SCA/18535/2007 1/36 JUDGMENT IN THE HIGH COURT OF GUJARAT AT AHMEDABAD SPECIAL CIVIL APPLICATION No. 18535 of 2007 For Approval and Signature: HONOURABLE MR.JUSTICE C.K.BUCH ========================================================= 1 Whether Reporters of Local Papers may be allowed to see the judgment ? 2 To be referred to the Reporter or not ? 3 Whether their Lordships wish to see the fair copy of the judgment ? 4 Whether this case involves a substantial question of law as to the interpretation of the constitution of India, 1950 or any order made thereunder ? 5 Whether it is to be circulated to the civil judge ? ========================================================= KADI TALUKA SAHAKARI KHARID VECHAN SANGH LIMITED - Petitioner(s) Versus STATE OF GUJARAT & 4 - Respondent(s) ========================================================= Appearance : MR PRAKASH K JANI for Petitioner(s) : 1, MR.SATYAM CHHAYA, ASST. GOVERNMENT PLEADER for Respondent(s) : 1, NOTICE SERVED BY DS for Respondent(s) : 1 - 2. MR PREMAL R. NANAVATI, LD. ADVOCATE FOR MR. HARSHAD K PATEL for Respondents No.3 - 5. ========================================================= CORAM : HONOURABLE MR.JUSTICE C.K.BUCH Date : 16/05/2008 CAV JUDGMENT The petitioner-the Khadi Taluka Sahakari Kharid Vechan Sangh Limited is a co-operative society SCA/18535/2007 2/36 JUDGMENT registered under the Gujarat Co-operative Societies Act, 1961, invoking writ jurisdiction of this Court under Article 226 of the Constitution of India has prayed that this Court may be pleased to issue a writ, order or direction quashing and setting aside the order dated 19/08/2006 passed by the respondent No.2-Assistant Commissioner and licensing authority under the Drugs and Cosmetics Act, 1940 (Annexure-W) and the order dated 18/07/2007 passed by the respondent No.1-State of Gujarat (Annexure-Z1). The respondents No.3 to 5 are the private parties and the persons concerned with the order under challenge. 2. The respondent No.2-licensing authority by the impugned order (Annexure-W) has overruled the objections raised by the petitioner in the application dated 14/02/2006 and has allowed the application preferred by the respondents No.3 to 5 dated 10/02/2006 in the prescribed proforma to the competent authority under the Drugs and Cosmetics Act, 1940 (herein after referred to as ' the Act'). The second order under challenge is passed by the Joint Secretary while disposing the appeal of the present petitioner under the Act whereby the order of the licensing authority is confirmed and dismissed SCA/18535/2007 3/36 JUDGMENT the appeal. 3. The facts leading to the controversy and compelling the petitioner to approach this Court invoking the inherent jurisdiction requires to be stated in brief as under: 3.1 The petitioner is a landlord of the premises of the structure which can be stated as shopping cum commercial center and respondent No.4-Dr.Manibhai Patel is tenant of two rooms of the shopping center of the petitioner-Society since October, 1990. Thereafter, an agreement was entered into between the petitioner and respondent No.4 in the month of April, 1992 in respect to the subject property. A plain reading of the papers give an impression that the entire constructions had taken place on account of the contribution given by each of the premises holder including respondent No.4. Undisputedly, the respondent No.4 was entitled to carry out any legal / or legitimate business or profession in the premises occupied by him as a tenant. The respondent No.4 was to use the premises for running a dental clinic. The respondent No.4 is tenant and in possession and occupation of two different shops / premises and the SCA/18535/2007 4/36 JUDGMENT same was being used as one room. It was submitted to petitioner by respondent No.4 that respondent No.4 may be permitted to use part of the rented premises as medical store, more particularly, the area of original shop No.8. The respondent No.4 had demarcated the part which respondent No.4 was entitled to use as medical store and requested the petitioner to accord permission in the meeting of the co-operative Society viz., the petitioner which was held in the year 1999. However, the request of the respondent No.4 was rejected. The Managing Committee of the petitioner-society again decided in the month of September, 2003 that the premises may not be permitted to use as medical store and reiterated the earlier decision and respondent No.4 was accordingly informed. It was decided that premises was to be used as dispensary and respondent No.4 was asked that respondent No.4 has no authority to make any change in use of the premises. In the year 1994, the respondent No.4 had attempted to seek licence to run a medical store in the name and style of Balaji Medical Store in the said premises through one Dabhi Hathisinh. The competent authority under the Act was informed that the petitioner being landlord has not granted any permission to its tenant to make any SCA/18535/2007 5/36 JUDGMENT change as to use of the premises and the landlord has also not granted any permission to use any part of the premises occupied by respondent No.4 as a medical store. 