licencing authority before the
commencement of the Drugs & Cosmetics (First Amendment) Rules,
1992.'
29. Ms. Jyoti Singh, learned counsel for the office of the Drugs
Controller & Licencing Authority of the Government of NCT of Delhi
has pointed out that inasmuch as the petitioners were satisfying the
applicable requirements at the time of grant of original licence, they
were granted such licence which, after the amendment, has been kept
renewed in view of the above proviso. It has further been pointed out
that it is an admitted position that the premises which are occupied
by the petitioners are measuring less than 15 sq. mtrs.
30. Reliance is also placed on policy decision of the concerned
th
authorities dated 15 December, 2003 on adequacy of the premises
under rule 62B and rule 64 of the Act. It was clarified under this
policy decision that so far as adequacy of the premises was concerned,
the premises should be pucca built and should have the minimum
carpet area prescribed in the rules. This policy decision also requires
that the height of all rooms shall not be less than 2.75 mtrs measured
from the surface of the floor to the lowest point of the ceiling.
th
31. By another decision taken by the drug authorities on 20
January, 2000, it has been directed that, for grant of the wholesale
drug licence, the area required should be in the same room or in
W.P.(C) Nos.7709 & 7728/2007 page 17 of 36
adjoining rooms on the same floor.
32. The primary argument on behalf of the authorities under the
Drugs & Cosmetics Act before this court is that the statutory licence is
granted against premises. Upon relocation, the authority would be
required to consider grant of licence against a new premises which
cannot be treated as a renewal of the existing licence in favour of the
petitioner. It is thus contended by Ms. Jyoti Singh, learned counsel,
that in case the relocated site does not meet the requirement of the
area prescribed under the amended rule 64, the respondent no. 3
would not be in a position to grant the licences to the petitioner
inasmuch as no relaxation to these conditions is permissible.
33. Learned counsel submits that even if the petitioners were to be
relocated back to the same site as occupied by them at present after
completion of the DMRC project, they would be required to apply
afresh under the statutory act and rules. In such eventuality also the
respondents would be required to meet the conditions laid in the
amended rule 64. In case the premises which were allotted to them
were not of such area as prescribed under the statutory rules, the
respondent no. 3 would not be in a position to grant the licence to the
petitioner.
34. The admitted position which thus emerges on record is that the
respondent no. 1 is effectuating relocation for the same trade and for
the same area which has been licenced to the different allottees. It is
W.P.(C) Nos.7709 & 7728/2007 page 18 of 36
also an admitted position, that on account of the amendment to the
rules, upon relocation the chemist trade cannot be carried out in the
proposed relocation sites contemplated by the NDMC for these
petitioners. Such chemist trade would also not be legally permissible
in the premises to which the NDMC proposes to restore the
petitioners, upon completion of the project.
35. The petitioners had approached the NDMC at the earliest. In
W.P.(C) No. 7728/2007, the first representation made by the
st
petitioner was dated 31 January, 2007 which was much before the
NDMC and the Delhi Metro Rail Corporation Ltd. had formulated or
finalised any plans towards the construction.
The NDMC has placed before this court the minutes of its
meetings wherein it has considered the issue of this relocation. It
appears that the Chairperson of the NDMC had constituted a
committee comprising of the Secretary, Director (Estate) and the
Additional Financial Advisor for relocation of the units.
36. The estate department of the NDMC had proposed shifting of
the shops/stalls/kiosks on the principal that the licencee paying the
highest licence fee per square feet would be relocated nearest to the
Safdarjung Hospital. It was the proposal of the estate department
rd
which was considered by this three member committee on 23 July,
2007, when it decided that the area mentioned in the files only would
be allotted. This committee also noticed the decision of the
W.P.(C) Nos.7709 & 7728/2007 page 19 of 36
Chairperson of the NDMC permitting clubbing of sites by the
licencees. The authorities were of the view that the
shifting/relocation of the licencees is an administrative matter. This
decision was therefore placed before the New Delhi Municipal
Council only for its information.
37. It is noteworthy that the committee had also noticed that the 40
shops which are to be relocated were providing services to the
patients/attendants, patients and employees working in these
hospitals/institutions and that they were being relocated within 125-
150 mtrs.
38. The NDMC has also disputed the contention of the petitioner in
W.P.(C) No. 7709/2007 that it was earlier allotted an area of 77 sq. ft.
