IN THE HIGH COURT OF JUDICATURE AT MADRAS DATED : 14.11.2011 CORAM THE HONOURABLE MR. JUSTICE N. PAUL VASANTHAKUMAR WRIT PETITION NOS.19233 & 19984 OF 2011 AND CONNECTED MPs. KUMARAN AGENCIES REP. BY ITS PROPRIETOR R. DHANDAPANI NO.133,VILLIANUR MAIN ROAD T.V. NAGAR EMBALAM PUDUCHERRY 605 106. ... Petitioner in both WPs. Vs 1 THE GOVERNMENT OF PUDUCHERRY REP. BY DIRECTOR OF AGRICULTURE DEPARTMENT OF AGRICULTURE PUDUCHERRY. 2 FERTILIZER LICENCING AUTHORITY CUM ADDITIONAL DIRECTOR OF AGRICULTURE (T & V) DEPARTMENT OF AGRICULTURE PUDUCHERRY. ... Respondents in both WPs. Writ Petition No.19233 of 2011 filed under Article 226 of the Constitution of India praying for the issuance of a Writ of Certiorarified Mandamus calling for the proceedings of the first respondent comprised in 7009/AGRI FERT/2001, dated 10.8.2011 and 12.8.2011 passed by the second respondent and quash the said proceedings and consequently direct the respondents to permit the petitioner to carry on the business of wholesale and retail trade of Fertilizers in terms of the authorisation issued to them under the FCO. Writ Petition No.19984 of 2011 filed under Article 226 of the Constitution of India praying for the issuance of a Writ of Certiorarified Mandamus calling for the order of the second respondent contained in Order No.1/ADA (T & V) TDY/2011-12, dated 17.8.2011 and quash the said proceeding and consequently permit the petitioner to carry on the business of wholesale and retail trade of Fertilizers in terms of the authorisation issued to them under the FCO. https://hcservices.ecourts.gov.in/hcservices/ For Petitioner : Mr. R.Muthukumaraswamy Senior Counsel for Mr.A.Jenasenan For Respondents : Mrs.N.Mala, for Government Pleader (Puducherry) COMMON ORDER In W.P.No.19233 of 2011, the petitioner has prayed to quash the orders dated 10.8.2011 and 12.8.2011 passed by the second respondent and consequently direct the respondents to permit the petitioner to carry on the business of wholesale and retail trade of fertilizers in terms of the authorisation issued to them under the Fertilizer (Control) Order, 1985. 2. In W.P.No.19984 of 2011, the petitioner has prayed to quash the order dated 17.8.2011 passed by the second respondent and consequently permit the petitioner to carry on the business of wholesale and retail trade of fertilizers in terms of the authorisation issued to them under the Fertilizer (Control) Order, 1985. 3. Since the issue raised in these writ petitions are common, both the writ petitions are heard together and a common order is passed. 4. It is the case of the petitioner that it is engaged in the business of selling fertilizers for the past 35 years at Embalam village, Puducherry Region of wholesale and retail in two different premises situated at Villiyanur Main Road, Embalam, Puducherry. The petitioner was issued with letters of authorisation under the Fertilizer (Control) Order, 1985 by the second respondent, which are valid upto 31.3.2013. As per the Fertilizer (Control) Order, 1985, the petitioner as a wholesale trader could sell fertilizer only to other fertilizer retail dealers and being authorised to do retail sales as a retailer, it can sell only to individual purchasers, like farmers, land owners, family members of land owners, tenants. 5. According to the petitioner, as per Clause 5 of the Fertilizer (Control) Order, 1985, the dealer is required to issue a cash/credit memorandum to the individual purchasers, who purchase fertilizers from a retail dealer. The retail dealer is required to enter the name and address of the purchaser and also get his signature affixed in the cash/credit memo in the prescribed 'M' Form. Under Clause 4 of the Fertilizer (Control) Order, 1985, the retail dealer should display the stock position and price list in front of the business premises and no retail dealer, who is having stocks can https://hcservices.ecourts.gov.in/hcservices/ refuse to sell the fertilizer to individuals, if the conditions prescribed in Clause 5 is complied with by the individual purchaser. According to the petitioner, on 9.6.2011, sales of fertilizer was effected by the petitioner from the retail outlet to various persons including three persons, who claimed to be representatives of farmers belonging to Sedarapet Village and Karasur Village of Puducherry Region. Two of them purchased 35 bags of urea representing two farmers and the third person purchased 30 bags of urea. All the said purchasers gave their names and their address and also affixed their signature in the cash memorandum. The said purchasers had arranged a lorry for transportation of their stocks to their respective villages, which according to them are situated nearby. Once the stock was handed over after getting the signature in the cash memo, the responsibility of the petitioner as dealer ceased. 6. On 10.6.2011, the second respondent issued a Stop Sale Notice under Clause 28 of the Fertilizer (Control) Order, 1985 alleging that there is reason to believe that the petitioner has contravened the Fertilizer (Control) Order. The said notice will be in force for a period of 21 days. Immediately, a show cause notice was issued stating that the petitioner had sold the urea to three persons, intended for the use of industrial purpose, and why action should not be taken for contravening the Fertilizer (Control) Order, 1985. The petitioner submitted its explanation on 16.6.2011 stating that the fertilizer was sold only to farmers or their representatives in terms of the procedure prescribed. Another Stop Sale Notice was issued on 17.6.2011 for a period of 21 days with effect from 17.6.2011. 