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2024 Supreme(Online)(DEL) 22514

HIGH COURT OF DELHI
Subramonium Prasad, J
MIC HAJJ CELL – Appellant
Versus
UNION OF INDIA – Respondent
W.P.(C)-15648/2022



Advocates:
Mr. Santhosh Krishnan, Ms. Sonam Anand, Ms. Deepshikha Sansanwal, Ms. Pratima N. Lakra, Mr. Kashish G. Baweja, Mr. Sumit Goel, Mr. Aditya S. Singh

Experience garnered by a sole proprietor does not transfer to a new proprietor upon the latter's assumption of ownership, as a proprietorship lacks perpetual succession.

Headnote:(A) Haj Policy 2019-2023 - Eligibility criteria for Haj Group Organizers (HGOs) - The petitioner, a sole proprietorship, was found ineligible for registration as an HGO due to the death of the original proprietor and the subsequent transfer of ownership to the son, who lacked requisite experience - The court emphasized that experience garnered by a sole proprietor does not transfer to a new proprietor upon the latter's assumption of ownership. (Paras 1, 17, 24, 26)

(B) Proprietorship and Legal Identity - The court reiterated that a proprietorship does not have perpetual succession and the legal identity is intertwined with the proprietor, thus experience cannot be transferred post-death of the original owner. (Paras 20, 22)

(C) Policy Interpretation - The court held that the Haj policy does not explicitly allow for the transfer of experience between proprietors, and the absence of a specific prohibition does not imply automatic eligibility under new ownership. (Paras 6, 10, 24)

Facts of the case:
The petitioner, established as a sole proprietorship, was previously registered as an HGO but was found ineligible after the death of the original proprietor and the transfer of ownership to his son, who lacked the necessary experience.

Findings of Court:
The court upheld the impugned order declaring the petitioner ineligible for registration as an HGO due to the lack of requisite experience under the new proprietor.

Issues: The main issue was whether the experience of a sole proprietor is transferable to a new proprietor following the death of the original owner.

Ratio Decidendi: The court concluded that the experience garnered by a sole proprietor does not transfer to a new proprietor, affirming that a proprietorship does not have perpetual succession and is legally tied to the original owner.

Result: Writ petition dismissed.

JUDGEMENT

1. The Petitioner has approached this Court challenging the Order dated 23.05.2022 passed by the Respondent No.1/MoMA, Haj Division whereby the Petitioner were found ineligible for registration as a Haj Organizer/HGO for Haj, 2022-2023.

2. The facts in brief leading to the filing of the instant writ petition are as follows:

  • i.
  • The Petitioner was established as a sole proprietorship by one CM Alikunju Moulavi. The proprietorship firm was engaged in business of providing Haj tours to pilgrims and was registered as an HGO for the following Haj i.e., Haj 2011, Haj 2012, Haj 2014, Haj,2016, Haj 2017, Haj 2018.
(emphasis supplied)
  • ii.
  • A new 5 year policy for Haj titled “Policy for Haj Group Organiser for Haj 2019-23” was issued by the Ministry of Minority Affairs, Haj Division on 20.12.2018 and the Petitioner was considered eligible under the new policy as a category II HGO.
  • iii.
  • Due to the advent of the COVID-19 pandemic, Haj tours were suspended by the Kingdom of Saudi Arabia due to which Haj tours were not undertaken by any HGOs registered under the HGO Policy 2019-2023. During the pandemic, the sole proprietor CM Alikunju Moulavi passed away.
  • iv.
  • Pursuant to the death of the erstwhile proprietor, the proprietorship firm was taken over by Zakariya Ali who is the son of the deceased.
  • v.
  • In the year 2022, the Kingdom of Saudi Arabia started accepting Haj Pilgrims pursuant to which a circular was issued by the Respondents to all registered HGOs under the 2019-23 Policy to express their willingness for participating in Haj, 2022. The interested HGOs were required to submit relevant documents confirming their eligibility under the said policy and subsequent allocation of pilgrims to the HGO. A circular dated 18.05.2022 was also issued by the Respondents whereby additional clarifications were provided vis-à-vis Haj policy 2019-23.
  • vi.
  • The Petitioner firm thereafter sent its willingness to operate as an HGO for Haj, 2022 along with supporting documents mentioned under annexure-I under 2019-23 Policy. Subsequently, the Respondents sought clarifications from the Petitioner regarding its prior experience of conducting Haj and it was also intimated to the Petitioner firm that they do not fulfil the criteria as required under the 2019-23 Policy. An undertaking was submitted by the Petitioner to the Respondents providing the required clarifications, pursuant to which the Impugned Order finding the Petitioner ineligible for registration as an HGO for Haj, 2022 was passed by the Respondents.
(emphasis supplied)

3. Notice was issued in the writ petition 15.11.2022. Counter affidavit has been filed by the Respondents.

4. During the pendency of the writ petition, a new policy titled “Registration of Haj Group Organisers (HGOs) for Haj-2023-registration and allocation of quota for Haj-2023” was issued by the Respondents whereby all HGOs regardless of their registration under the previous policy of 2019-23 were required to register a fresh as an HGO. Pursuant to the new policy being announced, this Court on 20.03.2023 allowed the Petitioner to file an application for registration as an HGO for Haj, 2023 and the Respondents were directed to file a status report after examining the applications. A report came to be submitted by the Petitioner wherein it was stated that the Petitioner had not provided a proper justification, details or documents against queries which were raised by the Respondents. It was also noted that the Petitioner failed to submit a proper break up of their GST filings or a copy of the GSTR-9 form.

5. Learned Counsel appearing for the Petitioner submits that it is undoubted that the legal identity of the proprietorship is intertwined with the proprietor but the law recognises the continuity of a business of the proprietorship through a new proprietor. He further states that once a firm is recognised as an HGO under the 2019-23 policy, it is not upto the

(emphas




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