Before this court it has been urged that the original area allotted to
the predecessor in interest of the petitioner was only 59 sq. ft and
upon the increased area of 18 sq. ft permitted on tehbazari in 1991,
the area in its possession became 77 sq. ft.
39. It is necessary to now consider the facts relating to the
construction with regard to the shops/kiosks at the relocation sites.
The DMRC had informed the petitioner Mrs. Shashi Bala Gupta on
th
28 February, 2007 that the size of the temporary shops would be
finalised mutually by the NDMC and the Delhi Metro Rail
Corporation Limited. It had requested the petitioner to approach the
NDMC on this issue. As noticed above, the three member committee
W.P.(C) Nos.7709 & 7728/2007 page 20 of 36
of the NDMC took the decision that the allottees would be allotted
shops of the same size as per the allotment which existed on the files.
40. Mr. Dhruv Madan, learned counsel appearing for the Delhi
Metro Rail Corporation Ltd. before this court, has filed two letters
th th
dated 24 July, 2007 and 27 September, 2007 received by the
DMRC from the New Delhi Municipal Council. By the letter dated
th
24 July, 2007, the NDMC had conveyed the list of
shops/kiosks/stalls for relocation in the descending order and had
also intimated the area as indicated in the list which was enclosed. A
th
modified list was sent to the DMRC with the letter dated 27
September, 2007.
41. The final list issued by the NDMC to the DMRC - respondent
no. 2 shows that the NDMC has permitted clubbing of two shops in
the list. This list also contains relocation of three premises for
carrying on the trade of chemist to premises having the area which is
between 133.37 to 157 sq. ft. One Bhutani Medicos which was
occupying two units, being nos. 38 and 39 each measuirng 69.18 sq.
feet has been permitted clubbing, thereby bringing its total area to
138.36 sq. feet. 37.
At the same time, so far as the petitioner in W.P.(C) No.
7709/2007 is concerned, this writ petitioner has been informed that
it would be relocated in an area of 77 sq. ft. So far as the writ
petitioner in W.P.(C) No. 7728/2007 is concerned the NDMC has
W.P.(C) Nos.7709 & 7728/2007 page 21 of 36
informed that it would be relocated on an area of 66 sq. ft only.
42. It now becomes necessary to consider the argument on behalf of
the NDMC that the area allotted on the file is sacrosanct and has to be
so maintained. The argument is that consequently, the stand taken
by the NDMC stand before this court is irrational, arbitrary and illegal
as the petitioners are being relocated with continuity of trade to
premises of such dimensions for which they would not be given the
licence. The petitioners point out that accepting the statutory
mandate of these statutory rules, the NDMC increased the area of
four chemist shops in the AIIMS subway as they did not satisfy the
size stipulation.
43. The NDMC has answered this contention substantially
admitting the facts pleaded by the petitioner. It is stated that in the
year 1998-99, NDMC built 16 shops in the subway at
AIIMS/Safdarjung Hospital out of which the shop nos. 1, 8, 9 and 16
had been reserved for the chemist trade. The shop nos. 1, 9 and 16
were allotted after inviting tenders for the same for this purpose.
These shops were having carpet area of 97.48 sq. ft. each. After the
allotment of these shops, it was brought to the notice of the NDMC
that the area of the shops was less than the carpet area required
under the Drugs & Cosmetics Rules, 1945 for running a chemist shop.
NDMC has stated, that for this reason it increased the area of the
shop no. 1 by 11.56 sq. ft; and, of the shop no. 9 by 8.37 sq. ft by
W.P.(C) Nos.7709 & 7728/2007 page 22 of 36
removing the partition wall. So far as shop no. 8 is concerned, it is
stated that as allotments had not been finalised, therefore, tenders
were invited afresh in respect of the shop in 1999 for an increased
carpet area of 145.63 sq. ft.
44. Ms. Anjana Gosain, learned standing counsel for the NDMC,
has urged at great length that the allottees of these shop nos. 1, 8, 9
and 16 are paying a huge amount as licence fee for these shops and
that no parity can be drawn between them and the petitioners.
Reliance has also been placed on Section 141 of the NDMC Act to
contend that the consideration for any immovable property which
may be sold, leased or otherwise transferred by the NDMC shall not
be less than the value at which such immovable property could be
sold, leased or otherwise transferred in normal and fair competition.
