SHRIJEE TRADING COMPANY Vs. STATE OF GUJARAT

JUDGEMENT

(1.) All these appeals are directed against the judgement and order dated 4th December 2002 made by the learned Single Judge in a group of petitions in which the petitioners challenged the action of the State Government of deciding not to renew under Rule 5 of the Gujarat Essential Articles (Licensing, Control & Stock Declaration) Order, 1981 (hereinafter referred to as "the Licensing Order of 1981"), the licences of wholesale kerosene dealers, who were not the agents / dealers of the Oil Companies, from 1-8-2002, and seeking a direction on the respondents to renew the licences of the petitioners as wholesale dealers in kerosene for a period of five years from the date of their applications for renewal with consequential and incidental orders. The petitioners challenged the provisions of Amendment Order 2002 made on 31-7-2002, by which definition of "Public Distribution System Kerosene Wholesale Dealer" was added as per Clause 2(18A) in the Licensing Order, 1981, and also the circular dated 31-7-2002 deciding not to renew the licences of those who were not covered by the said definition and to take action to cancel the existing licences of such persons.

(2.) According to the appellants - original petitioners, though they had earlier succeeded in Letters Patent Appeal No.538 of 2001, in which a Division Bench of this Court had set aside the executive orders made for excluding the wholesale kerosene dealers who were not dealers appointed by the Government Oil Companies, the State Government has repeated the same action and again excluded the appellants from being considered for issuing licences to them as wholesale kerosene dealers, to which they were entitled under the provisions of the Licensing Order of 1981 and which were being given to them and renewed from time to time till the amendment was made in the Licensing Order of 1981 by inserting the said definition clause 2(18A) by the impugned Amendment Order, 2002. The respondents have now, on the basis of the amendment taken a decision to abolish the wholesale dealers from the business of Public Distribution System in kerosene, excepting only those persons who were the agents / dealers appointed by the Government Oil Companies. According to the appellants, the respondents have discriminated against the appellants though they fell in the same class to which the other wholesale dealers in kerosene appointed by the Government Oil Companies belonged. The respondents, by a separate definition of "Public Distribution System Kerosene Wholesale Dealer", have created two classes of wholesale dealers contrary to the provisions of the Licensing Order of 1981 and in violation of the provisions of Article 14 of the Constitution of India. According to the appellants, they were doing the business of selling kerosene since 15 to 35 years and their families depended on the said source of income. The respondents authorities, however, by orders dated 31.7.2002 had decided not to renew the licences and to cancel them if already issued, in contravention of the directions contained in the decision of this Court, by which the earlier similar circulars were set aside. It was also pleaded that the agents / dealers of the Government Oil Companies were like any other traders or businessmen and simply because they were appointed as the dealers / agents by such Oil Companies, there did not exist any intelligible differentia between them and the appellants who were also wholesale dealers in the same business. Moreover, the Licensing Order of 1981 did not provide for any such disability. According to the petitioners, they had a fundamental right under Article 19(1)(g) of the Constitution to carry on the said business and the restrictions which were sought to be imposed by the respondents were not warranted by the provisions of Article 19(6) of the Constitution. It was also pleaded that if there were any instances of malpractice, adulteration or violation of any provisions of the Licensing Order, then action could be taken against the defaulting individuals, but the removal of the entire class of wholesale dealers in kerosene on the basis of presumptions against them was not warranted and was beyond the powers and jurisdiction of the respondent No.1. According to the appellants, they had already made applications for renewal before the expiry of their licences and therefore, were entitled to get their licences renewed in view of Clause-5 of the Order of 1981. It was pleaded that, before making the impugned Amendment Order, 2002, the respondents did not undertake any exercise for being satisfied for reaching an opinion that it was expedient and necessary in the interest of public to make such an order. It was also contended that the impugned Amendment Order was not applicable to the petitioners who had made their applications for renewal of licences earlier than 31-7-2002. Moreover, it was held by the order dated 10th July 2002 made by the learned Single Judge in an earlier petition (Special Civil Application No.3492 of 2002) that those petitioners were entitled to get renewal for five years and not for a lesser period. Similar treatment ought to be given even to the present petitioners, whose applications for renewal were pending on 31-7-2002.

(3.) In the affidavit-in-reply filed on behalf of the respondent No.1 dated 6th September 2002, it was contended that, on the basis of the facts and figures which were available with the Department, there was reason to believe that a large amount of stock of kerosene was directly being diverted into the black market and that the wholesale dealers of kerosene formed the basis of irregularities and hence, it was desirable to remove the basis itself. The wholesale dealers were an extra chain in the system of distribution of kerosene which was considered, by and large, responsible for the black marketing of kerosene. It was stated that the Amendment Order dated 31-7-2002 amending the Licensing Order of 1981 by adding the definition of "PDS Kerosene Wholesale Dealers" in clause 2(18A) was issued after obtaining the opinion of the Legislative & Parliamentary Affairs Department and concurrence of the Government of India, and the said Order was not a mere executive instruction since it was issued in exercise of the powers under Section 3(1) of the Essential Commodities Act, 1955. The impugned notification dated 31-7-2002, at Annexure "A" to the affidavit-in-reply, was issued pursuant to the said Amendment Order, 2002, and instructions were given to the subordinate officers not to renew the licence of wholesale dealers who were not company agents and whose licences had expired on 31-7-2002. It was contended that the policy decision was taken in the interest of the public and to remove the difficulties which were faced in the public distribution system. In paragraph 9 of the said reply, it was stated that, by the impugned order, the company's agents have to operate in the public distribution system and directly supply the PDS kerosene to the retailers, who in turn, would supply to the consumers and thus, the government have adopted a `two tier' system doing away with the earlier `three tier' system. It is stated that the PDS Kerosene is meant for the downtrodden and weaker sections of the society and the government was spending a huge amount of subsidy for PDS kerosene for giving relief to the card-holders by supplying it at a cheaper rate and therefore, it was the duty of the government to see that the benefit of subsidy reaches the targeted people. It is further stated that, on the basis of experience, it was found that the extra tier (wholesale dealers, who were not company agents/dealers) was engaged in diversion of kerosene by converting blue kerosene into white kerosene for the purpose of black-marketing and adulteration. Therefore, the government took a policy decision for the smooth functioning of the distribution system through company agents and retailers. Such a policy decision was in the interest of public at large and was not violative of the fundamental rights guaranteed by Article 14 or 19(1)(g) of the Constitution of India. It was also contended that the petitioners were not entitled to any renewal of their licences in view of the said policy decision reflected by the Amendment Order, 2002, and the impugned Circular.