R.M.Sahai - (1.) IN this petition directed against refusal to renew petitioner's licence under U. P. Kerosene Control Order the controversy that arises for consideration is if the application could have been refused without affording any opportunity to petitioner and even if it could be did the authorities act in accordance with law in placing reliance on a report submitted by Sub-Divisional Magistrate against petitioner under U. P. Sales of Motor Spirit, Diesel Oil and Alcohol Taxation Act, 1939 (hereinafter referred to as the Act) which was not found sufficient for cancellation of his Registration or licence of Diesel oil under that Act by the Commissioner in appeal.
(2.) ON 13th November, 1979 the Sub-Divisional Magistrate inspected petitioner's premises and found that petitioner who was a whole sale dealeT of Kerosene and diesel oil did not enter the licence number of retail dealers to whom diesel was sold in bulk. It was also found that address of one or two dealers was not mentioned. No defect was noticed in stock register of kerosene oil. But it was pointed out that whole sale dealer of Diesel and kerosens oil was required to maintain underground tankers like Petroleum dealer. According to report the petitioner had tankers but in them neither diesel nor kerosene was stored. ON this report notice was given to petitioner to show cause why action under U. P. Motor Diesel Oil and Alcohol Taxation Act, 1939 may not be taken. To this reply was filed by petitioner. The District Magistrate however held that as C Forms were not maintained by petitioner properly it was guilty of violating rule 18 (1) of U. P. Sales of Motor Spirit, Diesel and Alcohol Taxation Rule, 1977. It was therefore directed that petitioner's registration under Section 8 (b) be cancelled. In appeal it was held that although some discrepancies were found in the prescribed register maintained by petitioner but they were not such serious as to justify cancellation of registration. The appellate authority directed acceptance of Rs. 1000/- as compounding fee under Section 13 of the Act. While proceedings for cancellation of registration under Section 8 were going on petitioner applied for renewal of its licence in Form D under rule 114 (2) of Petroleum Rules as if licence was to expire on 20th November 1979. On 25th October 1981 the District Magistrate refused to renew the licence as from the report of Sub-Divisional Magistrate it was apparent that petitioner was guilty of various irregularities. In appeal the order was upheld as petitioner's explanation having not been found satisfactory in earlier proceedings that is under U. P. Motor Spirit Diesel and Alcohol Taxation Act there was no option but to refuse to renew the licence. In respect of opportunity the appellate authority was of the view that earlier show cause notice having been given to petitioner no fresh notice was necessary. By now it is firmly established that cancellation or refusal to renew licence entail serious consequence. Normally it should not be resorted to without affording opportunity. Reliance is placed on M/s. Raj Restaurant v. Municipal Corporation of Delhi, AIR 1982 SC 1550. But it is not necessary to rest the decision on it or to examine the vehement argument advanced by Sri P. C. Srivastava the learned Standing Counsel that petitioner being guilty of irregularity noticed in the report of Sub-Divisional Magistrate it was not a fit case for interference in exercise of writ jurisdiction as the order appears to be manifestly erroneous even otherwise.
(3.) SRI SRIvastava urged that period of licence having expired in November 1979 nothing was subsisting which could be renewed in 1980. The argument does not appear to be sound. The District Magistrate did not refuse renewal for this reason. Even if he would have it could not have been sustained. Although rules are silent about renewal being automatic but it is not denied that petitioner was granted licence in 1964 and its licence has been renewed year after year. Moreover rule 153 of Petroleum Rules contemplates filing of renewal application. And unless there is some reason to refuse renewal should be granted. Any other construction of rule may breed arbitrariness. The only reason for refusing renewal was the report of Sub-Divisional Magistrate. Irregularities found therein were in respect of diesel oil. Even that was not accepted as grave by appellate authority. If the report could not furnish base for cancellation of licence of diesel oil how could it be utilised for refusing to renew petitioner's licence under rule 114 (2) of Petroleum rules. In any case there being nothing in respect of kerosene oil except the technical omission of not storing in underground tanker which too was accepted by any authority as sufficient for cancellation of licence nor even has been relied in the counter affidavit filed on behalf of parties the order refusing to renew the licence cannot be maintained. In the result this petition succeeds and is allowed. The orders dated 25th March 1980 passed by Prescribed Authority and 31st August 1982 passed by Commissioner are quashed. The Prescribed Authority shall again consider the application of the petitioner for renewal of licence in accordance with law. Parties shall bear their own costs. Petition allowed.;