MANU/GJ/0430/2015

IN THE HIGH COURT OF GUJARAT

Special Civil Application No. 9422 of 2014 and Spl. C.A. Nos. 11363, 12692, 12693 of 2014

Decided On: 21.01.2015

Appellants: Nileshkumar Motilal Valand and Ors. Vs. Respondent: State of Gujarat and Ors.

Hon'ble Judges/Coram:
Abhilasha Kumari

JUDGMENT

Abhilasha Kumari, J.

1. Rule is issued in each petition. Mr. P.P. Banaji, learned Assistant Government Pleader, waives service of notices of Rule for the respondents in each petition. On the facts and in the circumstances of the respective cases and with the consent of the learned Counsel for the respective parties, the petitions are being heard and decided by a common order, as identical questions of fact and law arise in all petitions, except for the differences in the dates of the licences of the petitioners. For the sake of brevity and convenience, the facts, as obtaining in Special Civil Application No. 9422 of 2014, are being referred to.

1.1. The petitioners of this petition were granted licences as Stamp Vendors under the Gujarat Stamp Act, 1958 ("the Stamp Act" for short) read with the Gujarat Stamp Supply and Sales Rules, 1987 ("the Rules" for short), as per the details mentioned in the table below:

1.2. The duration of the licences was for a period of one year. However, the licences were extended from time to time in all cases (except in Special Civil Application No. 12693 of 2014, where the application was made for the first time) by the Competent Authorities under the Rules. After such extension, the term under the licences was to expire on 31-3-2014. The petitioners had made applications for the renewal of their licences, as prescribed under Rule 6(2) of the Rules, on different dates. On 20-5-2014, respondent No. 2 - Deputy Collector and Prant Officer, Jhalod, issued show-cause notices to the petitioners under the subject "renewal of licences". It was stated in the said notices that the petitioners have made applications for renewal of their licences, however, as per instructions dated 7-1-2004, issued by respondent No. 1 - Superintendent of Stamps, to the effect that no person shall be granted a licence till new arrangements are made, and as no new licences have been issued after 1-1-2004, the petitioners should show cause why their licences ought not to be revoked. The petitioners were called upon to remain present, personally, on the next day, that is, 21-5-2014, at 12-00 hours, at the Prant Office, Jhalod, for this purpose. The petitioners appeared before respondent No. 2 - Prant Officer, as directed. On the very same day, by identically worded orders dated 21-5-2014, respondent No. 2 revoked the licences of the petitioners, on the ground that they cannot be renewed in view of the instructions dated 7-1-2004, issued by the Superintendent of Stamps. Aggrieved by the said orders, the petitioners have approached this Court by preferring the present petitions, challenging, not only the orders of the revocation of their licences, but also the instructions dated 7-1-2004, issued by respondent No. 1.

2. Mr. Dhaval D. Vyas, learned Advocate for the petitioner in Special Civil Application No. 9422 of 2014, has made detailed submissions. Mr. Vimal A. Purohit, learned Advocate for the petitioners in the connected petitions, states that he adopts the arguments advanced by Mr. Dhaval D. Vyas, learned Advocate.

2.1. On behalf of the petitioners, it is submitted by Mr. Dhaval D. Vyas, learned Advocate, that the reason for the revocation of the licences of the petitioners is only that, according to the respondent-authorities, the said licences cannot be renewed due to the instructions dated 7-1-2004. The petitioners had made applications for the renewal of their licences and on the date on which the impugned orders dated 21-5-2014 were passed, their terms had already expired as the licences were not renewed. There cannot, therefore, be a revocation of a licence that no longer subsists. In any case, the revocation of the licences has only been done on the ground that they cannot be renewed. The reason for this action of the respondent-authorities is based solely upon the impugned instructions dated 7-1-2004, issued by respondent No. 1. It is submitted that a perusal of the said instructions clearly goes to show that insofar as District Dahod is concerned, nineteen persons, as mentioned in the instructions, are not permitted to perform the duties of Stamp Vendors. Those nineteen persons have been black-listed, but the petitioners are not amongst those persons. It is further stated in the impugned instructions that till such time as new arrangements are made for selling stamps, no fresh licences shall be given with effect from 1-1-2004. It is contended that these instructions are temporary in nature and have been issued only to tackle an emergent situation which resulted from cases of malpractice and fraud committed by the nineteen persons mentioned in the instructions. That the fact that the instructions are temporary in nature is borne out from Paragraph 3, wherein it is stated that till such time as new arrangements are made, no new licences shall be issued after 1-1-2004. It is not as though the instructions impose a permanent or perpetual ban upon the issuance of licences. The granting of fresh licences has merely been put on hold, till such time as new arrangements are made. These instructions, therefore, cannot constitute a valid reason for the revocation of the licences of the petitioners.

