STATE OF U.P. AND ORS. v. DAULAT RAM GUPTA

Citation: [2002] 2 S.C.R. 838

Court: Supreme Court of India

Bench: V.N. KHARE, ASHOK BHAN

Judgment text

STATE OF U. P. AND ORS. v. DAULAT RAM GUPTA MARCH 22, 2002 (V. N. KHARE AND ASHOK BHAN, JJ. ] U. P. High Speed Diesel Oil and Light Diesel Oil (Maintenance ofSupply and Distribution) Order, 1981-Clauses 16(6) and 4 with Form 'B' and 'C'- Sale ofHigh Speed Diesel Oil and Light Diesel Oil in rural areas-Issuance ofdirection by State Government oflicensing Authority-With regard to refusal to renew licences granted to petty dealers under the order if their places of business are within a radius of5 Kms, ofretail outlet run by the Government Oil Company-Correctness of-Held, such direction not correct since it is inconsistent with the provisions ofthe statutory Order and is not for purpose ofgiving effect to the statutory order. The question which arose for consideration is whether the State government or the licensing authority can issue direction for refusal of renewal of licences granted to petty dealers under sub-clause (6) of clause. 16 of the U. P.

High Speed Diesel Oil and Light Diesel Oil (Maintenance of Supplies · and Distribution) Order, l 981 if their places of business are within a radius of five Kilometers of retail outlet run by a Government oil company. Dismissing the appeal, the Court HELD: 1. The provisions of the U. P. High Court Speed Diesel Oil and Light Diesel Oil (Maintenance of Supplies and Distribution) Order, 1981 do not provide for refusal to renew a licence granted under the statutory order, if the place of business of a licensee falls within a radius of 5 kms, of a government run retail outlet Further, the statutory order neither expressly nor by necessary implications prohibit the grant of licence to person or refusal to renew such a licence if the place of business of such licensee falls within the radius of 5 Kms. of a government run retail outlet [846-D-EJ 2. 1. statutory order clause 16 sub-clause (6) enables the making of an order of issuing of direction by the executive.

There are two restrictions on the power of the State Government or a licensing authority while issuing a general or special direction-firstly, such a direction should not be inconsistent STATE v. DAULATRAM GUPTA 839 with the statutory Order and secondly, such direction can be issued only for · purposes of giving effect to the provisions of the statutory order. [844-G-H; 845-AJ 2. 2. The direction so issued by the State government or licensing Authority must be compatible with the provisions of the statutory order. The State Government or the licensing authority in exercise of delegated powers to issue direction cannot make provisions which are inconsistent with the statutory order. Any direction issued if found not in conformity with the provisions of the statutory order, the same must be held to be beyond the enabling provisions of the statutory order.

The power to issue directions is derived from sub-clause (6) of Clause 16 of the statutory order and a delegatee on whom such a power is conferred is required to act within the framework of the authority conferred by the statutory order. In the instant case the direction issued by the licensing authority that the licence of the respondent shall not be renewed on the premise that his place of business falls within a radius of 5 kms, of retail outlet of a Government run oil company being not in conformity with the provisions of the statutory order, it must be held to be inconsistent to the provisions of the statutory order. [1145-C-D-E-FJ 2. 3. The power of the State Government or the specified authorities, the provisions empowering them to issue directions to dealers could be exercised only to give effect to the provisions of the statutory order and further to effectuate the object behind the statutory order if the object is discernible in the statutory order.

The nature of directions which could be issued under the enabling provisions contained in sub-clause (6) ofClause 16 ofthe statutory order, is only for purpose of giving effect to the statutory order and not otherwise. The conditions of grant of licence and its renewal are the essential features of the statutory order and in guise of issuing directions, the State Government or a licensing authority cannot supplant the provisions of the statutory order but can supplement it only with a view to give effect to the provisions of the statutory order. The State Government or the licensing authority while giving effect to the provisions of the statutory order is not authorised to amend the statutory order by issuing directions.

Once the enabling provisions restrict the power of issuing direction only for giving effect to the provisions of the statutory order, the nature and extent of direction which the State Government or any authority specified therein are empowered ' to issue is confined to the area which is marked out by the statutory order. In the instant case the licensing authority while issuing the direction that the respondent's licence shall not be renewed on the premise that his place of business falls within a radius of 5 kms, of a retail outlet of government run oil company has, in fact, purported to amend the conditions of renewal of Licence granted under the statutory order which was not permissible under sub-clause (6) of Clause 16 of the statutory order inasmuch as the same was not for purpose ofgiving effect to the statutory order. [845-F-G-H; 846-A-C) Dau/at Ram Gupta, v. State ofUP. and Ors. , (1996) ALJ, 212 referred to. CIVIL APPEAL JURISDICTION: Civil Appeal No. , 2339 of2002.

From the Judgment and Order Dated 28. 3. 200 l of the Allahabad High Court in C. M. W. P. No. 11399 of 2001. WITH C. A. Nos. 2340, 2341, 2342 of2002 and S. L. P. (C) Nos. 5082, 5085, 5087, 5089, 5091, 5092 5094 and 5095 of 2002. A. B. Rohtagi, S. Markandaya, Ashok K. Srivastava, Ms. C. Markandaya, Kamlendra Misra and, Ms. Feroze Bano for the appearing parties. The Judgment of the Court was delivered by : . - V. N. KHARE, J. Leave granted in S. L. P. (Civil) Nos. 472/2002, 473/2002, 13106/200l and 2908/2002. The short question which falls for our consideration in this group of appeals is whether the State government or the licensing authority can issue direction for refusal of renewal of licences granted to petty dealers under the U. P.

