Susheela Aravind vs C.A. Aboobacker And Ors. on 13 February, 1996

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65
Madras High Court
Susheela Aravind vs C.A. Aboobacker And Ors. on 13 February, 1996
Equivalent citations: (1996) 2 MLJ 140
Author: Srinivasan


JUDGMENT

Srinivasan, J.

1. The fourth respondent in the writ petition is the appellant herein. The parties will be referred to according to their rank in the writ petition.

2. The petitioners owned two buildings, situate within Mahe Municipality, and leased out the same to one M/s. Chandramathi and the fourth respondent. The said two persons entered into a partnership on 1.4.1975, to run a business under the name and style of “Mahe Metals” for manufacturing aluminum foils. Application was made for issue of licence under Section 355 of the Pondicherry Municipal Decree (Levy and Validation of Taxes, Duties, Cesses and Fees) Act, 1973 (Act 1 of 1973) and for permission under Section 356 of the said Act. The permission under Section 356 of the Act was issued in favour of Thirumathi C.V. Chandramathi, Thavakkara House, Near Konar Vayal-cettancoon-Tellicherry, Door No. 685/1, Parakkal, Mahe under licence No. 49/76/LAD/C.5 Pondicherry dated 2.8.1976. The address mentioned in the licence for location of the industry was Door No. 685/1 Prakkal-Mahe. The nature and purpose of the industry was set out to be manufacture of aluminum circles and utensils. The details of the machinery authorised to be installed were also set out in the licence. Condition No. 7 in the licence read as follows:

The licence shall not be transferred to any other person by the person to whom it is issued and in case of change in the ownership of the unit by transfer, lease or otherwise, a fresh licence shall be applied for by the person who has acquired such ownership.

Clause 8 provided that the licence was liable to be cancelled by the Licensing Authority if he is satisfied that there has been a violation of any of the conditions of the licence. By an order in No. 1750/76/ LAD/C.5, dated 25.11.1976 an amendment was issued to the licence by adding the Door No.685/2 in the column for location of the industry in addition to Door No. 685/1 already mentioned in the licence.

3. A separate licence was issued under Section 355 of the Act bearing licence No. 394/78. That was renewed in the next year under No. 394/79. The licence was being renewed periodically as required by the provisions of the Act till 1983-84. At that time, certain difference of opinion crept up between the two partners Mrs. Chandriamathi and the fourth respondent and no application for renewal of licence was made. According to the petitioners, the factory was being run during the years 1984-85, 1985-86 and 1986-87 without any licence. But the contention of the fourth respondent was that the factory was not run during that period. The differences were settled between the two partners and a deed of release was executed on 31.5.1985 by Mrs. Chandramathi who received a sum of Rs. 1,10,000 from the fourth respondent and relinquished her interest in the firm. On the same day, thereafter, another person, by name K.E. Rehmath, was inducted as partner of the business by the fourth respondent. Fresh deed of partnership was entered on 2.4.1987. According to its terms, it came into existence even on 31.5.1985.

4. The licence which was issued previously had expired on 30.3.1985. On 15.7.1986 an order was passed by the competent authority, suspending the licence as it has already expired. On 4.9.1986, the fourth respondent applied for renewal of licence and paid the licence fee in the year 1985-86 and also a fee for the delay in filing the application for renewal. On 11.9.1986, another application for renewal was made for the period 1986-87 along with payment of fine for the delay. The firm M/s. Mahe Metal filed a suit in O.S. No. 7 of 1987 on the file of the Sub Court, Mahe for a declaration that the factory was being run validly by virtue of a statutory presumption under Section 457(13) of the Act and for an injunction against the Municipality. The suit was dismissed for want of statutory notice on 13.3.1987. The firm made a representation to the Government on 8.4.1987, for issue of renewal licence. On 12.5.1987 an order was passed setting aside the order dated 15.7.1987, suspending the licence which expired on 30.3.1985. The reason given was that there could not be any suspension of an expired licence. In the application filed by the firm before the Government for renewal of licence, objections were filed by the petitioners on 5.6.1987. The petitioners also filed W.P. No. 6203 of 1987 in this Court for a mandamus directing the Municipal Commissioner, Mahe Municipality to pass orders on the objections dated 5.6.1987 forthwith. This Court passed an order on 24.6.1987 in the writ petition directing the Municipal Commissioner, Mahe Municipality to pass orders on the objection dated 5.6.1987 filed by the petitioners therein on merits on or before 30.11.1987.