2.2. It is next submitted that in Paragraph 15 of the reply filed by respondent No. 2, it is stated that the authorities have made provisions for facilities of Franking and E-Stamping at authorised Banks, Postal Department and the Offices of the Sub-registrars. If these alternative arrangements have been made pursuant to the impugned instructions, then the instructions would no longer survive and there remains no bar to the issuance of fresh licences. The said instructions have outlived their life and would no longer subsist.

2.3. That the petitioners are not amongst the nineteen persons referred to in the impugned instructions, which is an admitted fact. The instructions have been issued due to the acts of those nineteen persons, who have already been black-listed. There are no allegations of misuse of their licences, fraud or malpractice, against the petitioners. Hence, the power of revocation of their licences could not have been exercised against them by the respondents, for no valid reason.

2.4. It is contended that the impugned instructions are dated 7-1-2004, whereas the licences of the petitioners have been issued in the year 2009. Moreover, the show-cause notices issued to the petitioners are regarding the renewal of the licences and not regarding revocation. The ground for revocation, as contained in the impugned order, to the effect that the licences of the petitioners are liable to be revoked only because they cannot be renewed, is unjustified and arbitrary, and not in consonance with the provisions of the Act and Rules.

2.5. It is urged that the impugned instructions are in the nature of executive instructions under Art. 162 of the Constitution of India and cannot override the power conferred by the Act and Rules. Rule 6(2) confers power upon the competent authority for the renewal of the licences. This power cannot be taken away by executive instructions. Moreover, the said instructions cannot be made a ground for the exercise of the power of revocation of the licences of the petitioners, for no fault on their part. The impugned instructions have only been issued for a temporary period, to control or regulate an emergent situation. It is submitted that the power to regulate can, by no means, be construed as power to impose a permanent ban.

2.6. In support of this submission, reliance has been placed upon a judgment of the Supreme Court in the case of Narinder S. Chadha v. Municipal Corporation of Greater Mumbai, dated 8-12-2014 rendered in Civil Appeal No. 10836 of 2014 (arising out of Special Leave Petition (Civil) No. 3038 of 2011).

2.7. Further, in the context of this submission, reliance is also placed upon a judgment of the Supreme Court in the case of Godawat Pan Masala Products I.P. Ltd. v. Union of India, reported in MANU/SC/0574/2004 : AIR 2004 SC 4057 (Paragraph 27), wherein it is stated that the Rules operate only for a temporary period, during which an emergent situation exists which needs to be controlled, and it is not possible to accept the State Government's contention that the power under the statute is one that empowers the authority to impose the ban for a long period of time.

2.8. It is next submitted that in the present case, there is no power in the Act or the Rules that empowers the Superintendent of Stamps to control or regulate the exercise of the statutory power of renewal of licences under the Act. Even assuming that such power exists, in the alternative, it is submitted that the power to regulate cannot be read to include the power to prohibit, as held in Narinder S. Chadha v. Municipal Corporation of Greater Mumbai, (supra).

2.9. It is further contended that Rule 6 of the Rules deals with the appointment of Stamp Vendors. The proviso to sub-rule (2) of Rule 6 enumerates the type of breaches that may be committed by Stamp Vendors, for which the Competent Authority is empowered to refuse the renewal of their licences. The breaches mentioned therein are failure to maintain adequate stocks of stamps, refusal to sell a particular kind, or denomination, of stamps in spite of stock lying with the Stamp Vendor, and failure to deposit the stock register as provided in sub-rule (3) of Rule 14. These are the only breaches for which the renewal of licences can be refused. The petitioners have not committed any of the above breaches, therefore, there is no reason why their applications for renewal of their licences have not been considered and instead, their licences have been revoked.

