IMPORTANT POINT
The U.P. State Govt. or Licencing Authority cannot issue direction for refusal of renewal of licences granted to petty dealers under clause 16(6) or in levy under provision of the U.P. High Speed Diesel Oil and Light Diesel Oil (Maintenance of Supplies and Distribution) Order 1981 if their places of business are within a radius of five kilometres of retail outlet run by a Government Oil Company.The High Court rightly set aside such executive order.

Headnote:(i) U.P. High Speed Diesel Oil and Light Diesel Oil (Maintenance of Supplies and Distribution) Order, 1981-Clauses 2(d), 2(h), 4 and 8 read with Forms B and C-Whether the District Supply Officer could refuse to renew the licence granted under the statutory Order of 1981, if the licencee s place of business falls or situated within a radius of 5 Kms. of the retail outlet of a Government run Oil Company? (No)-(Essential Commodities Act, 1955-Sections 3 and 5).
       Held : It is, therefore, manifest from the provisions of the Statutory Order that in so far as conditions of grant of licence for sale of Diesel Oil and its renewal are concerned, the Statutory Order is a complete code in itself and there is no provision in the Statutory Order under which a Licensing Authority could refuse to renew a licence if licensee s place of business falls within a radius of 5 kms. of a government run retail outlet. (Para 12)
       (ii) U.P. High Speed Diesel Oil and Light Diesel Oil (Maintenance of Supplies and Distribution) Order, 1981-Clause 16(6)-Whether State Government or licencing Authority under Clause 16(6) issue an order or direction refusing to renew a licence if licencee s place of business falls within a radius of 5 Kms. of a Government run retail outlet? (No)-Government issuing such direction-High Court setting it aside in writ petition-Appeals against -Whether High Court is right? (Yes)-Result-Appeals dismissed-(Constitution of India)-Articles 19(1) (g) r/w 19(6), 226 and 136).
       Held : There are two restrictions on the power of the State Government or a Licensing Authority while issuing a general or special direction - firstly, such a direction should not be inconsistent with the Statutory Order and secondly, such direction can be issued only for purposes of giving effect to the provisions of the Statutory Order. In that view of the matter any direction issued under sub clause (6) of Clause 16 must show that it complies with the description of delegation of power to issue directions. (Para 14)
       Held further : It must be remembered that the power to issue directions is derived from sub-clause (6) of Clause 16 of the Statutory Order and a delegatee on whom such a power is conferred is required to act within the framework of the authority conferred by the Statutory Order. Since the direction issued by the Licensing Authority that the licence of the respondent shall not be renewed on the premise that his place of business falls within a radius of 5 kms. of retail outlet of a government run oil company being not in conformity with the provisions of the Statutory Order, it must be held to be inconsistent to the provisions of the Statutory Order. (Para 15)
       Held also : The State Government or the Licensing Authority while giving effect to the provisions of the Statutory Order is not authorised to amend the Statutory Order by issuing directions. Once the enabling provisions restrict the power of issuing direction only for giving effect to the provisions of the Statutory Order, the nature and extent of direction which the State government or any authority specified therein are empowered to issue is confined to the area which is marked out by the Statutory Order. In the present case what we find is that the Licensing Authority while issuing the direction that the respondent s licence shall not be renewed on the premise that his place of business falls within a radius of 5 kms. of a retail outlet of government run oil company has, in fact, purported to amend the conditions of renewal of licence granted under the Statutory Order which was not permissible under sub-clause (6) of Clause 16 of the Statutory Order. (Para 16)
       Held consequently : We have already noticed that the provisions of the Statutory Order do not provide for refusal to renew a licence granted under the Statutory Order, if the place of business of a licensee falls within a radius of 5 kms. of a government run retail outlet. Further, the Statutory Order neither expressly nor by necessary implications prohibit the grant of licence to a person or refusal to renew such a licence if the place of business of such licensee falls within the radius of 5 kms. of a government run retail outlet. In that view of the matter, the direction/order issued by the Licensing Authority refusing to renew the licence of the respondent was inconsistent with the provisions of the Statutory Order inasmuch as the same was not for purposes for giving effect to the Statutory Order and, therefore, such a direction/order could not have given effect to, while considering the renewal of licence of the respondent herein. (Para 17)
       Held finally : For the aforesaid reasons, we are in agreement with the view taken by the High Court. Consequently, we do not find any merit in these appeals and the special leave petitions which are, accordingly, dismissed. There shall be no order as to costs. (Para 18)

