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Judgment
Petitioners are all legal representatives of the licensees/vendors of Kerosene. In these writ petitions, petitioners challenge the circular of the
Government withdrawing the previous orders of the commissioner and directing that on expiry of the licensee, the license and the registration shall
not be renewed to the retail vendors and hand cartmen.
The main submission of the counsel for the petitioners is that their registration and the licensees have to be renewed inspite of the expiry of their
licences and any refusal will be violating their fundamental right of trade guaranteed under Article 19(1)(g) of the Constitution and violative of
Article 14.
The brief history as well as the provisions relating to the orders of the Government are necessary in order to dispose of these writ petitions. The
right of the dealers are governed by two control orders issued under the Essential Commodities Act, 1955. They are :
(i) Kerosene (Fixation and Ceiling Prices) Order, 1978 issued by the Central Government (hereinafter referred to as the Central Government
Order); and
(ii) Tamil Nadu (Regulation of Trade) Order, 1973 (hereinafter referred to as the Regulations).
The object of the Regulation of the State Government is for maintaining supplies of Kerosene and for securing its equitable distribution and
availability at fair prices. A ""dealer"" has been defined under Clause 1(i) of the Regulations as a person engaged in the business of purchase,
movement, distribution and Storage for sale of Kerosene which includes Wholesalers, retailers, etc. Clause 3 deals with the licensing of
wholesalers. Clause 5 deals with the registration of retail traders. As per this provision no person shall carry on the retail business unless he had
been registered by the licensing authority. Every Certificate of registration shall be valid for a prescribed period only and may be renewed
subsequently. The renewal application as well as the form of Certificate has been prescribed. Sub-clause (10) states that the registered retailer shall
conform to such directions and instructions as may be issued by the Commissioner or Collector of the District concerned or the licensing authority
from time to time. Clause 11 also empowers the government to issue instructions and directions on all matters. The Central Government Order
defines a ""dealer"" as including his representative or agent and an oil company making wholesale supply.
Under the regulations of the State Government, there is a provision for appointment of a dealer for the purpose of Wholesale and retail
distribution of Kerosene. It also provides for the renewal of the license or registration. There is no dispute on this aspect that there is no provision
enabling a retail licensee or holder of a certificate of registration to pass on the licence or certificate to his legal heir. In other words, on the expiry
of the holder of the licence and certificate, the licence shall come to an end. There is no provision for a legal heir of the deceased licensee to
succeed to the license or certificate of registration.
However, in reference to the wholesale licensees, the wife of the deceased licensee or the legal heirs are granted the licence if they come
forward to ran the trade. This direction appears to have been given in the light of the heavy investment that has to be made in maintaining the
kerosene bunk. However, for retail licensees, there was no continuation of the licence or renewal in favour of the legal heirs. On representation of
the hand cartmen for transfer of the licence, the Government has issued certain orders on certain conditions for such transfers. Those orders are
given hereunder:
(1) 7.11.1979- Instructions issued by the Commissioner that in future, whole-sale licences may be issued only to Tamil Nadu Civil Supplies
Corpo-ration and to those SC/ST candidates appointed by the oil companies.
(2) 2.5.1980 - Commissioner permits the grant of fresh licence on the demise of a wholesale licensee to the wife and to the partners.
(3) 3.6.1980 - The instructions stated above were made applicable to the retail registration certificate holders also.
(4) 2.2.1992 - Direction from the commissioner, civil Supplies prohibiting the transfer of licensees/registration certificate to the legal heirs. At the
same time, permitting issuance of new licences if the deceased hand cartmen dies in indigent circumstances.
(5) 7.10.1994 -Detailed instructions regarding the manner of re- issue of licensed and certificate of registration.
(6) 2.2.1998 - Order of the Government deciding not to issue licenses or certificates of registration in future to any private parties.
(7) 13.7.1998 - Government instructions stating that prohibition for the issue of licence and certificates in future shall apply to the request for new
licences by the legal representatives on indigent circumstances. It further states that in future, there will be no renewal or grant of fresh licences and
certificates of registration.
(8) 24.2.1999 - Circular of the Government - Instructions contained in the Commissioner letters dated 2.2.1992, 7.10.1994, 9.5.1996 and
5.12.1997 are recalled. The instructions contained in the communica-tions dated 2.2.1998 and 13.7.98 are reiterated. It further states that any
new licence or renewal of the licence on the demise of the licensees and certificates holders to the legal representatives will not be issued and
action will be taken if any such licenses or certificates are issued.