2.10. Referring to the impugned instructions dated 7-1-2004, issued by respondent No. 1, learned Advocate for the petitioner would submit that the said instructions, insofar as they pertain to District Dahod, are discriminatory in nature. There is no ban on the renewal of licences in other parts of the State of Gujarat. It is only in District Dahod that licences are not being renewed, on the basis of the above instructions which, on the face of it, are temporary in nature but are being used in perpetuity by the respondents.

2.11. It is contended that the impugned instructions violate the fundamental rights of the petitioners under Arts. 16 and 19(1)(g) of the Constitution of India. Moreover, they restrict the exercise of power to grant licences under Rule 6 of the Rules. Hence, the impugned instructions deserve to be quashed and set aside.

3. Mr. P.P. Banaji, learned Assistant Government Pleader, has opposed the submissions advanced on behalf of the petitioners and has taken this Court through the entire contents of the affidavits-in-reply filed by respondent Nos. 1 and 2. On the basis of the said affidavits-in-reply, it is submitted by the learned Assistant Government Pleader, that the power to revoke the licence of a Stamp Vendor flows from Rule 11 of the Rules, read with Secs. 69 and 70 of the Act. The power under Rule 11 entitles the authority granting it to revoke the licence at any point of time. It is submitted that the impugned orders have been passed in exercise of power under Rule 11. As such power is available to the respondents, there is no legal defect in the impugned orders.

3.1. It is further submitted by the learned Assistant Government Pleader, that insofar as the impugned instructions are concerned, the authority which has passed the impugned orders is duty-bound to obey the instructions issued by the Superintendent of Stamps. The licences of the petitioners have been issued after the date of the instructions, therefore, they are liable to be revoked, as they were not in accordance with the instructions.

3.2. That the instructions were issued as it was found that in the past few years, scams and several cases of fraud came to the notice of the authorities. Therefore, a decision was taken not to issue new licences after 1-1-2004. When the instructions prohibit the issuance of new licences after 1-1-2004, the authorities are within their rights to revoke the licences of the petitioners.

3.3. On the basis of the above submissions, it is prayed that the petitions be rejected.

4. In rejoinder, Mr. Dhaval D. Vyas, learned Advocate for the petitioners, has reiterated the submission that the instructions dated 7-1-2004 have been challenged in the present petitions inter alia, on the ground that statutory power to issue, or renew, licences under the Rules cannot be restricted by executive instructions. It is clarified that the orders granting licences to the petitioners have not been cancelled. Instead, the impugned orders of revocation have been passed upon the applications for renewal of their licences made by the petitioners, and that, too, after the licences had already expired. That the action of revocation of licence cannot be considered as a valid exercise of power under Rule 11 of the Rules and the respondents may be called upon to exercise the power of renewal under sub-rule (2) of Rule 6 of the Rules, by considering the applications of the petitioners for the renewal of their licences.

5. This Court has heard learned Counsel for the respective parties at length, perused the averments made in the petitions and the documents annexed thereto and considered the submissions advanced at the bar.

6. Before the Court deals with the rival submissions, the relevant provisions of the Act and Rules may be referred to.

7. Section 69 of the Act empowers the State Government to make rules as below:

"Sec. 69. The State Government may make rules for regulating:

(a) the supply and sale of stamps and stamped papers.

(b) the persons by whom alone such sale is to be conducted, and

(c) the duties and remuneration of such person:

(Provided that such rules shall not restrict the sale of ten naye paise or five naye paise adhesive stamps)."

8. Section 70 of the Act encapsulates the power to carry out the purpose of the Act, as under:

"Sec. 70. Power to make rule generally to carry out purpose of Act:

The State Government may make rules to carry out generally the purposes of this Act, and may by such rules prescribed the fines, which shall in no case exceed five hundred rupees, to be incurred on breach thereof."

