AMICUS AI
Citation Codes
Neutral Citations
2009 INSC 992
Equivalent Citations
citation codes
Case Number
Disposition
Attorney(S)
Judges
Acts
  • Section 3 of the Essential Commodities Act, 1955
  • Section unknown, Article unknown of the unknown Act/Article (implied by "it is well known")
  • Section 5, Subsection 2 of the 1983 Income Tax Act
  • Sections 3/7 of the Essential Commodities Act, 1955
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Cites
Cited by
Citation Codes
Neutral Citations
2009 INSC 992
Equivalent Citations
citation codes
Case Number
Disposition
Attorney(S)
Judges
Acts
  • Section 3 of the Essential Commodities Act, 1955
  • Section unknown, Article unknown of the unknown Act/Article (implied by "it is well known")
  • Section 5, Subsection 2 of the 1983 Income Tax Act
  • Sections 3/7 of the Essential Commodities Act, 1955
Smart Summary

Factual and Procedural Background

The appellant was a licensed dealer in High Speed Diesel Oil (HSDO) and Light Diesel Oil (LDO) under the U.P. High Speed Diesel Oil and Light Diesel Oil (Maintenance of Supplies and Distribution) Order, 1981, framed pursuant to Section 3 of the Essential Commodities Act, 1955. His licence, originally granted on 1 April 1990, had been renewed up to 31 March 2010.

On 22 June 2002 the licensing authority cancelled the licence for alleged violations. The appellant obtained an interim stay from the High Court on 9 July 2002. While the writ petition was pending, the District Magistrate confirmed the cancellation on 28 March 2003; that order was also stayed by the High Court on 7 April 2003.

Subsequently, raids conducted on 24 October 2007 and 8 November 2007 by the Weights & Measures Department and the Food Cell revealed 3,178 litres of diesel in excess of the recorded stock. A show-cause notice dated 13 November 2007 was issued, and an FIR dated 14 November 2007 was lodged for alleged contraventions of Sections 3/7 of the Essential Commodities Act and the 1981 Order. The High Court stayed the appellant’s arrest in criminal proceedings.

By order dated 9 January 2008, the District Supply Officer cancelled the appellant’s licence. The appellant filed Writ Petition No. 5255 of 2008 challenging that cancellation, alleging disparity between the show-cause notice and the FIR and asserting mala fides. On 4 February 2008 the High Court dismissed the writ petition on the ground of availability of an alternative statutory remedy. The present appeal challenges that dismissal.

Legal Issues Presented

  1. Whether the High Court erred in summarily dismissing the writ petition on the ground of an alternative statutory remedy when the appellant alleged lack of jurisdiction, violation of natural justice, and mala fides.
  2. Whether the allegations of mala fides against a Cabinet Minister were sufficiently specific to warrant judicial scrutiny in writ jurisdiction.
  3. Whether disputed questions of fact concerning excess stock justified relegating the appellant to the statutory appellate forum under the 1981 Order.

Arguments of the Parties

Appellant's Arguments

  • The repeated raids and proceedings were initiated out of political vendetta by Cabinet Minister Shri Ramveer Upadhyay, rendering the entire process mala fide.
  • The existence of an alternative remedy does not bar a writ petition where the impugned order is without jurisdiction or violates natural justice.
  • The show-cause notice did not allege sale through unauthorised persons, unlike the FIR, evidencing procedural irregularity.

Respondents' Arguments

  • The High Court correctly dismissed the writ petition because the appellant had a full-fledged statutory appeal where both facts and law could be examined.

Table of Precedents Cited

Precedent Rule or Principle Cited For Application by the Court
Whirlpool Corpn. v. Registrar of Trade Marks, (1998) 8 SCC 1 Exceptions to the rule of alternate remedy when an order is without jurisdiction or violates natural justice. The Court held that the present case does not fit Whirlpool exceptions because adequate alternate remedy exists and no jurisdictional error is shown.
Pratap Singh v. State of Punjab, AIR 1964 SC 72 Judicial review is available where mala fides of fact are pleaded with specificity. The Court noted this principle but found the appellant’s allegations too vague to invoke it.
Swaran Singh Chand v. Punjab SEB, (2009) 13 SCC 758 Distinction between malice in fact (to be pleaded and proved) and malice in law. Used to emphasise that the appellant failed to plead and prove malice of fact; hence High Court was justified.

Court's Reasoning and Analysis

1. Statutory Power to Inspect: The Court affirmed that Weights & Measures and Food & Civil Supplies authorities were empowered to inspect and search the appellant’s premises. Possession of stock in excess of recorded quantities constitutes a contravention of the licence and the 1981 Order.

