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Reportable

IN THE SUPREME COURT OF INDIA

CIVIL APPELLATE JURISDICTION

CIVIL APPEAL NO.     2825  OF 2015 [Arising out of SLP(C) No. 30338 OF 2014]

State of West Bengal and Others ... Appellants

                               Versus

R.K.B.K. Ltd. & Anr. ...Respondents

J U D G M E N T

Dipak Misra, J.

In this appeal, by special leave, the legal substantiality

and  acceptability  of  the  judgment  and  order  dated

29.08.2014 passed by the Division Bench of the High Court

of Calcutta in AST No. 177/2013 whereby it has overturned

the  decision  of  the  learned  Single  Judge  requiring  the

respondent-writ  petitioner  to  knock  at  the  doors  of  the

alternative forum by way of appeal, on the foundation that

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the authority that had passed the adverse order against the

first respondent had no jurisdiction, and assuming he had

the jurisdiction, it stood extinguished by expiration of the

time  limit  stipulated  in  certain  paragraphs  of  the  West

Bengal Kerosene Oil Control Order, 1968 (for brevity, ‘the

Control Order’), is called in question.

2. The facts which need to be exposited for adjudication

of this appeal are that the first respondent was granted the

licence for carrying on the business of superior kerosene oil

as an agent by the Joint Director of Consumer Goods, West

Bengal in accordance with the paragraph 5(1) of the Control

Order.  The monthly allocation of public distribution system

of superior kerosene oil to the said respondent was fixed by

the Director of Consumer Goods, West Bengal at 1,82,000

litres per month.  On 10.8.2012 a physical inspection was

carried out by the Area Inspector attached to the office of

the Sub Divisional Controller, Food and Supplies, Burdwan

(for  short,  “SCFS”)  at  the  depot  of  the  respondent.   The

concerned  Inspector  submitted  the  report  to  the  SCFS

stating that 71,494 litres of superior kerosene oil had been

delivered in excess by the dealer.  On 8.4.2013, the SCFS

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issued a notice seeking explanation about the discrepancy

pointed out by the Area Inspector.  On receipt of the said

show  cause  notice,  the  first  respondent  submitted  his

explanation  on  16.4.2013.   The  SCFS  afforded  an

opportunity of personal hearing to the dealer on 3.5.2013

and the same was availed of.  After conducting the enquiry,

the  SCFS  forwarded  the  entire  record  to  the  District

Controller, Food and Supplies Department, Burdwan, who

in  turn  sent  the  entire  case  records  to  the  Director  of

Consumer Goods for appropriate decision.  After scrutiny of

the records, the Director of Consumer Goods issued a show

cause  notice  to  the  dealer  on  26.6.2013.   The  first

respondent replied to the same on 28.6.2013 through his

counsel  stating,  inter  alia,  that  under  the  Control  Order,

after the licence is issued to an agent by the Office of the

Director, the District Magistrate having jurisdiction or any

officer authorised by him, is alone empowered to look into

the functioning of the said agency and to give directions to

him  and/or  initiate  action  against  the  concerned  agent.

Additionally,  it  was  also  put  forth  that  the  second  show

cause notice on the self-same allegations was untenable in

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law and accordingly prayer was made to withdraw and/or

rescind the notice and take steps for disposal of the matter

in terms of the provisions of the Control Order.   

3. As  the  factual  matrix  would  further  undrape,  the

Director  of  Consumer  Goods,  vide  order  dated  22.7.2013

narrated the facts in detail and came to hold that SCFS has

the authority to ask for explanation regarding distribution of

superior  kerosene  oil  in  his  jurisdiction;  and  that  the

Director of Consumer Goods being the Licensing Authority,

can exercise the power to issue show cause notice and after

giving  the  delinquent  agent  a  fair  opportunity  of  being

heard, pass appropriate orders.  The said order also would

reflect  that  the  counsel  for  the  first  respondent  had

appeared before the Director on 17.7.2013.  The concerned

Director  analysed  the  factual  matrix  and  in  exercise  of

power conferred on him under paragraph 9(ii) of the Control

Order  imposed  a  penalty  of  Rs.26,08,816.00  and  further

directed  reduction  of  monthly  allocation  of  superior

kerosene oil of the agent by 12,000 litres for a period of one

year.

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4. The order passed by the Director was assailed by the

agent in W.P.No. 25204 (W) of  2013.  The learned Single

Judge vide order dated 22.08.2013 referred to paragraph 10

of  the  Control  Order  which provides  for  an appeal  to  be

preferred and accordingly directed that if the agent prefers

an appeal by 6.9.2013, the appellate authority shall dispose

of  the  same  by  31.12.2013.   The  learned  Single  Judge

further directed that the agent shall maintain with utmost

care  an  inventory  of  stocks  and  accounts  for  periodical

submission  to  the  authorities  and  the  penalty  amount

should  be  deposited  by  6.9.2013  and  the  said  penalty

amount shall be kept in a separate interest bearing account.

5. Being  aggrieved  by  the  aforesaid  order,  the

respondents 1 and 2 preferred an appeal being AST No. 177

of  2013 before  the  Division Bench.   It  was urged  in  the

intra-court appeal that the proceeding before the Director of

Consumer  Goods  was  patently  without  jurisdiction,  for

power of cancellation or suspension could only be exercised

by  the  Director  or  District  Magistrate  having  jurisdiction

and in the case at hand the District Magistrate, Burdwan is

the  competent  authority  to  exercise  the  power  under

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paragraph 9 of the Control Order and not the Director of

Consumer  Goods;  that  assuming  the  Director  had

jurisdiction,  the proceeding that  was initiated had lapsed

after expiry of 30 days after the date of issuance of the show

cause  notice  by  the  Director;  and  that  in  any  case  the

proceeding was initiated by SCFS and he could not  have

sent the record to the Director after expiry of 30 days when

the proceeding  stood lapsed.   It  was also  urged that  the

order  in  question  was  served  on  the  first  respondent  on

12.8.2013 and, therefore, the date mentioned in the order

could not validate the same as it was not dispatched within

30 days.  The submissions put forth by the first respondent

before the Division Bench of the High Court were seriously

contested by the learned counsel for the Department.  

