M/S Shri Laxmi Khaad Bheej Bhander Mehgaon Distt Bhind Through Its Proprietor Harishankar Shivhare vs. The State Of Madhya Pradesh

Held

The Court held that while the suspension of the certificate of registration under sub-clause 2 of Clause 31 of the FCO might appear just and proper, the revocation of the license/registration requires an opportunity of hearing as per sub-clause 2 of Clause 31 of the FCO. Consequently, the Court found the order dated December 5, 2023 (Annexure P-1) to be unsustainable and relegated the matter back to the concerned authority for reconsideration. The petitioner is directed to appear before the authority, which shall decide the matter in accordance with Clause 31 of the FCO. The Court also noted that if a final order is not passed within fifteen days from the receipt of the certified copy of this order, the provisions of sub-clause 2 of Clause 31 of the FCO would come into operation. The Court clarified that this order does not affect the fate of the criminal case registered at Crime No. 328/2023, which shall proceed on its own merits. The ratio decidendi is that a license suspension/revocation under FCO requires adherence to principles of natural justice, specifically an opportunity of hearing, and compliance with time limits for final orders as stipulated in the FCO.

Facts

The petitioner, M/s Shri Laxmi Khaad Bheej Bhandar, held wholesale and retail licenses for fertilizer sales, valid until February 28, 2025. The petitioner also had GST registration. An inspection on November 10, 2023, by the Collector, District Bhind, found the petitioner selling fertilizer without obtaining thumb impressions at the POS machine. Subsequently, 105 bags of fertilizer were seized, and a complaint was lodged, leading to the registration of FIR Crime No. 328/2023 under Section 3/7 of the Essential Commodities Act. Following the FIR, the Licencing Authority (Fertilizer) issued an order suspending the petitioner's retail and wholesale licenses on November 23, 2023, without prior notice or hearing. An additional communication on December 5, 2023, directed the blocking of the petitioner's IDs, effectively barring business operations.

Key Issues

1. Whether the suspension of the petitioner's retail and wholesale fertilizer licenses by the Licencing Authority, without providing an opportunity of hearing, is in compliance with Clause 31(3) of the Fertilizer (Control) Order, 1985 (FCO)? 2. Whether the order of interim suspension of the license is deemed revoked due to the failure of the authority to pass a final order within fifteen days, as stipulated by the first and second provisos of Clause 31(2) of the FCO? Petitioner's Arguments: The petitioner contended that Clause 31(3) of the FCO mandates providing an opportunity of hearing before suspending or cancelling a license, a mandatory provision that was not complied with. Furthermore, the petitioner argued that as no final order was passed within fifteen days of the suspension order, the interim suspension should be deemed revoked under Clause 31(2) of the FCO, rendering the proceedings arbitrary and illegal. The petitioner relied on the Allahabad High Court judgment in Santosh Kumar Vs. State of U.P. and Others. Respondents' Arguments: The respondents argued that the Collector is not specifically debarred from inspecting premises under the FCO and that the impugned order was passed by the Deputy Director Agriculture Welfare and Agriculture Development Department, who is the licensing authority, making the suspension order just, proper, and legal. They also contended that the criminal case and the impugned order operate in different spheres and do not overlap.