45. From the correspondence noticed above, and in view of the
submissions made by the respondent nos. 1 and 2 before this court, it
is evident that the shops in question are not ready for occupation
even as yet. The petitioner has handed over in court rough site plans
pointing out several locations wherein space is available so that the
respondents can make appropriate provision for the proposed
chemist shops/kiosks of such area as is required under the rules for
relocation of the petitioners.
46. The last argument on behalf of the NDMC was to the effect that
the petitioners have no right to relocation site. Certainly this could
W.P.(C) Nos.7709 & 7728/2007 page 23 of 36
have been validly contended if the NDMC did not have a scheme for
relocation. It has decided to relocate the 40 shops in public interest
in view of the services being rendered by them. It has made a
considered decision to effect such relocation and to bring the allottees
back to the original site on completion of the project. The NDMC has
also identified the allottees including these petitioners for relocation
when it has sent the list to the respondent no. 2 as well. The NDMC
allots these kiosks and permits a specific business/trade therein. The
allottee is not permitted to carry on any other trade. The impact of
these stipulations is really relocation of the business/trade of the
allottees.
47. As a statutory authority the NDMC is bound to comply with
statutory mandate. It is as much bound by provisions of the Drugs &
Cosmetics Act of 1940 and Rules thereunder, as the petitioners and
other respondents. Its scheme of relocation of the trade of chemists is
consequently required to abide by the statutory provisions. Looked at
from these aspects, it is not open to the NDMC to contend that the
petitioners would have no enforceable right to relocation of its
business in an appropriate premises.
48. The NDMC has contended that the DMRC in all fairness has
formulated a scheme for relocation of such persons who are required
to be displaced on account of the Metro Rail Corporation project.
While the project is in public interest, such a scheme for their
W.P.(C) Nos.7709 & 7728/2007 page 24 of 36
relocation is formulated only to further the ends of public interest so
that none suffers by any displacement on account of the project.
49. Law respects juridical possession. It is well settled that even an
owner of the property, under law can resume possession after the
expiry or earlier termination of the allotment only by due course of
law. The state or its instrumentalities are not in any higher or better
position. Certainly the petitioners cannot be removed by an
administrative or executive order or merely by termination of the
allotment. (Ref:- Anamallai Club vs. Government of Tamil
Nadu & Ors. (1997) 3 SCC 169; State of U.P. vs. Maharaja
Dharmender Prasad Singh (1989) 2 SCC 505 (SCC pgs 516,
17 paras 30, 31); Bishan Das v. State of Punjab (1962) 2 SCR
69 pg. 79, 80 = AIR 1951 SC 1570; Midnapur Zamindary Co.
Ltd. vs. Kumar Naresh Roy AIR 1924 PC 144) .
50. Due course of law in each particular case means such exercise
of the powers by a duly constituted tribunal or court in accordance
with the procedure established by law under such safeguards for the
protection of private rights. It would imply the right of the person
affected thereby to the present before the tribunal; to be heard, by
testimony or otherwise, and, to have the right determination of the
controversy by proof, every material fact which bears on the question
of fact or liability be conclusively proved or presumed against him. It
has been so laid down in East India Hotels Ltd. vs. Syndicate
W.P.(C) Nos.7709 & 7728/2007 page 25 of 36
Bank 1992 Supp. (2) SCC 29 (paras 29, 30 & 32) .
51. The statutory prescription for eviction of unauthorised
occupants of public premises is to be found in the Public Premises
(Eviction of Unauthorised Occupants) Act, 1972. The state has also
available to it the right to statutorily acquire other property as is
required for a pubic purpose under the scheme of compulsory
acquisition provided under the Land Acquisition Act.
There is no dispute that the premises in question are public
premise. At the same time, the NDMC could oust these petitioners
from their occupancy only by following due process of law and taking
appropriate remedy. Even if proceedings were initiated under the
Public Premises (Eviction of Unauthorised Occupants) Act, 1972, it
would be still take longer than if the occupants agreed to the
relocation. Such delays not only frustrate project aspirations but also
grossly exaggerate the costs involved.
52. Even the process of compulsory land acquisitions of private
properties under the provisions of the Land Acquisition Act is
normally time consuming as the persons on the land take recourse to
protracted litigation to protect their occupation.
