cw ^ V / Im'L- $~ * IN THE HIGH COURT OF DELHI AT NEW DELHI % Judgment Delivered on: 17.12.2013 + W.P.(C) 8646/2007 JANTA STORE Petitioner Through: Mr.Pradeep Gupta and Mr.Suresh Bharti, Advocates for the petitioner. versus GOTT. OF N.C.T. OF DELHI & ORS. Respondent Through: Mr.Sushil Dutt Salwan and Mr.Neeraj Chaudhary, Advocates for respondents CORAM: HON'BLE MR. JUSTICE G.S.SISTANI G.S.SISTANI, J. (ORAL) For Order see detailedjudgment passed in the matter [W.P.(C)948/2008' -XT. G.S. SISTANI, J. DECEMBER 17, 2013 'ssn' Signing Date:30.08.2024 17:10:59 Certify that the digital and physical file have been compared and the digital data is as per the physical file and no page is missing. Signature Not Verified $~ * IN THE HIGH COURT OF DELHI AT NEW DELHI % Judgment Delivered on: 17.12.2013 [1]+ W.P.(C) 948/2008 & CM. no.1863/2008 RAJENDER PRASAD SURINDER KUMAR Petitioner Through: Mr.Nitin Sehgal, Advocate versus TI-IE ASSISTANCE COMMISSIONER FOOD & SUPPLIES Respondent Through: Mr.Sushil Dutt Salwan and Mr.Neeraj Chaudhary, Advocates for respondents [2] W.P.(C) 5157/2008 & CM.No.9860/2008 AGGARWAL STORE Petitioner Through: Mr.Pradeep Gupta and Mr.Suresh Bharti, Advocates for petitioner versus GOVT. OF NCT OF DELHI & ANR Respondent Through: Mr.Sushil Dutt Salwan and Mr.Neeraj Chaudhary, Advocates for respondents [3] W.P.(C) 8386/2007 & CM No. 15850/2007 MAHENDER KUMAR Petitioner Through: Mr.Anurag Mangla, Advocate versus GOVT. OF N.C.T. OF DELHI & ORS. Respondent Through: Mr.Sushil Dutt Salwan and Mr.Neeraj . Chaudhary, Advocates for respondents [4] W.P.(C) 8478/2007 SHOBHA KUMARI Petitioner Through: Mr.Sanjay Goel, Advocate. versus W.P.(C) 948/2008 & ors. Page 1 of 16 THE GOVT. OF NCT OF DELHI&ORS Respondent Through: Mr.SushilDuttSalwanandMr.Neeraj Chaudhary,Advocatesfor respondents [5] W.P.(C)8554/2007 ASHOKPROVISIONSTORE Petitioner Through: Mr.PradeepGuptaandMr.SureshBharti, Advocates for the petitioner. versus GOVT. OF N.C.T.OF DELHI&ORS. Respondent Through: Mr.SushilDuttSalwanand Mr.Neeraj Chaudhary,Advocatesfor respondents [6] W.P.(C)8611/2007& 16227/2007 ISHWARCHAND Petitioner Through: Mr.AnuragMangla,Advocate. versus GOVT. OF N.C.T.OF DELHI&ORS. Respondent Through: Mr.SushilDuttSalwanand Mr.Neeraj Chaudhary,Advocatesfor respondents [7] W.P.(C) 8634/2007 SHIV STORE Petitioner Through: Mr.PradeepGuptaand Mr.SureshBharti, Advocates for the petitioner. versus GOVT. OF N.C.T.OF DELHI&ORS. Respondent Through: Mr.SushilDuttSalwanandMr.Neeraj Chaudhary,Advocatesfor respondents [8] W.P.(C)8635/2007 KANTADEVI Petitioner Through: Mr.PradeepGuptaandMr.SureshBharti, Advocates for the petitioner. W.P.(C)948/2008&ors. ^ versus GOVT. OF N.C.T. OF DELIH & ORS. Respondent Through: Mr.Sushil Dutt Salwan and Mr.Neeraj Chaudhary, Advocates for respondents [9] W.P.(C) 9456/2007 & CM.No. 17820/2007 AGGARWAL STORE Petitioner Through: Mr.Pradeep Gupta and Mr.Suresh Bharti, Advocates for the petitioner. versus GOVT. OF NCT OF DELHI & ORS Respondent Through: Mr.Sushil Dutt Salwan and Mr.Neeraj Chaudhary, Advocates for respondents [10] W.P.(C) 9616/2007 & CM.No. 18087/2007 RIKHAB CHAND PROP. OF M/S J.N.U. CAMPUS STORE Petitioner Through: Mr.Sanjay Goel, Advocate versus THE GOVT. OFNCT OFDELHI Respondent Through: Mr.SushilDutt SalwanandMr.Neeraj Chaudhary, Advocates for respondents [11] W.P.(C) 8820/2007 PAWAN RATION STORE Petitioner Through: Mr.PradeepGuptaand Mr.SureshBharti, Advocates for the petitioner. versus GOVT. OF NCT OF DELHI& ORS Respondent Through: Mr.SushilDutt Salwanand Mr.Neeraj Chaudhary,Advocates for respondents [12] W.P.(C) 8985/2007 & CM.No. 16923/2007 ASHOK KUMAR AGGARWAL Petitioner Through: Mr.Sanjay Goel, Advocate. W.P.