SOHAN LAL DIST DEORIA Vs. UNION OF INDIA

JUDGEMENT

(1.) THE petitioner, Messrs Sohan Lal, carries on the business of dealing in gold ornaments in the city of Deoria. He holds gold dealer's licence No. 195-Gold/63. For 1975 his application for renewal of the licence was presented in time. He was, however, served with a notice to show cause why his application for renewal should not be rejected in view of the fact that the transactions made by him in 1974 were below the limit prescribed under R.3(ee) of the Gold Control (Licensing of Dealers) Rules, 1969 (hereinafter referred to as 'the Rules'). THE petitioner submitted an explanation which was that he was not able to do his business properly in 1974 on account of drought. That explanation did not find favour with the Assistant Collector, Central Excise, Gorakhpur, respondent No. 2, who was the licensing authority and his application for renewal was rejected by an order dated 22-2-1975. THE petitioner preferred an appeal against that order which as well was dismissed by the Collector, Central Excise, Allahabad, respondent No. 3 by an order dated 28-1-1976. THE petitioner seeks in this writ petition the quashing of these two orders and further challenges the constitutional validity of R.3(ee) of the Rules. THE validity of these Rules has been challenged from different angles, inter alia, as being violative of Arts.19(1)(g) and 14 of the Constitution of India and as conferring an unguided power on the licensing authorities and further as not having been made for carrying out the purposes of the Gold Control Act, 1968 (hereinafter referred to as "the Act").

(2.) ON behalf of the petitioner these very contentions were elaborated and essentially reliance was placed on a decision of the Madras High Court rendered by a single Judge in B. Narasimhalu Chettiar v. Central Government (AIR 1976 Mad 224) wherein Rule 3(ee) of the Rules was held to be ultra vires and violative of Art.19(1)(g) and 14 of the Constitution.

(3.) A re'sume' of the above provisions would go to show that a dealer is under an obligation to obtain a licence under S.27. The licence is to be issued in the form as may be prescribed. It shall be valid for such a period which may be specified therein. It may be renewed from time to time. Lastly it shall be subject to such restrictions and conditions as may be prescribed. As for the renewal of the licence the conditions are provided in Sub-Sec. (6) and sub-cl. (iv) of cl.(b) thereof provides that in case the applicant does not fulfil the prescribed conditions, the application for renewal of licence shall be rejected. A dealer is of course to be given an opportunity of presenting his case and after hearing him the Administrator is to be satisfied on certain points specified in cl.(b). Further, the Central Government has been given powers to make Rules for carrying out the purpose of this Act. Some of the purposes have been specified in Sub- Sec. (2) and cl.(k) thereof which is in the nature of a residuary provision authorises the Central Government to make Rules for any other matter which is required to be or may be prescribed.