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High Court of Judicature at Madras
THE HONOURABLE MR. JUSTICE N. PAUL VASANTHAKUMAR
Kumaran Agencies rep. by its Proprietor R. Dhandapani
Versus
The Government Of Puducherry rep. by Director Of Agriculture Department Of Agriculture Puducherry & Another
Writ Petition Nos.19233 & 19984 of 2011 & Connected MPs.
Decided On :Decided on : 14-11-2011
Fertilizer Control Order - Cancellation of Wholesale and Retail License - Clause 31 of the Fertilizer (Control) Order, 1985 - The court discussed the statutory provisions of Clause 31 of the Fertilizer (Control) Order, 1985, which empowers the notified authority to suspend or cancel the authorization letter or certificate for specific grounds. The court highlighted the violation of statutory provisions and principles of natural justice in the cancellation of the wholesale and retail license by the second respondent without providing a reasonable opportunity to the petitioner.
Fact of the Case:
The petitioner, engaged in the business of selling fertilizers, was issued with letters of authorization under the Fertilizer (Control) Order, 1985. The second respondent issued stop sale notices and eventually suspended and canceled the wholesale and retail licenses of the petitioner based on alleged contraventions of the Fertilizer (Control) Order, 1985.
Finding of the Court:
The court found that the cancellation of the wholesale and retail licenses by the second respondent was in violation of statutory provisions and principles of natural justice, as the petitioner was not provided with a reasonable opportunity to be heard before the cancellation.
Issues: The main issue was whether the cancellation of the wholesale and retail licenses by the second respondent was in conformity with Clause 31 of the Fertilizer (Control) Order, 1985, and whether the petitioner had the right to challenge the cancellation order through a writ petition.
Ratio Decidendi: The court held that the cancellation of the licenses without providing a reasonable opportunity to the petitioner and without following the statutory provisions of Clause 31 of the Fertilizer (Control) Order, 1985, amounted to a violation of principles of natural justice. The court also rejected the contention that the order was appealable and allowed the writ petitions, setting aside the impugned orders.
Final Decision: The court set aside the impugned orders, allowing the writ petitions with the liberty for the second respondent to initiate fresh proceedings and pass appropriate orders in accordance with the law. No costs were awarded, and the connected miscellaneous petitions were closed.
1. In W.P.No.19233 of 2011, the petitioner has prayed to quash the orders dated 10.8.2011 and 12.8.2011 passed by the second respondent and consequently direct the respondents to permit the petitioner to carry on the business of wholesale and retail trade of fertilizers in terms of the authorisation issued to them under the Fertilizer (Control) Order, 1985.
2. In W.P.No.19984 of 2011, the petitioner has prayed to quash the order dated 17.8.2011 passed by the second respondent and consequently permit the petitioner to carry on the business of wholesale and retail trade of fertilizers in terms of the authorisation issued to them under the Fertilizer (Control) Order, 1985.
3. Since the issue raised in these writ petitions are common, both the writ petitions are heard together and a common order is passed.
4. It is the case of the petitioner that it is engaged in the business of selling fertilizers for the past 35 years at Embalam village, Puducherry Region of wholesale and retail in two different premises situated at Villiyanur Main Road, Embalam, Puducherry. The petitioner was issued with letters of authorisation under the Fertilizer (Control) Order, 1985 by the second respondent, which are valid upto 31.3.2013. As per the Fertilizer (Control) Order, 1985, the petitioner as a wholesale trader could sell fertilizer only to other fertilizer retail dealers and being authorised to do retail sales as a retailer, it can sell only to individual purchasers, like farmers, land owners, family members of land owners, tenants.
5. According to the petitioner, as per Clause 5 of the Fertilizer (Control) Order, 1985, the dealer is required to issue a cash/credit memorandum to the individual purchasers, who purchase fertilizers from a retail dealer. The retail dealer is required to enter the name and address of the purchaser and also get his signature affixed in the cash/credit memo in the prescribed M Form. Under Clause 4 of the Fertilizer (Control) Order, 1985, the retail dealer should display the stock position and price list in front of the business premises and no retail dealer, who is having stocks can refuse to sell the fertilizer to individuals, if the conditions prescribed in Clause 5 is complied with by the individual purchaser. According to the petitioner, on 9.6.2011, sales of fertilizer was effected by the petitioner from the retail outlet to various persons including three persons, who claimed to be representatives of farmers belonging to Sedarapet Village and Karasur Village of Puducherry Region. Two of them purchased 35 bags of urea representing two farmers and the third person purchased 30 bags of urea. All the said purchasers gave their names and their address and also affixed their signature in the cash memorandum. The said purchasers had arranged a lorry for transportation of their stocks to their respective villages, which according to them are situated nearby. Once the stock was handed over after getting the signature in the cash memo, the responsibility of the petitioner as dealer ceased.
6. On 10.6.2011, the second respondent issued a Stop Sale Notice under Clause 28 of the Fertilizer (Control) Order, 1985 alleging that there is reason to believe that the petitioner has contravened the Fertilizer (Control) Order. The said notice will be in force for a period of 21 days. Immediately, a show cause notice was issued stating that the petitioner had sold the urea to three persons, intended for the use of industrial purpose, and why action should not be taken for contravening the Fertilizer (Control) Order, 1985. The petitioner submitted its explanation on 16.6.2011 stating that the fertilizer was sold only to farmers or their representatives in terms of the procedure prescribed. Another Stop Sale Notice was issued on 17.6.2011 for a period of 21 days with effect from 17.6.2011.
7. On 13.7.2011, the second respondent issued an order under Clause 31(2) of the Fertilizer (Control) Order, 1985 suspending both the lett
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