(C) 948/2008&ors. Page3of16 versus THE GOVT. OF NCT OF DELHI & ORS Respondent Through: Mr.Sushil Dutt Salwan and Mr.Neeraj Chaudhary, Advocates for respondents [13] W.P.(C) 8714/2007 & CM.No. 16430/2007 DEVINDER GOEL Petitioner Through: versus GOVT. OF NCT OF DELHI & ORS Respondent Through: Mr.Sushil Dutt Salwan and Mr.Neeraj Chaudhary, Advocates for respondents [14] W.P.(O) 8646/2007 JANTA STORE Petitioner Through: Mr.Pradeep Gupta and Mr.Suresh Bharti, Advocates for the petitioner. versus GOVT. OF N.C.T. OF DELHI & ORS. Respondent Through: Mr.Sushil Dutt Salwan and Mr.Neeraj Chaudhary, Advocates for respondents [15] W.P.(C) 8819/2007 & CM.No. 16625/2007 SARASWATI GENERAL STORE Petitioner Through: Mr.Pradeep Gupta and Mr.Suresh Bharti, Advocates for the petitioner. versus GOVT. OF NCT OF DELHI & ORS Respondent Through: Mr.Sushil Dutt Salwan and Mr.Neeraj Chaudhary, Advocates for respondents [16] W.P.(C) 8264/2007 & CM.No. 15614/2007 ANIL KUMAR MISHRA Petitioner W.P.(C) 948/2008 & ors. Page 4 of 16 Through: Mr.S.K.Chaudhary,Advocate. versus GOVT. OF N.C;T.of DELHI&ORS. Respondent Through: Mi'.SushilDuttSalwanandMr.Neeraj Chaudhary,Advocatesforrespondents [17] W.P.(C)8046/2007&CM.No.15855/2007 SUMERCHANDMOHANLAL Petitioner Through: Mr.SanjeevKumarGupta,Adv. versus GOVT. OF NCT OF DELHI Respondent Through: Mr.SushilDuttSalwanandMr.Neeraj Chaudhary,Advocatesforrespondents [18] W.P.(C)262/2008&CM.No.506/2008 SHRI SHERSNGH Petitioner Through: Mr.AnilKumarJangra,Adv. versus GOVT. OF NCT OF DELHI&ORS .....Respondent Through: Mr.SushilDuttSalwanand Mr.Neeraj Chaudhary,Advocatesfor respondents [19] W.P.(C)8523/2007 MEHARCHANDBAL KISHORE Petitioner Through: Mr.PradeepGuptaand Mr.SureshBharti, Advocates for the petitioner. versus GOVT. OF NCT OF DELHI &ORS Respondent Through: Mr.SushilDuttSalwanandMr.Neeraj Chaudhary,Advocates for respondents [20] W.P.(C)8628/2007&CM.No.16252/2007 RAM DASS GUPTAPROP. OF MOHANSTORE Petitioner W.P.(C) 948/2008&ors. • 50/76 vi Through: Mr.Sanjay Goel, Adv. versus GOVT. OF N.C.T. OF.DELHI & ORS. Respondent Through: Mr.Sushil Dutt Salwan and Mr.Neeraj Chaudhary, Advocates for respondents [21] W.R(C) 8644/2007 RAM CHANDER PAWAR Petitioner Through: Mr.Nitin Sehgal, Adv. versus THE ASSISTANT COMMISSIONER OF FOOD AND SUPPLIES SOUTH DELHI Respondent Through: Mr.Sushil Dutt Salwan and Mr.Neeraj Chaudhary,, Advocates for respondents [22] W.P.(C) 620/2008 CMAPPL. 1214/2008 RAM AVTAR KAILASH CHAND FPS NO 8184 CIRCLE 2 Petitioner Through: Mr.Nitin Sehgal, Adv. versus ASSISTANT COMMISSIONER FOOD AND SUPPLIES DELHI AND ANR Respondent Through: Mr.Sushil Dutt Salwan and Mr.Neeraj Chaudhary, Advocates for respondents [23] W.P.(C) 291/2008 LAXMI STORE FPS Petitioner Through: Mr.Nitin Sehgal, Adv. versus THE COMMISSIONER FOOD AND SUPPLIES DELHI AND ANR. • Respondents Through: Mr.Sushil Dutt Salwan and Mr.Neeraj Chaudhary, Advocates for respondents W.P.(C) 948/2008 & ors. Page 6 of 16 \A^ [24] W.P.(C) 5505/2008 & CMAPPL. 11408/2009 DAYA PRAKASH GUPTA Petitioner Through: Mr. Sanjay Mishra, Advocate versus STATE ANDORS. Respondent Thorough: Mr.Sushil Dutt Salwan and Mr.Neeraj Chaudhary, Advocates for respondents [25] W.P.(C) 8645/2007 RADHEY SHYAM ANAND Petitioner Through: Mr.Pradeep Gupta and Ms.Sonia Sharma, Advocates for petitioner versus GOVT. OF N.C.T. OF DELHI AND ORS. Respondent Through: Mr.Sushil Dutt Salwan and Mr.Neeraj Chaudhary, Advocates for respondents [26] W.P.(C) 530/2008 CHUM LAL Petitioner Through: Mr.Pradeep Gupta and Ms.Sonia Sharma, Advocates for petitioner versus GOVT. OF N.C.T. OF DELHI AND ORS. Respondent Through: Mr.Sushil Dutt Salwan and Mr.Neeraj Chaudhary, Advocates for respondents [27] W.P.