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THE HIGH COURT OF GAUHATI (HIGH COURT OF ASSAM, NAGALAND, MIZORAM AND ARUNACHAL PRADESH
MANISH CHOUDHURY, J
M/s Car Servicing Center And Anr - Appellant
Versus
The Gauhati Municipal Corporation And 3 Ors - Respondent
WP(C) 190 / 2025
Decided On : 24-01-2025
(A) Gauhati Municipal Corporation Act, 1971 - Section 378(3) - Natural justice - Cancellation of trade licence without prior notice or opportunity to be heard - The petitioners were running a car washing business and had their trade licence cancelled by GMC authorities without following due process, violating natural justice principles. (Paras 5 , 8 , 11 , 14 )
(B) Principles of natural justice - The court emphasized that before cancelling a trade licence, reasonable opportunity must be afforded to the grantee to show cause against such action. (Paras 12 , 13 )
Facts of the case:
The petitioners were tenants operating a car washing center and had their trade licence cancelled without notice, following which their business premises were sealed.
Findings of Court:
The court found that the cancellation of the trade licence was not sustainable due to the violation of statutory provisions and principles of natural justice.
Issues: The main issues were whether the petitioners were afforded a fair opportunity before the cancellation of their trade licence and the legality of the GMC's actions.
Ratio Decidendi: The court ruled that the cancellation was invalid as it violated the statutory requirement of providing a notice and opportunity to be heard prior to such action.
Result: The writ petition is allowed, and the cancellation of the trade licence is set aside.
JUDGMENT :
MANISH CHOUDHURY, J.
Heard Mr. S.P. Roy, learned counsel for the petitioners and Mr. S. Bora, learned Standing Counsel, Gauhati Municipal Corporation [GMC] for the respondent nos. 1, 2 & 3.
2. Mr. Roy, learned counsel for the petitioners has submitted that the name of the respondent no. 4 can be struck off from the array of respondents.
3. In view of the above submission made by Mr. Roy, the name of the respondent no. 4 is struck off at the cost and risk of the petitioners. The Registry to do the needful.
4. In view of the limited nature of challenge made in this writ petition on the ground of violation of principle of natural justice and the instructions received by Mr. Bora, learned Standing Counsel, GMC in deference to the Order dated 20.01.2025, this writ petition is taken up for consideration at the motion stage itself, as agreed to by the learned counsel for the parties.
5. The case projected by the petitioners, briefly, is that they were running a business of car washing center from an ekchalia Assam Type house by obtaining a trade licence from the respondent GMC. The petitioners were running the business from the said premise as tenants. It has been averred that the petitioners have been paying the monthly rental to the owner of the premise regularly. In order to run the said business, the petitioners obtained the trade licence under the provisions of the Gauhati Municipal Corporation Act, 1971 [‘the GMC Act, 1971’, for short] in the name and style of M/s Car Servicing Center [the petitioner no. 1] wherein the petitioner no. 2 is the sole proprietor. The trade licence bearing no. 1723190438360156 has been renewed from time to time and as per the last renewal, the trade licence has validity up to 31.03.2025.
6. Mr. Roy, learned counsel for the petitioners has submitted that there has been litigations between the petitioners on one side and the owner of the tenanted premises on the other side. A title suit, Title Suit no. 245/2024 has been instituted by the petitioners as the plaintiffs and the owners of the plot of land wherein the tenanted premises is located and wherefrom the petitioners were running the business in the name and style of M/s Car Servicing Center as the defendant on the other side and the said title suit is pending as on date.
7. The petitioners have approached this Court by this writ petition assailing action of the respondent GMC authorities in cancelling the trade licence issued in favour of the petitioners as the respondent GMC authorities by its Communication bearing no. GLS/WZ/96/2024-25/23 dated 18.12.2024 has intimated the petitioner no. 2 that the trade licence issued in the name and style of M/s Car Servicing Center [the petitioner no. 2] has been cancelled after approval of the Commissioner, GMC in File no. GEF/84/2024-25.
8. The primary ground of challenge to such cancellation of the trade licence is that the petitioners was not served with any kind of prior notice and prior to the impugned cancellation, no opportunity of hearing was afforded to the petitioners. The decision to cancel the trade licence is also challenged on the ground that no order of cancellation has been served upon the petitioner. It is only by the Communication dated 18.12.2024, the petitioner has been informed that its trade licence has been cancelled. Pursuant to the cancellation of the trade licence, the respondent GMC authorities have also sealed the tenanted premises wherefrom the business were being run by the petitioners.
9. To support the ground of challenge, Mr. Roy has referred to the provisions contained in Section 378[3] of the GMC Act, 1971 wherein the procedure for cancellation has been laid down.
10. Mr. Bora, learned Standing Counsel, GMC who sought time to obtain instructions on 20.01.2025, has submitted that he has obtained instructions and as per the said instructions, no show-cause notice was issued to the petiti
Cancellation of a trade licence without prior notice or opportunity to be heard violates principles of natural justice as mandated by Section 378(3) of the GMC Act, 1971.
Cancellation of Trade Licences without due process and proper notice constitutes a violation of the principles of natural justice.
The cancellation of a trade license must adhere to due process, allowing alternative documentation; arbitrary grounds violate the right to trade.
The central legal point established is the requirement of a show cause notice and compliance with natural justice principles before the cancellation of a trading license.
Point of Law : Cancellation of license – Sale of stamp papers over and above the actual price - Cancellation of license of the petitioners by way of the impugned order is violative of principles of n....
A breach of natural justice due to non-service of notices invalidates administrative actions unless an alternative statutory remedy exists, which the petitioner must pursue.
The court underscored the necessity of adhering to principles of natural justice, requiring that administrative orders affecting rights must include clear reasoning and a fair opportunity for respons....
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