S.B Sanyal, J.:— These two writ petitions C.W.J.C No. 1028 of 1977, and C.W.J.C No. 1014 of 1977, have been taken up together as the points involved in these writ petitions are common. This judgment, therefore, will govern both the cases.

2. In C.W.J.C No. 1028 of 1977 the petitioner assails Annexures 1 and 2 and in C.W.J.C No. 1014 of 1977 the prayer is for quashing Annexures 1 and 8. These Annexures relate to an order of suspension of the petitioner's registration certificate bearing No. 40/76/77 (in C.W.J.C No. 1028 of 1977) and registration certificate No. 4F/72-73 (in C.W.J.C No. 1014 of 1977) issued under clause 7 of the Fertilizer Control Order, 1957 (hereinafter to be referred to as the ‘Order’) a Central Order issued under Section 3 of the Essential Commodities Act, 1955 (hereinafter to be referred to as ‘the Act’).

2A. The only relevant fact common to both the cases, is that there has been an inspection of the shops pertaining to the said two registration certificates, by the inspecting authorities and certain irregularities were detected in the maintenance of the accounts. Thereafter criminal cases under S. 7 of the Act have been instituted against the dealers which are pending disposal before the criminal Courts. During the pendency of the said criminal cases, and authorities suspended the registration certificates and further directed that the two firm dealers be not allotted any fertilizer by the wholesale dealers.

3. Mr. Rameshwar Prasad No. II, learned counsel appearing for the petitioners in both the cases drew my attentions to Cls. 6, 7 and 17 of the Order which read as follows:

“6. Application for registration.— Every person desiring to obtain a certificate of registration for selling fertilizer under this Order shall make an application in duplicate to the Registering Authority in form ‘A’ together with the fee for the registration and a certificate from the manufacturer whom he represents or intends to represent or from the State Government of a Commodity Board indicating the source from which the fertiliser will be obtained.

Provided that a certificate of registration shall not be granted to a person who

(a) has been convicted for any offence under the Essential Commodities Act, 1955 (10 of 1955) or any order made thereunder within three years preceding the date of application;

(b) fails to enclose with the application a certificate from the manufacturer, the State Government or a Commodity Board “as required under cl. 6.”

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“7. Grant and refusal of registration:— The Registering Authority shall grant a certificate of registration in Form ‘B’ within thirty days of the receipt of the application to any person who applies for it under Cl. 6.

Provided that where a certificate of registration granted under this order is suspended or cancelled under Cl. 17, the Registering Authority shall not grant a new certificate of registration during the period of such suspension or for a period of one year from the date of such cancellation.”

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“17. Power to cancel registration certificate:— A registering authority may, after giving the holder of a certificate of registration, an opportunity of being heard, cancel or suspend the certificate of registration on any of the following grounds, namely:—

(a) that the certificate of registration had been obtained by misrepresentation to a material particular; and

(b) that any of the provision of the Order or any condition of the certificate of registration has been contravened.”

Relying on the said provisions, he submits:—

(a) Under the aforesaid clause registration certificate could be cancelled or suspended for reasons enumerated in clause 17. Pendency of a criminal case is not one of the conditions attracting cancellation or suspension of the certificate;

(b) The law envisages cancellation or suspension of the registration certificate by way of punishment only and that, too, after following the principles of natural justice. In the instant case said procedure has not been followed, therefore, the order of suspension is without jurisdiction. It is also bad because the impugned order is by way of interim suspension of registration certificate pending the criminal cases;

(c) Powers of interim suspension is either creature of the statute governing the contract or express terms in the contract itself.

Neither the order nor the terms and conditions of the registration certificate, anywhere confer power on the authorities to pass an order of interim suspension of the registration certificate.

Counsel appearing for the State contended that since a criminal proceeding for contravention of the order is pending, it is just and proper as also urgent under the exigencies of the situation, that such a person should not be allowed to carry on business till the disposal of the said criminal case and, therefore, the order suspending the registration certificate is legal and valid. He further contends that clause 18(c) of the Order envisages an appeal from an order cancelling or suspending any certificate of registration and the petitioners have not exhausted the said remedy, as such the writ petitions should not be entertained.

