that the order would become a nullity, it really does not
serve the purpose of the Control Order. On the contrary, it
frustrates it and, therefore, the interpretation placed by the
High Court on Paragraph 9 in juxtaposition with Paragraph
10 to treat the order has null and void is neither correct nor
sound. It is desirable that the authority shall pass an order
within 30 days from the date of show cause. Be it noted
that there are two contingencies when the show cause is
issued for violation or when an order of suspension is
passed. There can be no trace of doubt that the order will
take effect from the date when it is served. The order,
unless it is served, definitely neither the agent nor the
dealer would suspend its activities or obey any order, for he
has not been communicated. Regard being had to this
aspect, it is to be seen whether the prescription of 30 days
from the date of order as provided in Paragraph 10 would
make the order null and void. The order passed by the
authority comes into effect when it is communicated. An
order passed in file in case of this nature would not be an
effective order, for it is adverse to the interest of the dealer
or agent and, therefore, paragraph 10 has to be given a
purposive meaning. It has to convey that 30 days from the
date of the order which is an effective order, and that is the
date of communication. Unless such an interpretation is
placed, the intention of the rule making authority and also
the intention behind the object and reasons behind the
Control Order and the Essential Commodities Act, 1955
would be frustrated. Thus, we are of the considered
opinion that the view expressed by the High Court on this
score also is absolutely incorrect and wholly unsustainable.
Reportable
IN THE SUPREME COURT OF INDIA
CIVIL APPELLATE JURISDICTION
CIVIL APPEAL NO. 2825 OF 2015
[Arising out of SLP(C) No. 30338 OF 2014]
State of West Bengal and Others
V
R.K.B.K. Ltd. & Anr.
Dated;September 04, 2015
Dipak Misra, J.
Citation;(2015)10 SCC369
In this appeal, by special leave, the legal substantiality
and acceptability of the judgment and order dated
29.08.2014 passed by the Division Bench of the High Court
of Calcutta in AST No. 177/2013 whereby it has overturned
the decision of the learned Single Judge requiring the
respondent-writ petitioner to knock at the doors of the
alternative forum by way of appeal, on the foundation that
the authority that had passed the adverse order against the
first respondent had no jurisdiction, and assuming he had
the jurisdiction, it stood extinguished by expiration of the
time limit stipulated in certain paragraphs of the West
Bengal Kerosene Oil Control Order, 1968 (for brevity, ‘the
Control Order’), is called in question.
2. The facts which need to be exposited for adjudication
of this appeal are that the first respondent was granted the
licence for carrying on the business of superior kerosene oil
as an agent by the Joint Director of Consumer Goods, West
Bengal in accordance with the paragraph 5(1) of the Control
Order. The monthly allocation of public distribution system
of superior kerosene oil to the said respondent was fixed by
the Director of Consumer Goods, West Bengal at 1,82,000
litres per month. On 10.8.2012 a physical inspection was
carried out by the Area Inspector attached to the office of
the Sub Divisional Controller, Food and Supplies, Burdwan
(for short, “SCFS”) at the depot of the respondent. The
concerned Inspector submitted the report to the SCFS
stating that 71,494 litres of superior kerosene oil had been
delivered in excess by the dealer. On 8.4.2013, the SCFSPage 3
3
issued a notice seeking explanation about the discrepancy
pointed out by the Area Inspector. On receipt of the said
show cause notice, the first respondent submitted his
explanation on 16.4.2013. The SCFS afforded an
opportunity of personal hearing to the dealer on 3.5.2013
and the same was availed of. After conducting the enquiry,
the SCFS forwarded the entire record to the District
Controller, Food and Supplies Department, Burdwan, who
in turn sent the entire case records to the Director of
Consumer Goods for appropriate decision. After scrutiny of
the records, the Director of Consumer Goods issued a show
cause notice to the dealer on 26.6.2013. The first
respondent replied to the same on 28.6.2013 through his
counsel stating, inter alia, that under the Control Order,
after the licence is issued to an agent by the Office of the
Director, the District Magistrate having jurisdiction or any
officer authorised by him, is alone empowered to look into
the functioning of the said agency and to give directions to
him and/or initiate action against the concerned agent.
Additionally, it was also put forth that the second show
cause notice on the self-same allegations was untenable inPage 4
4
law and accordingly prayer was made to withdraw and/or
rescind the notice and take steps for disposal of the matter
in terms of the provisions of the Control Order.
3. As the factual matrix would further undrape, the
Director of Consumer Goods, vide order dated 22.7.2013
narrated the facts in detail and came to hold that SCFS has
the authority to ask for explanation regarding distribution of
superior kerosene oil in his jurisdiction; and that the
Director of Consumer Goods being the Licensing Authority,
can exercise the power to issue show cause notice and after
giving the delinquent agent a fair opportunity of being
heard, pass appropriate orders. The said order also would
reflect that the counsel for the first respondent had
appeared before the Director on 17.7.2013. The concerned
Director analysed the factual matrix and in exercise of
power conferred on him under paragraph 9(ii) of the Control
Order imposed a penalty of Rs.26,08,816.00 and further
directed reduction of monthly allocation of superior
kerosene oil of the agent by 12,000 litres for a period of one
year. Page 5
5
4. The order passed by the Director was assailed by the
agent in W.P.No. 25204 (W) of 2013. The learned Single
Judge vide order dated 22.08.2013 referred to paragraph 10
of the Control Order which provides for an appeal to be
preferred and accordingly directed that if the agent prefers
an appeal by 6.9.2013, the appellate authority shall dispose
of the same by 31.12.2013. The learned Single Judge
further directed that the agent shall maintain with utmost
care an inventory of stocks and accounts for periodical
submission to the authorities and the penalty amount
should be deposited by 6.9.2013 and the said penalty
amount shall be kept in a separate interest bearing account.