9. In exercise of power conferred under Secs. 69 and 70 of the Act, the Rules have been framed by the State Government in order to regulate the supply and sale of stamps, for determining the persons by whom such sale is to be conducted and for prescribing the duties and remuneration of such person.

10. The power to appoint a person as a Licenced Stamp Vendor is contained in Rule 6(1) of the Rules. In the first instance, such power is to be exercised for a period of one year. The requirements to be fulfilled by such person are also described in the said Rule. The power of renewal of a licence of a Stamp Vendor is encapsulated in sub-rule (2) of Rule 6. Rule 6 is reproduced hereinbelow:

"Rule 6.(1) The Collector or any other Officer empowered by the State Government in this behalf may appoint a person to be Licensed Stamp Vendors for a period of one year who fulfils the following requirements:

(a) not be less than 21 years and not more man 10 years of age:

(b) have passed the Secondary School Certificate Examination:

Provided that the upper age-limit may be relaxed upto five years in favour of candidate belonging to Scheduled Caste, Scheduled Tribe, Socially and Educationally Backward Class, Widow or deserted women and handicapped person.

(c) a person who is appointed as Licensed Stamp Vendor shall on his obtaining a job shall have to surrender his licence to the concerned authorities.

(d) he shall have to invest atleast the minimum sum of Rs. 8,000/- for the said purpose:

Provided that where in appointing authority is satisfied, the ceiling of investment may be relaxed upto Rs. 5,000/- in cases of widow or deserted woman, handicapped and unemployed educated person:

Provided further that the licence for the sale of stamps embossed or engraved on stamp paper exceeding in value of 2,000/- shall be granted after obtaining previous sanction of the State Government:

Provided also that in the City of Ahmedabad a committee comprising of Superintendent of Stamps, Additional Superintendent of Stamps and Deputy Superintendent of Stamps on the basis of the average figure of sale and the population of the area in question shall decide every two certain persons to be Licensed Stamp Vendors for the period of one year:

Provided that in other cities and districts of the State the Collector of a District shall form committee comprising other officers as decided by him on the basis of the average figure of sale and the population of the area in question and shall decide every two years the number of Licensed Stamp Vendors for each such place-locality and shall appoint thereto certain persons to be Licensed Stamp Vendors for the period of one year.

(I-A) the Collector of any other officer empowered by the State Government in this behalf shall issue to such person appointed as Licensed Stamp Vendor as identity card duly signed and sealed Pass-Port Size Photograph Affixing thereon. The Licensed Stamp Vendor shall always have to keep with him the said Identity Card at the place of Vending.

(2) Every licence granted under sub-clause (1) may be renewed in Appendix 11 for a further period of one year at the end of financial year:

Provided that when licence vendor has committed breach of any of these rules or has failed to maintain adequate stocks of stamps or has refused to sell particular kind or denomination of stamps in spite of its stock lying with him or has failed to deposit the stock register as provided in sub-rule (3) of rule 14, the authority competent to renew the licence may refuse to renew the licence."

(Emphasis supplied)

11. The power of renewal of a licence under sub-rule (2) of Rule 6 is for a further period of one year at the end of the financial year. This power of renewal also contemplates the power of refusal to renew the licence on commission of certain breaches as mentioned in the proviso to sub-rule (2) of Rule 6. The breaches are: (i) breach of any of the Rules, (ii) failure to maintain adequate stocks of stamps or refusal to sell a particular kind or denomination of stamps in spite of stocks being available with the Stamp Vendor, and (iii) failure to deposit the stock register as per sub-rule (3) of Rule 14. These are the only three instances when the competent authority can refuse to renew the licence of a Stamp Vendor.

12. Rule 11 contains the power of revocation of a licence already granted, and is worded as below:

"11. Every licence granted under these rules shall be revocable at any time by the State Government or by the authority granting it."

13. It is an admitted position that the petitioners were granted licences as Stamp Vendors, initially in the year 2009. The said licences have been renewed from time to time, under sub-rule (2) of Rule 6. It is also an admitted fact that there are no allegations of malpractice or of the commission of any kind of breaches, including the breaches mentioned in the proviso to sub-rule (2) of Rule 6, against the petitioners.