5. On 15.8.1987, the Secretary, Local Administration Department, Government of Pondicherry, sent a telegram to the Commissioner of Mahe Municipality containing the following message:

Under Section 107 of Municipalities Act, direction of the Government is hereby given to Special Officer/ Commissioner, Mahe Municipality to issue fresh licence without going through usual formalities, to M/s. Mahe Metals in favour of Susila Aravind on the basis of application already submitted. This may be done forthwith. Thereafter, (repeat thereafter) petition dated fifth June of Mohammed and others may be disposed of as per High Court direction. Commissioner is directed to send compliance report within three days from the date of receipt of this message.

6. Pursuant to the said telegram, the Commissioner issued a licence on 17.8.1987 under Section 355 of the Act and reported to the Government accordingly. The writ petition was filed by the petitioners on 24.8.1987 with a prayer to quash the said licence as illegal and directed the Municipal Commissioner to consider the grant of licence to the fourth respondent, after taking into consideration the objections dated 5.6.1987 and 5.7.1987 and further objections which may be given by the petitioners and pass orders strictly following the rules and regulations contemplated under the Act and manual. The learned Judge who heard the writ petition allowed the same and while quashing the licence issued to the fourth respondent directed that it was open to the new partnership firm to apply for fresh licence, both under Sections 356 and 355 of the Act and it is open to the Commissioner, Mahe Municipality, to issue licence, after complying with all the formalities required by law and after hearing the objections of the petitioners.

7. It is the said order which is challenged in this appeal by the fourth respondent. The first contention urged by the learned senior counsel in the appeal is that there is a distinction between a licence issued under Section 355 of the Act and permission granted under Section 356 of the Act, which has been overlooked by the learned judge. According to learned Counsel, the permission, once granted under Section 356 of the Act, is permanent and there is no necessity whatever for applying afresh by the transferee of the property from the original licensee. It is submitted that the view expressed by the learned Judge, that the permission granted under Section 356 of the Act has already expired on the transfer of rights by Mrs. Chandramathi to the new firm, is erroneous.

8. The second contention is that condition No. 7 found in the licence issued under Section 356 of the Act dated 2.8.1996 preventing the transfer of the licence to the transferee of the rights in the property is ultra vires the provisions of the Act and the rules and it is null and void. The third contention urged on behalf of the appellant is that this is only a case of renewal of the licence which already expired and the partnership firm which got its licence is entitled to have such a renewal inspite of the fact that there was no application by it for such renewal within the period prescribed by the provisions of the Act.

9. We are unable to accept any of the three contentions urged by learned Counsel for the appellant as stated above. Before dealing with the said contentions we would like to express our anguish and indignation on the way in which the Government has treated the order of this Court passed in W.P. No. 6203 of 1987 on 12.6.1987 with a sort of contempt. In our opinion this Court when it admitted W.P. No. 8634 of 1987 ought to have initiated proceedings for punishing the concerned authority for contempt of this Court and the failure to do so has only perpetrated injustice. We have already referred to the contents of the telegram issued by the Government on 15.8.1987 compelling the Commissioner of the Municipality to issue licence ignoring the formalities prescribed by the Act and Rules and also ignoring the order of this Court passed in W.P. No. 6203 of 1987. When there is a specific direction contained in the writ of mandamus issued by this Court as early as on 12.6.1987, the Government had no business whatever to instruct its subordinate officials to keep aside the said order and proceed to issue a licence to make the matter fait accompli and thereafter, purport to act in pursuance of the direction issued by this Court. Such an action on the part of the Secretary to the Government is, to say the least, atrocious and it ought not to have been ignored by this Court when this writ petition was admitted. The concerned Secretary ought to have been punished for contempt of court. Unfortunately, now, a period of nine years had elapsed since the date of the telegram. The said Secretary may not be continuing in the office. It may not be possible for this Court to punish the concerned officials of the Government.