The Government of Tamil Nadu is the competent authority to take a decision, regulate and decide the policy and the instructions in regard to the
distribution of Kerosene. From the various instructions referred to earlier, it is noticed that the Government is evolving their own policies and
instructions from time to time based on public interest and to whom the system of distribution of Kerosene is made in public interest. No person
can state that the Government cannot take a policy decision taking into consideration that public interest in the distribution of Kerosene. There is no
restriction imposed under the Tamil Nadu Kerosene (Regulation of Trade) Order, 1973. clause 11 of the Order states that the Government, the
Commissioner, the Collector or the licensing authority may issue instructions directions on all matters covered by the provisions of the control
Order and all dealers and persons shall comply with these instructions. Such instructions may also deal with alteration, amendment or variation
regarding purchase, storage and sale of Kerosene by dealer, clause 6 also empowers the licensing authority to grant or renew a licence or
registrations certificate.
The Supreme Court, in Civil Appeal Nos.4092 to 4098 of 1989 dated 22.9.1989, has upheld the classification of persons for the retail sale
namely:
(a) Public Distribution System, i.e Fair Price Shops;
(b) Retail registration certificate holders who are attached with family cards not exceeding Rs. 500;
(c) Registration Certificate holders for doing street vending in Kerosene.
The Supreme Court, while holding that the object of the order for the classification was to maintain an equitable and effective distribution of
Kerosene and there is no discrimination. It was held that Kerosene, being a scarce commodity, cannot be distributed through all persons. Some
amount of restrictions had to be imposed on the clause of persons who deal with it. Therefore, if the Government chooses that Kerosene can be
distributed only through fair Price Shops ran by the Tamil Nadu Civil Supplies Corporation and Co-operatives, the orders are made on the basis
of a valid classification. Since the retail registration certificate holders doing street vending form part of a separate class, the Government is
empowered to make provisions regarding issue or non-renewal of licences to them.
The Government, in their Circular dated 2.2.1998, after examining the distribution of Kerosene through retail vending, has taken a policy
decision that in future, no private person shall be issued with a licence or certificate of registration. The argument is that his will apply only
prospectively in reference to issue of new licences and according to the counsel for the petitioners, the subsisting licences can be renewed in favour
of the legal representatives. This decision of the government dated 2.2.1998 is now more elaborately considered in the last circular dated
24.2.1999 and has made the intention of the Government very clear as to what they have meant in their circulars dated 2.2.98 and 13.7.98. It is
stated that the instructions will apply to all the three categories and consequently, the hand cartmen and the private retailer, on their demise, the
licence or certificate of registration shall not be renewed and no fresh licence will be issued to their legal representatives.
As it could be seen, the policy of the Government was evolved through a course of time and no objection can be taken against the Government
decision. In reference to the instructions issued by the Commissioner dated 7.10.94, in a batch of writ petitions, the Government Advocate
expressed no objection to adopt and follow those instructions and consequently, a batch of writ petitions filed by the Association for renewal of
licence was directed to be considered in the light of the instructions contained in the Circular issued by the Commissioner dated 7.10.94 and to re-
issue the retail licenses to the legal heirs subject to their following certain procedure. Petitioners cannot contend that the same procedure should be
continued for ever and that the Government cannot decide that distribution can hereafter be conducted by public distribution system and that no
renewal or fresh certificate of registration or licence can be issued to the legal heirs.
The only other question that remains to be considered is whether a licence issued or a certificate of registration for retail vending is a property
that can be succeeded as a matter of right. It has to be stated that a licence is a personal right and the same cannot be transferred or assigned. The
licence is issued to the person concerned on merits and on his own qualification and eligibility. The same cannot be treated as a hereditable or
assignable property. The licence is granted on the persons satisfying and deserving to hold the licence. By no stretch of imagination it can be stated
that the same qualifications will be available to the legal heirs and that they should be granted those licences automatically. The licenses are issued in
public interest for maintaining effective public distribution system. Therefore, the petitioners cannot claim the licenses as a property and for
maintaining their livelihood. There is a vast difference between the licencees and permits like for example transport permit, IMFL licence etc.,
where there are specific provisions for transfer of licences and which require investment, maintenance etc. The Government has conciously made
no provision in reference to the transfer of the licences or registration certificates. Further, this is dealing with essential commodities for effective
distribution of the same. Therefore, there cannot be any creation of a vested interest or a continued or perpetual right of the licence or certificate of
registration.