14. The petitioners made applications for the renewal of their licences on different dates between 27th to 30th March, 2014. For the first time, respondent No. 3 issued show-cause notices dated 20-5-2014, to the petitioners, under the heading of "renewal of licences". It is stated in the notices that in view of the instructions dated 7-1-2004, issued by respondent No. 1, no new licences were to be issued after 1-1-2004; therefore, as the licences of the petitioners were issued thereafter, they are liable to be revoked. Thus, instead of considering the applications of the petitioners for the renewal of their licences, the respondent authorities straightaway revoked them as, according to them, the said licences could not be renewed.

15. The petitioners were given just one day to show cause by respondent No. 3, by remaining present at his office at 12-00 hours on 21-5-2014. On the petitioners remaining present on that date, the impugned orders dated 21-5-2014 were passed, revoking their licences on the ground that they could not be renewed in view of the instructions dated 7-1-2004.

16. At this stage, it would be relevant to peruse the impugned instructions dated 7-1-2004, issued by the Superintendent of Stamps. The opening Paragraphs of the said instructions are general in nature. However, Paragraph 4(a) ('k' in the vernacular alphabet), refers to nineteen persons whose licences as Stamp Vendors have been revoked on grounds of alleged malpractices committed by them. Paragraph 4(b) ('Kh' in the vernacular alphabet) states that those nineteen persons, whose licences have been revoked, have been black-listed. Paragraph 3 of the said Circular is the offending part. It states that, till such time as fresh arrangements are not made for the sale of stamps and stamp papers and orders in this regard are not received, no person shall be issued a licence as a Stamp Vendor, with effect from 1-1-2004.

17. Three questions arise for determination by this Court which would cover the entire gamut of the submissions advanced by the respective parties.

18. The first question is whether the impugned instructions which are, at best, executive instructions under Art. 162 of the Constitution of India, can override the power vested in the authorities by virtue of the Statutory Rules? The second question would be whether instructions that seek to regulate the power of an authority can continue in perpetuity? The third question is whether the power of revocation of the licence of a Stamp Vendor under Rule 11 of the Rules can be used in an untrammelled manner, without valid reasons, just because it is conferred by the Rules?

19. In order to answer the first question, reference may once again be made to Rules 6(1) and 6(2). Rule 6(1) confers power upon the Collector or any other person empowered by the State Government in this behalf, to appoint a person as a Licenced Stamp Vendor, for a period of one year. The power to frame Rules flows from Secs. 69 and 70 of the Act and the Rules have been framed in exercise of this power. The impugned instructions dated 7-1-2004 have not been issued in exercise of power under the Rules but are the result of the exercise of executive power. They are, therefore, executive instructions which do not have the force of statutory Rules.

20. In Union of India v. Central Electrical and Mechanical Engineering Service Group A (Direct Recruits) Association, C.P.W.D., reported in MANU/SC/8088/2007 : AIR 2008 SC 3, the Supreme Court has held as below:

"10. It is now a well settled principle of law that an executive order must be passed in conformity with the Rules. Power of the State Government to issue executive instructions is confined to filling up of the gaps or covering the area which otherwise has not been covered by the existing Rules. See Sant Ram Sharma v. State of Rajasthan, MANU/SC/0330/1967 : AIR 1967 SC 1910 and D.D.A. MANU/SC/1040/2003 : 2004 (2) SCC 297. Such office orders must be subservient to the statutory rules."

21. Thus, it is clear that the Rules would govern the field for which they are framed and the power conferred by the Rules cannot be curtailed by executive instructions that can only be issued to cover areas not covered by the Rules. In the present case, the Rules regarding the renewal and revocation of licences are clear and no instructions are required in this regard. Paragraph 3 of the impugned instructions dated 7-1-2004, has the effect of curtailing the power to appoint a person as a Licenced Stamp Vendor, which flows from Rule 6(1). As per the settled legal position, executive instructions cannot impinge the power conferred by the Rules, or even occupy the same area as the Rules which are crystal clear and free from any lacunae.

