GENERAL SUPPLIERS AND MANUFACTURERS (FIRM BY ITS PARTNER V. JANAKIRAMAN) Vs. THE DISTRICT REVENUE OFFICER

JUDGEMENT

(1.) THIS Writ Appeal is directed against the Judgment of Kailasam, J., on a petition under Article 226 of the Constitution of India by the .appellant before us for the issue of a Writ of certiorari calling for the records relating to the order of the District Revenue Officer, Thanjavur, dated 8th June, 1968, and to quash the same. The appellant, Messrs. General Suppliers and Manufacturers, is a partnership firm carrying on business at No. 87, North Main Street, Thanjavur. From 1962 in any event the firm had the benefit of three licences commonly known as DL -4, DL -5 and DL -8, issued under the Madras Prohibition Act, Madras Denatured Spirit, Methyl Alcohol and Varnish (French Polish) Rules, 1959, hereinafter called the Act and the Rules respectively. It appears that originally these licences were granted in favour of Sri V. Janakiraman, the Managing Partner of the Firm and was renewed from time to time until the licences were transferred in the name of the above Firm. V. Janakiraman however continued to be the Managing Partner of the said business. He had also other business of his own at Tiruchirapalli and he had to necessarily attend to the same by visiting his place of business at Tiruchirapalli which was only about 34 miles away from Thanjavur. Whilst so, the respondent issued on 21st May, 1968, two show cause memos. addressed to the Managing Partner of the Firm, when in it was stated that V. Janakiraman was found guilty under Section 7(1)(a)(ii) to the Essential Commodities Act read with Clause 5 of the Fertilizer Control Order, 1957, that on verification of his accounts on a particular clay the Firm had in its possession an excess of varnish over the allowed quantity of 395.5 litres thereof and that therefore there has been a violation of Rule 9 (iii) (a) and (b) of the Rules and Condition No. 6 (a) (i) of the licence in Form DL -5. An explanation was called for. A due explanation was submitted by the Firm through V. Janakiraman, the Managing Partner. The explanation was not accepted and the respondent passed the impugned order stating that Thiru V. Janakiraman having been found guilty of an offence as set out above was by itself a violation of Rule 9 (iii) (a) and as he was not permanently residing in Thanjavur there has been a consequential violation of Rule 9 (iii) (b) of the Rules as well. He also found that the possession of the excess quantity of varnish on the date or dates when the Firm's accounts were inspected would come within the teeth of Condition No. 6 (a) (i) of the licence normally known as DL -5, and as a result thereof he did not accept the explanation of V. Janakiraman as also that furnished by the other partner of the Firm, and cancelled all the three licences in Forms DL -4, DL -5 and DL -8 by then held by the Firm. The appellant was also interdicted not to sell or otherwise dispose of the stocks held by him under the licences subsequent to the receipt of the impugned order.

(2.) THE appellant aggrieved against the cancellation of the totality of the licences held by the Firm, filed an application under Article 226 of the Constitution of India praying for the quashing of the said order on the ground that it was without jurisdiction and without authority. His main contentions before Kailasam, J., which are repeated before us, were as follows. His case is that Rule 9 (iii) (a) is not at all attracted in this case as it would apply only at the time when the authorities concerned consider whether the original grant of the licence to an applicant is feasible or justified. Also his case is that the conviction referred to in the proceedings impugned was unrelated to the conditions prescribed and that the fact that there was a conviction of the Managing Partner under the Essential Commodities Act in 1962, as evidenced by the Judgment of this Court in C.A. No. 335 of 1961, cannot be the foundation for cancellation of a licence already granted to an applicant and which the applicant was beneficially enjoying for several years in the past. The appellant also urges that the licences at all material times and at any rate from 1962, were issued to the Firm and not to V. Janakiraman, as is contended, and therefore the alleged violation of Rule 9 (iii) (b) of the Rules has not obviously been brought home to the appellant in the normal and grammatical sense of the content of the Rules. The appellant also would urge that the possession of varnish, though it might be in excess of the quantity prescribed, cannot be a violation of Clause 6 (a) (i) of the conditions of the licence attached to DL -5, since there can be a violation only if the appellant was in possession of excess quantity of denatured spirit and not a finished product like varnish. The appellant therefore would say that there has not been a violation in the sense set out and pleaded by the respondent in the impugned order and that therefore the cancellation of the licence is without authority and has to be quashed. Kailasam, J., who heard the matter in the first instance came to the conclusion that there has been a violation as indicated in the impugned order. The learned Judge was of the view that after the grant of the licence the fact of conviction was brought to the notice of the licensing authority and that would entitle the licensing authority to cancel the licence under Rule 9 (iii) (a). He was also of the view that the licensee ceased to be a resident of Thanjavur and therefore the appellant was not entitled to the continuance of the licence in his name. He also held that possession of excess quantity of varnish of which methylated spirit is the main ingredient without proper explanation has to be construed as a contravention of the conditions of the licence. He therefore dismissed the Writ Petition.

(3.) IN our view, the order of the respondent is not sustainable at all. The first of the grounds that there is a violation of Rule 9 (iii), has no relevance to the facts of the instant case. Rule 9 (iii) deals with the conditions to be satisfied before a licence is granted and sets out the procedure to be followed in dealing with applications for the issue of licences. The appellant has already been granted a licence and it is inappropriate, unless the licence expressly prescribes, to invoke this provision to cancel an existing licence. Licences also create vested rights and they ought not to be lightly disturbed unless exigencies are so emergent and necessary to do so. It is also essential that the authorities exercising such jurisdiction should bear in mind that cancellation of a licence by way of a penalty involves the bringing home of an offence to the delinquent licensee and it should be proved beyond all reasonable doubt. On a persual of the records, we have observed that V. Janakiraman was convicted for a technical offence under the Essential Commodities Act, and that apart, such a conviction was not before the grant of the licence. Rule 9 (iii) (a) is not apposite for consideration and much less to be made the base for the cancellation of an existing licence. Even so Rule 9 (iii) (6) has been misapplied. Apparently the confusion has arisen because of a misconception that the licensee was V. Janakiraman. Even the show -cause notice issued belies this assumption. The notice is addressed to "the Managing Partner Thiru V. Janakirman, General Suppliers and Manufacturers, No. 87, North Main Street, Thanjavur". The place of business is No. 87, North Main Street, Thanjavur. It is not suggested that the partnership firm has changed its place of business. On the other hand, V. Janakiraman, one of the partners, is said to be having some commercial interest in Srirangam, Tiruchirapalli District, which is within motorable distance from the licensed premises. Such a dual enterprise assumed by one of the partners is termed as change of address of the licenced premises and that by the Firm, which is the licensee. This allegation is without any substance. As long as the licensee is carrying on the business in the licensed premises through one of the partners, it cannot be said that there is any semblance of a violation of Rule 9 (iii) (b) of the Rules.