(C) 30/2009 M/S SHREE DURGA STORE Petitioner Through: Mr.Pradeep Gupta and Ms.Sonia Sharma, Advocates for petitioner versus GOVT. OF N.C.T. OF DELHI > W.P.(C)948/2008& ors. Page 7of 16 AND ORS. Respondent Through: Mr.SushilDuttSalwanand Mr.Neeraj Chaudhary,Advocatesfor respondents [28] W.R(C)9502/2007 TILAKRAJ Petitioner Thi-ough: Mr.SanjayGoel,Advocate versus GOVT. OF N.C.T. OF DELHI and ORS. Respondent Through: Mr.SushilDuttSalwanand Mr.Neeraj Chaudhary,Advocatesfor respondents CORAM: HON'BLE MR. JUSTICE G.S.SISTANI G.S.SISTANI. J. (OMAL) 1. Counsel for the parties submitthat facts in all these matters are similar. All thesepetitionsraise acommonlegal question,which can be disposed of by a commonorder. 2. Rule. With the consentof counsel for the parties,the writ petitionsare . takenup for finalhearingand disposal. 3. As agreed,the facts of the Writ PetitionNo.948/2008are being noticed. The petitionerhas beenrunningaFairPriceShop sincethe year 1987. On 19.3.1997,the shopwas visitedand inspectedby officialsofdepartmentof respondentand some irregularitieswere found. Ashowcausenotice-cum- suspension memo dated 31.3.1997 was issued by the then Assistant Commissionerfor violation,as mentionedand simultaneouslyan FIR was lodged againstthe authorisation/licenceholder. Reply to the show cause notice was submittedand hearingwas grantedby the Department. Upon hearing,the AssistantConmiissioner,Food and Suppliespassed an order W.P.(C)948/2008&ors. Page8of16 dated 25.4.1997 forfeiting entire security amount of Rs.500/- and thereafterrestoredthe licenceofthe petitioner. Afterpassingofthe order, the Assistant Commissionerdid not resort to any ftarther penal action againstthe petitionerfor cancellationofthe fairpriceshop. Thereafter,the petitionercontinuedto carryon its businesson the basisoflicencegranted by the respondent,withoutany complaintfromthe card-holders. 4. In the meanwhile,in the criminalproceedings,initiatedupon registration of the FIR, a judgment dated 22.8.1998 was passed by which the petitioner,though convicted,was releasedon probationfor one year and on paymentofcostsofRs.500/-. In theyear2007,afteragap ofmorethan 10 years,afresh show cause noticewas issuedon 10.9.2007callingupon the petitionerto showcauseas to why the licencebe not cancelled. 5. After hearing, by an impugned order dated 1.2.2008 the licence of the petitionerhas been cancelled. It is acomnioncase ofthe petitionersthat the impugned order of cancellationpassed by the respondentis unfair, unjustand contraryto law and liableto be setaside. 6. Counsel for the petitioners ftirther submitted that while passmg the judgment,the SpecialCourthad made it clearthatthe orderofconviction couldnot affectthe operationofthe fairpriceshop. 7. Attentionofthis courthas been drawnto the judgmentdated 22.8.1998,a copy of which has been placed on record. Concludingportion of the judgmentdated22.8.1998reads as under; "In respectof sentence,accused,SuridnerKumar, I direct that he shall be releasedon entering into a personalbond in the sum of Rs.5,000/-with asecurityoflike amountand to appearand receive sentencewithinaperiodof1years whenevercalledupon to do so and duringtimeto keep peaceand be ofgoodbehaviour. Accused, SurinderKumar shall also'payRs.500/- as costs of proceedings. This shouldnot affectoperationof F.P.S." 8. It is submittedby counselfor the petitionersthat once the respondentshad W.P.