6. The Division Bench posed the following two questions:-

“a. Who  is  the  competent  authority  to  take disciplinary  action  either  by  cancellation  or suspension  of  the  licence  of  a  S.K.  Oil  agent appointed in a district outside the Calcutta?

b. Whether  the  order  of  cancellation  or suspension of licence in terms of Paragraph 9 of the  West  Bengal  Kerosene  Control  Order  will become effective on the date of passing of the said order or when the said order is communicated to

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the concerned party?”

7. After posing the aforesaid two questions, the Division

Bench took note of the fact that the respondent-dealer was

authorised to carry on the business as an agent of super

kerosene oil in the district of Burdwan and the SCFS had

issued  a  show  cause  to  the  respondent  and  instead  of

taking the final decision himself, forwarded the records to

the Director of Consumer Goods for necessary action who

issued  a  fresh  show  cause  notice  on  the  self-same

allegations and passed a order on 22.07.2013 which was

without jurisdiction in view of the conjoint reading of  the

language employed in paragraphs 8, 9 and 10 of the Control

Order.   Thereafter,  the  Division Bench proceeded  to  deal

with the issue whether the Director had passed the order

imposing penalty within 30 days from the date of  serving

the  show  cause  notice  in  terms  of  paragraph  9  of  the

Control  Order,  for the same was served on the dealer  on

12.8.2013.  The Court took note of  the contention of  the

advanced by the learned counsel for the appellants therein

that the order under Paragraph 9 passed by the competent

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authority in writing within 30 days from the date of serving

the show cause notice should mean the communication of

the order in writing within the said period of 30 days and

not from the signing of the order and accepted the same.  To

arrive  at  the said conclusion,  the appellate  Bench placed

reliance  on  Rani  Sati  Kerosene  Supply  Company  and

Others  v.  The  State  of  West  Bengal  and  Others1.   It

referred to paragraphs 27 and 29 of the said decision and

thereafter came to hold thus:-

“For the reasons discussed hereinabove, we hold that  the  Sub-Divisional  Controller,  Food  and Supplies,  Burdwan  lawfully  initiated  the proceeding  against  the  appellant/writ  petitioner no. 1 by issuing show cause notice but did not conclude  the  same within  30  days  as  required under paragraph 9 of the West Bengal Kerosene Control Order, 1968.  

We  further  hold  that  the  Director  of Consumer  Goods  had  no  jurisdiction  and/or authority  to  initiate  any proceeding against  the appellant/writ  petitioner  no.  1  in  terms  of paragraph 9 of the West Bengal Kerosene Control Order  since  the  licence  was  granted  to  the appellant/writ  petitioner  no.  1  for  carrying  on business  as  S.K.  Oil  agent  in  the  district  of Burdwan which is outside Calcutta.  

In the result, the impugned order dated 22nd

1  2005 (4) CHN 264

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July, 2013 passed by the Director of Consumer Goods cannot survive and is liable to be set aside since the said Director had no authority and/or jurisdiction to pass any order under paragraph 9 of the West Bengal Kerosene Control Order, 1968 in  respect  of  S.K.  Oil  agent  of  Burdwan. Therefore,  the  impugned order  dated 22nd July, 2013 issued by the Director of Consumer Goods in respect of the appellant/writ petitioner no. 1 is quashed.”

Being of this view, it allowed the appeal and set aside

the judgment of the learned Single Judge of the High Court.  

8. We have heard Mr. Mohan Parasaran, learned senior

counsel along with Mr. Anip Sachtey, learned counsel for

the  appellants  and  Mr.  Vivek  K.  Tankha,  learned  senior

counsel along with Mr. Rajan K. Choursia, learned counsel

for the first respondent.

9. At the outset, it is obligatory on our part to state that

when the final  hearing of  the appeal  took place, we were

apprised at the Bar that SCFS who represents the District

Magistrate, has issued a fresh show cause notice in respect

of  self-same  lis  and  accordingly  the  following  order  was

passed:-

“In course of hearing we have been apprised that the Sub-Divisional Controller, Food and Supplies,

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Burdwan, who represents the District Magistrate, Burdwan, has issued a fresh show cause notice on the self-same lis and against its notice to show cause, an appeal  has been preferred before the Director  of  Consumer Goods in Kolkata.   Be it noted,  the  show  cause  number  is  Memo  No. 4159/SCF&S/BDN/14.  The appeal arisen out of the said show cause notice before the appellate authority,  shall  remain  stayed  till  the pronouncement of the judgment.”  

10. We shall advert to the legal permissibility of the second

show cause in respect of the same alleged deviation by the

agent at a later stage, if required.  As the factual foundation

would exposit, the thrust of the controversy is whether the

Director  of  Consumer  Goods,  Food  and  Supplies

Department  has  the  jurisdiction  to  take  action  in  the

manner  he  has  taken;  and whether  the  order  has  to  be

passed  and  communicated  within  30  days  under  the

Control  Order  and  the  consequence  of  failure  in  such  a

situation.   The  Control  Order  was  brought  into  force  on

26.6.1968 in exercise of powers conferred by sub-section 1

of Section 3 of the Essential  Commodities Act, 1955 read

with  clauses  (d),  (e),  (h)  and  (j)  of  sub-section  2  of  that

Section and Section 7(1) of the said Act and the Order No.