3.2 It is alleged that on 17/06/2005 an application was submitted to the licensing authority in Form No.19 in the name of M/s. Shivam Medical Stores with the same address i.e. premises occupied by respondent No.4 of the petitioner and it was requested that respondent No.4 may be given licence to open a medical store. Name of one Suthar Dineshkumar Ratilal was shown as a person who would look after the medical store. In the meantime, respondent No.4 prepared a partnership deed, pending the application preferred by him in the month of June, 2005 and in that deed two persons were shown to be partner of Shivam Medical Stores; one was respondent No.4-Shardaben w/o. Dr.Manibhai Patel- (Respondent No.2) and Suthar Dineshkumar Ratilal. This document is a notarized document and the partnership was made effective from 01/04/2001. 3.3 On 01/12/2005 the licensing authority had rejected the application of Dr.Manibhai Patel, filed SCA/18535/2007 6/36 JUDGMENT in the name of Shiv Medical Store on the ground that in the lease-deed there is no provision to run a medical store and since the owner of premises had raised the objection. The appeal was preferred as per scheme of Section 163 (2) of the Act, but that appeal was withdrawn. It is contended that with a view to avoid earlier decision, more particularly, the last decision rejecting the application preferred by respondent No.4 in the month of December, 2005, a fresh / another partnership deed was executed whereby the partnership was created by respondent No.4, his wife-Shardaben Patel (respondent No.5) and one Suthar Dineshkumar Ratilal. There was no reference of earlier partnership deed that was executed between respondent No.5 and Suthar Dineshkumar. On the basis of the partnership deed created on 08/02/2006, a fresh application was submitted in the name of Shiv Medical and Provision Stores through its partners for opening of medical store at the very same place. In the month of May, 2006, the licensing authority had decided to issue a Notice and the petitioner was asked to explain as to why the licence should not be granted. In response thereof the petitioner submitted a detailed reply pointed out the earlier events and submitted that licence may not be granted. SCA/18535/2007 7/36 JUDGMENT 3.4 It is alleged that licensing authority took the somersault and granted the licence in the name of Shiv Medical Stores holding that simply because the owner is not willing to grant no objection certificate, permission cannot be refused. This very order is under challenge. The first challenge is against order of the licensing authority and the second challenge is against the order passed by the appellate authority confirming the order of the licensing authority. 4. I have heard Mr.Prakash Jani, learned Advocate for the petitioner at length and he has taken me through the various aspects emerging from the record, more particularly, the nature of tenancy, status of respondent No.4 vis-a-vis the petitioner; the agreement that was executed earlier between the petitioner and respondent No.4 and so also the map which was tendered to the Court for perusal and to understand the geographical situation of the entire premises and the nature of use of the rented premises occupied by respondent No.4. During the course of hearing, Mr.Jani has fairly accepted that number of business and commercial shops are in the commercial SCA/18535/2007 8/36 JUDGMENT center and some of the premises are being used as medical stores. However, learned Advocate has denied that the litigation is motivated by the owners of other medical stores who are the occupier of the premises in the very shopping center or the persons having medical stores in the very vicinity. It has come on record that in the very shopping center other medical stores are situated and the business is going on in the name and style of Delux Medical Stores and M/s. Delux Chemists. The photographs were also produced before the licensing authority, who was evaluating the stand taken by the present petitioner. 5. The crucial question paused before the Court by the petitioner is that whether the licensing authority under the Act can grant licence in absence of any change in circumstance having rejected the application on earlier occasion in the same fact situation on the ground that owner has not granted permission to use the premises, which was leased out for opening a medical shop. Mr.Jani, learned Advocate has drawn the attention of the Court to one of the conditions i.e. condition No.4 of the agreement which was entered into between the petitioner and respondent No.4 on 20/04/1992. If the condition No.4 SCA/18535/2007 9/36 JUDGMENT is translated into English then the same can be stated as under: “That the premises are leased for dispensary and office purpose and the same are constructed. The tenant will be required to do any changes on his own expenses but before doing the same, he will have to obtain prior permission after submitting an application in writing.” 