TMI Blog1973 (10) TMI 58X X X X Extracts X X X X X X X X Extracts X X X X ..... y 1, 1963. The appellant filed a writ petition under Article 226 of the Constitution challenging the two orders. The High Court has dismissed the petition. Hence this appeal. 2. Sri Sen, counsel for the appellant, has urged four points before us. One of these points is : The Board endorsed the State proposal for the revocation of the licence before the explanation of the appellant reached the State. The explanation was not placed before the Board and accordingly not considered by the Board. So there was no due consultation of the Board and the order of revocation is void. As we are accepting this point, it is not necessary to notice his remaining points. We shall state only such facts as are necessary for the decision of the aforesaid point. 3. On August 17, 1962, the State Government issued a notice to the appellant under Section 4(3) of the Act asking him to show cause why the licence should not be revoked. He was asked to send his explanation within three months and three days from the date of the receipt of the notice. Much before the issue of this notice. On June 21, 1962, the State Government sent the letter No. 11795-EL 1/61/17/P.W. to the Board. The letter states that ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he Indian Electricity Act. In reply to paragraph 22 of the petition, the Government's affidavit states that orders were passed in accordance with the provisions of all the relevant Acts and the Rules and after considering the objections raised by the licensee. Paragraph 5 of the Board's affidavit is more outspoken and elaborate. It states : The State Government consulted the Board in the matter of revoking the licence of the Kottayam Electric Supply Agency by invoking Section 4(1)(a) of the Indian Electricity Act, 1910 and the Board vide letter No. BVI/5705/62, dated 26-7-1962 endorsed the views of the Government on the matter (and) recommended the revocation of the licence. Paragraph 18 of the Board's affidavit is a reply to paragraph 22 of the appellant's affidavit's. Paragraph 18 asserts that the impugned orders were passed in accordance with Law and the Rules thereunder. It is thus unmistakably plain that the Government as well as the Board understood the petition as raising a challenge to the orders on the ground of want of due consultation of the Board before the making of the impugned orders. And they have replied to that implicit challenge in the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... me time, nor could the members bestow collective consideration on the matter before giving the Board's opinion thereon. We have little doubt in our mind that there was no second consultation between the Government and the Board after the receipt of the explanation. Had there been a second consultation, the Board would surely have disclosed it in its counter-affidavit. The evidence already on record excludes the possibility of a second consultation after the receipt of the explanation. We have earlier quoted the number and date of the Government letter by which the Government asked for the Board's opinion on the issue of revoking the licence. The number and date of the Board's letter recommending revocation of the licence has also been mentioned earlier. On receiving the Board's letter, the Government sent another letter to the Board. It is dated April 6, 1963. The number of the letter is 11795-WLY/61-20/PW. The subject of the letter is : Electricity-Kottayam Electric Supply Agency-acquisition of. The letter makes reference to two earlier letters : (1) Government letter No. 11765-ELI/1/17/PW; (2) your reply No. BVI/5705/62 dated 26-7-1962. 8. It may be seen tha ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the Board regarding the revocation of the licence after the Government had received the appellant's explanation to the show cause notice served on him. In the circumstances of the case we are satisfied that no prejudice will be caused to the respondents if the point is permitted to be raised in this Court. So we permit Sri Sen to argue the point. 11. In State of U.P. v. Manbodhan Lal Srivastava (1958)IILLJ273SC , Hamdard Dawakhana (Wakf), Delhi and Anr. v. Union of India and Ors. [1965]2SCR192 . Karpagathachi and Ors. v. Nagarathinathachi [1965]3SCR335 and State of Mysore v. Guduthur Thimmappa and son and Anr. [1967]1SCR627 this Court did not permit a new issue of fact to be urged by the appellant. In Motibhai Pulabhai Patel and Company v. R. Prasad and Ors. [1969]1SCR580 the case was remanded to the High Court and the appellant was allowed to urge before the High Court his new contention. The facts of all these cases are different from the facts of the present case. The Government cannot derive any assistance from them. 12. It is necessary to consider whether the Act obligates the Board to consider the explanation of the licensee before recommending any action against h ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... its