26(11)-Com.Genl/66,  dated  18th June,  1966  feeling  the

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necessity  and  expediency  for  proper  maintenance   of

supplies  and  for  securing  the  equitable  distribution  and

availability  at  fair  prices  of  kerosene  in  West  Bengal.

Paragraph 3(a) of the Control Order defines “agent” which

reads as under:-

“3(a) “agent”  means  a  person  who  has  been appointed  as  an  agent  of  an  oil  distributing company by such company and has been granted a licence under paragraph 5 of this Order.”

11. Paragraph 3(c)  of  the  Control  Order  defines  “dealer”

which reads as follows:-

“3(c) “dealer”  means  a  person  who  has  been granted a licence under paragraph 6 of this Order authorising him to carry on trade in kerosene.

12. Paragraphs 3(d) and 3(e)  of  the Control  Order define

the  “Director”  and  the  “District  Magistrate”  respectively,

which reads as follows:-

3(d) “Director” means the Director of Consumer Goods,  Department  of  Food  and  Supplies, Government  of  West  Bengal  and  includes  any officer, not below the rank of Assistant Director, Directorate  of  Consumer  Goods,  Food  and Supplies  Department,  Government  of  West Bengal who can perform all the functions of the Director and this order including cancellation of licence.

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3(e) “District  Magistrate”  includes  the  Deputy Commissioner of a district and also includes any person  not  below  the  rank  of  a  Sub-divisional Controller  of  Food  and  Supplies  in  the Department of Food and Supplies, Government of West  Bengal,  authorised  by  the  District Magistrate or Deputy Commissioner, as the case may be,  in writing to perform all  or any of  the functions  of  the  District  Magistrate  under  this Order.”

13. Paragraph 5 of the Control Order deals with grant of

licence to an agent.  It reads as under:-

“5. Grant of licence to agent – (1) The Director may grant a licence to any agent in West Bengal authorising him to carry on trade in kerosene as such agent.

(2) A licence granted under sub-paragraph (1) shall be in Form A and shall be subject to such conditions  as  are  specified  therein  and  such other  conditions  as  the  Director  may lay  down from  time  to  time  in  the  interest  of  fair distribution of kerosene within the State.  

(3) No  agent  shall  sell,  supply  or  transfer kerosene to any person other than a dealer duly licensed under  paragraph 6 of  this  Order,  or  a holder of a permit or delivery order issued under paragraph 11 of this Order.”

14. Paragraph 6 deals with grant of licence to a dealer.  It

is as follows:-

“6. Grant of licence to dealer – (1) the Director or the District Magistrate having jurisdiction may

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grant  a  licence  to  any  person  authorsing  such person to carry on trade in kerosene as a dealer.  

(2) A licence granted under sub-paragraph (1) shall be in Form B and shall be subject to such conditions  as  are  specified  therein  and  such other  conditions  as  the  Director  or  the  District Magistrate having jurisdiction may impose from time to time for  the sake of  fair  distribution of kerosene.”

15. Paragraph  9  of  the  Control  Order  deals  with

cancellation or suspension of licence.  The same being of

significance, is reproduced in entirety herein below:-

“9. Cancellation or suspension of licence – If it  appears  to  the  Director  or  the  District Magistrate having jurisdiction that an agent or a dealer  has  indulged  in  any  malpractice  or contravened any provision of  this  Order or  any condition  of  the  licence  or  any  direction  given under  paragraph  12  of  this  Order,  he  may forthwith as the Agent or Dealer to show cause for violations made or suspend the licence:  

Provided that  the agent or  the dealer  who has been asked to show-cause or whose licence has  been  suspended  shall  be  given  an opportunity  of  being heard and the Director  or the  District  Magistrate  having  jurisdiction shall pass an order in writing within 30 days from the date  of  serving  the  show-cause  notice  or suspension of the licence taking any or all of the actions given below.

(i) He may let  off  the Agent or  Dealer  if sufficient cause has been shown.

(ii) He may pass an order by imposing a

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penalty which according to the gravity of the violations made will not be less than Rs.10,000/- in case of an Agent and Rs.2,000/- in case of a Dealer and revoke the suspension order if already served.  

(iii) He may cancel the licence:

Provided that the order shall be passed ex parte if the Agent or the Dealer whose licence has been so suspended or on whom show-cause notice has been served fails to appear at the hearing.”

16. Paragraph 10 of the Control Order which provides for

appeal is extracted hereunder:-

“10.  Appeal –  (a)  Any  person  aggrieved  by  an Order passed under paragraph 8 or paragraph 9 of this Order, may within 30 days from the date of  the  order,  prefer  an  appeal  to  the  State Government  in  the  Food  and  Supplies Department.  

(b) elsewhere, –  

(i) where  the  order  is  passed  by  the District  Magistrate  or  the  Deputy Commissioner  of  a  district,  to  the  State Government,

(ii) where the order is passed by any other officer authorised by the District Magistrate or  the  Deputy  Commissioner  of  a  district under  clause  (e)  of  paragraph  3,  to  the District  Magistrate  or  the  Deputy Commissioner,  as the case may be,  of  the district.

