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PETITIONER: GORAKHNATH

       Vs.

RESPONDENT: STATE OF UTTAR PRADESH & ORS.

DATE OF JUDGMENT:       11/10/1996

BENCH: B.P. JEEVAN REDDY, SUHAS C. SEN

ACT:

HEADNOTE:

JUDGMENT:                       J U D G M E N T      B.P. JEEVAN REDDY, J.      Leave granted.      The dispute  pertains to  the grant of FL-16 license in respect of  the area  Kachchi Sarai,  Dal Mandi,  Sector-II, Varanasi. Only one license is sanctioned for the said area.      Prior to  1961, the  license stood in the name of Mohd. Abdul Hamid,  brother of  Mohd. Khalil  -  fifth  respondent herein. In  that year, the name of fifth respondent was also added. Abdul  Hamid died  in March  1979.  Accordingly,  the license for  the excise year 1979-80 was renewed in the name of fifth  respondent alone.  On May 24, 1980, the license in favour of  fifth respondent  was cancelled  and a  temporary license was  issued to  One R.S.  Tiwari.  Fifth  respondent complained against  the same and took several proceedings in that behalf.  Ultimately, he  filed a  writ petition  in the Allahabad High  Court [Writ  Petition (C) No. 15434 of 1981] which was  allowed on  August 29, 1986. Pursuant to the said order, the  license in  favour of  the fifth  respondent was renewed and   continued to be renewed till and including the excise year 1991-92.      For the  excise  year  1992-93,  the  fifth  respondent applied for  renewal in  the usual  course. Thereon, a query was  raised  by  the  District  Excise  Officer  as  to  the circumstances in  which license  was granted  to  the  fifth respondent in 1984 and later. The fifth respondent furnished his explanation  to the said query but no orders were passed in the  matter. While  so, Sri  Surender Tripathi  filed  an application  dated   June  4,  Surender  Tripathi  filed  an application dated  June 4,  1993 requesting  for grant  of a temporary FL-16  license in  the name  of his  wife,  Shanti Devi. On  the said  application,   a report was submitted by the officer  that while the fifth respondent had not applied for renewal  of license  for the  year 1993-94,  he  is  yet running the  business on  the basis  of a temporary license. [This  fact   is  taken  from  the  order  of  the  District Magistrate dated May 20, 1994]. On this report, the District Excise Officer, Varanasi, cancelled the license in favour of the fifth  respondent with  the   result that the license in respect of  the said  shop was  deemed  to  be  vacant.    A

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notification was  issued on  October 16,  1993  calling  for applications for  the grant of a regular license  in respect of the  said shop.  Eleven persons  including the  appellant therein,  Sri Gorakhnath applied. The license was granted to Gorakhnath -  against which  the fifth respondent again took proceedings before  the excise authorities. On May 20, 1994, the  District   Magistrate,  Varanasi   accepted  the  fifth respondent’s case and directed the renewal of FL-16 license, for the  year 1994-95,  in his  favour  under  an  elaborate order. In  this order,   the District Magistrate set out the history relating  to the grant and the subsequent litigation concerning the said license found that litigation concerning the said  license and   found that the cancellation of fifth respondent’s license  by the  District Excise Officer by his order dated  July 3,  1993 was  incompetent   in law and not warranted  on  facts.  The  appellant  preferred  an  appeal against the  order of  the   District Magistrate  which  was dismissed by  the Additional Excise Commissioner. A revision filed before  the Government  was also dismissed,  whereupon he approached  the Allahabad  High Court  by way  of a  Writ Petition (C) No. 707 of 1995.      Writ Petition (C) No. 707 of 1985 has been dismissed by the  High   Court  under  the  order  impugned  herein.  The reasoning of  the High   Court  is : once it is rightly held that the  order of  cancellation [of  the fifth respondent’s license] dated  July 3,  1993 is competent and erroneous, it must follow  that there  was no  vacancy in  the license and hence, calling for applications for grant of license and the consequential grant of license in favour of the appellant is incompetent in  law. The High Court rejected the appellant’s plea that cancellation of his license without hearing him is illegal  being   violative  of  the  principles  of  natural justice.  It   opined  that   the  license  granted  to  the appellant, even if described as permanent, has to be treated as an  interim or  temporary arrangement    subject  to  the claims of  the fifth  respondent and that once the latter is held entitled to renewal of license, the appellant’s license is liable  to come  to an  end.  The    High  Court  further observed that  the cancellation  of appellant’s  license was not on  account of  any fault  of his  but only  because the license  of fifth respondent was restored to him. In view of the  further fact that the appellant has availed  the remedy of appeal  and revision  wherein he  had full opportunity of putting  forward   his  case,   there  are  no  grounds  for exercising the discretionary and extra-ordinary power of the High Court  under Article  226 of the Constitution in favour of the appellant, said the High Court.      Sri S.K.  Dhaon,  learned    senior  Advocate  for  the appellant, assailed  the order  of the  High Court  on   the following grounds; (a) on July 3, 1993, fifth respondent had no license at all, hence there  is no question of cancelling his license. Once, it is held that there was no cancellation of fifth  respondent’s license,  the reasoning  of  the High Court that  grant of  license   to the  appellant  -  though described as  permanent -  must be  deemed to be a temporary arrangement becomes  unsustainable; (b) the fifth respondent had not  even applied  for renewal  of license  for the year 1993-94, hence  there could  be no  question of  renewal  or grant of  license in  his favour and (c) the license granted to the appellant was a permanent/regular license which could be cancelled only on any of the grounds specified in Section 34 of  the U.P.  Excise Act  and admittedly none of the said grounds were  present in  this  case  nor  was  the  license cancelled with  notice to  the appellant.  The  order  being violative of principles of natural justice is void.

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    It is  not possible  to agree  with any  of  the  above contentions. The order dated July 3, 1993 expressly purports to cancel  the license  of the  fifth respondent.  As stated supra, on  that date,  the fifth  respondent was  holding  a temporary license.  It was  that license that was cancelled. The order  of the  District Magistrate  dated May  20,  1994 clearly  mentions   that  fifth   respondent  was  having  a temporary license  on that  date. Once  this so,  the  first ground of  attack fails  being premised  upon  an  incorrect factual assumption.  The second ground also fails in view of that fact;  if the fifth respondent was holding a license on July 3,  1993, there is no substance in the argument that he did not apply for renewal of the license for 1993-94.      Coming to  the third  ground of  Sri Dhaon, it would be seen  that   the  respondent   was  agitating   against  the cancellation of  his license  [by order  dated July 3, 1993] throughout. It  was   during the pendency of the proceedings taken by  him that  a notification  was issued   calling for applications for  a fresh  grant and  license was granted to the appellant. The said exercise was on the supposition that by virtue  of the  cancellation of  the  fifth  respondent’s license, a  vacancy has arisen. Once the said supposition is not true - in the sense that the said cancellation was found to be  illegal -  the grant of license to the appellant must be deemed  to be provisional and a temporary arrangement, as rightly held  by the  High Court,  notwithstanding the  fact that it   may  have been  described as  a permanent license. Once the fifth respondent’s license is restored, the license granted to  the appellant  comes to  an end  by operation of law. It  is not  really  a case of "cancellation" within the meaning of  Section 34 of the U.P. Excise Act. No notice was also necessary to be given to the appellant.      The appeal accordingly fails and is dismissed. no costs.