1. Tata Metaliks Kubota Pipes Limited, the petitioner No. 1 and the petitioner No. 2 one of the Directors and principal officers of the petitioner No. 1 are the petitioners in all the writ petitions. Hereinafter for the sake of brevity, the petitioner No. 1 shall be referred to as the ‘petitioner-company’.
2. The facts of the case are that on 16th October, 2007 the Registrar of Companies, West Bengal issued the Certificate of Incorporation to the petitioner-company. During March, 2008 the authorities issued the Certificate for Commencement of Business. Thereafter, on 18 April, 2009 the petitioner-company obtained factory licence. On 27 April, 2009 consent was granted by the West Bengal Pollution Control Board to operate the factory for manufacturing Centrifugally Cast (Spun) Ductile Iron Pressure. Pipes (hereunder referred to as ‘the pipes’) for water, gas and sewage in its plant at Kharagpur with an installed capacity of 1,10,000 TPA. On 1st May, 2009 an application for grant of licence was furnished with the Bureau of Indian Standards (for short ‘BIS’) to use standard mark as per IS 8329/2000 specification on the pipes wherein it was stated that the company had started its manufacturing process. After such application was filed, the BIS by letter dated 22nd May, 2009 informed the petitioner-company that preliminary inspection of the factory was to be carried out by its officers for the purpose of processing the application. It was stated in the said letter that the Inspecting Officer would examine the availability of essential testing facilities, study the quality control system and will draw samples for testing in an independent laboratory to judge the conformity of the product to the relevant Indian standard. The petitioner-company was further informed that it should not make any public claim through the media such as advertisement that the product conforms to the Indian standard until licence was granted. If any such claim was made, action would be taken in accordance with the Bureau of Indian Standards Act, 1986 (for short the Act) and the rules and regulations framed thereunder. As intimated, on 11 June, 2009 the officers of the BIS inspected the factory of the petitioner-company and collected samples. It is to be noted that on 25 June, 2009 the Central Government issued a notification called the Ductile Iron Pressure Pipes and Fittings (Quality Control) Order, 2009 (for short ‘2009 Order,’) which came into effect from 1 July, 2009. In terms of paragraph 3.1 of the 2009 Order it was provided that no person by himself or through any person on his behalf manufacture or store for sale or sell or distribute such pipes and fittings which do not conform to the specified standards and do not bear the standard mark of the Bureau without obtaining Certification Marks licence.
3. Challenging the 2009 Order a writ petition being W.P No. 12814 (W) of 2009 the first writ petition was moved on 30 July, 2009 when, besides issuing directions for filing affidavits, an order was passed directing the BIS to communicate the decision on the petitioners' application for licence within a week from that date. Incidentally, 2009 Order was revoked on 23rd October, 2009. Pursuant to the directions passed on 30 July, 2009 by the High Court, an order dated 6 August, 2009 was passed by M.K Roy, Scientist-F & Head (MDK-I) rejecting the application of the petitioner-company on the ground of antecedent as per Regulation 4(1) of the Bureau of Indian Standards (Certification) Regulations, 1988 (hereinafter referred to as the ‘Regulations’ and the guidelines provided under the Operating Manual for Product Certification, 2004 due to the seizure of materials during a search conducted on 15 July, 2009 on the factory premises of the petitioner company. Incidentally, on 15 July, 2009 the officers of the BIS conducted the search at the factory premises of the petitioner. At the time of search 45 pieces of pipes with IS 8329 markings and 3 pieces of stenciling plates for the purpose of marking IS 8329 were seized. Seizure memo was prepared. Thereafter, on 26 July, 2009 a show-cause notice was issued to the petitioner-company directing to show cause as to why the application for grant of licence should not be rejected on the ground of violation of section 12(b) of the Act.
4. Challenging the order of rejection dated 6 August, 2009, the petitioner moved a writ petition being W.P No. 14315 (W) of 2009 the second writ petition when on 19 August, 2009 after hearing the parties the Director General of BIS was directed to reconsider the decision passed on 6 August, 2009 upon such enquiry if it might be caused to be conducted keeping in mind the relevant considerations referred to in Regulation 4 of the Regulations.
5. In compliance with the directions contained in the order dated 19 August, 2009 the petitioner-company was granted opportunity to present its case. Written submission was filed. Hearing was granted. Thereafter, an order dated 31 August, 2009 was passed by the Director General of BIS confirming the decision dated 6 August, 2009 by M.K Roy, Scientist-F & Head (MDK-I) (BIS-Kolkata). Being aggrieved, the writ petition being W.P No. 16603 (W) of 2009- the third writ petition was filed.