4. The modem States have found the desirability to control or regulate specified activities to some form of Government control where the law-making authority has considered the imposition of such control desirable, it has, amongst other measures, imposed need to obtain licence. The form of the licence and the conditions on which the licence may or may not be issued in the particular instance, renewal, cancellation and suspension of the licence are either settled by statute or are laid down in some form of subordinate legislation. The subordinate legislation usually regulates the manner in which the principal activities may be carried on under the terms of the licence. It may be noteworthy to mention here:

“that non-renewal of an existing licence is usually a more serious matter than refusal to grant a licence in the first place. Unless the licensee has already been given to understand when he was granted the licence that renewal is not to be expected, non-renewal may seriously upset his plans, cause him economic loss and perhaps cast a slur on his reputation. It may, therefore, be right to imply a duty to hear before a decision not to renew when there is a legitimate expectation of renewal, even though no such duty is implied in the making of the original decisions to grant or refuse the licence.”

This principle is recognised by “some British statutes and judicial dicta, and number of judicial decisions in other Commonwealth Jurisdictions” (Quotations from De Smith's Judicial Review of Adminstrative Action, 4th Edition, Pages 223 and 224).

5. Suspension of licence whether by way of interim measure or by way of punishment stands on the same footing, nay on a better footing than refusal to renew a licence, as it causes unexpected and sudden interference with the business during the currency of licence, thus putting the licensee to serious jeopardy. Adherence to the principles of natural justice is a functional obligation more particularly “where people are affected by acts of authority”. “The soul of the rule of natural justice is fair play (Vide Mohinder Singh Gill v. Chief Election Commissioner, AIR 1978 SC 851).

6. A look at the scheme of the Order discloses that ordinarily if a person makes an application in accordance with the provisions of clause 6, there will be a grant of certificate of registration under clause 7 of the Order:—

(a) If the applicant had not suffered a prior suspension or cancellation of his registration certificate etc.;

(b) He has not been convicted of any offence under the Act or any Order made thereunder within three years, preceding the date of application;

(c) If the application is in compliance with the requirements of Cl. 6 of the Order.

The scheme thus envisages that mere pendency of a criminal case for breach of the Act and/or the order is of no consequence, unless the person has suffered a conviction i.e, contravention alleged is finally adjudicated.

7. A citizen has a right to carry on trade or business guaranteed under Article 19(1)(g) of the Constitution of India. The power to revoke or to suspend a licence is a drastic power. It results in severe abridgment of the right to carry on business and, therefore, the Order has prescribed certain conditions to prevent the abuse of power and to ensure just exercise of power. Any order of suspension or revocation in breach of any one of the conditions laid down under Cl. 17 of the Order is undoubtedly void. (See Narayana Sankaran Mooss v. State of Kerala, AIR 1974 SC 175; Andhra Industrial Works v. Chief Controller of Imports, AIR 1974 SC 1539). Trade in intoxicants, however, stands on a different footing as there is no fundamental right to do trade and business in intoxicants (Vide Har Shankar v. Deputy Excise and Taxation Commr., AIR 1975 SC 1121).

8. The question, however, in the instant case is whether in absence of any provision in the statute and in the subordinate legislation and/or in the terms and conditions of the licence, the authorities had any jurisdiction to pass an order of interim suspension till the disposal of the criminal case pending against the petitioner and that too without giving the dealer an opportunity to be heard in the matter. To my mind such a power of interim suspension could only be conferred by the statute or the subordinate legislation or a contract, i.e, the terms and conditions of the licence. The said power must be conferred in express terms. In contracts of employment this principle is well settled. (See V.P Gindroniya v. State of M.P AIR 1970 SC 1494; The Management Hotel Imperial, New Delhi v. Hotel Workers' Union, AIR 1959 SC 1342). There has been quite a number of unreported decisions of this Court which have taken the same view with respect to law of licence and the said decisions have laid down that in absence of any provisions in the statutes and/or the order and/or in the terms and conditions of the licence, the authorities had no jurisdiction at all to pass an interim order of suspension, (See C.W.J.C No. 27 of 1974, Sitaram Sah v. Subdivisional Magistrate, Bihar Sharif, dated 9th January 1974; C.W.J.C No. 1110 of 1975, Dewat Narain Singh v. State of Bihar disposed of on 21st April 1976 and C.W.J.C No. 771 of 1973, Babulal Sah Radhelal Sah v. The State of Bihar disposed of on 3rd August, 1976). This question again arose in the case of Kashiram Dalmia v. State of Bihar reported in AIR 1978 Pat 264 but their Lordships refrained to go into the said question and preferred to quash the order of interim suspension, as the said order was passed without affording an opportunity of being heard in the matter by taking the view “undoubtedly, the order suspending licence be it interim or final affects the liceneee adversely and therefore he should be afforded opportunity of being heard in the matter.”