5. Being aggrieved by the aforesaid order, the
respondents 1 and 2 preferred an appeal being AST No. 177
of 2013 before the Division Bench. It was urged in the
intra-court appeal that the proceeding before the Director of
Consumer Goods was patently without jurisdiction, for
power of cancellation or suspension could only be exercised
by the Director or District Magistrate having jurisdiction
and in the case at hand the District Magistrate, Burdwan is
the competent authority to exercise the power underPage 6
6
paragraph 9 of the Control Order and not the Director of
Consumer Goods; that assuming the Director had
jurisdiction, the proceeding that was initiated had lapsed
after expiry of 30 days after the date of issuance of the show
cause notice by the Director; and that in any case the
proceeding was initiated by SCFS and he could not have
sent the record to the Director after expiry of 30 days when
the proceeding stood lapsed. It was also urged that the
order in question was served on the first respondent on
12.8.2013 and, therefore, the date mentioned in the order
could not validate the same as it was not dispatched within
30 days. The submissions put forth by the first respondent
before the Division Bench of the High Court were seriously
contested by the learned counsel for the Department.
6. The Division Bench posed the following two questions:-
“a. Who is the competent authority to take
disciplinary action either by cancellation or
suspension of the licence of a S.K. Oil agent
appointed in a district outside the Calcutta?
b. Whether the order of cancellation or
suspension of licence in terms of Paragraph 9 of
the West Bengal Kerosene Control Order will
become effective on the date of passing of the said
order or when the said order is communicated toPage 7
7
the concerned party?”
7. After posing the aforesaid two questions, the Division
Bench took note of the fact that the respondent-dealer was
authorised to carry on the business as an agent of super
kerosene oil in the district of Burdwan and the SCFS had
issued a show cause to the respondent and instead of
taking the final decision himself, forwarded the records to
the Director of Consumer Goods for necessary action who
issued a fresh show cause notice on the self-same
allegations and passed a order on 22.07.2013 which was
without jurisdiction in view of the conjoint reading of the
language employed in paragraphs 8, 9 and 10 of the Control
Order. Thereafter, the Division Bench proceeded to deal
with the issue whether the Director had passed the order
imposing penalty within 30 days from the date of serving
the show cause notice in terms of paragraph 9 of the
Control Order, for the same was served on the dealer on
12.8.2013. The Court took note of the contention of the
advanced by the learned counsel for the appellants therein
that the order under Paragraph 9 passed by the competentPage 8
8
authority in writing within 30 days from the date of serving
the show cause notice should mean the communication of
the order in writing within the said period of 30 days and
not from the signing of the order and accepted the same. To
arrive at the said conclusion, the appellate Bench placed
reliance on Rani Sati Kerosene Supply Company and
Others v. The State of West Bengal and Others1
. It
referred to paragraphs 27 and 29 of the said decision and
thereafter came to hold thus:-
“For the reasons discussed hereinabove, we hold
that the Sub-Divisional Controller, Food and
Supplies, Burdwan lawfully initiated the
proceeding against the appellant/writ petitioner
no. 1 by issuing show cause notice but did not
conclude the same within 30 days as required
under paragraph 9 of the West Bengal Kerosene
Control Order, 1968.
We further hold that the Director of
Consumer Goods had no jurisdiction and/or
authority to initiate any proceeding against the
appellant/writ petitioner no. 1 in terms of
paragraph 9 of the West Bengal Kerosene Control
Order since the licence was granted to the
appellant/writ petitioner no. 1 for carrying on
business as S.K. Oil agent in the district of
Burdwan which is outside Calcutta.
In the result, the impugned order dated 22nd
1
2005 (4) CHN 264Page 9
9
July, 2013 passed by the Director of Consumer
Goods cannot survive and is liable to be set aside
since the said Director had no authority and/or
jurisdiction to pass any order under paragraph 9
of the West Bengal Kerosene Control Order, 1968
in respect of S.K. Oil agent of Burdwan.
Therefore, the impugned order dated 22nd July,
2013 issued by the Director of Consumer Goods
in respect of the appellant/writ petitioner no. 1 is
quashed.”
Being of this view, it allowed the appeal and set aside
the judgment of the learned Single Judge of the High Court.
8. We have heard Mr. Mohan Parasaran, learned senior
counsel along with Mr. Anip Sachtey, learned counsel for
the appellants and Mr. Vivek K. Tankha, learned senior
counsel along with Mr. Rajan K. Choursia, learned counsel
for the first respondent.
9. At the outset, it is obligatory on our part to state that
when the final hearing of the appeal took place, we were
apprised at the Bar that SCFS who represents the District
Magistrate, has issued a fresh show cause notice in respect
of self-same lis and accordingly the following order was
passed:-
“In course of hearing we have been apprised that
the Sub-Divisional Controller, Food and Supplies,Page 10
10
Burdwan, who represents the District Magistrate,
Burdwan, has issued a fresh show cause notice
on the self-same lis and against its notice to show
cause, an appeal has been preferred before the
Director of Consumer Goods in Kolkata. Be it
noted, the show cause number is Memo No.