Thus, by such schemes of relocation, the project implementing
authority is saved of the exorbitant cost of land acquisition and the
delays which result in completing the process. The respondents are
simultaneously saved from protracted eviction proceedings.
W.P.(C) Nos.7709 & 7728/2007 page 26 of 36
Equally important, additionally there is no displacement of the
persons whose premises are temporarily required for the purposes of
completion of the project. In the instant case, the petitioners have
very fairly agreed to be relocated in principle.
53. As noticed hereinabove, the decision to relocate the petitioner is
an administrative decision taken by the three member committee
which was placed before the council for information. The NDMC has
on an earlier occasion recognised the fact that in order to run a
chemist trade, it is necessary to comply with the Drugs & Cosmetics
Rules, 1945 as amended. It is an admitted position by the NDMC that
it has permitted the petitioners to carry on the chemist trade. The
petitioners are so conducting their business for over fifteen years.
They are being relocated for carrying on the same trade despite the
knowledge of the NDMC that the petitioner cannot be granted a drug
licence for running the chemist shop in the size of the shop to which
they are being relocated.
54. The NDMC has recognised this fact on an earlier occasion when
it has increased the size of shop no. 1, 9 and 16 in the subway between
AIIMS and Safdarjung Hospital.
55. The NDMC was fully aware of the requirement which has been
framed under statute. It has also granted the licence to the petitioner
to carry on the trade of chemist at the kiosk in question. It has stated
that the petitioner is required to carry on the same trade and would
W.P.(C) Nos.7709 & 7728/2007 page 27 of 36
be relocated to the original site after completion of the project to
carry on the same trade. In this background it certainly cannot
mandate reloction to a premises wherein such a trade cannot be
occupied.
56. The relocation policy has been carved out in public interest.
Such policy has to be rational, reasonable and fair. Whether by
tender or auction or by allotment on licence, the same is only one out
of the many modes of allotment of the immovable property by the
NDMC. Section 141 has merely mandated that such property would
be transferred on values as would be arrived at any normal and fair
competition.
57. So far as the additional area is concerned, the petitioners before
this court have fairly contended that they are willing to pay such rates
as could be fetched by the NDMC in normal and fair competition.
This was also stated by the petitioners in the various representations
made to the NDMC.
The offer of the petitioner in fact supports the spirit,
intendment and purpose of Section 141 of the statute.
rd
58. The decision of the committee arrive at on 23 July, 2007 fails
to consider the requirement of the Drugs & Cosmetics Rules, 1945 or
the aforenoticed facts. Such facts were certainly material and
relevant for arriving at a considered and fair decision. More so
having regard to the admitted action of the NDMC in deciding to
W.P.(C) Nos.7709 & 7728/2007 page 28 of 36
increase the size of the shop nos. 1, 9 and 16 in view of the
amendment to the rule. The NDMC has also not considered the
offer made by the petitioners to pay the current market rates which
may be prevalent towards the increase in area which may be
necessary.
59. The NDMC is a statutory authority and certainly is bound to act
reasonably and fairly. The NDMC has recognised the need for such
chemist shops. It is for this reason that it has permitted these
petitioners to carry on the trade of chemist. Additional chemists
have been permitted thereafter. The NDMC has thus accepted the
fact that the petitioners are rendering valuable service in public
interest. The Safdarjung Hospital is known to be the largest hospital
in the city. Thousands of patients visited these hospitals every single
day. There are huge wards wherein patients are admitted. Certainly
the requirement of the chemists near the two hospitals i.e. the All
India Institute for Medical Sciences and Safdarjung Hospital, which
are the major hospitals in the city, cannot be contended to be
unnecessary or not in the interest of the patients and public. It is
evident that the respondents are implementing the scheme for
relocation so far as the chemists are concerned, for this reason alone.
It is also the respondent no. 1's contention that the relocation is for
the same area and for the same trade which is being carrying on by
these petitioners for 15 years and 19 years respectively.
W.P.(C) Nos.7709 & 7728/2007 page 29 of 36
60. In the instant case, the NDMC is relocating the allottees to
premises of different measurements based on the area allotted to
them. In the case of the other chemists noticed above, it has
admittedly complied with the statutory mandate and increased the
area of the kiosks. The scheme of relocation does not postulate
shops/kiosks of identical sizes.
