Back
1979 Supreme(Pat) 97
PATNA HIGH COURT
Nagendra Prasad Singh and P.S.Sahay JJ.
Yadunandan Prasad
Versus
State Of Bihar
Civil Writ Jurisdiction Case No. 5350 of 1978 ;
Decided On : APRIL 17, 1979
The rejection of an application for renewal of a license without providing any reason or an opportunity to show cause violates the principle of natural justice.
Headnote:
ARMS ACT - SECTION 3, 13, 14, 15 - RENEWAL OF LICENCE - REJECTION OF APPLICATION - OPPORTUNITY OF HEARING - PRINCIPLE OF NATURAL JUSTICE - CANCELLATION OF LICENCE - STIGMA - PUNITIVE ORDER - SHOW CAUSE NOTICE.
Fact of the Case:
The petitioner, an arms dealer, applied for the renewal of his licenses under Forms XI and XII, which were rejected by the State Government without providing any reason or an opportunity to show cause. The petitioner challenged the order, arguing that it violated the principle of natural justice.
Finding of the Court:
The court held that the rejection of the application for renewal of the license was punitive in nature and that the petitioner should have been given an opportunity to show cause before the impugned order was passed. The court also held that the cancellation of the licenses amounted to a stigma, even if it was used in respect of a license that had spent its force.
Issues: 1. Whether the rejection of the application for renewal of the license without providing any reason or an opportunity to show cause violated the principle of natural justice? 2. Whether the cancellation of the licenses amounted to a stigma?
Ratio Decidendi: 1. The court relied on Section 15(3) of the Arms Act, which provides that every license shall be renewable for the same period for which the license was originally granted unless the licensing authority for reasons to be recorded in writing otherwise decides in any case. The court held that this provision requires the licensing authority to give reasons for rejecting an application for renewal and to provide the applicant with an opportunity to show cause before doing so. 2. The court held that the cancellation of the licenses amounted to a stigma, even if it was used in respect of a license that had spent its force. The court reasoned that the cancellation of a license could have a negative impact on the petitioner's reputation and could make it difficult for him to obtain a license in the future.
Final Decision: The court allowed the writ application and quashed the order of the State Government rejecting the application for renewal of the licenses and cancelling the licenses. The court directed the licensing authority to give notice to the petitioner making him to show cause as to why the application for renewal be not rejected, and, thereafter, pass an order in accordance with law.
Nagendra Prasad Singh, J.
1. -the petitioner in this writ application has made a prayer to quash an order of the State Government rejecting the application for renewal of the licences under the Arms Act (hereinafter referred to as the Act)and cancelling the licences which had been granted to the petitioner, which was communicated to the petitioner under letter dated 24-11-1978 by the under-Secretary to the State Government (respondent No.2 ). A copy of that communication is annexure I to the writ application.
2. According to the petitioner, he is an arms dealer and was holding licences under Forms XI and -XII being licence nos.4/1967 and 6/1975, respectively, issued to him in accordance with the provisions of the said Act. After the expiry of the period for which the licences had been granted, the petitioner made an application for renewal thereof, and that application as already stated above, was rejected by the State Government. According to the petitioner, the said order has been passed against the principle of natural justice because neither any reason has been mentioned in the order nor the petitioner was given any opportunity to show cause.
3. Section 3 of the Act provides that no person shall acquire, have in his possession, or carry any fire-arm or ammunition unless he holds licence issued in accordance with the Act and Rules made thereunder. Sec.13 contains as to how a licence is to be granted by the licensing authority. Sec.14 vests power in the licensing authority to refuse licence to an applicant. Sub-section (3) of section 14 is as follows :-
"where the licensing authority refuses to grant a licence to any person it shall record in writing the reasons for such refusal and furnish to that person on demand a brief statement of the same unless in any case the licensing authority is of the opinion that it furnish statement".
Sec.15 makes provision regarding the renewal of licence, which is as follows:-
" (1) A licence under section 3 shall, unless revoked earlier, continue in force for a period of three years from the date on which it is granted : provided that such alience may be granted for a shorter period if the person by whom the licence is required so desires or if the licensing authority for reasons to be recorded in writing considers in any case that the licence should be granted for a shorter period.
(2) A licence under any other provision of Chapter II shall, unless revoked earlier, continue in force for such period from the date on which it is granted as the licensing authority may in each case determine.
(3) Every licence shall, unless the licensing authority for reasons to be recorded in writing otherwise decides in any case, be renewable for the same period for which the licence was originally granted and shall be so renewable from time to time, and the provisions of section 13 and 14 shall apply to the renewal of a licence as they apply to the grant thereof. In view of sub section (3) of Sec.15, every licence shall be renewable for the same period for which the licence was originally granted and shall be so renewable from time to time "unless the licensing authority for reasons to be recorded in writing otherwise decides in any case. " On the basis of this subsection it was submitted that once a licence is granted in accordance with the provisions of the Act and the Rules framed thereunder, it shall be renewable for the same period from time to time unless the licensing authority is of opinion that any particular licence in the facts and circumstance of any particular case should not be renewed ; in other words, if a licensee by his conduct or any disqualification which has come to the notice of the licensing authority, forfeits that right. If it is held that once the licence is granted, the renewal is a matter of course and rejection of the application for renewal is to be made only when the licensing authority is satisfied that the licensee has forfeited the right of renewal, then the principl