7. On 13.7.2011, the second respondent issued an order under Clause 31(2) of the Fertilizer (Control) Order, 1985 suspending both the letters of authorisation issued for wholesale and retail dealership and the said notice will be in force only for 15 days, before which final orders are to be passed and if no final order is passed within 15 days, interim suspension will be deemed to be revoked under Clause 31(2) of the Fertilizer (Control) Order, 1985. The petitioner having aggrieved about the suspension, filed an appeal before the first respondent under Clause 32(a) of the Fertilizer (Control) Order, 1985 on 20.7.2011 and prayed to revoke the order of suspension in relation to the wholesale business without prejudice to the decision to be taken regarding the allegation of misuse of retail authorisation. The first respondent issued a notice of hearing and hearing was held on 4.8.2011 and on 11.8.2011. In the meantime, 15 days time expired. The petitioner also informed that the order of suspension relating to wholesale license is illegal and the criminal complaint registered though is pending, no charge sheet has been filed. The petitioner was served with two Minutes dated 10.8.2011 and 12.8.2011 relating to the personal hearing stating that the petitioner failed to prove his innocence and the first respondent is of the view that the license is to be cancelled for wholesale and retail sales. https://hcservices.ecourts.gov.in/hcservices/ 8. The said orders having been passed in the appeal preferred against the suspension order, the petitioner filed W.P.No.19233 of 2011 to quash the order and prayed for giving a direction to the respondents to permit the petitioner to carry on the business of wholesale and retail trade in fertilizer. 9. The learned counsel for the respondents, took notice and the matter was adjourned to 23.8.2011 for getting instructions. On 17.8.2011, the cancellation order was passed in respect of wholesale and retail trade and the said order is challenged in the second writ petition contending that the order passed by the second respondent based on the direction issued by the first respondent is illegal, as the second respondent is the competent authority to decide about the cancellation of authorisation/licence under Clause 31 of the Fertilizer (Control) Order, 1985 and the first respondent is only an appellate authority, before whom the order of cancellation if passed by the second respondent is to be challenged and therefore, the order passed by the second respondent based on the direction issued by the first respondent is illegal and the petitioner has also lost the opportunity of filing appeal against the order before the first respondent and therefore, prayed for setting aside the order among other grounds. 10. The second respondent has filed a counter affidavit contending that the Director of Agriculture on coming to know of the seizure of vehicle containing urea weighing about 5.00 Metric Tons, which was purchased from the petitioner directed the second respondent and other officials to verify the same from the Sedarpet Police Station and on verification, it was found that the seized urea is an essential commodity notified under the Essential Commodities Act, 1955 and was handed over to Food Cell Police for further enquiry and take action. The urea sold by the petitioner, under the guise of sale to the farmers, were seized on the complaint made by the public, which was sent to M/s.ATC Chemical Private Limited (Tanning Industry). The Food Cell, Puducherry had taken cognizance of the offence under Clauses 25(1) and (2) of the Fertilizer (Control) Order, 1985 read with 7(1)(a)(ii) of the Essential Commodities Act, 1955 read with Section 34 of the Indian Penal Code and registered a criminal complaint in Crime No.16 of 2011 on 10.6.2011. Samples were taken for testing and was handed over to the notified Analyst and the Analyst confirmed to the standards of urea i.e. Nitrogen 46%. The explanations furnished by the petitioner being unsatisfactory, the Fertilizer Inspector has recommended for cancellation/suspension of the licence of the petitioner for the alleged sale of fertilizers for non-agricultural purpose. On 13.7.2011, the order of suspension of both wholesale and retail licence was issued. The petitioner filed an appeal before the Director of Agriculture to revoke the suspension order issued by the second respondent, without making representation to the second respondent, who issued suspension order. The first respondent gave an opportunity to the petitioner, and after hearing, https://hcservices.ecourts.gov.in/hcservices/ found that the petitioner failed to prove its innocence and recommended cancellation of licence given to the petitioner as wholesale and retail dealer. Accordingly, the second respondent cancelled the wholesale and retail licence and the said order can be challenged by the petitioner by filing appeal before the first respondent and without challenging the same, the petitioner has filed these writ petitions and the same are not maintainable. 