Case: State Of West Bengal And Ors Vs. R.K.B.K. Ltd.

Division Bench has found support from Rani Sati Kerosene Supply Company and Others (supra) wherein it has been held that if an order is communicated after 30 days, an order of cancellation can easily be frustrated and, therefore, the phrase by an order in writing to be made appearing in proviso to Paragraph 9 of the Control Order is to be construed as by an order in writing to be communicated. 27. The Division Bench has read the prescription of 30 days passing of an order in writing within 30 days from the date of serving the show cause notice or suspension of licence to be mandatory. To elaborate, if the order is not passed within the said period, the authority cannot pass any order or if it passes an order, it is a nullity. In this context, we may fruitfully refer to a passage from G.P. Singh’s book, as has been reproduced by the three-Judge Bench in Kailash v. Nankhu and others (2005) 4 SCC 480 ). It reads as under:- “Justice G.P. Singh notes in his celebrated work Principles of Statutory Interpretation (9th Edn., 2004) while dealing with mandatory and directory provisions:“The study of numerous cases on this topic does not lead to formulation of any universal rule except this that language alone most often is not decisive, and regard must be had to the context, subject-matter and object of the statutory provision in question, in determining whether the same is mandatory or directory. In an oft-quoted passage Lord Campbell said: ‘No universal rule can be laid down as to whether mandatory enactments shall be considered directory only or obligatory with an implied nullification for disobedience. It is the duty of courts of justice to try to get at the real intention of the legislature by carefully attending to the whole scope of the statute to be considered.’ ” (p. 338)“ ‘For ascertaining the real intention of the legislature’, points out Subbarao, J. ‘the court may consider inter alia, the nature and design of the statute, and the consequences which would follow from construing it the one way or the other; the impact of other provisions whereby the necessity of complying with the provisions in question is avoided; the circumstances, namely, that the statute provides for a contingency of the non-compliance with the provisions; the fact that the non-compliance with the provisions is or is not visited by some penalty; the serious or the trivial consequences, that flow therefrom; and above all, whether the object of the legislation will be defeated or furthered’. If object of the enactment will be defeated by holding the same directory, it will be construed as mandatory, whereas if by holding it mandatory serious general inconvenience will be created to innocent persons without very much furthering the object of enactment, the same will be construed as directory.” (pp. 339-40)” 28. Keeping in view the aforesaid principles, if it is held that the order would become a nullity, it really does not serve the purpose of the Control Order. On the contrary, it frustrates it and, therefore, the interpretation placed by the High Court on Paragraph 9 in juxtaposition with Paragraph 10 to treat the order has null and void is neither correct nor sound. It is desirable that the authority shall pass an order within 30 days from the date of show cause. Be it noted that there are two contingencies when the show cause is issued for violation or when an order of suspension is passed. There can be no trace of doubt that the order will take effect from the date when it is served. The order, unless it is served, definitely neither the agent nor the dealer would suspend its activities or obey any order, for he has not been communicated. Regard being had to this aspect, it is to be seen whether the prescription of 30 days from the date of order as provided in Paragraph 10 would make the order null and void. The order passed by the authority comes into effect when it is communicated. An order passed in file in case of this nature would not be an effective order, for it is adverse to the interest of the dealer or agent and, therefore, paragraph 10 has to be given a purposive meaning. It has to convey that 30 days from the date of the order which is an effective order, and that is the date of communication. Unless such an interpretation is placed, the intention of the rule making authority and also the intention behind the object and reasons behind the Control Order and the Essential Commodities Act, 1955 would be frustrated. Thus, we are of the considered opinion that the view expressed by the High Court on this score also is absolutely incorrect and wholly unsustainable.29. Apart from above, the words used in Paragraph 10 are “date of the order”. In the scheme of the Control Order, the order comes into effect from the date of receipt by the agent or the dealer. Once that becomes the decision, the commencement of limitation of 30 days for the purpose of Paragraph 10 would be the date when the order is effective. The High Court in Rani Sati Kerosene Supply Company and Others (supra) has opined that if the order of cancellation is not served on the affected person and the appeal period expires, there is the possibility that the adverse order would become unassailable. The reasoning is totally fallacious. An appeal can only be preferred when the order is effective. The ineffective order, that is to say, uncommunicated order cannot be challenged. Therefore, the reasoning given by the court in earlier judgment is erroneous and hence, the reliance thereupon by the impugned order is faulty. There has to be a purposive construction of the words “from the date of order”. To place a construction that the date of an order would mean passing of the order, though not made effective would lead to an absurdity.

