- (1.) 1. In this case the petitioner, Banwarilal Rajgarhia, has moved this Court for a writ in the nature of 'mandamus' commanding the respondents not to give effect to an order of the Cloth Controller refusing to renew the license of the petitioner as a wholesale dealer in cloth.
(2.) THE petitioner is the proprietor of the firm Hari Textiles, Ranchi. He obtained a license as a wholesale dealer in cloth in March, 1950, in the name of the firm Sri Hari Textiles. THE license was granted by the Cloth Controller, Bihar, and renewed for the year 1951 and also for the year 1952. THE petitioner applied for renewal of the license for the year 1953, but on 15-3-1953, the District Supply Officer wrote to him a letter stating that the license could not be renewed for the year 1953, and his business should be liquidated and stocks should be cleared by 31-3-1953. No reasons had been assigned by the Cloth Controller or by the District Supply Officer for refusing to renew the license of the petitioner for the year 1953. The contention of the petitioner, in the first place, is that the Cloth Controller had no power to refuse the renewal of a license already granted. In the second place, the contention of the petitioner is that even if the Cloth Controller has such a power, the order of refusal is an order made without giving any reasons and is wholly arbitrary and 'mala fide'. The petitioner, therefore, prays that this Court should issue a writ in the nature of 'mandamus' commanding the respondents not to give effect to the order of the Cloth Controller refusing the renewal of the license. In support of this rule Mr. Baldeva Sahai put forward the argument that Clauses 4 and 5 of the Bihar Cotton Cloth and Yarn (Control) Order, 1943, were constitutionally invalid, since there was a violation of the guarantee given under Article 19(5), (sic. (1) (2)) of the Constitution of India. The argument of Counsel is that the restrictions imposed in Clauses 4 and 5 are unreasonable restrictions & do not fall within the ambit of Article 19(5) of the Constitution. The argument on behalf of the petitioner is that Article 19(1)(g) of the Constitution is a guarantee of the right to practise any profession, or to carry on any occupation, trade or business, and the impugned provisions of the Bihar Cotton Cloth and Yarn (Control) Order, 1948, impose unreasonable restrictions on this guarantee. The argument is based upon the language of Clauses 3, 4 and 5 of the said Order. Clause 3 states that: "Save as provided in Sub-clause (3) of Clause 5, no person shall, after the commencement of this Order, carry on business as a dealer except under and in accordance with the terms and conditions of a license granted by the licensing authority in Form B". Sub-clause (3) of Clause 4 is to the following effect: "On receipt of an application in Form A, the licensing authority may, if he finds that the application is in order, grant a license in form B, and such license shall remain in force until the 31st day of December of the year in which it is granted." Sub-clause (5) of Clause 4 provides that the license shall be renewable every year and the renewal, if allowed, shall be endorsed by the licensing authority on the license or, as the case may be, on the duplicate. Sub-clauses (1) and (2) of Clause 5 are to the following effect: "(1) The District Magistrate may, for reasons to be recorded in writing, suspend or cancel the license of a retail dealer or a hawker, if he is satisfied that the licensee has contravened any of the provisions made in, or the directions or conditions of the license issued under, this Order, and the orders of the District Magistrate cancelling or suspending the license shall be final: Provided that the District Magistrate may, with the concurrence of the Controller and for reasons to be recorded in writing, suspend the license of a wholesale dealer for a period not exceeding one month. (2) The Provincial Government or the Controller may, without giving any previous notice and without assigning any reason, suspend or cancel any license under this Order." The contention of Mr. Baldeva Sahai, in the first place, is that the Cloth Controller has no power under Clause 4(5) to refuse the renewal of a license which has already been granted. It is contended for the respondents that the Controller has such a power of refusal, that, as a matter of necessary implication, it must be held that an authority empowered to renew a license has the power of refusal to renew the license. We do not think it necessary to decide this point in this case for assuming in favour of the respondents that there exists such a power in the State Controller, we consider