4159/SCF&S/BDN/14. The appeal arisen out of
the said show cause notice before the appellate
authority, shall remain stayed till the
pronouncement of the judgment.”
10. We shall advert to the legal permissibility of the second
show cause in respect of the same alleged deviation by the
agent at a later stage, if required. As the factual foundation
would exposit, the thrust of the controversy is whether the
Director of Consumer Goods, Food and Supplies
Department has the jurisdiction to take action in the
manner he has taken; and whether the order has to be
passed and communicated within 30 days under the
Control Order and the consequence of failure in such a
situation. The Control Order was brought into force on
26.6.1968 in exercise of powers conferred by sub-section 1
of Section 3 of the Essential Commodities Act, 1955 read
with clauses (d), (e), (h) and (j) of sub-section 2 of that
Section and Section 7(1) of the said Act and the Order No.
26(11)-Com.Genl/66, dated 18th June, 1966 feeling thePage 11
11
necessity and expediency for proper maintenance of
supplies and for securing the equitable distribution and
availability at fair prices of kerosene in West Bengal.
Paragraph 3(a) of the Control Order defines “agent” which
reads as under:-
“3(a) “agent” means a person who has been
appointed as an agent of an oil distributing
company by such company and has been granted
a licence under paragraph 5 of this Order.”
11. Paragraph 3(c) of the Control Order defines “dealer”
which reads as follows:-
“3(c) “dealer” means a person who has been
granted a licence under paragraph 6 of this Order
authorising him to carry on trade in kerosene.
12. Paragraphs 3(d) and 3(e) of the Control Order define
the “Director” and the “District Magistrate” respectively,
which reads as follows:-
3(d) “Director” means the Director of Consumer
Goods, Department of Food and Supplies,
Government of West Bengal and includes any
officer, not below the rank of Assistant Director,
Directorate of Consumer Goods, Food and
Supplies Department, Government of West
Bengal who can perform all the functions of the
Director and this order including cancellation of
licence. Page 12
12
3(e) “District Magistrate” includes the Deputy
Commissioner of a district and also includes any
person not below the rank of a Sub-divisional
Controller of Food and Supplies in the
Department of Food and Supplies, Government of
West Bengal, authorised by the District
Magistrate or Deputy Commissioner, as the case
may be, in writing to perform all or any of the
functions of the District Magistrate under this
Order.”
13. Paragraph 5 of the Control Order deals with grant of
licence to an agent. It reads as under:-
“5. Grant of licence to agent – (1) The Director
may grant a licence to any agent in West Bengal
authorising him to carry on trade in kerosene as
such agent.
(2) A licence granted under sub-paragraph (1)
shall be in Form A and shall be subject to such
conditions as are specified therein and such
other conditions as the Director may lay down
from time to time in the interest of fair
distribution of kerosene within the State.
(3) No agent shall sell, supply or transfer
kerosene to any person other than a dealer duly
licensed under paragraph 6 of this Order, or a
holder of a permit or delivery order issued under
paragraph 11 of this Order.”
14. Paragraph 6 deals with grant of licence to a dealer. It
is as follows:-
“6. Grant of licence to dealer – (1) the Director
or the District Magistrate having jurisdiction mayPage 13
13
grant a licence to any person authorsing such
person to carry on trade in kerosene as a dealer.
(2) A licence granted under sub-paragraph (1)
shall be in Form B and shall be subject to such
conditions as are specified therein and such
other conditions as the Director or the District
Magistrate having jurisdiction may impose from
time to time for the sake of fair distribution of
kerosene.”
15. Paragraph 9 of the Control Order deals with
cancellation or suspension of licence. The same being of
significance, is reproduced in entirety herein below:-
“9. Cancellation or suspension of licence – If
it appears to the Director or the District
Magistrate having jurisdiction that an agent or a
dealer has indulged in any malpractice or
contravened any provision of this Order or any
condition of the licence or any direction given
under paragraph 12 of this Order, he may
forthwith as the Agent or Dealer to show cause
for violations made or suspend the licence:
Provided that the agent or the dealer who
has been asked to show-cause or whose licence
has been suspended shall be given an
opportunity of being heard and the Director or
the District Magistrate having jurisdiction shall
pass an order in writing within 30 days from the
date of serving the show-cause notice or
suspension of the licence taking any or all of the
actions given below.
(i) He may let off the Agent or Dealer if
sufficient cause has been shown.
(ii) He may pass an order by imposing aPage 14
14
penalty which according to the gravity
of the violations made will not be less
than Rs.10,000/- in case of an Agent
and Rs.2,000/- in case of a Dealer and
revoke the suspension order if already
served.
(iii) He may cancel the licence:
Provided that the order shall be passed ex parte if
the Agent or the Dealer whose licence has been
so suspended or on whom show-cause notice has
been served fails to appear at the hearing.”
16. Paragraph 10 of the Control Order which provides for
appeal is extracted hereunder:-
“10. Appeal – (a) Any person aggrieved by an
Order passed under paragraph 8 or paragraph 9
of this Order, may within 30 days from the date
of the order, prefer an appeal to the State
Government in the Food and Supplies
Department.