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17. We  have  reproduced  the  relevant  paragraphs  of  the

Control  Order  to  understand  the  schematic  purpose  and

effect of the Control Order.  Paragraph 5, as it envisages,

empowers the Director to grant licence to any agent in West

Bengal  authorising  him to  carry  on trade  in kerosene as

such  agent.   Paragraph  6  empowers  the  Director  or  the

District Magistrate having jurisdiction to grant the licence to

any person as a dealer.  As the scheme would reflect there is

a  distinction  between  an  “agent”  and  a  “dealer”,  for  the

agent is granted licence under paragraph 5 of the Control

Order whereas dealer is granted licence under paragraph 6

of the Control Order.  Paragraph (7) provides for renewal of

licences,  licence  fees,  etc.   The  relevant  part  of  the  said

paragraph is as follows:-  

“7. Renewal of  licences, licence fees,  etc. – (1)  Every  licence  issued  under  paragraph  5  or paragraph 6 of this Order shall be valid up to 31st December  next  following  the  date  of  issue  and may, at the discretion of the authority by which the  licence  was  granted,  be  renewed  for successive periods of one year on an application made  in  that  behalf  to  such  authority  in  the manner provided hereinafter before the expiry of the date of validity of the licence:

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Provided that –  

(i) the  Director  may,  by  notification  in  the Official  Gazette,  extend the period of  validity of existing agents’ licences issued under paragraph 5 of this Order for such period, not exceeding 60 days,  beyond  the  31st December,  hereinbefore mentioned, as he may, for reasons to be recorded in writing, think fit; and  

(ii) the  Director,  or  the  District  Magistrate having  jurisdiction,  may,  by  notification  in  the Official  Gazette,  extend the period of  validity of existing dealers’ licences issued under paragraph 6 of this Order for such period, not exceeding 60 days  beyond  the  31st December,  hereinbefore mentioned, as he may, for reasons to be recorded in  writing,  think  fit:  Provided  further  that  the Director  or  the  District  Magistrate,  as the  case may  be,  may,  by  notification  in  the  Official Gazette, extend the time for filing of application for renewal of licences:

Provided also that on an application made by  a  licensee  in  that  behalf,  the  authority  by which the licence was issued may, if he considers it  expedient  so  to  do,  renew  a  licence  issued under paragraph 5 or paragraph 6 of this Order, for a maximum period of three years at a time on payment  in  non-judicial  stamps  of  the  fees  for renewal of licences referred to in sub-paragraph (3) of this paragraph, for each year of renewal or part thereof.

(2) Every  application  for  the  issue  of  licence under paragraph 5 or paragraph 6 of the Order or for  the  renewal  of  such  licence  under  this paragraphs  shall  be  made  to  the  appropriate authority in Form C”.

18. On a reading of that paragraph it is clear that power

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conferred on the  Director  and the  District  Magistrate  are

different, for the Director is a higher authority and the rule

clothes him with more authority.  Needless to say, the said

paragraph  has  to  be  read  in  juxtaposition  with  other

paragraphs.  It is clear from paragraph 5 that the Director

alone is authorised to grant a licence to an agent whereas a

dealer’s licence can be granted either by the Director or by

the District Magistrate.    Sub-para 3 of Paragraph 5 of the

Control Order is also indicative of  the fact that the agent

operates at a larger scale than the dealer.  An agent can sell,

supply or transfer kerosene to a dealer, holder of a permit or

delivery  order  and  no  other  person.   Sub-para  2  of

Paragraph 6 of the Control Order is differently worded as it

postulates that conditions can be specified by the Director

or  the  District  Magistrate  having  the  jurisdiction.   The

conditions imposed may vary from time to time for the sake

of  fair  distribution of  kerosene.   The authorities  are  also

different as per the dictionary clause.  

19. In this backdrop, we are required to understand the

language  employed  in  paragraph 9  of  the  Control  Order.

The said paragraph, as we perceive,  is rather loosely and

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ambiguously  worded.   It  becomes  obvious  when  we

appreciate the Control Order on the bedrock of schematic

interpretation.   It  is  worth noting that while paragraph 5

deals  with  grant  of  licence  to  an  agent  by  the  Director,

paragraph 6 deals with grant of licence to a dealer by the

Director  or  the  District  Magistrate.   The  term  “District

Magistrate”  as  per  paragraph  3(e)  of  the  Control  Order

includes authorities mentioned therein.  Paragraph 9  which

pertains  to  cancellation  or  suspension  of  licence  is  a

composite  paragraph  and  stipulates  when  and  who  can

cancel or suspend a licence of an agent or a dealer.  The

said  power  is  exercised,  when  an  agent  or  dealer  has

indulged  in  any  kind  of  malpractice  or  contravened  any

provision of the Control Order or conditions applicable, etc.

On a literal reading of paragraph 9, it may convey or one

may be  emboldened to  urge  that  Director  as  well  as  the

District  Magistrate  including  the  authorised  officers

mentioned in paragraph 3(e), have concurrent jurisdiction to

cancel  or  suspend  the  licence  granted  to  an  agent  or  a

dealer.  However,  such  an  interpretation  could  not  be

occurred  with  the  legislative  intent  and  would  lead  to

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absurdity  and  anomaly.   Therefore,  such  kind  of  an

interpretation has to be avoided.  We are disposed to think

so inasmuch as an agent, as noted above, is appointed by

the  Director  and  has  the  authority  to  carry  on  trade  of

kerosene  within  the  entire  State.   But  a  dealer,  cannot

supply, sell or transfer kerosene to any person other than a

holder  of  a  permit,  delivery  order  or  through  a  dealer

specified in paragraph 6.  That apart, it is noticeable that

sub-paragraph  (e)  of  paragraph  (3)  a  District  Magistrate

would  include  a  sub-Divisional  Controller  of  Food  and

Supplies,  authorised by the District  Magistrate or Deputy

Commissioner  and  District  Magistrate  is  for  a  specified

small area within the State.  He cannot exercise jurisdiction

in respect of an area beyond the geographical boundaries of

the  area/district.   In  such  a  situation  to  place  a

construction on Paragraph 9 that the Director as well as the

District  Magistrate  would  have  concurrent  jurisdiction

would be inapposite.  In our considered view, a logical and

reasonable  interpretation  to  paragraph  9  of  the  Control

Order  has  to  be  preferred  instead  of  adopting  the  loose

meaning in the literal sense.  Such an interpretation would

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be  in  consonance  with  the  principles  of  harmonious

construction, that is, harmonious reading of paragraphs 5,

6, 7 and 9 of the Control Order.  It is based on the premise

that the authority who has the right to grant licence has the

authority to suspend or cancel the licence.  In this regard,

we may fruitfully reproduce a passage from Reserve Bank

of India v. Peerless General Finance and Investment Co.