22. In the impugned orders passed by respondent No. 3, it is clearly stated that as per the said instructions, no licences could have been granted to any persons, including the petitioners, after 1-1-2004. In the considered view of this Court, no such restrictions are placed by the Legislature in Rule 6(1). By issuing the impugned instructions, the respondents cannot restrict the power of appointment of Stamp Vendors as contained in Rule 6(1), for an indefinite period of time, bordering on perpetuity. To that extent, the instructions dated 7-1-2004, are against the settled legal position.

23. To answer the second question, whether executive instructions that seek to regulate the power of an authority can operate in perpetuity, it would be fruitful, once again, to refer to the impugned instructions in order to examine the language in which they are couched and the relevant context in which they are issued. It is clear from a reading of the said instructions that the reason for their issuance is that instances of fraud and malpractice, allegedly committed by nineteen Stamp Vendors, came to light. The licences of those nineteen Stamp Vendors stood revoked and they stood black-listed. Because of such malpractices, it was decided to make fresh arrangements and issue fresh orders. It was stipulated that until such time as new arrangements are made and fresh orders issued, no new licences should be issued post 1-1-2004. Undisputedly, the petitioners are not amongst those nineteen black-listed persons. On the contrary, there are no allegations of breach of the Rules or malpractice of any kind, against the petitioners. The language and context of the impugned instructions clearly reveals that they have been issued in order to tackle an emergent situation brought about by the discovery of instances of fraud and malpractices, by nineteen persons. In that context, it is stated that until new arrangements are made and fresh orders passed, no licences be issued after 1-1-2004.

24. It may be noted that about eleven years have passed after the issuance of the instructions dated 7-1-2004. It cannot be said, by any stretch of imagination, that the emergent situation that had arisen when the instructions were issued still prevails as of today. There is nothing on record to show whether "new arrangements" or "fresh orders", as mentioned in Paragraph 3 of the impugned instructions, have been made, or not. In Paragraph 15 of the affidavit-in-reply filed by respondent No. 2, it is stated that the authorities have made provisions for facilities such as Franking and E-stamping at authorised Banks, Postal Department and Offices of the Sub-Registrars. If these are the new arrangements contemplated in the impugned instructions, then the ban imposed by them has outlived its life and would no longer survive.

25. The prohibition regarding the issuance of fresh licences after 1-1-2004, as contained in the instructions, is not meant to be perpetual in nature.

It is nowhere so stated. Clearly, it is a temporary restriction, until such time as new arrangements are made. The respondents, therefore, cannot read the instructions as though they contain a permanent ban against the issuance of fresh licences or renewal of licences, forever. If that is the manner in which the instructions are being construed by the respondents, it is clearly illegal and unlawful.

26. In this regard, reference may be made to the judgment of the Supreme Court in Narinder S. Chadha v. Municipal Corporation of Greater Mumbai, (supra) cited by the learned Advocate for the petitioners, wherein the Supreme Court has held as below:

"24. In the Gujarat High Court case, an order dated 14th July, 2011, purportedly made under Sec. 33 of the Bombay Police Act read with Sec. 144 of the Code of Criminal Procedure prohibited hotels and restaurants from providing the facility of hookah and prohibited hookah bars. In the course of a lengthy judgment, the Division Bench referred to the evil effects of smoking and generally of tobacco products, and ultimately, came to the conclusion that Sec. 33 of the Bombay Police Act would include the power to prohibit, stating that the word "regulate" would include "restriction" and even "prohibition". Several authorities were stated for this proposition, but the one authority binding on the High Court was missed. In Himat Lal K. Shah v. Commissioner of Police, Ahmedabad, MANU/SC/0583/1972 : 1973 (1) SCC 227, the Supreme Court had to construe the word "regulate" under the very Act i.e. Sec. 33 of the Bombay Police Act. The Court held:

'15. Coming to the first point raised by the learned Counsel, it seems to us that the word "regulating" in Sec. 33(o) would include the power to prescribe that permission in writing should be taken a few days before the holding of a meeting on a public street. Under Sec. 33(o), no rule could be prescribed prohibiting all meetings or processions. The Sec. proceeds on the basis that the public has a right to hold assemblies and processions on and along streets though it is necessary to regulate the conduct and behavior or action of persons constituting such assemblies or processions in order to safeguard the rights of citizens and in order to preserve public order. The word "regulate", according to Shorter Oxford Dictionary, means, "to control, govern, or direct by rule or regulation; to subject to guidance or restrictions". The impugned Rules do not prohibit the holding of meetings but only prescribe that permission should be taken, although it is not stated on what grounds permission could be refused. We shall deal with this aspect a little later.'"