(b) elsewhere, –
(i) where the order is passed by the
District Magistrate or the Deputy
Commissioner of a district, to the State
Government,
(ii) where the order is passed by any other
officer authorised by the District Magistrate
or the Deputy Commissioner of a district
under clause (e) of paragraph 3, to the
District Magistrate or the Deputy
Commissioner, as the case may be, of the
district.Page 15
15
17. We have reproduced the relevant paragraphs of the
Control Order to understand the schematic purpose and
effect of the Control Order. Paragraph 5, as it envisages,
empowers the Director to grant licence to any agent in West
Bengal authorising him to carry on trade in kerosene as
such agent. Paragraph 6 empowers the Director or the
District Magistrate having jurisdiction to grant the licence to
any person as a dealer. As the scheme would reflect there is
a distinction between an “agent” and a “dealer”, for the
agent is granted licence under paragraph 5 of the Control
Order whereas dealer is granted licence under paragraph 6
of the Control Order. Paragraph (7) provides for renewal of
licences, licence fees, etc. The relevant part of the said
paragraph is as follows:-
“7. Renewal of licences, licence fees, etc. –
(1) Every licence issued under paragraph 5 or
paragraph 6 of this Order shall be valid up to 31st
December next following the date of issue and
may, at the discretion of the authority by which
the licence was granted, be renewed for
successive periods of one year on an application
made in that behalf to such authority in the
manner provided hereinafter before the expiry of
the date of validity of the licence: Page 16
16
Provided that –
(i) the Director may, by notification in the
Official Gazette, extend the period of validity of
existing agents’ licences issued under paragraph
5 of this Order for such period, not exceeding 60
days, beyond the 31st December, hereinbefore
mentioned, as he may, for reasons to be recorded
in writing, think fit; and
(ii) the Director, or the District Magistrate
having jurisdiction, may, by notification in the
Official Gazette, extend the period of validity of
existing dealers’ licences issued under paragraph
6 of this Order for such period, not exceeding 60
days beyond the 31st December, hereinbefore
mentioned, as he may, for reasons to be recorded
in writing, think fit: Provided further that the
Director or the District Magistrate, as the case
may be, may, by notification in the Official
Gazette, extend the time for filing of application
for renewal of licences:
Provided also that on an application made
by a licensee in that behalf, the authority by
which the licence was issued may, if he considers
it expedient so to do, renew a licence issued
under paragraph 5 or paragraph 6 of this Order,
for a maximum period of three years at a time on
payment in non-judicial stamps of the fees for
renewal of licences referred to in sub-paragraph
(3) of this paragraph, for each year of renewal or
part thereof.
(2) Every application for the issue of licence
under paragraph 5 or paragraph 6 of the Order or
for the renewal of such licence under this
paragraphs shall be made to the appropriate
authority in Form C”.
18. On a reading of that paragraph it is clear that powerPage 17
17
conferred on the Director and the District Magistrate are
different, for the Director is a higher authority and the rule
clothes him with more authority. Needless to say, the said
paragraph has to be read in juxtaposition with other
paragraphs. It is clear from paragraph 5 that the Director
alone is authorised to grant a licence to an agent whereas a
dealer’s licence can be granted either by the Director or by
the District Magistrate. Sub-para 3 of Paragraph 5 of the
Control Order is also indicative of the fact that the agent
operates at a larger scale than the dealer. An agent can sell,
supply or transfer kerosene to a dealer, holder of a permit or
delivery order and no other person. Sub-para 2 of
Paragraph 6 of the Control Order is differently worded as it
postulates that conditions can be specified by the Director
or the District Magistrate having the jurisdiction. The
conditions imposed may vary from time to time for the sake
of fair distribution of kerosene. The authorities are also
different as per the dictionary clause.
19. In this backdrop, we are required to understand the
language employed in paragraph 9 of the Control Order.
The said paragraph, as we perceive, is rather loosely andPage 18
18
ambiguously worded. It becomes obvious when we
appreciate the Control Order on the bedrock of schematic
interpretation. It is worth noting that while paragraph 5
deals with grant of licence to an agent by the Director,
paragraph 6 deals with grant of licence to a dealer by the
Director or the District Magistrate. The term “District
Magistrate” as per paragraph 3(e) of the Control Order
includes authorities mentioned therein. Paragraph 9 which
pertains to cancellation or suspension of licence is a
composite paragraph and stipulates when and who can
cancel or suspend a licence of an agent or a dealer. The
said power is exercised, when an agent or dealer has
indulged in any kind of malpractice or contravened any
provision of the Control Order or conditions applicable, etc.