2. Disputed Questions of Fact: Determining actual stock levels and compliance with licence conditions involves factual controversies better suited to the statutory appellate forum. While writ courts are not absolutely barred from fact-finding, the Court underscored that the appellant’s grievances hinge on contested facts.

3. Adequacy of Alternate Remedy: The 1981 Order provides an appeal against cancellation. The appellate authority can examine both facts and law. Consequently, the High Court did not err in directing the appellant to exhaust that remedy.

4. Allegations of Mala Fides: Although mala fides can justify writ intervention, the High Court found the appellant’s pleadings against the Cabinet Minister “vague in nature” and unsupported by material. The Supreme Court agreed with this assessment, citing the necessity to plead and prove malice of fact distinctly from malice in law.

5. Inapplicability of Whirlpool Exception: Because no jurisdictional error or proven violation of natural justice was shown, and a competent appellate forum exists, the Whirlpool doctrine did not assist the appellant.

Holding and Implications

HOLDING: The appeal is dismissed with costs assessed at Rs 10,000.

Implications: The decision reinforces the principle that writ jurisdiction will ordinarily not be invoked where an efficacious statutory remedy exists, particularly when disputed facts are central and allegations of mala fides are inadequately pleaded. No new legal precedent is created, but the ruling underscores the obligation to exhaust appellate procedures under the Essential Commodities regulatory framework before seeking writ relief.

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    Mukesh Kumar Agrawal v. State Of Uttar Pradesh And Others

    S.B Sinha, J.— Leave granted. The appellant is before us aggrieved by and dissatisfied with a judgment and order dated 4-2-2008 passed by a Division Bench of the High Court of Judicature at Allahabad in Writ Petition No. 5255 of 2008 whereby and whereunder the writ petition filed by the appellant questioning the validity of a judgment and order dated 9-1-2008 has been dismissed.

    2. The appellant was a dealer in high speed diesel oil and light diesel oil. Business in the said commodity is governed by the U.P High Speed Diesel Oil and Light Diesel Oil (Maintenance of Supplies and Distribution) Order, 1981 (for short “the 1981 Order”). The said 1981 Order has been framed in terms of Section 3 of the Essential Commodities Act, 1955. The appellant was granted a licence for dealing in the said commodities in terms of the said 1981 Order on or about 1-4-1990, which was renewed till 31-3-2010.

    3. Indisputably, on the premise that the appellant had violated the terms and conditions of the said licence, the licensing authority by reason of an order dated 22-6-2002 cancelled the said licence. The appellant preferred a writ petition thereagainst in the High Court. By an interim order dated 9-7-2002, the operation of the order dated 22-6-2002 was stayed.

    4. During pendency of the said writ petition, the order of cancellation of licence was confirmed by the District Magistrate on 28-3-2003. Another writ petition came to be filed by the appellant on 7-4-2003 in the High Court and the said order dated 28-3-2003 passed by the District Magistrate was also stayed.

    5. Indisputably, again on 24-10-2007 and 8-11-2007, raids were conducted on the appellant's establishment by the Weights and Measures Department, Lucknow and Food Cell of the Office of the Additional Commissioner, Food and Civil Supplies, U.P In the said raid, 3178 litres of high speed diesel oil were found to be in excess. A show-cause notice was issued on or about 13-11-2007 asking the appellant to show cause as to why his licence should not be cancelled. A first information report (FIR) was also lodged on 14-11-2007 purporting to be for violation of Sections 3/7 of the Essential Commodities Act, 1955 as also the provisions of the 1981 Order. The appellant filed a criminal miscellaneous writ petition for quashing the FIR lodged against him. In the said proceedings, the High Court stayed the order of his arrest.

    6. The District Supply Officer by his order dated 9-1-2008 cancelled the licence of the appellant. Questioning the said order, the appellant filed a writ petition inter alia on the premise that the allegations contained in the show-cause notice were different from those made in the FIR insofar as the notice did not specify that any sale through unauthorised persons had taken place. By reason of the impugned judgment, the said writ petition has been dismissed by the High Court opining that the appellant has an alternative remedy.

    7. Mr Rakesh Dwivedi, learned Senior Counsel appearing on behalf of the appellant would contend that the High Court committed a manifest error in passing the impugned judgment insofar as it failed to take into consideration that the very fact that the appellant's establishment had repeatedly been raided by way of political vengeance for which he had to move the High Court again and again is itself a pointer to the fact that the entire proceeding against him was mala fide having been initiated at the instance of the Minister who was a political rival as the appellant had fought an election against him. Learned counsel would contend that the existence of alternate statutory remedy by itself cannot be a ground for dismissing a writ petition summarily as it is well known that when an order is passed without jurisdiction, existence of alternative remedy would not be a bar for maintaining the same.