25. From a reading of Himat Lal's case, MANU/SC/0583/1972 : 1973 (1) SCC 227 it is clear that the word "regulate" would not include the power to prohibit......"

(Emphasis supplied)

27. As held by the Supreme Court hereinabove, the word 'regulate' would not include the power to 'prohibit'. The regulation on the issuance of fresh licences as intended by the impugned instructions, is temporary in nature and cannot be construed as a total prohibition, as such an interpretation is not warranted by any provision in the Act and the Rules. The respondents cannot seek to impose a total ban on the issuance of fresh licences or refuse to renew licences, on the basis of these instructions, de hors the provisions of the Act and the Rules.

28. The third question, is regarding whether the power of revocation under Rule 11 of the Rules can be used in an untrammelled manner, without any valid reason, only because it is conferred by the Rules.

29. In this regard, it has been submitted by the learned Assistant Government Pleader that this power is absolute in nature and can be exercised at any point of time, and in any manner. It is no doubt true that Rule 11 states that every licence granted under the Rules shall be revocable at any time by the State Government or the authority granting it. It cannot but be kept in mind that the State is expected and bound to act in a fair and reasonable manner. The power exercised by it ought not to be vitiated by the taint of unreasonableness or arbitrariness. The revocation of the licence of a Stamp Vendor would have an adverse affect on the licence-holder, seriously affecting his, or her, very livelihood. As such, it would also affect the right to life, as enshrined under Art. 21 of the Constitution of India, and the right to practice any profession or to carry on any occupation, trade or business, as enshrined under Art. 19(1)(g) of the Constitution of India. Any regulation of the right under Art. 19(1)(g), has to be in accordance with law and not de hors the statute or Rules governing such regulation. As already stated above, the impugned instructions seeking to regulate the issuance of fresh licences only for a temporary period. They are clearly being wrongly read and construed by the respondents, as a total ban on the issuance of licences and renewal thereof, in perpetuity. This, in the view of this Court, is an incorrect interpretation of the instructions dated 7-1-2004.

30. The power of revocation of a licence available under Rule 11, has to be exercised on valid, justifiable and reasonable grounds. Just because a power is conferred upon an authority by the Rules, does not mean that the authority can exercise it as per its whims and fancies, without there being any valid or substantial reason for its exercise. Admittedly, the petitioners have not committed any breach of the Rules. It is not the case of the respondents that the petitioners have committed any breaches of the nature mentioned in the proviso to Rule 6(2), so as to disentitle them for the renewal of their licences. Revocation of a licence is much more serious man a refusal to renew it, as there is an element of finality attached to the power of revocation. Once their licences are revoked, it would be difficult for the petitioners to obtain fresh licences again. This would have a serious impact upon the livelihood of the petitioners. The power of revocation, therefore, ought not to be lightly or casually exercised by the competent authority.

31. When there is no material against the petitioners for refusing to renew their licences, the action of the respondents in revoking their licences only on the ground that they cannot be renewed due to the impugned instructions, is nothing short of being an arbitrary and unreasonable exercise of power under Rule 11.

32. It is a settled position of law that the stricter the consequences and effects of the power, the stricter ought to be the interpretation of such power. This position of law is clear from the judgment of the Supreme Court in Bhikhubhai Vithlabhai Patel v. State of Gujarat, reported in MANU/SC/7399/2008 : 2008 (4) SCC 144 : [2008 (2) GLR 1531 (SC)], wherein it is held as below:

"37. ... ...The power to restrict the use of land by the owners thereof, is a drastic power. The designation or reservation of the land and its use results in severe abridgment of the right to property. Statutory provisions enabling the State or its authorities to impose restrictions on the right to use one's own land are required to be construed strictly... ..."