61. In this background, fully knowing the requirement of the Drugs
& Cosmetics Rules, 1945, the NDMC cannot require the petitioners to
be relocated to a premises wherein they would become disentitled to
the licence under the applicable rules. The NDMC is as much
required to comply with the mandate of applicable rules under the
Drugs & Cosmetics Act of 1940 as the petitioners and other
respondents are.
62. As per the list submitted by the NDMC to the Delhi Metro Rail
th
Corporation Ltd. with its letter dated 27 September, 2007, so far as
the chemist trade is concerned the respondents have permitted such
clubbing to M/s Bhutani Medicos which had been allotted nos. 38
and 39. According to the NDMC, the covered area of each of these
units is only 69.18 sq. feet. and this concern would be able to satisfy
the requirement of the amended rule under the Drugs & Cosmetics
Rules, 1945 only on account of the clubbing whereby its total area
would admittedly become 138 sq. feet.
63. It is well settled that actions of the State, its instrumentalities
W.P.(C) Nos.7709 & 7728/2007 page 30 of 36
and public authorities or of persons whose actions bear the insignia of
public law element or public character are amenable to judicial review
and that legality of such actions would be tested upon the anvil Article
14 of the Constitution.
64. The Court has defined the contours of the public law remedy as
intervention in exercise of the judicial review power where the actions
of State or its agencies bearing the imprint of public interest element,
can be examined. It is trite that non-arbitrariness and fairness are
considered as such cornerstones of the principle of equality which
form the immutable legal behavioral standard. Every action, policy or
even change of policy in the realm of activity of the State or its
instrumentality therefore, has to be informed, fair and non-arbitrary.
In appropriate cases, actions informed by reason may be
questioned as arbitrary in proceedings under Article 226 (Ref. AIR
1979 SC 1628 R.D. Shetty v. International Airports
Authority of India; AIR 1980 SC 1992 Kasturi Lal v. Lakshmi
Reddy; AIR 1991 SC 537 Kumari Srilekha Vidyarthi; AIR
1990 SC 1031 Mahabir Auto Store v. Indian Oil Corporation;
1994 (6) SCC 651 Tata Cellular v. UOI and 144 (2007) DLT
824 C.P. Mittal v. UOI & Anr.)
65. It is well settled that policy decision taken in exercise of
executive power must be made fairly and applied uniformly and not
give the impression that it was done arbitrarily or by any ulterior
W.P.(C) Nos.7709 & 7728/2007 page 31 of 36
criteria. The Apex Court was called upon to examine a decision to
change a policy in its pronouncements reported at (2003) 4 SCC
579 UOI vs. International Trading Company and laid down
the principles thus :-
“While the discussion to change the policy in
exercise of the executive power when not trampled
by any statute or rule, is wide enough, what is
imperative and implicit in terms of Article 14 is that
a change in policy must be made fairly and should
not give he impression that it was done arbitrarily or
by any ulterior criteria. The wide sweep of Article 14
and the requirement of every State action qualifying
for it validity on this touchstone irrespective of the
fields of activity of the State is a expected tenet. The
basic requirement of Article 14 is a fairness in action
of the State and non-arbitrariness in essence and
substance is the heartbeat of fair play.”
66. In this behalf it would also be appropriate to consider the
observations of the Apex Court in JT 2004 (10) SC 500 Bannari
Amman Sugars Ltd. Vs. Commercial Tax Officer & Ors .,
wherein it was held thus :
“9. While the discretion to change the policy in
exercise of the executive power, when not trammelled
by any statute or rule is wide enough, what is
imperative and implicit in terms of Article 14 is that a
change in policy must be made fairly and should not
give impression that it was so done arbitrarily or by
any ulterior criteria. The wide sweep of Article 14 and
the requirement of every State action qualifying for its
validity on this touchstone irrespective of the field of
activity of the State is an accepted tenet. The basic
requirement of Article 14 is fairness in action by the
State, and non-arbitrariness in essence and substance
is the heart beat of fair play. Actions are amenable, in
the panorama of judicial review only to the extent that
the State must act validly for discernible reasons, not
whimsically for any ulterior purpose. The meaning
W.P.(C) Nos.7709 & 7728/2007 page 32 of 36
and rule import and concept of arbitrariness is more
easily visualised than precisely defined. A question
whether the impugned action is arbitrary or not is to be
ultimately answered on the facts and circumstances of
a given case. A basic and obvious test to apply in such
cases is to see whether there is any discernible
principle emerging from the impugned action and if so,
does it really satisfy the test of reasonableness.”