11. The learned Senior Counsel for the petitioner submitted that the competent authority to cancel the licence is the second respondent under clause 31 of the Fertilizer (Control) Order, 1985. Learned Senior Counsel further submitted that merely because the petitioner has filed an appeal against the order of suspension, the first respondent cannot make a recommendation to cancel the licence and the first respondent is vested with limited jurisdiction to find out as to whether the suspension is warranted or not. The learned Senior Counsel also submitted that the direction given by the first respondent to the second respondent clearly establishes the pre- determined mind of the first respondent and therefore, the petitioner cannot file appeal before the first respondent as he only directed the second respondent to cancel the licence. The learned Senior Counsel further submitted that the impugned order passed by the second respondent is bound to be set aside as there is a statutory violation, as the second respondent has not given any notice or opportunity of hearing before passing the impugned order of cancellation of both wholesale and retail licence. 12. Mrs.N.Mala, representing learned Government Pleader (Puducherry) appearing for the respondents, on the other hand, submitted that the petitioner having filed appeal against the order of suspension before the first respondent and the first respondent having considered the matter on merits, is entitled to give a direction to the second respondent to cancel the licence. Hence, there is no illegality in the orders, particularly when there is a criminal complaint registered against the petitioner, which is pending investigation. 13. I have considered the rival submissions made by the leaned Senior Counsel for the petitioner as well as learned counsel representing Government Pleader (Puducherry) for the respondents. 14. The point arises for consideration in these writ petitions is, whether the order of cancellation passed by the second respondent cancelling the wholesale and retail licence of the petitioner is in conformity with Clause 31 of the Fertilizer (Control) Order, 1985. 15. Clause 31 of the Fertilizer (Control) Order, 1985 is the statutory provision dealing with cancellation or suspension of licence. The said clause reads as follows:- https://hcservices.ecourts.gov.in/hcservices/ "31. Suspension, Cancellation or Debarment (1) A Notified Authority, registering authority, or as the case may be, the controller may, after giving the authorised dealer or the holder of certificate of registration or certificate of manufacture or any other certificate granted under this Order, an opportunity of being heard, suspend such authorisation letter or certificate or debar the dealer from carrying on the business of fertiliser on one or more of the following grounds, namely;- (a) that the authoristion letter or certificate of registration or certificate of manufacture, as the case may be, has been obtained by wilful suppression of material facts or by misrepresentation of relevant particulars ; (b) that any of the provisions of this Order or any terms and condition of the Memorandum of Intimation or Certificate of registration or the certificate of manufacture, as the case may be, has been contravened or not fulfilled ; Provided that while debarring from carrying on the business of fertilizer or cancelling the certificate, the dealer or the certificate holder thereof may be allowed for a period of thirty days to dispose of the balance stock of fertilizers, if any, held by him: Provided further that the stock of fertilizer lying with the dealer after the expiry of the said period of thirty days shall be confiscated. (2) Where the contravention alleged to have been committed by a person is such as would, on being proved, justify his debarment from carrying on the business of selling of fertilizer or, cancellation of authorisation letter or certificate of registration or certificate of manufacture or any other certificate granted under this Order to such person the Notified Authority or registering authority or, as the case may be, the controller may, without any notice, suspend such certificate, authorisation letter, as an interim measure; Provided that the registering authority, Notified Authority or, as the case may be, the Controller shall immediately furnish to the affected person details and the nature of contravention alleged to have been https://hcservices.ecourts.gov.in/hcservices/ committed by such person and, after giving him an opportunity of being heard, pass final orders either revoking the order of suspension or debarment within fifteen days from the date of issue of the order of suspension; Provided further that where no final order is passed within the period as specified above, the order of interim suspension shall be deemed to have been revoked without prejudice, however, to any further action which the registering authority, Notified Authority or, as the case may be, the Controller may take against the affected person under sub-clause (1) (3) Wherever an authorisation letter or certificate is suspended, cancelled or the person is debarred from carrying on the business of fertilizer, the Notified Authority, registering authority, or as the case may be, the Controller shall record a brief statement of