SHIHABUDEEN KUNJU Vs. STATE

JUDGEMENT

(1.) THE petitioner on 11-4-1983 submitted an application to the 2nd respondent. Director of Factories and Boilers who is also the Chief Inspector of Factories, for the approval of the site and for permission for the construction of a factory for processing raw cashew. THE application was in the proper form and was in accordance with Rule 3 of the Kerala Factories Rules, 1957. As per Ext. P1 memo dt. 13-5-1983 the 2nd respondent returned the application for rectification of certain defects pointed out therein. THE defects were cured and the application was re-presented on 25-5-1983. THEre was no reply within the statutory period of 3 months mentioned in sub-sec.(2) of S.6 of the Factories Act, 1948 and the petitioner was entitled to presume that his application for approval of site and permission for the construction had been granted. Sub-sec.(1) of S.6 authorises the Government to make rules requiring the previous permission in writing of the State Government or the Chief Inspector to be obtained for the site on which the factory is to be situated. Rule 3 of the Factories Rules requires an application for such permission to be submitted to the Chief Inspector in form No. 1 accompanied by the documents mentioned therein. It was such an application after curing the defects pointed out that was re-presented, to the 2nd respondent on 25-5-1983. Sub-sec.(2) of S.6 enacts that if on an application for permission referred to in cl.(a) of sub-sec.(1) accompanied by the plans and specifications required by the rules made under cl.(b) of that subsection, sent to the State Government or Chief Inspector by registered post, no order is communicated to the applicant within three months from the date on which it is so sent, the permission applied for in the said application shall be deemed to have been granted. Since there was no order communicated to the petitioner within 3 months he was justified in presuming that the permission applied for had been granted and he started the construction of the building for the cashew factory. An application was sent to the 2nd respondent for registration of the factory and for the grant of licence as required by R.4 of the Factories Rules. Ext. P3 is a copy of the application in form No. 2 and Ext. P4 is a copy of the covering letter sent along with Ext. P3 application. THE 2nd respondent as per his letter Ext. P5 dt. 5-12-1983 has informed the petitioner that the Cashew Special Officer, Quilon had informed the licensing authority that there is a specific direction from the 1st respondent against the issue of licences to new cashew factories and hence the plans forwarded along with the application dt. 11-4-1983 are returned unapproved. Ext. P5 makes reference only to the application dt. 11-4-83 submitted in form No. I for approval of the site and for permission to construct the factory building. THE application, Ext. P3 in form No. II is not adverted to in Ext. P5. Clause (d) of sub-sec.(1) of S.6 empowers the Government to make rules requiring the registration and licensing of factories, and prescribing the fees payable for such registration and licensing and for the renewal of licences. As per R.4 of the Factories Rules the Chief Inspector is the authority competent to effect registration of factories and grant licences and as per Rule 5 a licence for a factory may be granted by the Chief Inspector in form No. 4 on an application made to him in the prescribed form and on payment of the fee specified in Appendix I. THE proviso to R.5 requires the Chief Inspector to record reasons in writing when he refuses to grant licence and communicate the same to the applicant. It is clear from R.5 that it is the statutory duty of the licensing authority to consider the application for registration and issue of licence and on satisfaction of the requirements of the Act and the rules the licensing authority is bound to issue the licence applied for. Sub-sec.(3) of S.6 confers on the applicant a right of appeal to the Government in case the Chief Inspector declines to grant registration and refuses to issue the licence applied for. Ext. P5 shows that the application for approval of site and for permission to construct was rejected after the expiry of the statutory period mentioned in sub-sec.(2) of S.6, for the reason of the direction said to have been issued by the Government against issue of licences to new cashew factories. Almost on similar circumstances a learned Judge of this Court in O. P. 3256 of 73 quashed the order of the licensing authority and directed the issue of the licence applied for without reference to the Government's direction not to issue licences to new Cashew Factories. This decision of the learned single Judge was confirmed in writ appeal 182 of 74. An assessment made under the Central Excises and Salt Act on the basis of a direction issued by the Appellate Authority was held to be invalid by the Supreme Court in its decision in Orient Paper Mills Ltd. v. Union of India reported in AIR 1970 SC 1498, wherein it is stated :-

(2.) EXT. P5 order of the 2nd respondent cannot therefore be sustained in law. It is accordingly quashed and the 2nd respondent is directed to consider EXT. P3 application on its merits and dispose of the same within six weeks from today. Petition allowed.