Ltd.  and Others2,  wherein  it  has  succinctly  been stated

thus:-  

“Interpretation must depend on the text and the context. They are the bases of interpretation. One may well say if the text is the texture, context is what  gives  the  colour.  Neither  can  be  ignored. Both are  important.  That  interpretation  is  best which makes the textual interpretation match the contextual. A statute is best interpreted when we know why it was enacted. With this knowledge, the statute must be read,  first  as a whole  and then section by section, clause by clause, phrase by  phrase  and  word  by  word.  If  a  statute  is looked at,  in the context of  its enactment, with the  glasses  of  the  statute-maker,  provided  by such context, its scheme, the sections, clauses, phrases and words may take colour and appear different  than  when  the  statute  is  looked  at without the glasses provided by the context. With these glasses we must look at the Act as a whole and  discover  what  each  section,  each  clause, each  phrase  and  each  word  is  meant  and designed to say as to fit into the scheme of the

2  (1987) 1 SCC 424

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entire Act. No part of a statute and no word of a statute  can  be  construed  in  isolation.  Statutes have to be construed so that every word has a place and everything is in its place.”

20. We have referred to the said passage, for the Control

Order was brought into force for maintenance of  supplies

and for securing the equitable distribution and availability

of kerosene at fair prices in West Bengal.  It has controlling

measures and it subserves the public purpose.  The intent

of  the Control  Order is  to totally prohibit  creation of  any

kind of situation which will frustrate the proper distribution

of kerosene oil.    The purpose of any Act or Rule or Order

has its own sanctity.  While interpreting the same, the text

and context have to be kept in mind. In  this  regard,  we

may  usefully  refer  to  an  authority  in  Workmen  v.

Dimakuchi Tea Estate3,  wherein the  three-Judge Bench

while interpreting the expression “any person” occurring in

Section 2(k) of the Industrial Disputes Act, 1947 observed

that the definition clause must be read in the context of the

subject matter and scheme of the Act, and consistently with

the  objects  and other  provisions  of  the  Act.   Elaborating

3  AIR 1958 SC 353

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further, the Court proceeded to state:-

“It  is  well  settled  that  “the  words of  a  statute, when there is a doubt about their meaning are to be understood in the sense in which they best harmonise with the subject of the enactment and the object which the legislature has in view. Their meaning is found not so much in a strictly gram- matical or etymological propriety of language, nor even in its popular use, as in the subject or in the occasion on which they are used, and the object to  be  attained”.  (Maxwell,  Interpretation  of Statutes, 9th Edn., p. 55).”

21. Keeping in view the aforesaid rule of interpretation, we

are constrained to think that  it  would be incongruous to

hold that even when the licence of  an agent at the State

level  is  granted  and  issued  by  the  Director,  a  District

Magistrate,  as  defined  in  paragraph  3(e)  of  the  Control

Order, in exercise of concurrent jurisdiction can suspend or

cancel the State level licence.  Be it noted, as per Section 21

of  the  General  Clauses  Act,  power  to  issue  notification/

order/rules/bye-laws,  etc.  includes  the  power  to  amend/

vary or rescind.  Though the said provision is not applicable,

yet it is indicative that generally unless the statute or rule

provides  to  the  contrary,  either  expressly  or  impliedly,

issuing or appointing authority would also exercise the right

to cancel or suspend the licence.  As has been stated earlier,

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on  a  cursory  reading  it  may  appear  that  paragraph  9

confers concurrent jurisdiction.  The said paragraph deals

with  suspension  or  cancellation  of  licence  and  is  a

composite paragraph, which applies to licence granted to an

agent  as  well  as  the  dealer.   It  refers  to  the  power  of  a

Director  and District  Magistrate  having  jurisdiction.   The

words “District Magistrate having jurisdiction” are also used

in paragraph 6.  The expression “District Magistrate having

jurisdiction”  reflects  the  legislative  intent  that  District

Magistrate having jurisdiction under paragraph 9 would be

the  same  District  Magistrate  or  authority  which  has  the

power  to  grant  licence  to  a  dealer  in  Form  B  under

paragraph 6.  Read in this manner, we have no hesitation in

holding that it is the Director alone who could have issued

the  show  cause  notice  under  paragraph  9  and  has  the

authority  and  jurisdiction  to  pass  an  order  in  terms  of

paragraph 9 of the Control Order.  The earlier notice issued

by SCFS has to be regarded at best a show cause notice to

ascertain and affirm facts alleged and it ensured a response

and reply  from the  first  respondent.   The said  notice  by

SCFS  could  not  have  culminated  in  the  order  under

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paragraph 9,  for  he  has  no  authority  and jurisdiction  to

pass  an  order  suspending  or  cancelling  the  licence.

Therefore, the matter was rightly referred to the Director for

action, if required, in terms of paragraph 9 of the Control

Order.   