10. The first contention that the permission granted under Section 356 of the Act is permanent and there was no necessity for applying afresh for such permission whenever there is a transfer of rights of the property is unsustainable in view of the fact that the licence which has been issued under Section 356 of the Act expressly imposes a condition that it should not be transferred to any other person. It is seen that the licence has been issued to a particular individual by name Thirumathi C.V. Chandramathi. It is not issued to the firm as contended by learned Counsel for the appellant. The name of the firm is mentioned only for the purpose of description of the licensee. The preamble portion reads:

Subject to the provisions of the decree dated 10.5.1982 and the terms and conditions of this licence, Tmt. C.V. Chandramathi M/s. Mahe Metal is/ are hereby authorised to install and carry on an industry at the following place with machineries as detailed below:

Having obtained the permission on the above terms, it is not open to the licensee or any persons claiming under such licensee to contend that the condition prohibiting transfer of the licence is not valid or that it is a permanent licence. We have been taken through the relevant rules and the prescribed forms. We do not find any form having been prescribed for the licence in question. There is a model form for the grant of permission under Section 356(3) of the Act. Paragraph 2 of the form reads,

The permission is subject to the following conditions: Condition No. 1 reads:

Power required should not be exceeded.

Other conditions are not found in the form. Obviously other conditions have been imposed by virtue of other rules or regulations which might have been prescribed by the Government or the concerned authorities. But, the licence which has been issued under Section 356(3) of the Act, to the applicant namely Chandramathi, is very clear in its terms and it is subject to the conditions already set out. The validity of the conditions imposed in the licence was never challenged by the licensee. She constructed a building and started running the factory only pursuant to the said licence and it is not open to the appellant to contend not that the permission under Section 356 if permanent in nature. Neither the wording of Section 356 of the Act nor the language of the rules prescribed therein warrant the acceptance of the contention that the permission granted if permanent in nature. So long as the permission is granted to a particular individual, it is certainly open to the concerned authorities to say that permission should be obtained as and when there is a transfer of ownership or other rights.

11. The second contention also fails inasmuch as, there is nothing in the Act or in the Rules to hold that the condition imposed in the licence is contrary to its provisions. We have already pointed out that the provisions of the Act do not help the contention that the permission granted under Section 356 of the Act is a permanent one. Hence, the condition cannot be said to be contrary to the statutory provisions.

12. The third contention, that the same firm continues and that it is only a renewal of the licence already issued in favour of the firm is factually and legally untenable. As stated already, licence was not issued to the firm as such. It was issued only to an individual by name Chandramathi. Reliance is placed on the order of amendment issued on 8.11.1976 in which Thirumathi Chandramathi is said to be representing M/s. Mahe Metals. That will not alter the licence. It is only a case of description of the person concerned. The amendment order relates only to the Door number of the place where industry was located and it does not amend any other part of the licence. Hence, we cannot accept the contention that the amendment is also with regard to the name of the licencee. Insofar as the name of the licencee is concerned, we have pointed out that it is only an individual who is described in that column.

13. There is no merit in the contention that the same firm continues to be in existence. It is not the case of the appellant that in the firm, which was originally started, a third person was inducted and thereafter, Thirumathi Chandramathi relinquished her rights. It ‘ is the specific case of the appellant that on 31.5.1985 one of the partners viz., Chandramathi relinquished her rights and walked out of the firm and thereafter, another person was entered as a partner by the fourth respondent. Once Chandramathi relinquished her rights, the partnership ceased to be in existence and there was an automatic dissolution of that partnership. The partnership between the fourth respondent and Mrs. Rehman can only be a new partnership in the eye of law.

14. There is also no substance in the contention that the licence issued originally had been renewed by the order dated 15.8.1987. The following circumstances are sufficient to show that there was no such renewal. The number of the original licence was 394. As and when it was being renewed every year, it was indicated in the licence. Originally it was 394/78. When it was renewed in 1979 it became 394/79. Thus, every year it was only the year which was altered. But when the licence was issued as per the direction of the Government on 17.8.1987 it was licence No. 722/87. A new number has been given and this is an indication that it is a fresh licence.

15. Secondly, the instruction in the telegram dated 15.8.1987 is only to issue a fresh licence without going through the usual formalities. That itself shows that it was not a case of renewal. Particularly, the report of the Municipal Commissioner to the Government was also only that fresh licence had been issued as instructed by the Government. Fourthly, the firm which was utilising the licence previously having been dissolved and a new firm having come into existence, their could not be renewal of the licence. Prior licence was in favour of Chandramathi and the present licence is in favour of the firm comprising the fourth respondent and her partner K.E. Rehmath, Hence, it cannot be considered to be a renewal licence. We are therefore, entirely in agreement with the view taken by the learned Judge that the licence is a fresh one and not a renewal.

