Satish Chandra, J. - (1.) THE peti tioners were appointed handling agents for the sale of foodgrains supplied to them by the Government. By an order dated 2nd August, 1973. the District Ma gistrate, Moradabad terminated the peti tioners' appointment. This order has been challenged in the present writ peti tion on the ground that the principles of natural justice were violated as also on the ground that the order has been pass ed mala fide. In the supplementary affi davit, the petitioners have further taken the plea that the impugned order cancel led the licence granted to them Under the U. P. Foodgrains Dealers Licensing Order, 1964 and thus violated their right to carry on trade guaranteed by Article 19 (1) (g) of the Constitution.
(2.) IT is admitted that the peti tioners held a licence under the U. P. Foodgrains Dealers Licensing Order, 1964. This licence authorised them to carry on business as a dealer or commission agent in foodgrains. The respondents' case is that the impugned order does not cancel or affect the petitioners' licence. A peru sal of the impugned order also shows that the retailer's agreement alone has been terminated. The petitioners' apprehen sion that their licence has been cancelled is misconceived. Clause 3 of the U. P. Food-grains (Control, Requisition and Distri bution) Order, 1966, provides that no per son, other than an authorised retail dis tributor shall sell or offer for sale any of the Government foodgrains. Clause 2 (a) of the Order defines authorised dis tributor to mean a person appointed as 'Agent' (Retail) by the District Magistrate for the sale of Government foodgrains. In virtue of these provisions the District Magistrate appointed the petitioners as authorised retail distributor. This appoint ment was made through an agreement executed by the petitioners with the District Magistrate. Clause 16 of the agreement provides that the District Ma gistrate shall have the right 'to terminate the agreement at any time without as signing any reason therefor. Clause 19 of the agreement was a penal clause. It provided that if and whenever there shall be a breach or non-observance of any of the terms and conditions by the handling agent hereinbefore contained then the District Magistrate may forfeit the secu rity deposited by the handling agent and in addition terminate the agreement. Thus the agreement contemplated penal action by way of forfeiture of security deposit. The agreement could be termi nated only in addition to the forfeiture. Clause 19 did not contemplate termina tion of the agreement simpliciter as penal action for breach or non-observance of the terms or conditions of the agreement. In the present case the impugned order merely terminates the agreement. Ex facie the 'impugned order is within the purview of Clause 16 and not Clause 19 of the agreement. It cannot, hence be said that the District Magistrate took penal action against the petitioners so that the principles of natural justice may get attracted.
(3.) CLAUSE 16 of this agreement authorises the District Magistrate to ter minate an agreement at any time with out assigning any reason therefor. When the petitioners agreed to their appoint ment as handling agents on the specific condition that the agreement may be uni laterally terminated by the District Ma gistrate at any time without assigning any reason, they cannot turn round and complain that a sudden termination of the agreement was beyond the powers of the District Magistrate. When by an agreement the parties agreed to such a termination an action taken accordingly cannot be held to be violative of the fundamental right to carry on business. In view of the agreement the petitioners be came entitled to sell Government food-grains. Termination of the agreement means that they can no longer sell Gov ernment foodgrains; but the termination of the agreement does not disentitle the petitioners from carrying on the business of selling foodgrains acquired or procur ed by them from elsewhere. Their li cence as dealers in foodgrains is still ope rative and they are free to carry on their trade.;