22. Having held that, we think it appropriate to refer to the

aspect of communication pertaining to period as prescribed

in paragraphs 9 and 10. The High Court has taken note of

the fact that SCFS had issued the notice of show cause to

which  the  agent  had  replied.   The  said  authority  has

forwarded the matter to the Director, Consumer Goods for

his  perusal  and necessary  action,  who in  exercise  of  his

authority  had  passed  the  order  on  22.7.2013 which was

received by the first respondent on 12.8.2013.  The Division

Bench has opined that as per Paragraph 9, the order has to

be passed within 30 days after the issue of  the notice to

show cause and same has to be communicated within the

said  period  and  passing  an  order  on  the  file  would  not

tantamount to an order.   

23. The Division Bench, as it appears, has been guided by

the decision in Rani Sati Kerosene Supply Company and

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Others (supra).  In the said case the agent had challenged

the  order  of  suspension-cum-show  cause  notice  and  the

order of cancelling the agency licence.  The High Court had

taken note of the contention that assuming the Director had

jurisdiction,  the order having been communicated beyond

30 days from the issue of the order of suspension, it was

liable  to be set  aside.   After  stating the facts,  the earlier

Division Bench proceeded to interpret Paragraphs 9 and 10

of the Control Order and opined thus:-

“29. After going through the aforesaid two para- graphs, I find that against an order of cancella- tion of licence, there is a provision of appeal to be availed of within 30 days from the date of the or- der. There is, however, no power conferred upon the appellate authority to entertain such appeal after the period of limitation by condoning the de- lay. If I accept the contention of Mr. Chakraborty, the learned Counsel appearing for the State that the  date  of  communication  of  the  order  is  in- significant, in that case, the right of appeal con- ferred upon the aggrieved agent against an order of cancellation can easily be frustrated by com- municating the order after the expiry of 30 days from the date of the order. Therefore the phrase "by an order in writing to be made" appearing in the proviso to the Paragraph 9 is to be construed as "by an order in writing to be communicated" and so  long  the  order  is  not  communicated,  it should be presumed that the order has not been passed and consequently, a duty is cast upon the authority concerned to communicate the order to the  aggrieved,  either  direct  or  constructively.

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Mere passing of an order and keeping it in the file will  not fulfil  the requirement of  the said Para- graph 9.

30. Mr. Banerjee, the learned advocate appearing for the petitioners, has in this connection placed strong reliance upon a decision of the Supreme Court in the case of Assistant Transport Commis- sioner, Uttar Pradesh v. Nand Singh, [reported in 179 ELT (510) where the Apex Court while con- sidering Section 35 of the Central Excise and Salt Act, 1944 held that the date of communication of the order will be the starting point of limitation for filing an appeal and not the date of the order, because, the order would be effective against the person affected by it only when it comes to the knowledge either direct or constructively, other- wise not.  The Supreme Court further  held that mere writing of an order in the file, kept in the of- fice of the authorities, is no order in the eye of law.

31. The aforesaid decision of the Supreme Court supports  the  contention  of  the  petitioners  that the  order  of  cancellation,  for  all  practical  pur- poses, should be deemed to have been passed on January 30, 2004 when the same was faxed for communication  to  the  petitioners  and  served upon them. Thus, the order of cancellation of li- cence was, in the eye of law, passed beyond 30 days from the date of passing the order of sus- pension and consequently, the order of suspen- sion had automatically ceased to have any effect from January 10, 2004, and the order of cancel- lation not having been passed in accordance with law within 30 days from December 10, 2003, the Director could not pass any such order beyond that date. Thus, the order impugned is liable to be quashed also on the aforesaid ground.”

The said judgment is the fulcrum of reasoning of the

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impugned judgment.  

24. The aforesaid decision, as is evident,  lays down that

passing of  the order and communication thereof  must be

within 30 days and on that basis has opined that the order

passed  on  the  file  and  not  communicated  to  the  person

aggrieved is not an order that can be taken cognizance of.

There can be no scintilla of doubt that unless an adverse

order  is  communicated  that  does  not  come  into  effect.

Passing of an order on the file does not become an order in

the eye of law.  But the core question would be, if an order

is  passed  within  30  days  and  communicated  thereafter,

what would be the effect.  In the instant case, as the factual

matrix would unveil, the order was passed before expiration

of 30 days, but the same was served on the first respondent

beyond 30 days.  The thrust of the matter is whether the

order has to be passed and communicated within 30 days.

Paragraph 9 of  the Control  Order requires the competent

authority to pass an order within 30 days from the date of

serving the show cause notice or the suspension of licence.

The word used is “shall”.  Paragraph 10 of the Control Order

enables the aggrieved person to prefer an appeal against an

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order passed under Paragraph 8 or 9 within 30 days to the

State  Government  in  Food and Supplies  Department.   In

this context,  reference to the authority in  MCD v. Qimat

Rai Gupta and others4 is of significance. In the said case,

the  Court  was interpreting  the  word “made”  occurring  in

Section  126(4)  of  the  Delhi  Municipal  Corporation  Act,

1957,  which  stipulated  that  no  amendment  under

sub-section  1  shall  be  made  in  the  assessment  list  in

relation to  certain aspects.   It  was contended before  this

Court on behalf of the Municipal Corporation of Delhi that

the  use  of  the  expression  “made”  occurring  in  the  said

sub-section would necessitate communication of the order.