On a literal reading of paragraph 9, it may convey or one
may be emboldened to urge that Director as well as the
District Magistrate including the authorised officers
mentioned in paragraph 3(e), have concurrent jurisdiction to
cancel or suspend the licence granted to an agent or a
dealer. However, such an interpretation could not be
occurred with the legislative intent and would lead toPage 19
19
absurdity and anomaly. Therefore, such kind of an
interpretation has to be avoided. We are disposed to think
so inasmuch as an agent, as noted above, is appointed by
the Director and has the authority to carry on trade of
kerosene within the entire State. But a dealer, cannot
supply, sell or transfer kerosene to any person other than a
holder of a permit, delivery order or through a dealer
specified in paragraph 6. That apart, it is noticeable that
sub-paragraph (e) of paragraph (3) a District Magistrate
would include a sub-Divisional Controller of Food and
Supplies, authorised by the District Magistrate or Deputy
Commissioner and District Magistrate is for a specified
small area within the State. He cannot exercise jurisdiction
in respect of an area beyond the geographical boundaries of
the area/district. In such a situation to place a
construction on Paragraph 9 that the Director as well as the
District Magistrate would have concurrent jurisdiction
would be inapposite. In our considered view, a logical and
reasonable interpretation to paragraph 9 of the Control
Order has to be preferred instead of adopting the loose
meaning in the literal sense. Such an interpretation wouldPage 20
20
be in consonance with the principles of harmonious
construction, that is, harmonious reading of paragraphs 5,
6, 7 and 9 of the Control Order. It is based on the premise
that the authority who has the right to grant licence has the
authority to suspend or cancel the licence. In this regard,
we may fruitfully reproduce a passage from Reserve Bank
of India v. Peerless General Finance and Investment Co.
Ltd. and Others2
, wherein it has succinctly been stated
thus:-
“Interpretation must depend on the text and the
context. They are the bases of interpretation. One
may well say if the text is the texture, context is
what gives the colour. Neither can be ignored.
Both are important. That interpretation is best
which makes the textual interpretation match the
contextual. A statute is best interpreted when we
know why it was enacted. With this knowledge,
the statute must be read, first as a whole and
then section by section, clause by clause, phrase
by phrase and word by word. If a statute is
looked at, in the context of its enactment, with
the glasses of the statute-maker, provided by
such context, its scheme, the sections, clauses,
phrases and words may take colour and appear
different than when the statute is looked at
without the glasses provided by the context. With
these glasses we must look at the Act as a whole
and discover what each section, each clause,
each phrase and each word is meant and
designed to say as to fit into the scheme of the
2
(1987) 1 SCC 424Page 21
21
entire Act. No part of a statute and no word of a
statute can be construed in isolation. Statutes
have to be construed so that every word has a
place and everything is in its place.”
20. We have referred to the said passage, for the Control
Order was brought into force for maintenance of supplies
and for securing the equitable distribution and availability
of kerosene at fair prices in West Bengal. It has controlling
measures and it subserves the public purpose. The intent
of the Control Order is to totally prohibit creation of any
kind of situation which will frustrate the proper distribution
of kerosene oil. The purpose of any Act or Rule or Order
has its own sanctity. While interpreting the same, the text
and context have to be kept in mind. In this regard, we
may usefully refer to an authority in Workmen v.
Dimakuchi Tea Estate3
, wherein the three-Judge Bench
while interpreting the expression “any person” occurring in
Section 2(k) of the Industrial Disputes Act, 1947 observed
that the definition clause must be read in the context of the
subject matter and scheme of the Act, and consistently with
the objects and other provisions of the Act. Elaborating
3 AIR 1958 SC 353Page 22
22
further, the Court proceeded to state:-
“It is well settled that “the words of a statute,
when there is a doubt about their meaning are to
be understood in the sense in which they best
harmonise with the subject of the enactment and
the object which the legislature has in view. Their
meaning is found not so much in a strictly grammatical
or etymological propriety of language, nor
even in its popular use, as in the subject or in the
occasion on which they are used, and the object
to be attained”. (Maxwell, Interpretation of
Statutes, 9th Edn., p. 55).”
21. Keeping in view the aforesaid rule of interpretation, we
are constrained to think that it would be incongruous to
hold that even when the licence of an agent at the State
level is granted and issued by the Director, a District
Magistrate, as defined in paragraph 3(e) of the Control
Order, in exercise of concurrent jurisdiction can suspend or
cancel the State level licence. Be it noted, as per Section 21
of the General Clauses Act, power to issue notification/
order/rules/bye-laws, etc. includes the power to amend/
vary or rescind. Though the said provision is not applicable,
yet it is indicative that generally unless the statute or rule
provides to the contrary, either expressly or impliedly,
issuing or appointing authority would also exercise the right
to cancel or suspend the licence. As has been stated earlier,Page 23
23
on a cursory reading it may appear that paragraph 9
confers concurrent jurisdiction. The said paragraph deals
with suspension or cancellation of licence and is a
composite paragraph, which applies to licence granted to an
agent as well as the dealer. It refers to the power of a
Director and District Magistrate having jurisdiction. The
words “District Magistrate having jurisdiction” are also used
in paragraph 6. The expression “District Magistrate having
jurisdiction” reflects the legislative intent that District
Magistrate having jurisdiction under paragraph 9 would be
the same District Magistrate or authority which has the
power to grant licence to a dealer in Form B under
paragraph 6. Read in this manner, we have no hesitation in
holding that it is the Director alone who could have issued
the show cause notice under paragraph 9 and has the
authority and jurisdiction to pass an order in terms of
paragraph 9 of the Control Order. The earlier notice issued
by SCFS has to be regarded at best a show cause notice to
ascertain and affirm facts alleged and it ensured a response
and reply from the first respondent. The said notice by
SCFS could not have culminated in the order underPage 24
24
paragraph 9, for he has no authority and jurisdiction to
pass an order suspending or cancelling the licence.