6. Mr.Jani, learned Advocate has also taken me through the relevant rules framed under the Act, mainly the Rule 64 (2) (3), 65 (A), 59, 62 (B) and Rule 66 which pertains to cancellation of licence. According to Mr.Jani, the licensing authority is a quasi judicial authority. The appellate authority was exercising powers of quasi judicial authority and at least all these authorities are supposed to record their ultimate finding in an objective manner. The subjective satisfaction of these two authorities should be arrived at in more transparent way and objective manner and the authorities are failed in doing so and this situation has made both the orders under challenge arbitrary. 6.1 One of the argument of Mr.Jani is that merely because the licensing authority is an administrative authority cannot review its own order. It is submitted that as per the stand taken by the SCA/18535/2007 10/36 JUDGMENT Medical Council, a doctor should not be permitted to run a medical store. A business which is ethically not permissible cannot be permitted to run under the guise of licence granted by the competent authority and that to against the will and wish of the landlord of the premises in which the medical store is to run. The grievance of the petitioner is that the same authority after lapse of sometime whether can ignore its own earlier decision and record altogether a different finding earlier arrived at on the same set of facts is a question which shows malice in the minds of these authorities and therefore the Court may allow the petition and may quash and set aside the orders more particularly the order granting licence to run the medical stores. 7. According to Mr.P.R.Nanavati, learned Advocate for the respondents No.3 to 5, the present litigation is motivated. It is submitted that the entire construction has been put up by respondent No.4 and the conditions mentioned in the petition itself shows that the premises was to be used as dispensary and for this purpose the same is constructed. The tenant was authorized to do any change at his own expenses. The obligation on the shoulder of the tenant was to seek prior permission SCA/18535/2007 11/36 JUDGMENT after submitting the written application. So in absence of any justifiable reason, the petitioner- landlord was supposed to accord even sanction to make alteration in the construction area occupied by respondent No.4. As per the agreement executed in the month of April, 1992, there are total three premises. Room No.6 and 7 are given to Dr.Babubhai S Patel and the monthly rent for these two rooms was determined at Rs.900/- per month. Room Nos.8 and 9 were rented to respondent No.4 and monthly rent of these two rooms was decided at Rs.750/- per month. The conditions No.1 and 2 of the agreement show that the construction was to be carried out by the tenant of room No.6, 7, 8 and 9 and they are adjacent premises. Even the expenses of electricity fitting was also born by the tenants and respondent No.4 has spent for his part i.e. for rooms No.8 and 9. The premises undisputedly is on the first floor. The condition No.8 pointed out by Mr.Nanavati is significant. Meaning thereby, on vacating premises the tenants were not to get anything that they have spent in developing the entire premises. Mr.Nanavati, has submitted that in this background the facts should be evaluated. SCA/18535/2007 12/36 JUDGMENT 7.1 It is argued by Mr.Nanavati that withdrawal of the appeal by one of the partner and that to preferred in the capacity of the earlier partnership firm would not come in the way of the authority or respondents herein. In the earlier partnership firm, the actual tenants shown as occupier of the premises. As per the rent agreement, Dr.Manibhai Patel was not a partner. To avoid controversy and more particularly any other litigation, Dr.Manibhai decided to join partnership and new partnership ultimately had applied for the licence and the application has been considered in that background. 7.2 Mr.Nanavati, has submitted that as per settled legal position any legitimate use can be made by the tenant unless there is any expressed prohibited term that to incorporated in the background of a particular special set of facts and the order under challenge is passed keeping the entire law i.e. law of transfer of property, rent legislation and the provisions of Drugs and Cosmetics Act and the Rules framed thereunder. Both the orders under challenge are absolutely legal. There is no element of either arbitrariness, perversity or competent illegality. No statutory mandate is found SCA/18535/2007 13/36 JUDGMENT to have been violated by both the authorities and therefore both the orders should not be taken under judicial review. 