Regulatory licence cancellation: statutory safeguards, fair hearing, and absence of repeated non-compliance controlled the outcome.

Section 25(1)(c) of the Bihar Mica Act, 1947 was treated as a regulatory restriction supported by objective standards, since cancellation of a mica licence was confined to repeated non-compliance, required a reasonable opportunity to show cause, and operated through the State Government under a controlled statutory scheme. The provision was therefore held to be a valid restriction on property and trade rights. By contrast, the licence cancellation itself was found invalid because the record did not establish repeated failure, the defaults were treated as trivial, the petitioner was not given a real and effective opportunity to answer the charge, and the action was tainted by bias in the decision-making process. The cancellation could not stand.

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Issues: (i) Whether Section 25(1)(c) of the Bihar Mica Act, 1947 imposed an unreasonable restriction on the right to acquire, hold and dispose of property and to carry on trade or business under Article 19(1)(f) and (g) of the Constitution of India; (ii) Whether the cancellation of the mining licence was invalid for want of reasonable opportunity, absence of a finding of repeated failure, and bias in the decision-making process.

Issue (i): Whether Section 25(1)(c) of the Bihar Mica Act, 1947 imposed an unreasonable restriction on the right to acquire, hold and dispose of property and to carry on trade or business under Article 19(1)(f) and (g) of the Constitution of India.

Analysis: The statutory scheme regulated possession, transport and trade in mica and provided for licences, duties of licensees, penalties, and cancellation in defined cases. The impugned power was not unguided: cancellation could be ordered only where there was repeated failure to comply with the Act or the rules, and only after reasonable opportunity to show cause. The power was vested in the State Government and was controlled by ascertainable standards and by the requirements of fair procedure. On that basis, the restriction was treated as regulatory and justified in the public interest.

Conclusion: Section 25(1)(c) was held to be constitutionally valid and not an unreasonable restriction; this issue was decided against the petitioner.

Issue (ii): Whether the cancellation of the mining licence was invalid for want of reasonable opportunity, absence of a finding of repeated failure, and bias in the decision-making process.

Analysis: The notice and subsequent action did not disclose any proper finding that the petitioner had repeatedly failed to comply with the Act. The alleged defaults were trivial, clustered within a limited inspection period, and did not establish repeated failure within the meaning of the provision. The authority also proceeded in circumstances showing personal bias, since the minister in charge had political rivalry with the proprietor interested in the company and nonetheless initiated and completed the action. The petitioner was not afforded a real and effective opportunity to meet the charge, especially when the seized books were not returned and no meaningful further hearing followed the explanation already filed. The second proviso to Section 25(1) required a fair opportunity before cancellation, and that safeguard was not satisfied.

Conclusion: The cancellation order was held invalid for breach of the statutory safeguard and for lack of proof of repeated failure; this issue was decided in favour of the petitioner.

Final Conclusion: The licence cancellation could not stand because the statutory preconditions for exercise of the power were not met and the procedure adopted was vitiated by bias and denial of a fair opportunity.

Ratio Decidendi: A regulatory restriction affecting fundamental rights may be valid if it operates on objective standards and with fair procedure, but cancellation of a licence under such a statute is unlawful unless the statutory precondition is established and the affected person is given a genuine reasonable opportunity to meet the charge before an unbiased authority.

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