9. From the provisions of clause 7 and Cl. 17 of the Order it is manifest that a certificate of registration can only be refused when a person has been convicted of any offence under the Act. A person's registration certificate can be cancelled and suspended after following the principles of natural justice. A mere allegation of contravention does not call for any action under the Act, order or under the terms and conditions of the registration certificate. Whether the petitioner has contravened the provisions of the order in the instant case is sub judice before the criminal court and as such in the domain of mere allegation, yet the petitioner is made to suffer by stoppage of his right to carry on trade and business. The order neither expressly nor impliedly conferred power to suspend the certificate of registration by way of interim measure. I am convinced in my mind that such a power is a creature of the statute and/or the terms of contract. Since the power is absent, the authorities acted wholly without jurisdiction in suspending the licence through the impugned annexures. I am also in full agreement with the principle that since a suspension by way of punishment or by way of interim measure visits the person with the same consequences the person so affected must be given an opportunity of being heard before the proposed action is taken. A question may arise as to what would be the form of hearing in the case of suspension by way of punishment and suspension by way of an interim measure (assuming for a moment, such an action is envisaged by the statute). It is contended if the same procedure is to be followed in both the circumstances, the interim suspension measure would be meaningless. The answer to this question is not too far to seek. The decision of the Supreme Court in the case of Swadeshi Cotton Mills v. Union of India reported in AIR 1981 SC 818 provides the answer. The Supreme Court while considering the provision of S. 18AA, Industries (Development & Regulation) Act which section conferred power on the Central Government to immediately take over an industrial undertaking, pending investigation of its detrimental acts observed:

“Cases of extreme urgency where action under Section 18AA(1)(a) to prevent fall in production and consequent injury to public interest, brooks absolutely no delay would be rare. In most cases, where the urgency is not so extreme, it is practicable to adjust and strike a balance between the competing claim of hurry and hearing.

The audi alteram partem rule as already pointed out, is a very flexible, malleable and adaptable concept of natural justice. To adjust and harmonise the need for speed and obligation to act fairly it can be modified and the measure of its application cut short in reasonable proportion to the exigencies of situation. Thus, in the ultimate analysis, the question (as to what extent and in what measure) the rule of fair hearing will apply at the predecisional stage will depend upon the degree of urgency, if any, evident from the facts and circumstances of the particular case.”

In my opinion, the authorities at least must record a finding of prim a facie case against the dealer for the proposed action, by following “Participatory Justice”. In the instant case admittedly no opportunity was provided to the petitioner before the impugned action was taken and therefore also the order is illegal and without jurisdiction.

10. The submissions of the learned counsel appearing on behalf of the State that this court should not interfere with the impugned order as the petitioner has not preferred an appeal, is wholly misconceived for more than one reasons. The writ having once been admitted it would be unfair to refuse to exercise jurisdiction. The order per se is void, illegal and without jurisdiction. The order passed is further in breach of the principle of natural justice. No disputed questions of fact is at all involved for the decision. For each one of the reasons a case of interference is clearly made out (State Of U.P v. Mohammad Nooh ., AIR 1958 SC 86; A.V Venkateshwara v. Ramchand Sobhrai Wadhwani, AIR 1961 SC 1506; Coffee Board; Bangalore v. Joint Commercial Tax Officer, AIR 1971 SC 870).

The impugned order abridges the petitioner's fundamental right guaranteed under Article 19(1)(g) of the Constitution of India. It is too late in the day to contend that a firm is not a citizen and, therefore, not entitled to enforce fundamental rights. Vide Andhra Industrial Works; AIR 1974 SC 1539) (supra). Once it is held that the cancellation and suspension of licence is an abridgment of fundamental right, the case falls within the provisions of Article 226(1) of the Constitution of India and, therefore, no question of alternative remedy at all arises. Further clause 18(c) of the Order does not provide appeal against an order of interim suspension. I, therefore, hold that the submissions raised on behalf of the State are devoid of any substance.

11. In fine, I quash Annexures 1 and 2 of C.W.J.C No. 1028 of 1977 and Annexures 1 and 8 of C.W.J.C No. 1014 of 1977 as being wholly illegal and without jurisdiction and allow the writ petitions. There will, however, be no order as to costs.

12. It would be open to the authorities to take such steps as they may deem fit in accordance with law, bearing in mind the observations aforesaid.

P.S Sahay, J.:— I agree.

Petitions allowed.