7.3 The first authority who granted the licence is the administrative authority. Merely because he has completed certain formalities and accorded opportunity to the petitioner so that he can appreciate the grievance of the landlord, it would not make the order quasi judicial or a decision which can be taken under judicial review. The decision of granting licence is a decision of an administrative authority and the appellate authority has appreciated the administrative order in the legal perspective of the Act and the Rules framed thereunder. This is not a case of re-grant of licence which was either cancelled or revoked. So the question of reviewing the earlier decision would not arise. 7.4 The competition is not prohibited to the medical stores. The Council and the Regulations governing the dentist has clarified that there is no prohibition to any dentist to run a medical store. According to Mr.Nanavati, in the present case, respondent No.4-Dr.Manibhai has limited share in the SCA/18535/2007 14/36 JUDGMENT firm. His wife is a major partner. If the petitioner finds that any sub-tenancy right is created under the guise of partnership and therefore the respondent No.4 can be evicted from the premises, appropriate other legal steps can be taken in the appropriate forum, but it would not make the petitioner good in the petition of a present nature. 8. It is submitted that the partnership deed does not create any sub-tenancy right. But, ultimately there were two different premises i.e. room No.8 and 9. Till date the respondent No.4 has not been ordered to evict the premises on the ground of making alteration in the rented premises or for putting up unauthorized permanent construction / structure. It is argued that as per the ratio of the decision in the case of Mohd. Yunus Vs. Mohd. Mustaqim and others reported in AIR 1984 SC 38, the present petitioner has no locus to challenge the order. The petitioner-society cannot be said to be an aggrieved party by the administrative decision of granting licence. 9. It is submitted that the appellate authority SCA/18535/2007 15/36 JUDGMENT has ultimately evaluated the finding under challenge in correct perspective. The litigation is motivated and under the sponsorship of one Sharad Patel and this circumstance has come on record. This Sharad Patel who is keen to see that no other medical store will start in the said premises and was active participant in the proceedings conducted by the licensing authority and the appellate authority and there is no specific denial on affidavit as to allegations made to that effect. 10. For short, according to Mr.Nanavati, learned Advocate for the respondent No.5 there is no merit in the petition and same requires to be dismissed by observing that this petition being motivated litigation preferred by Mr.Sharad Patel having adverse interest against the respondents No.3 and 5 and the petitioner should be fastened with the liability of paying cost to the other side. 11. I have carefully considered the affidavit, counter affidavit and other documents produced in support of the contents of the petition. That Suthar Dineshkumar Ratilal was having a licence and qualification and be an active partner and that fact SCA/18535/2007 16/36 JUDGMENT was placed before the licensing authority vide Annexure – J to the petition. So, the medical stores was not handed over to the unauthorized person. The decision rejecting the request to grant licence is only on the ground of absence of consent given by the landlord and the objections raised by the landlord- petitioner. But, considering the entire scheme, prescribed Form No.19 or any other administrative circular does not carve out a policy that in absence of consent given by landlord, no licence can be granted. 12. Mr.Nanavati, learned Advocate for respondent No.3 to 5 has taken me through the reasons assigned by the licensing authority, more particularly, the page runs from 139 to 150 of the petition. The licensing authority has considered the entire aspect on the strength of the facts that were brought to the notice and therefore the authority was able to pass such a lengthy reasoned order of allowing the application. The authorities have considered the correspondence between the office bearers of the petitioner including the letter written by Dabhi Hathisinh dated 13/10/1998, letter of President of petitioner-society dated 08/10/1998 and subsequent letter of 17/10/1998 written by the President of SCA/18535/2007 17/36 JUDGMENT petitioner-society of revoking his earlier letter of 08/10/1998. After lapse of about 12 to 13 days a fresh letter was again written to the licensing authority on 31/10/1998 and the licensing authority was intimated that the decision being policy decision, due to election cod of conduct, no formal decision has been taken and the decision is left to the new general body. Meaning thereby, at one point of time, the petitioner had decided to act in a particular manner and thereafter it took the different decision and according to Mr.Nanavati, the decision of the authority should be evaluated in this background. 