High Speed Diesel Oil and Light Diesel Oil (Maintenance of Supplies and Distribution) Order, 1981 (hereinafter referred to as the ('statutory order') if their places of business are within a radius offive kilometers ofretail outlet run by a government oil company. . A.. .. Since common question of fact and law is involved in this group of appeals, learned counsel for the parties have advanced arguments in Special · ' - Leave Petition (Civil) No. 472/2002. Therefore, we propose to notice the facts which have given rise to Civil Appeal No. 2339/2002 (arising out of S. L. P (Civil) No. 472/2002. Earlier, the sale of Light Diesel Oil and High Speed Diesel Oil in the State of U. P. was governed by an Act known as 'U. P. Motor Spirit, Diesel Oil and Alcohol (Imposition of Tax) Act, 1939 enacted by provincial legislature ofthe then united provinces.

Subsequently, the Parliament enacted the Essential Commodities Act, 1955 (hereinafter referred to as 'the Act') with a view to provide, in the interest of general public, for the control of the production, supply and distribution of, and trade and commerce, in certain commodities. It is not disputed that the sale of High Speed Diesel Oil and Light Diesel Oil is one of the essential commodities which is governed by the Act. Section 3 - - not inconsistent with this order that may be given to him in writing by the State Government, the Commissioner, Food and Civil Supplies or the Collector for the purpose of giving effect to the provisions of this Order and any contravention of such directions shall be deemed to ·a contravention of this Order. " A perusal of sub-clause {6) shows that. it enables the making of an order or issuing of direction by the executive.

In exercise of that power, the State government, the Commissioner, Food and Civil Supplies or the Collector are empowered to issue a general or special direction to any dealer, which is ~ not inconsistent with the provisions of the statutory order, only for giving ' '• effect to the provisions of the statutory order. Thus, there are two restrictions on the power of the State government or a licensing authority while issuing - STATEv. DAULATRAMGUPTA [Y. N. KHARE, J. ] 845 a general or special direction - firstly, such a direction should not be inconsistent with the statutory order and secondly, such direction can be issued only for purposes of giving effect to the provisions of the statutory order. In that view ofthe matter any direction issued under sub clause (6) of Clause 16 must show' that it complies with the description of delegation of power to issue directions. In Black's Law Dictionary the expression 'inconsistent' means lack_ing consistency; not compatible with.

Viewed in this light, the nature and extent of power the State government or a licensing authority possessed under subclause (6) is to issue directions only in conformity with the statutory order. In other words, the direction so issued by the State government or licensing authority must be compatible with the provisions of the statutory order. The State Govt. or the licensing authority in the exercise of delegated powers to issue direction cannot make provisions which are inconsistent with the statutory order. Since the power to issue directions by the State government or any other specified authorities must not be inconsistent with the statutory order, any direction issued if found not in conformity with the provisions of the statutory order, the same must be held to be beyond the enabling provisions ofthe statutory order.

It must be remembered that the power to issue directions is derived from sub-clause (6) of Clause 16 of the statutory order and a delegatee on whom such a power is conferred is required to act within the .. framework ofthe authority conferred by the statutory order. Since the direction issued by the licensing authority that the licence of the respondent shall not be renewed on the premise that his place of business falls within a radius of 5 kms. ofretail outlet ofa government run oil company being not in conformity with the provisions of the statutory order, it must be held to be inconsistent - to the provisions of the statutory order.

Coming to the second restriction on the power of the State government or the specified authorities, the provisions empowering them to issue directions to dealers could be exercised only to give effect to the provisions of the statutory order and further to effectuate the object behind the statutory order if the object is discernable in the statutory order. The nature of directions which could be issued under the enabling provisions contained in sub-clause (6) of Clause 16 of the statutory order, is only for purposes of giving effect to the statutory order and not otherwise. The conditions of grant of licence and its renewal are the essential features of the statutory order and in guise of issuing directions, the State government or a licensing authority cannot supplant the provisions of the statutory order, but can supplement it only with a view to give effect to the provisions of the statutory order.

The State ~ government or the licensing authority while giving effect to the provisions of the statutory order is not authorised to amend the statutory order by issuing directions. Once the· enabling provisions restrict the power of issuing direction only for giving effect to the provisions of the statutory order, the nature and extent of direction which the State government or any authority specified therein are empowered to issue is confined to the area which is marked out by the statutory order. In the present case what we find is that the licensing authority while issuing the direction that the respondent's licence shall not be )>. -. renewed on the premise that his place of business falls within a radius of 5 kms. of a retail outlet of government run oil company has, in fact, purported to amend the conditions of renewal of licence granted under the statutory order which was not permissible under sub-clause (6) o(,Clause 16 of the statutory order.

We have already noticed that the provisions of the statutory order do not provide for refusal to renew a licence granted under the statutory order, - if the place of business of a licensee falls within a radius of 5 kms. of a government run retail outlet. Further, the statutory order neither expressly nor by necessary implications prohibit the grant of licence to a person or refusal to renew such a licence if the place of business of such licensee falls within the radius of 5 kms. of a government run retail outlet. In that view of the matter, the direction/order issued by th~ licensing authority refusing to renew the licence of the respondent was inconsistent with the provisions of the statutory order inasmuch as the same was not for purposes for giving effect to the statutory order and, therefore, such a direction/order could not have given effect to, while considering the renewal of licence ofthe respondent herein.

For the aforesaid reasons, we are in agreement with the view taken by the High Court. Consequently, we do not find any merit in these appeals and the special leave petitions which are, accordingly, dismissed. There shall be no order as to costs. N. J. Appeals and Petitions dismissed.