the reasons for such suspension or, as the case may be, cancellation or debarment and furnish a copy thereof to the person whose certificate or authorisation letter has been suspended or cancelled or business has been debarred ; (4) Wherever the person alleged to have committed the contravention is an industrial dealer, the Notified Authority may take action against the holder of such certificate of registration under sub-clause (1) and sub-clause (2): Provided that where such certificate is suspended or cancelled, the Notified Authority shall, within a period of fifteen days from the date of issue of such order of suspension or cancellation, furnish to the Controller also, besides sending the same to the person whose certificate has been suspended or cancelled, a detailed report about the nature of contravention committed and a brief statement of the reasons for such suspension or, as the case may be, cancellation ; Provided further that the controller, shall, in case of the order for suspension passed by the Notified Authority, on receipt of the detailed report and after giving the person an opportunity of being heard, pass final order either revoking the order of suspension or cancelling the certificate of registration, within fifteen days from the date of receipt of the detailed report from the Notified Authority, failing which the https://hcservices.ecourts.gov.in/hcservices/ order of interim suspension passed by the Notified Authority shall be deemed to have been revoked, without prejudice however, to further action which the Controller may take against the holder of certificate under sub-clause (1); Provided also that the order of cancellation passed by the Notified Authority shall remain effective as if it had been passed by the controller till such time the Controller, on receipt of the detailed report from the Notified Authority, and if deemed necessary, after giving the person a fresh opportunity of being heard, pass the final order either revoking or confirming the order of cancellation." Clause 31 of the Fertilizer (Control) Order, 1985 clearly states that the notified authority/registering authority, after giving the authorised dealer or holder of certificate of registration, after giving an opportunity of being heard, can cencel the authorisation letter or certificate or debar the dealer from carrying on the business of fertilizer for certain grounds. Clause 31(2) of the Fertilizer (Control) Order, 1985 empowers the notified authority/registering authority to suspend the certificate of authorisation as an interim measure. 16. Admittedly, the second respondent suspended petitioner's wholesale and retail licence, against which the petitioner filed an appeal before the first respondent, which is maintainable as per the statutory provision. The issue raised before the appellate authority was as to whether the suspension order is justified or not. Admittedly, the suspension order can be in force only for 15 days and thereafter, the order gets revoked automatically under Clause 31(2) proviso. Therefore, the appeal filed by the petitioner before the first respondent against the suspension order on expiry of 15th day will become infructuous. The first respondent, instead of deciding about the validity of the suspension of licence, has chosen to recommend to the second respondent to cancel the licence. The competent authority to cancel the licence by considering the matter on merits, is the second respondent as per the statutory provision viz., Clause 31 of the Fertilizer (Control) Order, 1985. A reasonable opportunity contemplated under the said provision is also to be extended only by the second respondent, who is the notified authority/registering authority. Admittedly, the second respondent has not given any opportunity to the petitioner before cancelling either the wholesale or retail licence. Hence, there is violation of statutory provision as well as the principles of natural justice. 17. It is well settled in law that if an order is passed by the statutory authority in violation of principles of natural justice, the said order can be challenged in a writ petition without availing https://hcservices.ecourts.gov.in/hcservices/ alternative remedy of filing appeal. The petitioner also cannot file appeal before the first respondent, as the first respondent has already directed the second respondent to cancel the licence. Hence, the contention raised by the learned counsel for the respondents that the order impugned in W.P.No.19984 of 2011 is an appealable order and the writ petition cannot be entertained, is rejected. 18. In fine, the impugned orders are set aside. However, this order will not preclude the second respondent to initiate fresh proceedings and pass appropriate orders in accordance with law. Both the writ petitions are allowed with the above liberty. No costs. Consequently, connected miscellaneous petitions are closed. Sd/- Asst. Registrar //true copy// Sub Asst.Registrar kb To 1 THE DIRECTOR OF AGRICULTURE DEPARTMENT OF AGRICULTURE GOVERNMENT OF PUDUCHERRY PUDUCHERRY. 2 FERTILIZER LICENCING AUTHORITY CUM ADDITIONAL DIRECTOR OF AGRICULTURE (T & V) DEPARTMENT OF AGRICULTURE PUDUCHERRY. 1 cc to Mr.A.Jenasenan, Advocate, Sr.No.69326 Orders made in W.P.Nos.19233 & 19984/2011 TS {CO} TP/24.11.2011. https://hcservices.ecourts.gov.in/hcservices/