AI Drafter 
TaxTMI 
TaxTMI 
1981 (12) TMI 173
X X X X Extracts X X X X
X X X X Extracts X X X X
....s passed by the District Food and Supplies Controllers, Faridkot and Bhatinda, for a period not exceeding ninety days under the second proviso to sub-cl. (1) of cl. 11 of the Order. The orders of suspension of licence in each of these cases rest on the allegation that the licensee has committed a breach of conditions Nos. 4, 8 and 10 of the licence. The petitioners have all been served with notices under the first proviso to sub-cl. (1) of cl. 11 of the Order to show cause why their licences should not be cancelled. Some of the petitioners accept that in the recent past their licences were suspended under the second proviso to sub-cl. (1) of cl. 11 of the Order for alleged breach of the licence conditions for having sold large quantities of wheat to dealers outside the State without disclosing the names of the purchasers in their stock registers. It, therefore, appears that the present suspension is for a repeated breach. These petitioners have filed the petitions under Art. 32 of the Constitution for protection of their fundamental rights to carry on trade or business as foodgrains dealers within the meaning of Art. 19 (1) (g) read with Art. 301 thereof. The other petitioner....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ary to deal with the scheme of the Order. Cl. 3 of the Order provides that no person shall carry on business as a dealer except under and in accordance with the terms and conditions of a licence granted by the licensing authority. Cl. 7 (3) thereof provides that where an application for grant of a licence is not refused, the licensing authority shall grant a licence in Form B subject to the conditions specified therein. Condition No. 4 of the licence enjoins that the licensee shall submit to the licensing authority concerned fortnightly returns in Form C of the stock receipts and deliveries. Condition No. 8 of the licence lays down that the licensee shall exhibit the price list of foodgrains held by him for sale and it shall indicate separately the prices of different varieties of foodgrains. Condition No. 10 thereof interdicts that the licensee shall give all facilities at all reasonable times to the licensing authority or any officer authorised by it or the State Government, for the inspection of his stocks and accounts at any shop, godown or other place used by him for the storage, sale or purchase of foodgrains etc. Cl. 11 of the Order provides for cancellation or suspension of....
X X X X Extracts X X X X
X X X X Extracts X X X X
....d expedient that the licensing authority should be clothed with powers to suspend a licence on the spot when it detects contravention of any of the terms and conditions of the licence or any of the provisions of the Order. Otherwise, a foodgrains dealer after committing flagrant breaches of the terms and conditions of his licence and the provisions of the Order, may, with impunity, carry on his trading activities without any check or control. The power of suspension conferred by the second proviso to sub-cl. (1) of cl. 11 of the Order is by way of an interim measure, pending the holding of an inquiry as to whether there is any breach which must result in cancellation of the licence. It is true that the suspension of licence is a drastic measure, if taken without affording to the dealer a reasonable opportunity of stating his case, but it is a measure of social control in the interests of the community. The power of suspension is a necessary concomitant of the power to grant a privilege or a licence. By reason of cl. 3 of the Order, no dealer can engage in the business of purchase and sale of foodgrains except under and in accordance with the terms and conditions of a licence issued....
X X X X Extracts X X X X
X X X X Extracts X X X X
....be passed under the second proviso in respect of the same breach. The second proviso expressly states that the licensing authority may suspend a licence for a period not exceeding ninety days. It, therefore, fixes the period of suspension. From its very terms, it is obvious that there cannot be repeated orders of suspension of a licence under the second provision in respect of the same breach. Normally, the order of suspension under the second proviso to sub-cl. (1) of cl. 11 of the Order after the expiry of the period of 90 days, would automatically lapse. However, if the licensee commits another breach, after the expiry of the period of suspension, there is nothing to prevent the licensing authority to suspend his licence afresh. On a fair reading of the second proviso to sub-cl. (1) of cl. 11 of the Order, it cannot be said that it commits to the unrestrained will of the District Food and Supplies Controller, who is the licensing authority, the power of suspension of a licence. It does not confer arbitrary and uncontrolled power because the suspension can only be for specified reasons and the second proviso lays down the circumstance or grounds on which the power may be exerc....
X X X X Extracts X X X X
X X X X Extracts X X X X
....spension of a licence during the pendency of or in contemplation of the proceedings for cancellation thereof, and it does not suffer from the vice of arbitrariness and is, therefore, not violative of Art. 14 of the Constitution. On the contrary, as already indicated, it affords reasonable safeguards. There still remains the question whether the impugned orders of suspension are mala fide or motivated. We are unable to hold from the material on record that the licensing authorities acted with improper motives or were actuated with bias in directing the suspension of the licences held by the petitioners. All that is averred in para 9 is: "(Under oral instructions of the Punjab Government from the Civil Supplies and Food Department to all the Licensing Authorities, including the Food Department and Supplies Controllers, instructions were issued that if any one dealer is found exporting wheat to another State, there being no direct or indirect ban on such movement, he should be punished at the spot by way of suspension of licences so that the dealer may not export wheat to any other State for which there are no restrictions imposed by any law or notified order or even the t....