6. Learned Senior Advocate appearing on behalf of the petitioners has submitted that the order dated 31s’ August, 2009 passed by the Director General of BIS is only an affirmation of the order dated 6 August, 2009 which was passed without granting an opportunity of hearing as postulated under Regulation 4(4) of the Regulations. Moreover, the order dated 6 August, 2009 was not an independent decision since it was at the behest of the higher authorities. However, in his usual fairness learned Senior Advocate has submitted that the order passed on 6 August, 2009 had merged with the order dated 31 August, 2009. Submission has been made that the order of rejection for BIS licence of the ground of recovery of 45 pieces of pipes with IS 8329 markings, which was due to inadvertence and had been admitted by the petitioners, is harsh as there is no allegation that the goods are sub-standard. Besides, goods seized were never used. Therefore, except for the fact that the products were recovered with the IS markings which has been branded as antecedent by the BIS in its order, as all factors as stipulated in Regulation 4(1) are in favour of the petitioners, licence may be granted. Besides, authority should have taken a pragmatic view since considerable amount of money including foreign exchange has been invested and 450 employees are on the rolls. It is submitted that refusal to grant licence and the proceedings pursuant to the seizure would amount to double jeopardy. Submission is, since the appropriate procedure for grant of licence has been prescribed under the Regulations, licence cannot be held back on the ground of antecedent as the issue is pending before the learned Magistrate. It has been submitted that since by the orders dated 30th July, 2009 and 19 August, 2009, the Writ Court carved out a jurisdiction, the instant writ petitions cannot be turned down on the ground of availability of an alternative remedy.
7. Learned Additional Solicitor General supporting the order of rejection for the grant of BIS licence submitted that production commenced on 30 April, 2009, not on 1 May, 2009. Referring to the seizure list it has been submitted that even before the licence was granted and preliminary enquiry was going on for grant of licence, machinery was in place, IS numbers were stamped on the products which shows it was a pre-meditated act. So far as the order dated 6 August, 2009 is concerned, it has been submitted that it was not passed pursuant to the direction of the headquarters. As under Regulation 4(1) satisfaction is of prime consideration and since it stipulates that antecedent, among other factors has to be taken note of all factors relating to the grant of licence including antecedent, which includes the incident of search carried out on 15 July, 2009, were taken into consideration. It is submitted that as BIS was directed to communicate the decision within a week, while passing the order dated 6 August, 2009 due to paucity of time hearing could not be granted. However, while reconsidering, as directed, the petitioner-company was given an opportunity to put forward its case. Submission is since the provisions of the Act are not under challenge, as neither there is any jurisdictional error nor there is any allegation of denial of natural justice, the petitioners ought to have availed themselves of the statutory alternative remedy provided under section 16(1) of the Act and thus the writ petition is not maintainable.
8. The point to be considered is whether the Director General of BIS was justified in passing the order rejecting the application of the petitioner-company for grant of licence.
9. In order to appreciate the issue, it is necessary to refer to section 15 of the Act which speaks of mechanism for grant of licence. Section 15 is as under:
“15.(1) The Bureau may, by order, grant, renew, suspend or cancel a licence in such manner as may be determined by regulations.
15.(2) The grant of renewal of the licence under sub-section (1) shall be subject to such conditions and on payment of such fees as may be determined by regulations.”
10. Section 15 of the Act postulates that the grant of licence is determined by Regulations. Regulations 4(1) and 4(4) which deal with grant and refusal of licence respectively, are as under:
“4. Grant of Licence.—(1) If the Bureau, after a preliminary inquiry, is satisfied that the applicant having regard to requisite skill, equipment, systems, resources, previous performance and antecedents relevant to the issuance of the licence is fit to use the Standard Mark, the Bureau shall grant a licence in Form II authorizing the use of the Standard Mark in respect of the article or class of articles manufactured by the applicant or in respect of the process employed in any manufacturer or work, subject to such terms and conditions as specified in these regulations. The Bureau shall intimate the applicant about grant of licence.
(4) Where the Bureau, after a preliminary inquiry, is of the opinion that a licence should not be granted, the Bureau shall give a reasonable opportunity to the applicant of being heard, either in person or through a representative authorized by him in this behalf, and may take into consideration any fact or explanation urged on behalf of the applicant before rejecting the application.”