33. Further, in Ram Pyare Chaudhary v. State of Uttar Pradesh, reported in MANU/SC/0218/1982 : 1982 (1) SCC 671, the Supreme Court has held as follows:

"12. Mr. Dikshit lastly urged that even on the view this Court would take, the term of the Committee of Management would expire on June 30, 1982, and therefore, hardly a period of four months remains and the Court should not, therefore, disturb the Administrator. This submission does not commend to us because the Government by executive fiat cannot reduce the term of office statutorily fixed. Further, the elections to panchayats, cooperative societies and smaller local bodies provide an apotheosis or a training ground for success of our larger experiment of parliamentary democracy. Election process is sacrosanct. Members elected must be permitted to discharge their functions as chosen representatives of the electorate for the statutory terms. Such a drastic power of removing elected representatives before the expiry of term and substituting non-elected persons must receive strict and narrow interpretation at the hands of the Courts. If allowed to foster it would be the negation of the democratic process and would engulf the whole fabric of democratic instructions which we are trying to build up. Therefore, even though, the term would expire roughly after four months, we would be perfectly justified in removing the Administrator and reinstating the elected representatives."

34. In light of the above principles of law, it can be stated that the drastic power of revocation of a licence under Rule 11 ought to be construed strictly and exercised only for substantial reasons. It cannot be resorted to only because it exists in the Rule-book. The authority exercising such power is bound to do so cautiously. Ultimately, the exercise of the power under Rule 11 has to be tested on the touchstone of Arts. 14 and 21 of the Constitution of India. In the view of this Court, in the present case, the respondents have failed this test.

35. This brings us to the issue of discrimination under Art. 14 of the Constitution of India. It is an admitted position that the ban imposed by the instructions is for the issuance of licences of Stamp Vendors in District Dahod only. This means that according to the instructions, no new licences are to be issued to any person as a Stamp Vendor, in District Dahod, after 1-1-2004. This prohibition does not operate in any other District of the State of Gujarat, where licences are being issued as per the Rules. In the view of this Court, by imposing such a ban in District Dahod, the respondent authorities have created a situation where persons desirous of applying for licences in this District are being discriminated against. Such instructions, resulting in discrimination in a particular district, cannot be upheld by this Court.

36. The reason for the revocation of the licences of the petitioners, as contained in the impugned order, is the ban on the issuance of new licences after 1-1-2004. As the licences of the petitioners have been issued in the year 2009, they have been revoked on the ground that they cannot be renewed. This reason can hardly be considered as valid, reasonable or justifiable. The authorities have themselves granted licences to the petitioners in the year 2009, and have been renewing them from time to time. It is only when the petitioners made applications for renewal in the year 2014, that such a reason has been conjured up by the respondents. Instead of renewing, or refusing to renew, the licences of the petitioners, the respondent-authorities have straightaway revoked them. The inability expressed by the respondents for not renewing the licences can hardly be considered as a valid ground for their revocation. Another strange aspect of the matter is that the licences of the petitioners are being revoked after they have expired. The respondents cannot revoke the licences of the petitioners on the ground of their own inaction in renewing them.

37. On all counts, the learned Advocate for the petitioner has succeeded in making out a good case for granting the prayers made in the petition.

38. The cumulative effect of the above discussion is that this Court is of the considered view that the impugned orders dated 21-5-2014, passed by the respondents, in Special Civil Application No. 9422 of 2014, and the orders dated 3-5-2014, passed in Special Civil Application No. 11363 of 2014, Special Civil Application No. 12692 of 2014 and Special Civil Application No. 12693 of 2014, are unsustainable in law and deserve to be quashed and set aside.

39. Consequently, the impugned orders in all the petitions are quashed and set aside.

40. Insofar as the instructions dated 7-1-2004 are concerned, the offending part of the instructions, as contained in Paragraph 3, to the effect that no fresh licences be issued Post 1-1-2004, is quashed and set aside. The respondents are directed to consider the applications made by the petitioners for the renewal of their licences, in accordance with law and Rule 6(2) of the Rules, within a period of four weeks from the date of the receipt of a copy of this judgment. The petitions are allowed, in the above terms. Rule is made absolute, in each petition, accordingly.

Direct Service of this order is permitted.

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