(C)948/2008&ors. Page9of16 7- issued show cause notice-cum-suspension memo dated 31.3.1997 and after due hearing a penalty of forfeiture of security amount was imposed, petitioners cannot be punished twice for the same offence. The second argument of counsel for the petitioners is that in view of Section 12 of the Probation of Offenders Act, 1958, petitioners do not suffer any disqualification. The third argument of counsel for the petitioners is that the show cause notice issued and cancellation order passed is liable to be quashed, as firstly the action initiated has become stale; and secondly, violation, if any, of the petitioners stands condoned as licences were renewed subsequently for 10 years and more. 9. While counsel for the respondent submits that in addition to the administrative action, respondents were entitled to take action as per - i • Clause 6 of Delhi Kerosene Oil (Export and Price) Control Order 1962 dated 5.12.1962, which reads as under: "6. Contravention of the terms and conditions of licence: (1) If any licencee or his agent or servant or any other person acting on his behalf contravenes any of the terms and condition or directions or any provisions of this order then without prejudice to any other action that may be taken against licensee according to law, his licence can be suspended by order in writing by the Commissioner. Proviso to clause 6(1) order vide Dt. 15.2.80. (2) Without prejudice to the provisions of sub-clause 1 if the Commissioner is satisfied that the licensee has contravened any of the terms and conditions of a licence or the directions issued under clause 3-D or any provision of this order and cancellation of his licence is called for, may after giving the licencee a reasonable opportunity of stating his case against the proposed cancellation by order in writing cancel his licence and shall forward a copy thereof to the licensee. JV.P.(C)948/2008 & ors. Page 10 of16 (3) Notwithstandinganything contains in this clause, where a licencee is convicted by a court of law for breach of the terms and conditions of the licence or contravention of the provision of this order the licensing authority may by order in writing, cancel his licence. Provided that no such order shall be passed until the appeal, if any, filed against such conviction is dismissed and where no such appeal is filed until the period of limitation for filing an appeal expires." 10. Counsel for the respondent also relied on Clause 7 of the 1981 Order dated 12.01.1981, i.e. Delhi Specified Articles (Regulations of Distribution) Order, 1981 which reads as follows, and submits that once the petitioners had committed breach and he/she was, convicted the respondents were bound to cancel the licence of the petitioner: "7. Cancellation of authorization upon Conviction.- Notwithstandins anything contained in this clause where an authorized wholesaler or a fair price shop holder has been convicted by a court of law in respect of contravention of any of the provisions of this Order or any other order made under Section 3 of the Essential Commodities Act, 1955 (10 of 1955), the Deputy Commissioner may, by order, in writing cancel his authorization forth with : Provided that where such conviction is set aside in appeal or revision the Deputy Commissioner may on application by the person whose authorization has been cancelled re-issue the authorization to such person. " 11. Counsel for the respondent submits that the delay is procedural, as in the period of 18 years, 24 Assistant Commissioners had been transferred in one zone, and in another zone 12 Assistant Commissioners were transferred in 10 years. W.P.