(Emphasis supplied)
11. It is seen from a perusal of Regulation 4(1) that factors such as “requisite skill, equipment, systems, resources, previous performance and antecedents” are “relevant” for the issue of licence. Information regarding these factors are gathered during “preliminary inquiry”. Thus, “preliminary inquiry” is a part of the fact finding process. In the instant case, during preliminary inquiry on 15 July, 2009 raid was conducted, 45 pieces of pipes with IS 8329 markings with batch numbers were seized. Pursuant to the order dated 19 August, 2009 a notice of personal hearing was given to the petitioner-company. On 31 August, 2009 hearing was held. Subsequently, the Director General of BIS passed the reasoned order rejecting the application for grant of licence. Now the question is whether the Director General of BIS was justified in rejecting the application for grant of licence solely on the basis of “antecedent”. The answer has to be in the affirmative. Reasons are not far to see. If scrutinized, Regulation 4(1) provides the answer. Under Regulation 4(1), factors such as “requisite skill, equipment, systems, resources, previous performance and antecedents” are to be taken note of while considering an application for grant of licence. Due weightage has to be given to each of the factors. One factor cannot be read in isolation. There is no room for individual consideration of the factors. That the factors have to be considered conjunctively and not disjunctively is borne out from the use of the word “and” in Regulation 4(1). If after inquiry with regard to all the factors in the said Regulation, the authorities are “satisfied”, then licence would be issued. Therefore, satisfaction under Regulation 4(1) prior to the grant of licence is of utmost importance. While interpreting a statutory Regulation it is to be borne in mind, Court has to examine what has been stipulated. Language used has to be looked into. In order to gather the meaning, interpretation has to be on the basis of the words used in the Regulation. Thus, while ascertaining the exact meaning of the Regulation, language used should be of prime consideration. Hence, in this backdrop while considering an application due regard has to be given to each of the words in Regulation 4(1) since it is the mechanism for grant of licence, a mechanism which is essential for standardization, marking and quality certification of goods as spelt out in the preamble of the Act. Thus, in my view, for the reasons as aforesaid, the Director General of BIS while reconsidering, was justified in passing the order rejecting the application for grant of licence.
12. During hearing an argument has been advanced on behalf of the petitioner-company that there was no violation of section 12 of the Act as evident from the order dated 31 August, 2009 since the pipes with IS marking were not put to use and those were lying stored. In order to deal with this question, it is appropriate to examine section 12 of the Act, which is as under:
“12. No person shall, except in such cases and under such conditions as may be prescribed, use without the previous permission of the Bureau,—
a. any name which so nearly resembles the name of the Bureau as to deceive or likely to deceive the public or which contains the expression ‘Indian Standard’ or any abbreviation thereof; or
b. any mark or trade mark in relation to any article or process containing the expressions ‘Indian Standard’ or ‘Indian Standard Specification’ or any abbreviation of such expressions.”
13. As seen section 12 of the Act absolutely prohibits the “use” of mark in any manner whatsoever without the previous permission of the BIS. That the prohibition is total is spelt out by the words “No person” at the outset of the said section. Now the question is— was the mark used. In my view, even mere stamping, as found on the pipes during seizure, brings the action within the definition of the word ‘use’. In coming to such conclusion it has to be kept in mind that statute or Regulation has to be considered contextually since as any other interpretation would frustrate the object of the statute, section 12 of the Act in particular. The proposition of law laid down by the Supreme Court in Automotive Manufacturers Private Ltd. v. Government of Andhra Pradesh, reported in AIR 1972 SC 229, relied on by the petitioner is not applicable to the facts of the case as the issue was considered in the backdrop of the provisions contained in the Andhra Pradesh Motor Vehicles Taxation Act, 1963.
14. So far as the issue regarding the maintainability of the writ petition raised by the learned Advocate for the respondent is concerned, since Court by its orders dated 30 July, 2009 and 19 August, 2009 had carved out a jurisdiction and the point regarding the maintainability was not raised at the beginning, the writ petitions are maintainable.
15. Therefore, for the reasons as aforesaid the writ petition being W.P No. .16603 (W) of 2009 is dismissed. Since 2009 order has already been withdrawn and order has been passed on 6 August, 2009 pursuant to the order passed by the High Court, nothing remains to be decided in W.P No. 12814 (W) of 2009 and hence, the said writ petition is disposed of. Similarly pursuant to the directions contained in the order dated 19 August, 2009 passed by the High Court, since the order dated 6 August, 2009 was reconsidered by the Director General of BIS by passing the order dated 31 August, 2009 nothing remains to be decided in the writ petition being W.P No. 14315 (W) of 2009 and the said writ petition too is, thus, disposed of.
16. There will be no order as to costs.
17. Urgent photostat certified copy of this order, if applied for, be supplied to the parties on priority basis.
A.D