that the power is granted in such wide terms as to transgress the bounds of constitutionality. The learned Government Advocate alternatively relied on the power granted under Clause 5, Sub-clause (2) to the Cloth Controller to cancel or suspend a license without assigning reasons. But this clause is also open to the same constitutional objection. Mr. Baldeva Sahai put forward the argument that even if the Cloth Controller has power to cancel a license or refuse to renew a license, such a power would be constitutionally invalid, since neither Clause 4(5) nor Sub-clauses (1) and (2) of Clause 5 lays down the conditions under which the renewal of a license may be refused or cancellation of a license may be made. In support of this argument Counsel relied upon a recent decision of the Supreme Court in - 'Messrs Dwarka Prasad Laxmi Narain v. State of U. P.', AIR 1954 SC 224 (A) pronounced on 11-1-1954. The question at issue in that case was whether Clause 4(3) of the Uttar Pradesh Coal Control Order was constitutionally valid. This clause gave the licensing authority power to grant or to refuse to grant, renew or refuse to renew, suspend, revoke or cancel any license under the Order. Clause 4(3) was in the following terms: "The Licensing Authority may grant, refuse to grant, renew or refuse to renew a license and may suspend, cancel, revoke or modify any license or any terms thereof granted by him under the Order for reasons to be recorded. Provided that every power which is under this Order exercisable by the Licensing Authority shall also be exercisable by the State Coal Controller or any person authorised by him in this behalf." It was argued on behalf of the petitioner in that case that Clause 4(3) granted uncontrolled power to the authority to grant or to refuse to grant, to renew or refuse to renew, suspend, revoke or cancel any license under the Order. It was contended that Clause 4(3) was not a reasonable restriction within the meaning of Article 19(5) of the Constitution and Clause 4(3) was, therefore, unconstitutional and 'ultra vires'. The argument succeeded in the Supreme Court and it was held that Clause 4(3) was constitutionally void as imposing an unreason- able restriction upon the freedom of trade guaranteed under Article 19(1) (g) of the Constitution. In our opinion, the present case falls within the ambit of the principle laid down by the Supreme Court. The discretion conferred in the present case upon the cloth controller under Clause 4(5) and Sub-clauses (1) and (2) of Clause 5 is an unfettered and uncontrolled discretion. No standards have been laid down by the legislative authority to cricumscribe or to regulate the exercise of this discretionary power. No conditions have been specified in the Order upon which the Cloth Controller may refuse the renewal of a license or cancel a license already issued. There are no provisions made in the Order to give the right of appeal or revision to the party aggrieved against an order cancelling or refusing to renew a license in a particular case. On the contrary, the order of the Cloth Controller refusing to renew a license or cancelling a license is expressly made final; and the aggrieved party cannot test the validity of the Cloth Controller's order by going to a higher authority in appeal or revision. To put it differently, the matter of renewal of a license or cancellation of a license is left to the personal opinion of the Cloth Controller whose discretion is unfettered and not restrained by any rules or directions. In our opinion, therefore, the provisions embodied in Clauses 4(3) and (5) and 5(1) & (2) of the Bihar Cotton Cloth and Yarn (Control) Order, 1948, are not reasonable from the procedural aspect. The restrictions imposed transgress the limit contemplated in Article 19(5) and are, therefore, constitutionally invalid. It is obvious that the provisions enacted in Clauses 4(3) and (5) and 5(1) and (2) are an integral part of the scheme of control contemplated by the legislative authority & the machinary of the Bihar Cotton Cloth and Yarn (Control) Order, 1948, cannot operate in an effective manner unless the provisions in question are so amended as to conform to the constitutional requirements. As the matter stands, the order of refusal by the Cloth Controller in the present case to renew the license of the petitioner must be taken to be void and ineffective. In our opinion, a writ in the nature of 'mandamus' should be issued against the respondents commanding them not to give effect to the order of the Cloth Controller refusing to renew the license of the petitioner. The application is, accordingly, allowed. There will be no order as to costs. ;