Article 19(1)(g) conferring on the citizens the right to carry on business subject to reasonable restrictions in public interest. This Court in Dr. N.B. Khare v. The State of Delhi [1950]1SCR519 held that if an Act, which imposes restrictions on the rights specified in Article 19, does not provide for a reasonable hearing to the party affected, the restriction could not be said to be reasonable in certain circumstances. It seems that Parliament realised, though late, in 1958, that Section 4 may not stand the test of Article 19(1)(g). Accordingly it made radical amendments in Section 4. The amended Section 4 reads : (1) The State Government may, if in its opinion the public interest so requires, and after consulting the State Electricity Board, revoke, a licence in any of the following cases, namely :- (a) where the licensee, in the opinion of the State Government, makes wilful and unreasonably prolonged default in doing anything required of him by or under this Act; (b) where the licensee breaks any of the terms or conditions of his licence the breach of which is expressly declared by such licence to render it liable to revocation; (c) where the licensee fails, with ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n this case are the phrase 'after consulting the State Electricity Board' and Sub-section (3) which now provides for a hearing to the licensee before revocation of his license. 16. It appears from a reading of Section 4 that when the Government consults the Board on the question of revocation of a licence under Section 4, the Board is to make up its mind as to whether it should recommend (1) to revoke the licence, or (2) not to revoke the licence, or (3) to permit the licence to remain in force subject to such further terms and conditions as may be thought proper. It is difficult to conceive how the Board will make a choice out of these three courses without considering the explanation of the licensee. The explanation may make out a case for not revoking the licence or a case for continuance of the licence with certain over-added conditions. In a particular case the Government may propose to revoke the licence under Section 4(1)(c) on the ground that the licensee has failed to show that he is in a position fully and efficiently to discharge the duties and obligations imposed on him by his licence. Similarly, it may propose to revoke the licence under Section 4(1)(d) wher ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ishbud v. State of Delhi 1955CriLJ526 ). 20. The power to revoke the licence is a drastic power. The revocation of licence results in severe abridgment of the right to carry on business. Having in mind the requirements of Article 19(1)(g), Parliament has, it seems to us, prescribed certain conditions to prevent the abuse of power and to ensure just exercise of power. Clauses (a) to (d) of Section 4 prescribe some of the conditions precedent for the exercise of power The order of revocation, in breach of any one of those conditions, will undoubtedly be void. The clause if in its opinion the public interest so requires is also a condition precedent, On a successful showing that the order of revocation has been made without the Government applying its mind to the aspect of public interest or without forming an honest opinion on that aspect, it will, we have no doubt be void. The phrase after consulting the State Electricity Board is sandwiched between the clause if in its opinion the public interest so requires and Clauses (a) to (d). In this context it appears to us that consultation with the Board is also a condition, precedent for making the order of revocation. Accordingl ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... astava (supra), Ram Gopal Chaturvedi v. State of Madhya Pradesh (1970)ILLJ367SC and The State of Bombay v. D.A. Korgaonkar Civil Appeal No. 289 of 1958 decided on 6-5-1960. He has also relied on Rollo v. Minister of Town and Country Planning [1948] (1) AELR 13 and Derham v. Church Commissioners for England [1954] A.C. 245. Ram Gopal Chaturvedi v. State of Madhya Pradesh (1970)ILLJ367SC and State of Bombay v. D.A. Korgaonkar Civil Appeal No. 289 of 1958 decided on 6-5-1960 have followed Manbodhan Lal Srivastava (supra). In Manbodhan Lal this Court held that Article 320(c) of the Constitution is directory and not mandatory. A Government employee was dismissed from service after complying with the provisions of Article 311(2) of the Constitution. The U.P. Public Service Commission was consulted as to the punishment to be imposed on him. But it was consulted before the explanation of the employee was received by the Government. The argument was that as the Commission did not have the opportunity of considering his explanation, there was no real consultation as required by Article 320(c). It was also argued that Article 320(c) is directory. The proviso to Article 320 empowers the approv ..... X X X X Extracts X X X X X X X X Extracts X X X X
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