A NATARAJAN Vs. ASSISTANT DIRECTOR

JUDGEMENT

(1.) THESE writ appeals are against the common order of the learned single Judge dated 20.12.2011 made in a batch of writ petitions, namely, W.P.(MD) Nos.11745, 11746 and 11752 of 2011, filed as against the cancellation of the fertilizer licences. The appellants herein are all licensed dealers in fertilizers; the terms of the licences are governed by the Fertilizer Control Order, 1985. Some of the appellants are proprietary concerns and some of them are partnership firms. It is a matter of record that the appellants who are carrying on business as proprietary concerns are partners in the partnership firms.

(2.) IT is seen from the documents placed before this Court that on 29.08.2008, a notice was issued by the second respondent in the writ petitions, calling upon A.Natarajan, an individual licence holder, to show cause as to why the licence granted should not be cancelled. The notice stated that the verification of the documents showed that between March, 2008 and June, 2008, there was sale of 2228 metric tonnes of potash to one M/s.Srikanth & Nagesh Firm, Chennai. However, without even receiving the said quantity, the said Natarajan, having his business at Pudukottai, had created an impression as though there was a receipt. On the other hand, the said quantity was not sold to M/s.Srikanth & Nagesh Firm and from Chennai Port Trust, the same was sent to M/s.Sree Chemicals, Ambattur; as such, the transfer directly made is contrary to Clause 35 of the Fertilizer Control Order. Thus, proceedings were initiated to cancel the licence as per Clause 31(1)(b) of the Fertilizer Control Order, 1985. Immediately thereon, on 11.09.2008, the writ petitioner replied. The petitioner pointed out that he had not created any document as had been alleged. Further, all fertilizers received were properly accounted for and sold to M/s.Srikanth & Nagesh Firm. Giving the details of sale of the said M/s.Srikanth & Nagesh Firm, the appellant/writ petitioner pointed out that the petitioner had no knowledge as to the existence of M/s.Sree Chemicals, a fact which he came to know only through the letter of the first respondent. By notice dated 25.09.2008, the first respondent called upon the writ petitioner to furnish the details as to the mode of transport, delivery note and firm invoices as regards the sale made to the said M/s.Srikanth & Nagesh Firm. The notice further pointed out that the purchased quantity of 1878 tonnes of potash fertilizer, made through I.P.L. and R.C.F. companies, were sent from Tuticorin. Referring to the above reply, the writ petitioner was directed to produce the necessary details. Immediately thereon, on 13.10.2008, the appellant / writ petitioner enclosed the details as regards the purchase and sale to the said firm M/s.Srikanth & Nagesh Firm. IT was also pointed out that the original statement as regards the sale effected to M/s.Srikanth & Nagesh Firm was already submitted and the same was already in possession of the first respondent therein and there had been no violation of the terms of the licence order.

(3.) IN reply to the proposal to cancel the licences granted to them on the ground that the business was done contrary to the conditions of the licences granted, the petitioners pointed out that after issuing show cause notice way back in 2008, there was no further proceedings taken thereon. Hence, the proceedings now initiated to cancel the licences in respect of all other areas such as Thanjavur, Trichy etc., without any adverse report from the Assistant/Joint Directors, was bad in law. Quite apart, the petitioners alleged that the show-cause notice revealed the pre-determined action to cancel the licences of the petitioners. Aggrieved by the proceedings, the petitioners approached this Court for quashing the notices. IN considering the said plea, learned single Judge pointed out that Clause 25.1 of the Fertilizer Control Order stipulated that no person shall, except with the prior permission of the Central Government, and subject to such terms and conditions as may be imposed by the Government, sell or use fertilizer, for purposes other than the fertilization of soils and increasing the productivity of crops. Thus, fertilizers which are given to the dealers for sale to agriculturists for agricultural operations are not to be diverted for non-agricultural purposes. Clause 25.1 prohibited an industrial dealer to sell fertilizers for agricultural purposes. On a conjoint reading of the Clauses, learned single Judge held that it was clear that the object of the provision is to ensure that the farmers get equitable distribution of fertilizers at a competitive price. Clause 31 of the Fertilizer Control Order deals with suspension, cancellation or debarment. Clause 32 deals with appeals to the Central Government. IN the context of the provisions stated above, where a dealer having a fertilizer licence commits any violation, Clause 31(1) enabled the authority to debar a dealer from carrying on the business in fertilizer or cancelling the certificate. The said action could be taken after giving the dealer an opportunity of being heard. Thus, on a reading of the said provision, learned single Judge pointed out that suspension of certificate of authorisation could be ordered as an interim measure, followed by a final order by either cancelling the certificate or debarring the dealer from dealing with fertilizers. IN the background of these provisions, learned single Judge rejected the contention of the petitioners to hold that in the light of the appeal remedy available under Clause 32A at the Government level, the writ petitions were not maintainable. Learned single Judge further pointed out that given the object of the Fertilizer Control Order, the question of interfering with the proceedings did not arise.