The decision of the Government not to continue the license or certificate of registration for the legal representatives cannot be termed as
unreasonable. The certificate of registration which we are concerned with is registered in the name of the retailer. On his demise, the registration
certificate automatically lapses unless a fresh name is entered in the certificate of registration. In the absence of any legal right on the petitioner to
claim the registration, he cannot, on the basis of his father being a registration certificate holder, claim the same as a matter of right. Even though at
one particular point of time, the Government thought it fit to consider the grant of a new licence taking into account the indigent circumstances of
the deceased certificate holder, the Government cannot go on to continue that policy permanently. The policy or the instructions are liable to be
changed from time to time and the Government has retained their authority and discretion to take into account all the relevant factors in the matter
of granting the licence. The attempt on the part of the petitioners is to read between the lines, some words here and there so as to make it appear
as though the continuance of the existing licence will include the licence to the legal representatives also. In the matter of this nature, where
regulation of essential commodities is involved, the Government has got complete discretion to decide the mode of distribution and though whom it
should be distributed. At the risk of repetition, it has to be stated that there is absolutely no dispute that there is no specific provision for the
continuance of the licence of the certificates of the registration by the legal representatives. There is no provision for transfer or assignment. In such
circumstances, petitioners cannot be permitted to infer something which is not available on the basis of the provisions of Transfer of Property Act.
In my view, that argument is made out of desparation without any legal basis. The licence issued to a retailer for vending Kerosene, which is an
essential commodity, as one of the mode of the public distribution system, cannot be treated as a property so as to claim such licenses as
transferable to the legal representatives. Any such claim will be opposed to Article 14 of the Constitution and will be unreasonable. No person
much less a retail licensee for public distribution system of Kerosene can claim hereditary right of acquring that licence especially in the absence of
any provision made on a rational basis.
Learned Counsel for the petitioners referred to the judgment in Rathi Alloys and Steel Ltd., Alwar Vs. Collector, Central Excise, Jaipur, , for
the proposition that matters already been settled by Government''s own action in favour of a class of persons cannot be reopened, even though
such actions are not fully in terms of statutory provision. The Supreme Court, in that case, while holding that in fiscal matters, no one need to go
unneccesarily by reason for considering the inherent injustice and hardship to the appellant primarily due to the action of the Department and the
Government and in the peculiar facts and circumstances of the ease, but not as a precedent (Italics added) discharge the notices issued by the
Board. Therefore, the petitioner cannot rely on his judgment which was rendered in the facts of the case and not as a precedent. Besides, though
the Government, at a particular point of time, as decided to grant a new licence in case of indigency, it cannot be expected to continue the same
further.
The next judgment relied on by the petitioners is Style (Dress) Land, Chandigarh, v. Union Territory, 1998 (7) SCC 89, wherein the Supreme
Court held that the Government cannot act like a private individual in imposing conditions solely with the object of extracting profit from its lessees.
The Government actions are required to be based on standards which are not arbitrary or unauthorised. All actions of every public functionary in
whatever sphere must be, guided by reason and not humor, whim, caprice or personal predelictions. The said principle enunciated by the Supreme
Court will not apply to the facts of this case. It cannot be stated that the Government has acted arbitrarilly and without following any standards.
The refusal to renew the licence in favour of a legal representative cannot be termed as arbitrary. On the contrary, as stated earlier, the
Government is the authority to decide and in the absence of any provision for succeeding to the licence or certificates of registration by the legal
representatives the normal rule is that the licence and the certificate of registration will go along with the original licensee.
The learned counsel for the petitioners filed supplementary written submissions along with a bunch of copies of judgments in support of his
argument. In my view, the basic premises an which the petitioners proceed namely that the petitioners have got a fundamental right of trade
guaranteed under Article 19(1)(g) of the Constitution an that the restriction imposed by the Government is unreasonable. Basically, the petitioners
have no fundamental right to deal with the essential articles within the control and regulation of the State. The regulation and control order are not
under challenge. The regulation includes the distribution through licence and certificate of registration. It further includes the right of renewal of
those licencee and certificates of registration. Therefore, freedom of trade guaranteed under Article 19(1)(g) of the Constitution is subject to
reasonable restrictions by sub Article (6) viz. the control orders. These restrictions are reasonable restrictions and agree riot under attack.
Therefore, when these rules do not provide for any renewal, there is no case for petitioners to say that their fundamental right of trade is affected.
Petitioners are trying, to expand the argument by certain orders granted to different class of licensees and, even in reference to this class of
licensees at one particular point of time. As I have found, if is for the Government to decide the policy, of distribution of essential articles and the
method of selecting that, particular class of persons, and for those persons to issue licence and renew it. This cannot give rise to a legal subsisting
right, to the legal representatives. Hence, the decisions which are circulated, in my, view have no relevance to the facts and circumstances arising
under the Essential Commodities Control. Orders and the right of the Government to determine the class of distributors. .
For all the above reasons, no grounds are made, out to grant the relief sought for by the petitioners; in these writ petitions. The writ petitions
therefore fail and are accordingly dismissed. No costs. Consequently, all the connected W.M.Ps. are also dismissed.