JUDGMENT
M.Y. Eqbal, J.
1. Petitioner has challenged the order dated 1.10.1999 as contained in Annexure 4 passed by the Sub-Divisional Officer, Porahat Chakradharpur, whereby and whereunder licence granted to the petitioner under the Provisions of the Bihar Trade Articles (Licences Unification Control) Order, 1984 has been cancelled.
2. Petitioner’s case is that he is having Licence No. 16/84 granted under the Bihar Trade Articles (Licences Unification Control) Order, 1984 (hereinafter called the Unification Order, 1984) and is carrying on his business of running a fair price shop under the Public Distribution System in accordance with the terms and conditions of the Licence. Petitioner was
called upon to show cause vide Letter No. 313 dated 21.8.1999 by the Sub-Divisional Officer, Porahat, Chakradharpur as to why his licence be not cancelled on the ground that he lifted 25 quintals of rice for the month of May, 1999 on 19.7.1999 and 25 quintals for June, 1999 on 22.7.1999 but he distributed only 4 kg. of rice per consumer instead of 8 kg. of rice. It was further alleged in the show-cause notice that during the inspection on 28.7.1999 petitioner was not present in his shop premises. Petitioner filed his show-cause on 9.8.1999 and clearly stated that he lifted 25 quintals of rice on 19.7.1999 for the month of May, 1999 and therefore he distributed 4 kg. of rice per consumer for May, 1999. Petitioner further lifted 25 quintals of rice for the month of June, 1999 and thereafter he distributed 8 kg. of rice for both May and June, 1999 and the same was entered in the Ration Card of the consumers. He further stated in his show-cause that on 28.7.1999, he had come to Food Corporation of India, Ranchi to lift the quota of Sugar which was also informed to the Food Supply Inspector, Goel Kera. However, dissatisfied with the show-cause the licence of the petitioner was cancelled by the impugned order and the same was communicated to the petitioner vide letter dated 1.10.1999.
3. Mr. P.D. Agarwal, learned counsel for the petitioner assailed the impugned order as being illegal and wholly without jurisdiction. Learned counsel submitted that cancellation of licence of the petitioner is arbitrary, capricious and violative of principles of natural justice. Learned counsel further submitted that in the order of cancellation the Licencing authority has not assigned any reason for rejecting the show-cause and the order being non-speaking order can not be sustained in law. On the other hand, Mr. M.S. Anwar, learned GP 1 raised preliminary objection that the impugned order being appealable before the Deputy Commissioner, the writ application is not maintainable. Learned counsel further submitted that on the basis of complaint
received from the consumers, an inquiry was conducted and it was reported by the Inquiry Officer that the dealer was indulged in suspected conduct which is in violation of the agreement. The Sub-Divisional Officer after considering the complaint of the consumers and the Inquiry report found that the show-cause of the petitioner was not satisfactory. Accordingly the impugned order was passed cancelling the licence of the petitioner.
4. This matter was taken up on 23.1.2001. From perusal of the counter-affidavit it was found that respondents have not stated any where that the licence was cancelled by a reasoned order passed on 30.9.1999. The officer of the respondent was accordingly directed to produce the record of the case. Accordingly the record of the case was produced before this Court and supplementary affidavit was also filed annexing the copy of the order dated 30.9.1999. The impugned order dated 30.9.1999 reads as under :–
Abhilekh Upasthapit. ShriGupta Se spaslikaran prapta hua, jiska avalokan kiya. It is clear from the petition of the villagers and the clarification offered by the shop-keeper that the points raised in the report of the BSO are valid and that the clarification offered by the dealer (shop-keeper) is inadequate. Accordingly, his licence is cancelled due to violation of the terms and conditions. BSO Goelkera to take charge of the items in the dealer’s charge and arrange for their proper distribution.”
5. From bare perusal of the aforesaid order, it is evident that neither any reason has been assigned nor any finding has been recorded as to which terms of the licence or the Unification order has been violated. The order simply shows that the point raised in the report of the BSO is valid and that the description offered by the dealer is inadequate.