(C) 948/2008 & ors. Page 11 of 16 12. In response to the above, the counsel for the petitioners statedthat in case the respondentswere to rely upon Clause 6 of Delhi KeroseneOil (Export and Price) Control Order 1962 and Clause 7 of the order dated 12.1.1981, the same should have been invoked by them within a shortest period of time from the date of the cause of action and in any case within a reasonable period of time. It is further contended that on account of delay, the respondents are estopped from relying on Clause 6 of Delhi Kerosene Oil (Export and Price) Control Order 1962 and Clause 7 of the Order dated 12.01.1981 which would deem to have been given up by the respondents, by virtue of their conduct; and on the contrary, vested rights have been created in favour of the petitioners by continuous renewal of licenses, which cannot be taken away at this belated stage. 13. I have heard counsel for the parties and also perused the petition as also the aimexures filed along with the petitions. 14. The basic facts are not in dispute that the licenses were granted to the petitioners to run fair price shops/Kerosene Oil Depots. Upon inspection having been carried out and some irregularities having been found, show cause notice was issued; hearing was granted and the petitioners were penalized by forfeiting their security amount or some administrative action was taken. Thereafter, licences of the petitioners were renewed from time to time and only after a gap of more than 10 years, fresh show cause for cancellation of the Fair Price Shop/KODs was issued and the licences were cancelled as according to the respondent, petitioners had incurred a disqualification having been convicted by a criminal court, in . terms of the 1962 and 1981 Orders. 15. Admittedly, action was taken by the Assistant Commissioner against the petitioners and a penalty of forfeiture of security amount was imposed. No further action against the petitioners was taken for more than a period W.P.(C) 948/2008 & ors. Page 12 of 16 of 10 years. Thus in my view havingnot taken actionfor 10 years and on the contrary having renewed licences of the petitioners would amountto condoningthe acts of the wrong doer; and after 10 years, the respondents are estoppedfrom taking actionagainstthe petitionershavingwaived off their rights by their own conduct, and the respondents by their own act have condoned the acts of the wrongdoer and are now estopped from changing their position. 16. It is settled law that a statutory authority is required to act reasonably and fairly. The Apex Court in Power Control Appliances v. SumeetMachines (P) Ltd., (1994) 2 see 448 has held as under: "Acquiescenceis sitting by, when another is invading the rights and spending moneyon it. It is a course ofconduct inconsistentwith the claim for exclusive rights in a trade mark, trade name etc. It implies positive acts; not merely silence or inaction such as is involved in laches. In Harcourt v. White Sr.John Rommilly said: "It is important to distinguish mere negligence and acquiesce." Therefore, acquiescence is onefact ofdelay. If theplaintiff stood by knowingly and let the defendants build up an important trade until it had become necessary to crush it, then the plaintiffs would be stopped by their acquiescence. If the acquiescence in the infringement amounts to consent, it will be a complete defence as was laid down in Mouson (J.G.) & Co. v. Boehm. The acquiescence must be such as to lead to the inference ofa license to create a new right in the defendant as was laid down in Rodgers v. Nowill. 17. Accordingly, the respondents have not only slept over its rights and, thus, waived it but also by agreeing to transfer the licenses in the name of the W.P.(C) 948/2008 & ors. Page 13 of 16 A [/ petitionershave reasonablyand fairlygivena rightto petitioners.Further, the respondentsin the presentpetitionshave given a reasonablebeliefto the petitionersthattheirrightsandtitleis good and shallnotbe disturbed. 