It was contended before this Court by the Corporation that

the  distinction must  be  made between communication of

order  and  making  thereof  inasmuch  as  whereas

communication  may  be  necessary  so  as  to  enable  an

assessee to prefer an appeal against the order of assessment

but only signing of the order would subserve the purpose of

saving the period of limitation.  The submission was that

the expression “no amendment under sub-section (1) shall

4  (2007) 7 SCC 309

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be made” should be given a liberal interpretation.   Reliance

was placed on the pronouncement in CCE v. M.M. Rubber

and Co.5  The said stand was controverted on the ground

that  the  Act  having  been  enacted  for  the  purpose  of

controlling  the  abuse  of  power  on  the  part  of  the

Commissioner,  the  same  should  be  given  purposive

meaning  so  as  to  fulfil  the  purport  and  object  of  the

legislation.  While dealing with the period of limitation, the

Court observed:-

“16. In interpreting a provision dealing with limi- tation,  a  liberal  interpretation in  a  situation of this nature should be given. Although an order passed  after  expiry  of  the  period  of  limitation fixed under  the statute would be a  nullity,  the same would not mean that a principle of interpre- tation applied thereto should not (sic) be such so as to mean that not only an order is required to be made but the same is also required to be com- municated.

17. When an order is passed by a high ranking authority appointed by the Central Government, the  law  presumes  that  it  would  act  bona  fide. Misuse of power in a situation of this nature, in our opinion, should not be readily inferred. It is difficult to comprehend that while fixing a period of  limitation,  Parliament  did  not  visualise  the possibility of abuse of power on the part of the statutory authority.  It  advisedly chose the word

5  (1992) Supp. (1) SCC 471

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“made” and not “communicated”.  They, in ordi- nary parlance, carry different meanings.”

25. After so stating, the Court proceeded to interpret the

term “made” and observed that meaning of a word depends

upon the text and context and it will also depend upon the

purport  and  object  it  seeks  to  achieve.   The  two-Judge

Bench  referred  to  Surendra  Singh  v.  State  of  U.P.6,

Harish  Chandra  Raj  Singh  v.  Dy.  Land  Acquisition

Officer7 and K.Bhaskaran v. Sankaran Vaidhya Balan8.

The  Court  reproduced  paragraphs  12  and  18  from  M.M.

Rubber and Co. (supra).  They read as follows:-

“12. It may be seen therefore, that, if an authority is authorised to exercise a power or do an act af- fecting the rights of parties, he shall exercise that power within the period of limitation prescribed therefor. The order or decision of such authority comes into force or becomes operative or becomes an effective  order  or  decision  on  and  from the date when it is signed by him. The date of such order or decision is the date on which the order or decision was passed or made: that is to say when he ceases to have any authority to tear it off and draft a different order and when he ceases to have  any  locus  paetentiae.  Normally  that  hap- pens when the order or decision is made public or notified in some form or when it can be said to have left his hand. The date of communication of

6  AIR 1954 SC 194 7  AIR 1961 SC 1500 8  (1999) 7 SCC 510

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the order to the party whose rights are affected is not the relevant date for purposes of determining whether the power has been exercised within the prescribed time.”

xxxxx xxxxx xxxxx

“18. Thus if the intention or design of the statu- tory provision was to protect the interest of the person adversely affected, by providing a remedy against the order or decision any period of limita- tion prescribed with reference to  invoking such remedy  shall  be  read  as  commencing  from the date of communication of the order. But if it is a limitation for a competent authority to make an order the date of exercise of that power and in the case of exercise of suo motu power over the sub- ordinate  authorities’  orders,  the  date  on  which such power was exercised by making an order are the relevant dates for determining the limitation. The ratio of this distinction may also be founded on the principle that the Government is bound by the  proceedings  of  its  officers  but  persons  af- fected are not concluded by the decision.”

Eventually, the Court came to hold thus:

“An order passed by a competent authority dis- missing a government servant from services re- quires communication thereof as has been held in  State of Punjab v.  Amar Singh Harika9 but an order placing a government servant on suspen- sion does not require communication of that or- der. (See  State of Punjab v.  Khemi Ram10.) What is, therefore, necessary to be borne in mind is the knowledge leading to the making of the order. An order ordinarily would be presumed to have been made when it is signed. Once it is signed and an entry in that regard is made in the requisite reg-

9  AIR 1966 SC 1313 10  (1969) 3 SCC 28

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ister kept and maintained in terms of the provi- sions of a statute, the same cannot be changed or altered.  It,  subject  to  the  other  provisions con- tained in the  Act,  attains  finality.  Where,  how- ever, communication of an order is a necessary ingredient for bringing an end result to a status or to provide a person an opportunity to take re- course to law if he is aggrieved thereby, the order is required to be communicated.”

26. We have referred to the aforesaid authority in extenso

as the Division Bench has in one line stated that the said

decision makes it clear that communication of an order is

necessary ingredient for bringing an end result to a status

or to provide a person an opportunity to take recourse to

law  if  he  is  aggrieved  thereby,  then  the  said  order  is

required  to  be  communicated.   To  arrive  at  the  said

conclusion, as has been stated earlier, the Division Bench

has  found  support  from  Rani  Sati  Kerosene  Supply

Company and Others (supra) wherein it has been held that

if  an  order  is  communicated  after  30  days,  an  order  of

cancellation  can  easily  be  frustrated  and,  therefore,  the

phrase  by  an  order  in  writing  to  be  made  appearing  in

proviso  to  Paragraph  9  of  the  Control  Order  is  to  be

construed as by an order in writing to be communicated.

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27. The  Division  Bench has  read  the  prescription  of  30

days passing of an order in writing within 30 days from the

date  of  serving  the  show  cause  notice  or  suspension  of

licence to be mandatory.  To elaborate, if the order is not

passed within the  said  period,  the  authority  cannot  pass

any order or if it passes an order, it is a nullity.  In this

context,  we  may  fruitfully  refer  to  a  passage  from  G.P.

