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1971 Supreme(Gau) 31
GAUHATI HIGH COURT
P.K.Goswami, M.C.Pathak, JJ.
Purshottam Bahel -Appellant
Versus
A.C.Baruah -Respondent
Civil Rule No. 86 of 1971
Decided On : 07-05-1971
Padma Prasad, P.G.Barua, A.R.Barthakur
A statutory authority exercising a statutory power affecting the right of a citizen to carry on trade or business must observe the principles of natural justice, even if the order is administrative in character.
Headnote:
MUNICIPAL LAW - LICENSE RENEWAL - PRINCIPLES OF NATURAL JUSTICE - DUTY TO GIVE OPPORTUNITY OF SHOWING CAUSE - ASSAM MUNICIPAL ACT, 1956 (ASSAM ACT XV OF 1957), SECTIONS 229, 234.
Fact of the Case:
The petitioner, who ran a hotel and restaurant, applied for renewal of his license under Section 229 of the Assam Municipal Act, 1956. The Board refused to renew the license and directed the petitioner to close down his business, alleging that he had violated the conditions of the license by selling liquor on the premises. The petitioner challenged the Board's decision, arguing that he had not been given an opportunity to show cause against the allegations.
Finding of the Court:
The court held that the Board was required to follow the principles of natural justice before refusing to renew the license. The court found that the Board had not given the petitioner any notice or opportunity to respond to the allegations against him, and that this violated the principles of natural justice.
Issues: Whether the Board was required to follow the principles of natural justice before refusing to renew the license.
Ratio Decidendi: The court held that the Board was required to follow the principles of natural justice before refusing to renew the license because the decision had civil consequences for the petitioner. The court noted that the Board's decision would result in the petitioner being forced to close down his business, and that this would have a significant impact on his livelihood.
Final Decision: The court quashed the Board's decision and directed the Board to reconsider the petitioner's application for renewal of his license in accordance with the principles of natural justice.
2. The petitioner's case is as follows: The petitioner opened a restaurant in 1967 under a valid license No. 172 dated 4-12-67 for the year 1967-68 issued by the Jorhat Municipal Board (hereinafter referred to as the Board) and his license was renewed till 1969. He applied for the renewal of his license on 15-4-69 for the year 1969-70. By his letter No. 5049 dated 19-12-69 the Chairman of the Municipal Board relying on some report of the Excise Superintendent held that the petitioner violated an express condition of the license, namely, not to sell or allow use of liquor in the hotel and directed the petitioner to close down his hotel and restaurant within seven days. The said letter of the Chairman of the Municipal Board is at Annexure I to the petition. On 26-12-69 the petitioner submitted another application praying for reconsideration of the decision of the Board. In his application he denied to have ever violated any of the conditions of the license or that the Excise Inspector had seized any liquor from his hotel premises. It was further stated that the Excise Inspector's allegation of seizure of liquor from the hotel premises of • the petitioner was sub judice and it should not be accepted as correct.
By letter No. 112 dated 9th April 1970 the Chairman of the Municipal Board informed the petitioner that the Board had decided to stand by its previous decision communicated under letter No. 5049 dated 19-12-69 and directed the petitioner to close down his hotel and restaurant with immediate effect, failing which, necessary action would be taken. A copy of the said letter is Annexure II to the petition. 'Against this order of the Board the petitioner preferred an appeal before the Commissioner of Plains Division under Section 296 of the Assam Municipal Act 1956 (Assam Act XV of 19571 (hereinafter called 'the Act'). The appeal was rejected by the Commissioner of Plains Division by his order dated 11th January 1971. Hence this writ petition for quashing the aforesaid orders of the Commissioner and the Board.
3. In his petition the petitioner has stated that he preferred an appeal under S. 296 of the Act before the Commissioner of Plains Division from the Board's order dated 9th April 1970 refusing renewal of the license. Such an appeal however lies not under Sec. 296 but under Section 322 of the Act. As no objection was raised, it is presumed that the Commissioner was authorised by the State Government to entertain appeal under Section 322 of the Act.
4. Mr. A. R. Barthakur, the learned counsel for the petitioner submits that the Chairman or the Board in refusing to renew the license acted illegally and in violation of the principles of natural justice and therefore the impugned orders of the Board and the Commissioner are liable to be quashed.
5. Relevant provisions of Section 229 of the Act may be auoted here:-•
"229. (1) Within such local limits as may be fixed by the Board at a meeting, no place shall be used without license from the Board which shall be renewable annually, for any of the following purposes, namely:-
(1) tea stall:
(m) sweetmeet stall;
(n1 hotel or eating house:
(2) Such license shall not be withheld unless the Board has reason to believe that the business which it is intended to establish or maintain would be offensive or dangerous to persons residing, in or frequenting the neighbourhood.
(3) ******
(4) ***** *».
6. From the original license in the record it is found that the petitioner's license was issu