Therefore, the matter was rightly referred to the Director for
action, if required, in terms of paragraph 9 of the Control
Order.
22. Having held that, we think it appropriate to refer to the
aspect of communication pertaining to period as prescribed
in paragraphs 9 and 10. The High Court has taken note of
the fact that SCFS had issued the notice of show cause to
which the agent had replied. The said authority has
forwarded the matter to the Director, Consumer Goods for
his perusal and necessary action, who in exercise of his
authority had passed the order on 22.7.2013 which was
received by the first respondent on 12.8.2013. The Division
Bench has opined that as per Paragraph 9, the order has to
be passed within 30 days after the issue of the notice to
show cause and same has to be communicated within the
said period and passing an order on the file would not
tantamount to an order.
23. The Division Bench, as it appears, has been guided by
the decision in Rani Sati Kerosene Supply Company andPage 25
25
Others (supra). In the said case the agent had challenged
the order of suspension-cum-show cause notice and the
order of cancelling the agency licence. The High Court had
taken note of the contention that assuming the Director had
jurisdiction, the order having been communicated beyond
30 days from the issue of the order of suspension, it was
liable to be set aside. After stating the facts, the earlier
Division Bench proceeded to interpret Paragraphs 9 and 10
of the Control Order and opined thus:-
“29. After going through the aforesaid two paragraphs,
I find that against an order of cancellation
of licence, there is a provision of appeal to be
availed of within 30 days from the date of the order.
There is, however, no power conferred upon
the appellate authority to entertain such appeal
after the period of limitation by condoning the delay.
If I accept the contention of Mr. Chakraborty,
the learned Counsel appearing for the State that
the date of communication of the order is insignificant,
in that case, the right of appeal conferred
upon the aggrieved agent against an order
of cancellation can easily be frustrated by communicating
the order after the expiry of 30 days
from the date of the order. Therefore the phrase
"by an order in writing to be made" appearing in
the proviso to the Paragraph 9 is to be construed
as "by an order in writing to be communicated"
and so long the order is not communicated, it
should be presumed that the order has not been
passed and consequently, a duty is cast upon the
authority concerned to communicate the order to
the aggrieved, either direct or constructively.Page 26
26
Mere passing of an order and keeping it in the file
will not fulfil the requirement of the said Paragraph
9.
30. Mr. Banerjee, the learned advocate appearing
for the petitioners, has in this connection placed
strong reliance upon a decision of the Supreme
Court in the case of Assistant Transport Commissioner,
Uttar Pradesh v. Nand Singh, [reported in
179 ELT (510) where the Apex Court while considering
Section 35 of the Central Excise and Salt
Act, 1944 held that the date of communication of
the order will be the starting point of limitation
for filing an appeal and not the date of the order,
because, the order would be effective against the
person affected by it only when it comes to the
knowledge either direct or constructively, otherwise
not. The Supreme Court further held that
mere writing of an order in the file, kept in the office
of the authorities, is no order in the eye of
law.
31. The aforesaid decision of the Supreme Court
supports the contention of the petitioners that
the order of cancellation, for all practical purposes,
should be deemed to have been passed on
January 30, 2004 when the same was faxed for
communication to the petitioners and served
upon them. Thus, the order of cancellation of licence
was, in the eye of law, passed beyond 30
days from the date of passing the order of suspension
and consequently, the order of suspension
had automatically ceased to have any effect
from January 10, 2004, and the order of cancellation
not having been passed in accordance with
law within 30 days from December 10, 2003, the
Director could not pass any such order beyond
that date. Thus, the order impugned is liable to
be quashed also on the aforesaid ground.”
The said judgment is the fulcrum of reasoning of thePage 27
27
impugned judgment.
24. The aforesaid decision, as is evident, lays down that
passing of the order and communication thereof must be
within 30 days and on that basis has opined that the order
passed on the file and not communicated to the person
aggrieved is not an order that can be taken cognizance of.
There can be no scintilla of doubt that unless an adverse
order is communicated that does not come into effect.
Passing of an order on the file does not become an order in
the eye of law. But the core question would be, if an order
is passed within 30 days and communicated thereafter,
what would be the effect. In the instant case, as the factual
matrix would unveil, the order was passed before expiration
of 30 days, but the same was served on the first respondent
beyond 30 days. The thrust of the matter is whether the
order has to be passed and communicated within 30 days.
Paragraph 9 of the Control Order requires the competent
authority to pass an order within 30 days from the date of
serving the show cause notice or the suspension of licence.
The word used is “shall”. Paragraph 10 of the Control Order
enables the aggrieved person to prefer an appeal against anPage 28
28
order passed under Paragraph 8 or 9 within 30 days to the
State Government in Food and Supplies Department. In
this context, reference to the authority in MCD v. Qimat
Rai Gupta and others4
is of significance. In the said case,
the Court was interpreting the word “made” occurring in
Section 126(4) of the Delhi Municipal Corporation Act,
1957, which stipulated that no amendment under
sub-section 1 shall be made in the assessment list in
relation to certain aspects. It was contended before this
Court on behalf of the Municipal Corporation of Delhi that
the use of the expression “made” occurring in the said
sub-section would necessitate communication of the order.
