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1972 Supreme(Pat) 139

PATNA HIGH COURT
S.N.P. SINGH, A.N. MUKHERJEE JJ.
M/s. Gauri Shankar, Badri Narain - Petitioner
v.
The State of Bihar and others - Respondent
Cr. W.J.C. No. 68 of 1972
Decided on : 9th August, 1972

Advocates appeared:
For the petitioners: Messrs Basudeva Prasad, Hari Lal Agarwal and Anand Sankar Sinha.
For the respondents: Mr. Udai Sinha,

Headnote:Constitution of India- Art 19(1) g-Clause 8 (2) Bihar Motor Spirit and High Speed Diesel Oil Dealer's Licensing Order 1966-whether ultra vires.

       Clause 8 (2) of the order gave power to the State Govt. to suspend or cancel any license issued under the order without issuing any previous notice and without assigning any reason.

       Held that the power conferred under the order amounted to unreasonable restriction on trade and is in violation of Art 19 (1) g of the Constitution of India. Para 6

       Bihar Motor Spirit and High Speed Deisel Oil Dealers Licensing Order 1966-Clause 8 (2)-Whether amounts to unreasonable restriction.

       Held that the provisions of clause 8(2) constitutes unreasonable restriction upon the right of a dealer to carryon trade or business. Para 6

S.N.P. SINGH, J.

Messrs Gouri Shankar, Badri Narain (Petitioner No.1) is a registered partnership firm having its business at Sakri, police station Manigachi, in the district of Darbhanga. Petitioners 2 to 6 are the partners of the said firm. Petitioner no. 7 is the son of petitioner no. 2. Petitioner No.1 is a licensee of kerosene and petrol under the Bihar Motor Spirit and High Speed Diesel Oil Dealer's Licensing Order, 1966, herein after to be called" "the Order".

2. In this writ application under Articles 226 and 227 of the Constitution the petitioners have challenged the constitutional validity of clause 8 (2) of the order. The petitioners have further made a prayer for quashing the order of the State Government suspending the licence of petitioner no. 1 which was issued under the order. A copy of the order of the State Government has been made Annexure 4' to the writ application.

3. The material facts for the disposal of this application may briefly be stated as follows. On the 9th of September, 1971, the District Supply Officer of Darbhanga along with the Marketing Officer made an inspection of the business premises of the petitioner firm. At the time of inspection Chatarbhuj Prasad Ladia (respondent no.7) was present. The District Supply Officer in course of the inspection found petrol and H.S.D. stored in two separate tanks. He also found eight drums containing petrol mixed with H.S.D. After taking sample from the drums he seized these drums containing petrol mixed with H.S.D. and prepared a seizure list. It is alleged that the District Supply Officer on verification found shortage in the stock of petrol and H.S.D. and also detected some irregularities in the accounts. By Memo No. 2007/SC, dated the 8th October, 1971, a copy whereof has been Annexure "1" to the writ application, the District Supply Officer issued a notice to petitioner No.1 to show cause why its licence for dealing in petrol and H.S.D. should not be cancelled and other legal action taken against it for committing the various irregularities and thereby contravening the conditions of the licence issued under the order. In that show cause notice seven irregularities were mentioned. As stated in paragraph 7 of the writ application, cause was shown by the petitioner explaining all the irregularities. It appears that subsequently complaint was filed by the Marketing Officer Darbhanga, against petitioners 2 to 7 under section 7 of the Essential Commodities Act 1955 (Act 10 of 1955) and under section 417 and 420 of the Indian Penal Code. The learned Sub-divisional Magistrate by his order dated the 6th of January, 1972, took cognizance under section 7 of the Essential Commodities Act, hereinafter to be called "the Act".

4. On the 19th of January, 1972, the District Magistrate of Darbhanga gave a personal hearing to the petitioner on the question of cancellation of licence. The petitioners gave the explanation that due to mistake the petrol was mixed with H.S.D. and in support of that explanation they produced certain correspondence with M/s Burmah Shell & Co. The petitioners further made a prayer that the licence should not be cancelled till the disposal of the criminal case. The District Magistrate in his order dated the 2nd of February, 1972, a copy whereof has been made Annexure "2" to the writ application, expressed the view that it would be possible to say whether the petitioners are guilty or not only after the final decision of the criminal case. Since a direction of the State Government for cancelling the licence of petitioner no.1 had been received by the District Magistrate, a letter dated the 8th of February, 1972, was sent by him to the State Government recommending not to cancel the licence of petitioner no. 1 till the final decision of the criminal case. A copy of that letter had been made Annexure 3' to the writ application. The State Government, however, purporting to exercise powers under clause 8 (2) of the Order, suspended the licence of petitio










































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