    8. Mr Dinesh Dwivedi, learned Senior Counsel appearing on behalf of the respondents, however, would support the impugned judgment.

    9. It is no doubt true that the appellant in his writ petition has made out a case of malice against one Shri Ramveer Upadhyay, Cabinet Minister for Power/Energy. The High Court by reason of the impugned judgment opined that although the said Shri Ramveer Upadhyay contested an election against the appellant in the years 2002 and 2007, the allegations of mala fides were vague in nature. It was furthermore opined by the High Court that the averments made in the writ application in regard to the malice of fact against said Shri Ramveer Upadhyay were not supported by any material which would lead to a finding of malice against him.

    10. The appellant indisputably was holder of a licence granted to him in terms of the provisions of the 1981 Order. Clause 16(1) of the 1981 Order obligates the licensee to display a stock of price board at his business premises showing the opening balance of high speed diesel oil or light diesel oil and the rate per litre as also the closing balance recorded at the end of the day. Clause 14 of the conditions of the licence mandates a licensee to maintain a stock register.

    11. The contention of the appellant is that he did not hold any stock of high speed diesel oil in excess, as he had received 3000 litres of diesel at about 12.00 p.m on 8-11-2007, that is, before the raid was conducted. From a perusal of the show-cause notice, however, it appears that the allegation against him was that he had stored 8300.47 litres of diesel in the underground tank, whereas according to the tank calibration chart measuring 83 centimetres, the amount of diesel oil stored therein was calculated at 7523.05 litres.

    12. The appellant in his writ application had inter alia contended that he had not been given a copy of the inspection report at the spot. Furthermore, it is contended that the District Supply Officer had proceeded against him with a predetermined view.

    13. It is true that ordinarily a writ petition cannot be dismissed summarily when the allegations made in the writ petition inter alia make out a case that the order and/or action taken therein was wholly without jurisdiction and/or in violation of the principles of natural justice as has been held by this Court in Whirlpool Corpn. v. Registrar of Trade Marks (1998) 8 SCC 1, but, in our considered opinion, in the present case no such case has been made out.

    14. There cannot be any doubt or dispute whatsoever that the authorities of the Weights and Measures Department as also the Food Cell of the Office of the Additional Commissioner, Food and Civil Supplies, U.P were entitled to inspect the business premises of the appellant and carry out searches. Indisputably again, possession of higher quantity of diesel oil than that has been shown in the stock book would amount to contravention of the provisions of the licence and/or licensing Order.

    15. The appellant in invoking the writ jurisdiction of the High Court order raised contentions involving disputed questions of fact. Ordinarily, the disputed questions of fact are not determined in a writ petition. We would, however, hasten to add that the same would not mean that the High Court cannot exercise its discretionary writ jurisdiction for determination of disputed questions of fact or only because some dispute had been raised in the writ proceedings itself the same would deter the High Court from exercising its jurisdiction.

    16. The appellant has raised pure questions of fact for determination in the writ proceedings in respect whereof the licensing authority itself was required to go into the materials brought on record by both the parties. It is neither denied nor disputed that the order passed by the licensing authority cancelling the licence of a dealer is an appealable one. The appellate authority is entitled to go into the questions of both law and fact. The High Court, therefore, in our opinion, cannot be said to have committed any error in refusing to entertain the writ petition. It is, thus, not a case where the ratio laid in Whirlpool (1998) 8 SCC 1 is applicable.

    17. There cannot furthermore be any doubt or dispute that the High Court can go into the question where malice of fact is alleged. (See Pratap Singh v. State of Punjab AIR 1964 SC 72.) The High Court, however, upon considering the averments made in the writ petition, as noticed hereinbefore, found that the allegations of malice made therein are vague in character. The appellant, thus, was entitled to raise all his contentions including the aforementioned contention before the authorities under the 1981 Order.

    18. We also intend to emphasise that the distinction between a malice of fact and malice in law must be borne out from records; whereas in a case involving malice in law which if established may lead to an inference that the statutory authorities had acted without jurisdiction while exercising its jurisdiction, malice of fact must be pleaded and proved. (See Swaran Singh Chand v. Punjab SEB (2009) 13 SCC 758, (2009) 7 Scale 622.)

    19. For the aforementioned reasons, the appeal is dismissed with costs. Counsel's fee assessed at Rs 10,000.

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    Mukesh Kumar Agrawal v. State Of Uttar Pradesh And Others
    (Jul 31, 2009)