16. It is argued by learned Counsel for the appellant that the period prescribed in the Act for making an application for renewal under Section 457(ii) of the Act is not a period of limitation and even if an application for renewal is made long afterwards, it can be treated to be a valid application and renewal could be granted. Section 457(11) of the Act reads as follows:

Save as otherwise expressly provided in or may be prescribed under this Act, every application for a licence or permission or for registration or the renewal of a licence or permission or registration, shall be made not less than thirty days and not more than ninety days before the commencement of the year.

(The language of section is mandatory. There is no escape from the said language which prescribes that an application for renewal should be made not less than 30 days and not more than 90 days before the commencement of the year. No person has got right to say that an application for renewal whatsoever, may be made by him long afterwards and he can compel the municipal authorities to grant the renewal.

17. Reliance is placed upon the judgment of a single judge of this Court in Municipal Council, Chidambaram v. Subramania Aiyar and Ors. 55 M.L.J. 495, which rose out of a prosecution by the Municipality for failure to comply with the provisions of Section 249(5) of the Madras District Municipalities Act which prescribed a time-limit for filing an application for renewal of the licence. The court of first instance dismissed the prosecution and acquitted the accused. On revision against acquittal, this Court confirmed the order of the court of first instance and held that the provision in the District Municipalities Act should not be understood as if it is one of the Articles of the Limitation Act standing in way of the Chairman granting a licence, as the provisions are for the benefit of the public having been created by the statute. The learned Judge also said that on the facts of the case, the Chairman of the Municipality would have been well advised to have granted the licence to the applicants and his action in refusing the money orders was uncalled for. While we are unable to agree with the view expressed by the learned Judge on the question of law, we do not think it necessary in this case to deal with the same at length. The facts of this case are entirely different. Here, it is not the Municipal Commissioner who has issued the licence on the basis that the fourth respondent was entitled to the renewal inspite of the belated application. But, the issue of licence was pursuant to the instructions issued by the Government and it was a fresh licence. Hence, the ruling referred to above will not apply to the facts of this case and we do not express our opinion on the correctness of the said ruling. However, we would like to point out that the language in Section 457(11) of the Act is mandatory and anybody can claim that even if the application is filed belatedly for renewal, he is entitled to get such a renewal from the authorities concerned. In this case in particular, the licence expired on 30.3.1985 and there was an order of the appropriate authority suspending the licence on 15.7.1986. Thereafter, applications are filed by the fourth respondent forrenewal of the licence on 4.9.1986 and 11.9.1986. By no stretch of imagination, it can be said that the fourth respondent is entitled in law to insist upon a renewal of the licence, which expired on 30.3.1985.

18. A faint attempt was made to contend that the fourth respondent is entitled to the benefit of Section 457(B) of the Act. In that section, it is stated that if any licence or permission is suspended or revoked or when the period for which it was granted, or within which application for renewal should be made had expired, whichever expires later, the grantee shall, for all purposes of this Act or any rule or bye law made thereunder, be deemed to be without a licence or permission until the order suspending or revoking the licence or permission is cancelled, or subject to Sub-section (13), until the licence or permission is renewed, as the case may be. It is contended before us that the fourth respondent is deemed to be functioning with a licence, in view of the cancellation of the order of suspension. There is no warrant for such a contention on the facts of this case. Sub-section (i) of Section 457 of the Act is to the effect that the acceptance by the Municipal Council of the pre-payment of the fee for licence or permission shall not entitle such a person to the licence or permission, as the case may be. Hence, no advantage can be taken by the fourth respondent by the payment of the renewal fee and the fees paid for filing the application made by her on 4.9.1986 and 11.9.1986.

19. In the circumstances, we have no hesitation to hold that the judgment of the learned Judge is entirely unassailable. There is no merit whatsoever in this appeal.

20. We find that the learned Judge, while quashing the licence issued to the fourth respondent, has observed that it is open to the new partnership firm to apply for fresh licence and it is open to the Commissioner to grant fresh licence after compliance of the formalities, required by law. Inspite of such a beneficial observation by the learned Judge, the appellant has chosen to file this frivolous appeal. As pointed out already, the Secretary to the Government was guilty of contempt and the appellant obviously instigated the Secretary to commit such a contempt. Hence, the appellant can be punished with an order for heavy costs. The writ appeal is dismissed with costs. Counsel fee Rs. 10,000.

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