18. Consequent to raids carried out on different dates in different cases, proceedingswere initiatedagainstdifferentpersons by respondents.The matters were pursued by the respondentsand the order(s) was/were so passed, were within the knowledge of the respondents. In case the respondents/departmentwas of the view that in addition to the administrative action licence of authorization is also to be cancelled, then the respondent/departmentwould have been well withinits rights to take appropriateaction within a reasonableperiod of time. Whereas in the presentcases,the departmentinmany caseshas only takenadministrative actionand passedorders of forfeitureof securitydeposit,but decidednot to take extreme action of cancellation of licence. At this belated stage, the action of the respondenthas become stale and more so the authorization of person who was actually convictedhas already been transferredto another, which transfer has been carried out by the respondents departnient and the new proprietor authorization holder has been continuously running KOD/ Fair Price Shop for years. The above naiTation of facts would show that the department has been extremely careless and casual in enforcing the terins of the license, in accordance with law, and, thus, respondents' action cannot be sustained. 19. Moreover, in my view the petitioners have not incurred the disqualificationof grantof license/authorizationdue to conviction,as it is settled law that a person released on probation under Section 12 of the Probation of Offenders Act shall not suffer any disqualification. In the case of Gulzar v. State of M.P., (2007) 1 SCC 618, it has been held as under: JV.R(C) 948/2008&ors, Page14of16 ".... While Section 12 of the PO Act states that the person found guilty of an offence and dealt with under Section 3 or 4 of the PO Act shall not suffer disqualification, if any, attached to the •conviction ofan offence under any law 20. Respondents counsel has placed reliance upon the report of Justice Wadhwa Committee constituted by the Supreme Court of India. Due to the aforesaid facts and. observations, respondents cannot at this stage get benefit of their inaction or the findings on the report. 21. In view of the aforesaid, present petitioners cannot be penalized, at this stage even more so since the published acts, in some cases, were never committed by the present license holders. A party is bound to act reasonably more so a statutory authority. The authority was under a duty to act •reasonably and without prejudice to the rights of the petitioners. Given.that the authority has itself renewed to license(s) of the petitioners, they themselveshave condoned the earlier convictions.Further by not acting within a reasonable period of time and by agreeing to renew the license^ in the name of petitioners have given the petitioners a reasonable cause to believe that a right has accrued in their favour. Petitioners are also entitled to the benefit of Section 12 of the Probation of Offenders Act. Accordingly, the impugned orders of show cause notices/cancellation orders are quashed. 22. Rule is, made absolute. All the petitions and the applications stand . disposed of in above terms. Parties shall bear their own costs. 23. It is informed that in the case of WP(C)No.9502/2007 in addition to the order of cancellation, other proceedings are also pending. It is clarified that in addition to the order of cancellation, all other proceedings which are stated to be pending in the case of WP(C)No.9502/2007 shall be W.P.(C)948/2008& ors. Page15of 16 decided unaffected by the orders passed by this court in the present proceedings. G.S. sistaniTx DECEMBER 17, 2013 'ssn' W.P.(C) 948/2008 & ors. Page 16 of 16