13. I have considered two different agreements as pointed out by Mr.Jani and earlier decision rejecting the request to grant licence to the applicant of those application. True it is that earlier when licence was sought for the very premises for which the authority has now decided to grant licence to respondents No.3 to 5. But, according to me, it will not be possible for this Court to quash and set aside any of these orders which are under challenge on the grounds mentioned in the petition or that have been placed by Mr.Jani, learned Advocate SCA/18535/2007 18/36 JUDGMENT for the petitioner. 14. There is enough strength legally as well as factually in the argument advanced by Mr.Nanavati, as referred herein above. Respondent No.2 cannot be said to be a quasi judicial authority and the decision therefore under challenge cannot be equated with the decision of a quasi judicial authority. True it is that the administrative decision can also be interfered, if the same is found to be contrary to a statutory mandate; against the principle of natural justice and to be presence of element of arbitrariness or perversity. Even, if any other irregularity is found to have been committed by the administrative authority while taking decision, it would not sufficient to invoke the constitutional jurisdiction vested with the Court under Article 226 of the Constitution of India. In the present case, the administrative decision was taken by passing a detailed, speaking and reasoned order evaluated by the responsible Officer exercising the appellate jurisdiction. So when the different view taken by the licensing authority is found to have been taken correctly by the appellate authority then this Court should not interfere with the decision because this SCA/18535/2007 19/36 JUDGMENT would be a case of two concurrent findings based on facts which were placed before both the appellate authorities. 15. Undisputedly, the respondent No.4 is a person who ultimately erected the premises and earned tenancy. Respondent No.4 has been permitted to do the business and to run an office under the agreement. So, the licence granted to respondent No.4 cannot be said to be an endangerous or nuisance to the other tenants of the premises. 16. The stand of Medical Council is clear and the same is on record vide letter dated 22/08/2006. So the petitioner has no locus to stand on ethical standard that a doctor should maintain. The Medical Council is the competent machinery to take care of such situation and petitioner can approach this machinery for the purpose. 17. Mr.Nanavati, learned Advocate for respondents No.3 to 5 has relied upon one judgment reported in AIR 2002 SC 33, in case of Roshan Deen Vs. Preeti Lal. Paragraph 12 of the said judgment SCA/18535/2007 20/36 JUDGMENT reads as under. “12. We are greatly disturbed by the insensitivity reflected in the impugned judgment rendered by the learned single Judge in a case where judicial mind would be tempted to utilise all possible legal measures to impart justice to a man mutilated so outrageously by his cruel destiny. The High Court non-suited him in exercise of a supervisory and extraordinary jurisdiction envisaged under Article 227 of the Constitution. Time and again this Court has reminded that the power conferred on the High Court under Articles 226 and 227 of the Constitution is to advance justice and not to thwart it. (Vide State of Uttar Pradesh v. District Judge, Unnao and others, (AIR 1984 SC 1401)). The very purpose of such constitutional powers being conferred on the High Courts is that no man should be subjected to injustice by violating the law. The look out of the High Court is, therefore, not merely to pick out any error of law through an academic angle but to see whether injustice has resulted on account of any erroneous interpretation of law. If justice became the byproduct of an erroneous view of law the High Court is not expected to erase such justice in the name of correcting the error of law.” 18. The order passed by the appellate authority under challenge is upholding the finding passed by the licensing authority. This is not a case where this Court should exercise supervisory jurisdiction or assume jurisdiction to supervise and contrary the administrative decision a statutory machinery established. The different view can be taken by the licensing authority whether can be said to be justifiable or not is a question that can be addressed if the Court assumes to exercise SCA/18535/2007 21/36 JUDGMENT supervisory jurisdiction above the authorities