It was contended before this Court by the Corporation that
the distinction must be made between communication of
order and making thereof inasmuch as whereas
communication may be necessary so as to enable an
assessee to prefer an appeal against the order of assessment
but only signing of the order would subserve the purpose of
saving the period of limitation. The submission was that
the expression “no amendment under sub-section (1) shall
4
(2007) 7 SCC 309Page 29
29
be made” should be given a liberal interpretation. Reliance
was placed on the pronouncement in CCE v. M.M. Rubber
and Co.5
The said stand was controverted on the ground
that the Act having been enacted for the purpose of
controlling the abuse of power on the part of the
Commissioner, the same should be given purposive
meaning so as to fulfil the purport and object of the
legislation. While dealing with the period of limitation, the
Court observed:-
“16. In interpreting a provision dealing with limitation,
a liberal interpretation in a situation of
this nature should be given. Although an order
passed after expiry of the period of limitation
fixed under the statute would be a nullity, the
same would not mean that a principle of interpretation
applied thereto should not (sic) be such so
as to mean that not only an order is required to
be made but the same is also required to be communicated.
17. When an order is passed by a high ranking
authority appointed by the Central Government,
the law presumes that it would act bona fide.
Misuse of power in a situation of this nature, in
our opinion, should not be readily inferred. It is
difficult to comprehend that while fixing a period
of limitation, Parliament did not visualise the
possibility of abuse of power on the part of the
statutory authority. It advisedly chose the word
5
(1992) Supp. (1) SCC 471Page 30
30
“made” and not “communicated”. They, in ordinary
parlance, carry different meanings.”
25. After so stating, the Court proceeded to interpret the
term “made” and observed that meaning of a word depends
upon the text and context and it will also depend upon the
purport and object it seeks to achieve. The two-Judge
Bench referred to Surendra Singh v. State of U.P.6
,
Harish Chandra Raj Singh v. Dy. Land Acquisition
Officer7
and K.Bhaskaran v. Sankaran Vaidhya Balan8
.
The Court reproduced paragraphs 12 and 18 from M.M.
Rubber and Co. (supra). They read as follows:-
“12. It may be seen therefore, that, if an authority
is authorised to exercise a power or do an act affecting
the rights of parties, he shall exercise that
power within the period of limitation prescribed
therefor. The order or decision of such authority
comes into force or becomes operative or becomes
an effective order or decision on and from the
date when it is signed by him. The date of such
order or decision is the date on which the order
or decision was passed or made: that is to say
when he ceases to have any authority to tear it off
and draft a different order and when he ceases to
have any locus paetentiae. Normally that happens
when the order or decision is made public
or notified in some form or when it can be said to
have left his hand. The date of communication of
6 AIR 1954 SC 194
7 AIR 1961 SC 1500
8
(1999) 7 SCC 510Page 31
31
the order to the party whose rights are affected is
not the relevant date for purposes of determining
whether the power has been exercised within the
prescribed time.”
xxxxx xxxxx xxxxx
“18. Thus if the intention or design of the statutory
provision was to protect the interest of the
person adversely affected, by providing a remedy
against the order or decision any period of limitation
prescribed with reference to invoking such
remedy shall be read as commencing from the
date of communication of the order. But if it is a
limitation for a competent authority to make an
order the date of exercise of that power and in the
case of exercise of suo motu power over the subordinate
authorities’ orders, the date on which
such power was exercised by making an order are
the relevant dates for determining the limitation.
The ratio of this distinction may also be founded
on the principle that the Government is bound by
the proceedings of its officers but persons affected
are not concluded by the decision.”
Eventually, the Court came to hold thus:
“An order passed by a competent authority dismissing
a government servant from services requires
communication thereof as has been held
in State of Punjab v. Amar Singh Harika9
but an
order placing a government servant on suspension
does not require communication of that order.
(See State of Punjab v. Khemi Ram10.) What
is, therefore, necessary to be borne in mind is the
knowledge leading to the making of the order. An
order ordinarily would be presumed to have been
made when it is signed. Once it is signed and an
entry in that regard is made in the requisite reg-
9 AIR 1966 SC 1313
10 (1969) 3 SCC 28Page 32
32
ister kept and maintained in terms of the provisions
of a statute, the same cannot be changed or
altered. It, subject to the other provisions contained
in the Act, attains finality. Where, however,
communication of an order is a necessary
ingredient for bringing an end result to a status
or to provide a person an opportunity to take recourse
to law if he is aggrieved thereby, the order
is required to be communicated.”
26. We have referred to the aforesaid authority in extenso
as the Division Bench has in one line stated that the said
decision makes it clear that communication of an order is
necessary ingredient for bringing an end result to a status
or to provide a person an opportunity to take recourse to
law if he is aggrieved thereby, then the said order is
required to be communicated. To arrive at the said
conclusion, as has been stated earlier, the Division Bench
has found support from Rani Sati Kerosene Supply
Company and Others (supra) wherein it has been held that
if an order is communicated after 30 days, an order of
cancellation can easily be frustrated and, therefore, the
phrase by an order in writing to be made appearing in
proviso to Paragraph 9 of the Control Order is to be
construed as by an order in writing to be communicated.
27. The Division Bench has read the prescription of 30
days passing of an order in writing within 30 days from the
date of serving the show cause notice or suspension of
licence to be mandatory. To elaborate, if the order is not
passed within the said period, the authority cannot pass
any order or if it passes an order, it is a nullity. In this
context, we may fruitfully refer to a passage from G.P.