Singh’s book, as has been reproduced by the three-Judge

Bench in  Kailash v. Nankhu and others11.   It  reads as

under:-

“Justice G.P. Singh notes in his celebrated work Principles  of  Statutory  Interpretation (9th  Edn., 2004) while dealing with mandatory and directory provisions:

“The study of numerous cases on this topic does not lead to formulation of any universal rule except this that language alone most often is not decisive, and regard must be had to the context, subject-matter and object of the statu- tory  provision  in  question,  in  determining whether the same is mandatory or directory. In an oft-quoted passage Lord Campbell said: ‘No universal rule can be laid down as to whether mandatory enactments shall be considered di- rectory only or obligatory with an implied nulli- fication  for  disobedience.  It  is  the  duty  of courts of justice to try to get at the real inten- tion of the legislature by carefully attending to

11  (2005) 4 SCC 480

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the whole  scope of  the statute  to be consid- ered.’ ” (p. 338)

“ ‘For ascertaining the real intention of the legislature’, points out Subbarao, J. ‘the court may consider inter alia, the nature and design of  the  statute,  and  the  consequences  which would follow from construing it the one way or the  other;  the  impact  of  other  provisions whereby  the  necessity  of  complying  with  the provisions in question is avoided; the circum- stances, namely, that the statute provides for a contingency  of  the  non-compliance  with  the provisions;  the  fact  that  the  non-compliance with the provisions is or is not visited by some penalty;  the  serious  or  the  trivial  conse- quences,  that  flow  therefrom;  and  above  all, whether the object of the legislation will be de- feated or furthered’. If object of the enactment will be defeated by holding the same directory, it will be construed as mandatory, whereas if by holding it mandatory serious general incon- venience  will  be  created  to  innocent  persons without very much furthering the object of en- actment, the same will be construed as direc- tory.” (pp. 339-40)”

28. Keeping in view the aforesaid principles,  if  it  is held

that  the order  would become a nullity,  it  really  does not

serve the purpose of the Control Order.  On the contrary, it

frustrates it and, therefore, the interpretation placed by the

High Court on Paragraph 9 in juxtaposition with Paragraph

10 to treat the order has null and void is neither correct nor

sound.  It is desirable that the authority shall pass an order

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within 30 days from the date of show cause.  Be it noted

that there are two contingencies when the show cause is

issued  for  violation  or  when  an  order  of  suspension  is

passed.  There can be no trace of doubt that the order will

take  effect  from the  date  when  it  is  served.   The  order,

unless  it  is  served,  definitely  neither  the  agent  nor  the

dealer would suspend its activities or obey any order, for he

has  not  been  communicated.   Regard  being  had  to  this

aspect, it is to be seen whether the prescription of 30 days

from the date of order as provided in Paragraph 10 would

make the order null and void.   The order passed by the

authority comes into effect when it is communicated.  An

order passed in file in case of this nature would not be an

effective order, for it is adverse to the interest of the dealer

or  agent  and,  therefore,  paragraph 10 has  to  be  given a

purposive meaning.  It has to convey that 30 days from the

date of the order which is an effective order, and that is the

date of  communication.  Unless such an interpretation is

placed, the intention of the rule making authority and also

the  intention  behind  the  object  and  reasons  behind  the

Control  Order  and  the  Essential  Commodities  Act,  1955

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would  be  frustrated.    Thus,  we  are  of  the  considered

opinion that the view expressed by the High Court on this

score also is absolutely incorrect and wholly unsustainable.  

29. Apart from above, the words used in Paragraph 10 are

“date of the order”.  In the scheme of the Control Order, the

order comes into effect from the date of receipt by the agent

or  the  dealer.   Once  that  becomes  the  decision,  the

commencement of limitation of 30 days for the purpose of

Paragraph 10 would be the date when the order is effective.

The High Court in  Rani Sati Kerosene Supply Company

and  Others (supra)  has  opined  that  if  the  order  of

cancellation is not served on the affected person and the

appeal  period  expires,  there  is  the  possibility  that  the

adverse order would become unassailable.  The reasoning is

totally fallacious.  An appeal can only be preferred when the

order  is  effective.   The  ineffective  order,  that  is  to  say,

uncommunicated  order  cannot  be  challenged.   Therefore,

the  reasoning  given  by  the  court  in  earlier  judgment  is

erroneous  and  hence,  the  reliance  thereupon  by  the

impugned  order  is  faulty.   There  has  to  be  a  purposive

construction of the words “from the date of order”.  To place

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a  construction  that  the  date  of  an  order  would  mean

passing of the order, though not made effective would lead

to an absurdity.    

30. In  view  of  the  aforesaid  analysis,  we  arrive  at  the

irresistible conclusion that the High Court has erroneously

interpreted Paragraph 9 and 10 of the Control Order and

that  is  why  it  has  arrived  at  an  erroneous  conclusion.

When we had reserved the judgment, we were apprised that

a fresh show cause notice had been issued for the self-same

allegation by the SCFS and an appeal has been preferred

against them.  As we have held, the Director alone has the

jurisdiction to pass the order, the said order remains a valid

order and can be challenged in an appeal under Paragraph

10  and  the  appellate  authority  would  be  the  State

Government.   

31. Consequently,  the  appeal  is  allowed  and  the  order

passed by the Division Bench in AST No. 177/2013 is set

aside and the respondent no.1 is granted liberty to prefer an

appeal  within  the  prescribed  period  before  the  State

Government.   Be  it  noted,  the  Control  Order  has  been

amended in 2014 whereby the period of limitation has been

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extended.  Be that as it may, we direct that the period of

limitation shall  commence from today.  There shall  be no

order as to costs.  

.............................J. [Dipak Misra]

............................J. [Prafulla C. Pant]

New Delhi September 04, 2015