67. In (1994) 2 SCC 729 State of U.P. v. U.P. University
Colleges Pensioners' Association, the court had held that it is
only if a policy decision was unreasonable or against public interest
that the same could be subjected to a judicial review.
68. In the instant case the respondents have recognised the need of
chemist shops especially having regard to the large number of
patients visiting the hospitals. For this reason, both the petitioners
were permitted to change the trade to run chemist shops for over a
decade. Over a period of time, it can be presumed that having regard
to increase in the requirement of the chemist shops, additional
chemist shops were admittedly constructed and allotments made by
the respondents. No submission to the contrary has been placed
before this court and it would appear that the petitioners who are in
location in public interest
the trade of chemist shop are required at the
as well.
69. The petitioners have valid allotments and the statutory licences
as on date. If they continue at the same site where they are located
today, there is no impact on their business at all. They are being
required to be relocated at the instance of the respondents for the
W.P.(C) Nos.7709 & 7728/2007 page 33 of 36
purposes of expeditious execution of another project. The NDMC has
stated that it has no proposal to permanently relocate them and has
proposed to relocate the petitioners to the existing site upon
completion of the project. By such action of the respondents, the
rights of the petitioners shall be adversely impacted and also there is
no compliance of the statutory requirements.
70. The respondents have not placed any material or rational for
implementing its relocation policy in such manner even though it has
moulded earlier allotments to ensure statutory compliance. No
reasons of economics or any other exigencies have been taken or
placed. The Delhi Metro Rail Corporation has also submitted that it
is bound by the decisions taken by the NDMC and would be willing to
implement any directions made to it. Examined in this background,
it would clearly appear that the action of the respondents is irrational
and arbitrary and would therefore be subject to judicial review.
71. The DMRC is constructing the premises for the NDMC and has
raised no objection to construction of bigger premises. It is
constructing kiosks of such area as notified by the NDMC. None of
the respondents has urged that space is not available or that there is
any other technical reason which could prohibit construction of the
larger premises.
The only explanation given by the NDMC for not doing so is
that the same would open a Pandora's box.
W.P.(C) Nos.7709 & 7728/2007 page 34 of 36
As discussed hereinabove, this submission has no basis.
72. It is trite that the state in all its activities must act fairly and
cannot act arbitrarily. Equity and good conscience should be at the
core of all state functions. It is now well settled that every executive
action which operates to the prejudice of a person must have the
sanction of law. In (2003) 1 SCC 591 Hindustan Times v. State
of U.P ., the Apex Court had held that the respondents being a state
cannot, in view of the equality doctrine contained in Article 14 of the
Constitution of India, resort to the theory of 'take it or leave it'.
For all the foregoing reasons it has to be held that the
petitioners can be relocated only to a premises which would meet the
requirements of the amended rule 64 of the Drugs & Cosmetics Rules,
1945.
73. In the light of the discussion there is merit in the contentions of
st
the petitioner. The letter dated 1 August, 2007 to the extent that it
refers to the petitioners is therefore set aside and quashed. It is held
that the allottees running a chemist trade could be relocated only to
premises which would meet requirements of the amended rule 64 of
Drugs & Cosmetics Rules 1945 and it is so directed.
It shall be for the respondent nos. 1 and 2 to work out the best
manner in which the statutory requirements are complied with.
The petitioners shall remain bound by the offer made by them
to pay the market rate towards the area which would be in excess of
W.P.(C) Nos.7709 & 7728/2007 page 35 of 36
the area, which they are occupying at present. So far as the area
occupied at present is concerned, the petitioner would be required to
pay the same rate as the others. It shall be for the NDMC to
determine the same and to inform the petitioners of the decision
taken at the earliest.
th
The interim orders passed on 24 October, 2007 shall continue
to operate till implementation of the above directions.
These writ petitions are allowed in the above terms.
(GITA MITTAL)
JUDGE
December 26, 2007
kr
W.P.(C) Nos.7709 & 7728/2007 page 36 of 36