Singh’s book, as has been reproduced by the three-Judge
Bench in Kailash v. Nankhu and others11. It reads as
under:-
“Justice G.P. Singh notes in his celebrated work
Principles of Statutory Interpretation (9th Edn.,
2004) while dealing with mandatory and directory
provisions:
“The study of numerous cases on this topic
does not lead to formulation of any universal
rule except this that language alone most often
is not decisive, and regard must be had to the
context, subject-matter and object of the statutory
provision in question, in determining
whether the same is mandatory or directory. In
an oft-quoted passage Lord Campbell said: ‘No
universal rule can be laid down as to whether
mandatory enactments shall be considered directory
only or obligatory with an implied nullification
for disobedience. It is the duty of
courts of justice to try to get at the real intention
of the legislature by carefully attending to
11 (2005) 4 SCC 480Page 34
34
the whole scope of the statute to be considered.’
” (p. 338)
“ ‘For ascertaining the real intention of the
legislature’, points out Subbarao, J. ‘the court
may consider inter alia, the nature and design
of the statute, and the consequences which
would follow from construing it the one way or
the other; the impact of other provisions
whereby the necessity of complying with the
provisions in question is avoided; the circumstances,
namely, that the statute provides for a
contingency of the non-compliance with the
provisions; the fact that the non-compliance
with the provisions is or is not visited by some
penalty; the serious or the trivial consequences,
that flow therefrom; and above all,
whether the object of the legislation will be defeated
or furthered’. If object of the enactment
will be defeated by holding the same directory,
it will be construed as mandatory, whereas if
by holding it mandatory serious general inconvenience
will be created to innocent persons
without very much furthering the object of enactment,
the same will be construed as directory.”
(pp. 339-40)”
28. Keeping in view the aforesaid principles, if it is held
that the order would become a nullity, it really does not
serve the purpose of the Control Order. On the contrary, it
frustrates it and, therefore, the interpretation placed by the
High Court on Paragraph 9 in juxtaposition with Paragraph
10 to treat the order has null and void is neither correct nor
sound. It is desirable that the authority shall pass an order
within 30 days from the date of show cause. Be it noted
that there are two contingencies when the show cause is
issued for violation or when an order of suspension is
passed. There can be no trace of doubt that the order will
take effect from the date when it is served. The order,
unless it is served, definitely neither the agent nor the
dealer would suspend its activities or obey any order, for he
has not been communicated. Regard being had to this
aspect, it is to be seen whether the prescription of 30 days
from the date of order as provided in Paragraph 10 would
make the order null and void. The order passed by the
authority comes into effect when it is communicated. An
order passed in file in case of this nature would not be an
effective order, for it is adverse to the interest of the dealer
or agent and, therefore, paragraph 10 has to be given a
purposive meaning. It has to convey that 30 days from the
date of the order which is an effective order, and that is the
date of communication. Unless such an interpretation is
placed, the intention of the rule making authority and also
the intention behind the object and reasons behind the
Control Order and the Essential Commodities Act, 1955
would be frustrated. Thus, we are of the considered
opinion that the view expressed by the High Court on this
score also is absolutely incorrect and wholly unsustainable.
29. Apart from above, the words used in Paragraph 10 are
“date of the order”. In the scheme of the Control Order, the
order comes into effect from the date of receipt by the agent
or the dealer. Once that becomes the decision, the
commencement of limitation of 30 days for the purpose of
Paragraph 10 would be the date when the order is effective.
The High Court in Rani Sati Kerosene Supply Company
and Others (supra) has opined that if the order of
cancellation is not served on the affected person and the
appeal period expires, there is the possibility that the
adverse order would become unassailable. The reasoning is
totally fallacious. An appeal can only be preferred when the
order is effective. The ineffective order, that is to say,
uncommunicated order cannot be challenged. Therefore,
the reasoning given by the court in earlier judgment is
erroneous and hence, the reliance thereupon by the
impugned order is faulty. There has to be a purposive
construction of the words “from the date of order”. To place
a construction that the date of an order would mean
passing of the order, though not made effective would lead
to an absurdity.
30. In view of the aforesaid analysis, we arrive at the
irresistible conclusion that the High Court has erroneously
interpreted Paragraph 9 and 10 of the Control Order and
that is why it has arrived at an erroneous conclusion.
When we had reserved the judgment, we were apprised that
a fresh show cause notice had been issued for the self-same
allegation by the SCFS and an appeal has been preferred
against them. As we have held, the Director alone has the
jurisdiction to pass the order, the said order remains a valid
order and can be challenged in an appeal under Paragraph
10 and the appellate authority would be the State
Government.
31. Consequently, the appeal is allowed and the order
passed by the Division Bench in AST No. 177/2013 is set
aside and the respondent no.1 is granted liberty to prefer an
appeal within the prescribed period before the State
Government. Be it noted, the Control Order has been
amended in 2014 whereby the period of limitation has beenPage 38
38
extended. Be that as it may, we direct that the period of
limitation shall commence from today. There shall be no
order as to costs.
.............................J.
[Dipak Misra]
............................J.
[Prafulla C. Pant]
New Delhi
September 04, 2015
No comments:
Post a Comment