6. Principles of natural justice are intended to prevent mis-carriage of justice and are now applied even to administrative order which involves civil consequences. Generally principles of natural justice require that opportunity of hearing should be given to the persons against
whom administrative order is passed. However, application of principal of natural justice, and its sweep depends upon the nature of the rights involved. It is well settled that where statute requires an authority though acting departmentally to record reasons, it is mandatory for the authority to pass speaking orders and in the absence of reasons order would be rendered illegal. In the case of S.N. Mukherjee v. Union of India, (1990) 4 SCC 594, the Apex Court while considering the object and basic principles of applicability of natural justice held as under :–
“The object underlying the rules of natural justice “is to prevent miscarriage of justice” and secure “fair play in action”. As pointed out earlier the requirement about recording of reasons for its decision by an Administrative authority exercising quasi-judicial functions achieves this object by excluding chances of arbitrariness and ensuring a degree of fairness in the process of decision making. Keeping in view the expanding horizon of the principles of natural justice, we are of the opinion that the requirement to record reason can be regarded as one of the principles of natural justice which govern exercise of power by administrative authorities. The rules of natural justice are not embodied rules. The extent of their application depends upon the particular statutory frame-work where under jurisdiction has been conferred on the Administrative Authority. With regard to the exercise of a particular power by an Administrative Authority including exercise of judicial or quasi-judicial functions the legislature, while conferring the said power, may feel that it would not be in the larger public interest that the reasons for the order passed by the Administrative Authority be recorded in the order and be communicated to the aggrieved party and it may dispense with such a requirement. It may do so by making an express provision to that effect as those contained in the Administrative Procedure Act 1946 of U.S.A. and the Administrative Decisions (Judicial Review) Act, 1977 of Australia whereby the orders passed by certain specified authorities are excluded from the ambit of the enactment. Such an exclusion can also arise by necessary implication from the nature of the subject matter, the scheme and the provisions of the enactment. The public
interest under-lying such provision would outweigh the salutary purpose served by the requirement to record the reasons. The said requirement can not, therefore, be insisted upon in such a case.
7. In the said decision their lordship further held that it is not always required that the reason should be as elaborate as in the decision of a Court of Law. What is necessary is that the reasons are clear and explicit so as to indicate that the authority has given due consideration to the points in controversy. The need for recording of reason is greater in a case where order is passed at the original stage. The appellate or revisional authority, if it affirms such an order, need not give separate reasons if the such authority agrees with the reasons contained in the order under challenge.
8. In the case of Mahabir Prasad Santosh Kumar v. State of U.P. and Ors., AIR 1970 SC 1302, the Apex Court while considering the validity of the order cancelling the licence under the provisions of U.P. Sugar Dealers Licensing order, 1962, their lordship observed that:
“The case discloses a disturbing State of affairs. The authorities have disclosed by their conduct a reckless disregard of the rights of the appellants. The order passed by the District Magistrate cancelling the licences was quasi-judicial, it could be made only on a consideration of the charges and the explanation given by the appellants. That necessarily implied that the District Magistrate had to give some reasons why he held the charges proved, and the explanation unacceptable. When the matter was carried in appeal, the State Government could at least have acted with some awareness that citizens have rights which must be protected against possible arbitrary action by Subordinate Officials. The District Magistrate is not made the final authority in cancelling the licence. The appellants had a right to carry on their business, and as they held a licence to carry on business they could be deprived of their right by an executive order supported by good and adequate reasons. The relevant rules granted a right of appeal to the State Government against that order, and that implied that the aggrieved party must have an opportunity
to convince the State Government that the order passed by the District Magistrate was erroneous. That right could be effectively exercised if reasons be recorded by the District Magistrate and supplied to the aggrieved party. If the aggrieved party is not supplied the reasons, the right to appeal is an empty formality.”
9. In the case of Akhtar Ali v. State of Bihar and Ors., (1989) PLJR 709, a Division Bench of this Court while considering similar question held that no licence can be cancelled without following the procedure provided in the law. Petitioner must also be provided with the copy of the order and the authority must also record a finding as to the violation of the terms and conditions of the licence.
10. As noticed above, in the instant case it appears that the Licensing Authority mainly relied upon the Inquiry Report and on that basis it was simply stated in the order that explanation was inadequate. Admittedly, no prima facie finding was recorded by the authority as to whether petitioner in fact has violated the conditions of licence or provisions of the Unification Order or the allegations made against the petitioner are correct or not? In that view of the matter the order impugned can not be sustained in law and the matter needs reconsideration by the Sub-Divisional Officer.
11. For the reasons aforesaid, this writ application is allowed and the impugned order is set-aside. The matter is remitted back to the Sub-Divisional Officer, Porahat, Chakradharpur, for passing fresh order in accordance with law.
12. Writ application allowed.