JUDGMENT

V.N. Khare, J.-Leave granted in SLP (C) Nos. 472/2002, 473/2002, 13106/ 2001 and 2908/2002.

2. The short question which falls for our consideration in this group of appeals is whether the State Government or the Licensing Authority can issue direction for refusal of renewal of licences granted to petty dealers under the U.P. High Speed Diesel Oil and Light Diesel Oil (Maintenance of Supplies and Distribution) Order, 1981 hereinafter referred to as the ( Statutory Order ) if their places of business are within a radius of five kilometers of retail outlet run by a government oil company.

3. Since common question of fact and law is involved in this group of appeals, learned counsel for the parties have advanced arguments in Special Leave Petition (C) No. 472/2002. Therefore, we propose to notice the facts which have given rise to Civil Appeal No. 2339/2002 (arising out of SLP (C) No. 472/2002.

4. Earlier, the sale of Light Diesel Oil and High Speed Diesel Oil in the State of U.P. was governed by an Act known as U.P. Motor Spirit, Diesel Oil and Alcohol (Imposition of Tax) Act, 1939 enacted by provincial legislature of the then united provinces. Subsequently, the Parliament enacted the Essential Commodities Act, 1955 (hereinafter referred to as the Act ) with a view to provide, in the interest of general public, for the control of the production, supply and distribution of, and trade and commerce, in certain commodities. It is not disputed that the sale of High Speed Diesel Oil and Light Diesel Oil is one of the essential commodities which is governed by the Act. Section 3 of the Act provides that if the Central Government is of the opinion that it is necessary or expedient so to do for maintaining or increasing supplies of any essential commodity or for securing their equitable distribution and availability at fair prices, it may, for order, provide for regulating or prohibiting the production, supply and distribution thereof and trade and commerce therein. Sub-section (2) thereof provides that without prejudice to the generality of the powers conferred by sub-section (1), an order amongst other things, may provide for regulating by licences, permits or otherwise the storage, transport, distribution, disposal or consumption of any essential commodity. Section 5 of the Act provides that the Central government may, by notified order, direct that the power to make orders or issue notifications under Section 3 shall, in relation to such matters and subject to such conditions, if any, as may be specified in the direction, be exercisable by a State government or any officer or such authorities subordinate to the State government, as may be specified in the direction.

5. After passing of the Act, the government of U.P. felt that in the absence of retail outlets for sale of Diesel Oil in rural areas, the consumers, specially the farmers have to face considerable hardship in carrying out their agricultural operations and, therefore, it took decision to grant licences to petty dealers in rural areas to sell Diesel Oil. It is in the aforesaid background, the State government of U.P. framed the Statutory Order, in exercise of power delegated to it under the Act.

6. The respondent herein was granted a licence for sale of Diesel Oil under the Statutory Order. The said licence was being renewed from time to time. On 25.11.1981, the government of U.P. by an executive order directed that no license for retail sale of Diesel Oil granted under the Statutory Order shall be renewed if the place of business of such licensee falls within a radius of 5 kms. of the government run retail outlets. The said executive order dated 25.11.1981 was challenged by means of writ petitions before the High Court of Judicature at Allahabad. It is alleged that by a judgment and order dated 14.5.1989, the High Court allowed the writ petition, inter alia, holding that the impugned executive order dated 25.11.1981 placed an unreasonable restriction on the fundamenta

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