Decision (1 = appeal accepted, 0 = rejected): 1

Explanation:
1[ds]18. On a reading of that paragraph it is clear that power conferred on the Director and the District Magistrate are different, for the Director is a higher authority and the rule clothes him with more authority. Needless to say, the said paragraph has to be read in juxtaposition with other paragraphs. It is clear from paragraph 5 that the Director alone is authorised to grant a licence to an agent whereas alicence can be granted either by the Director or by the District Magistrate.3 of Paragraph 5 of the Control Order is also indicative of the fact that the agent operates at a larger scale than the dealer. An agent can sell, supply or transfer kerosene to a dealer, holder of a permit or delivery order and no other person.2 of Paragraph 6 of the Control Order is differently worded as it postulates that conditions can be specified by the Director or the District Magistrate having the jurisdiction. The conditions imposed may vary from time to time for the sake of fair distribution of kerosene. The authorities are also different as per the dictionary clause.Keeping in view the aforesaid rule of interpretation, we are constrained to think that it would be incongruous to hold that even when the licence of an agent at the State level is granted and issued by the Director, a District Magistrate, as defined in paragraph 3(e) of the Control Order, in exercise of concurrent jurisdiction can suspend or cancel the State level licence. Be it noted, as per Section 21 of the General Clauses Act, power to issue notification/etc. includes the power to amend/ vary or rescind. Though the said provision is not applicable, yet it is indicative that generally unless the statute or rule provides to the contrary, either expressly or impliedly, issuing or appointing authority would also exercise the right to cancel or suspend the licence. As has been stated earlier, on a cursory reading it may appear that paragraph 9 confers concurrent jurisdiction. The said paragraph deals with suspension or cancellation of licence and is a composite paragraph, which applies to licence granted to an agent as well as the dealer. It refers to the power of a Director and District Magistrate having jurisdiction. The wordsare also used in paragraph 6. The expressionreflects the legislative intent that District Magistrate having jurisdiction under paragraph 9 would be the same District Magistrate or authority which has the power to grant licence to a dealer in Form B under paragraph 6. Read in this manner, we have no hesitation in holding that it is the Director alone who could have issued the show cause notice under paragraph 9 and has the authority and jurisdiction to pass an order in terms of paragraph 9 of the Control Order. The earlier notice issued by SCFS has to be regarded at best a show cause notice to ascertain and affirm facts alleged and it ensured a response and reply from the first respondent. The said notice by SCFS could not have culminated in the order under paragraph 9, for he has no authority and jurisdiction to pass an order suspending or cancelling the licence. Therefore, the matter was rightly referred to the Director for action, if required, in terms of paragraph 9 of the Control Order.22. Having held that, we think it appropriate to refer to the aspect of communication pertaining to period as prescribed in paragraphs 9 and 10. The High Court has taken note of the fact that SCFS had issued the notice of show cause to which the agent had replied. The said authority has forwarded the matter to the Director, Consumer Goods for his perusal and necessary action, who in exercise of his authority had passed the order on 22.7.2013 which was received by the first respondent on 12.8.2013. The Division Bench has opined that as per Paragraph 9, the order has to be passed within 30 days after the issue of the notice to show cause and same has to be communicated within the said period and passing an order on the file would not tantamount to an order.Keeping in view the aforesaid principles, if it is held that the order would become a nullity, it really does not serve the purpose of the Control Order. On the contrary, it frustrates it and, therefore, the interpretation placed by the High Court on Paragraph 9 in juxtaposition with Paragraph 10 to treat the order has null and void is neither correct nor sound. It is desirable that the authority shall pass an order within 30 days from the date of show cause. Be it noted that there are two contingencies when the show cause is issued for violation or when an order of suspension is passed. There can be no trace of doubt that the order will take effect from the date when it is served. The order, unless it is served, definitely neither the agent nor the dealer would suspend its activities or obey any order, for he has not been communicated. Regard being had to this aspect, it is to be seen whether the prescription of 30 days from the date of order as provided in Paragraph 10 would make the order null and void. The order passed by the authority comes into effect when it is communicated. An order passed in file in case of this nature would not be an effective order, for it is adverse to the interest of the dealer or agent and, therefore, paragraph 10 has to be given a purposive meaning. It has to convey that 30 days from the date of the order which is an effective order, and that is the date of communication. Unless such an interpretation is placed, the intention of the rule making authority and also the intention behind the object and reasons behind the Control Order and the Essential Commodities Act, 1955 would be frustrated. Thus, we are of the considered opinion that the view expressed by the High Court on this score also is absolutely incorrect and wholly unsustainable.29. Apart from above, the words used in Paragraph 10 areIn the scheme of the Control Order, the order comes into effect from the date of receipt by the agent or the dealer. Once that becomes the decision, the commencement of limitation of 30 days for the purpose of Paragraph 10 would be the date when the order is effective. The High Court in Rani Sati Kerosene Supply Company and Others (supra) has opined that if the order of cancellation is not served on the affected person and the appeal period expires, there is the possibility that the adverse order would become unassailable. The reasoning is totally fallacious. An appeal can only be preferred when the order is effective. The ineffective order, that is to say, uncommunicated order cannot be challenged. Therefore, the reasoning given by the court in earlier judgment is erroneous and hence, the reliance thereupon by the impugned order is faulty. There has to be a purposive construction of the wordsthe date ofTo place a construction thatthe date ofan order would mean passing of the order, though not made effective would lead to an absurdity.