# STATE OF WEST BENGALAND OTHERS v. R.K.8.K. LTD. &ANR

- **Citation:** [2015] 9 S.C.R. 309
- **Court:** Supreme Court of India
- **Decided:** 2015-09-04
- **Case number:** Civil Appeal No.2825 of 2015
- **Bench:** Dipak Misra, Prafulla C. Pant
- **Source:** https://unisonlegal.in/judgment/supreme-court-of-india/state-of-west-bengaland-others-v-r-k-8-k-ltd-anr-30669
- **Pages:** 34

## Headnote

West Bengal Kerosene Oil Control Order, 1968:
8
Paragraphs 5, 6, 7 and 9- Competent authority to initiate C
disciplinary action in terms of Paragraph 9-Against the agent
holding licence for carrying on business of superior kerosene
oil - Show Cause Notice issued to the agent by SubDivisional Controller, Food and Supplies (SCFS) (who
represents the District Magistrate) - Seeking explanation D
about the discrepancy found in distribution of superior
kerosene oil- Explanation submitted- SCFS forwarded the
record to Director of Consumer Goods - Director passed
order imposing penalty in exercise of power conferred on him
under paragraph 9(ii) - Jurisdiction of Director questioned E
by the agent- Held: The power to grant a licence to an agent
as per Paragraph 5 is Director and to a dealer as per
Paragraph 6 is the Director or the District Magistrate
[including the authon"ties mentioned in Paragraph 3(e)]- But F
the power to cancel or suspend such licence is given to the
Director as well as the District Magistrate (including authon"zed
officer) by a composite paragraph- s.21 of General Clauses
Act also indicates that issuing authority would exercise the
n"ght to cancel or suspend the licence unless the statute G
provides to the contrary- Therefore, it would be incongruous
to hold that even when the licence of an agent is granted by
a superior authority (Director), a District Magistrate in
309
H
310
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[2015] 9 S.C.R.
A
exercise of concurrent jurisdiction can cancel or suspend that
licence - Such an interpretation of Paragraph 9 would be
contrary to legislative intent and would lead to absurdity and
anomaly- Instead of adopting literal interpretation, a logical
and reasonable interpretation, in consonance with the
B principles of harmonious construction has to be adopted -A
harmonious reading of Paragraphs 5, 6, 7 and 9 leads to the
interpretation of Paragraph 9 that it is Director alone who had
authority to show cause notice and pass an order in terms of
Paragraph 9 -
Interpretation of Statutes -
Literal
C interpretation; Harmonious construction - General Clauses
Act, 1897-s. 21.
Paragraphs 9 and 10 - Limitation for passing order
under Paragraph 9 - Prescribed as 30 days from the date
D the show cause notice was issued - The order in question
was passed within 30 days but communicated after 30 days
- High Court held that passing an order on the file would not
tantamount to an order unless communicated; and that the
order having not been communicated within 30 days was not
E within limitation and hence null and void - On appeal held:
An order comes into effect only when it is communicated -
The words "date of the order" used in Para 10 has to be given
purposive meaning- The expression "date of the order" would
F construe the date on which the order comes into effect i.e.
the date of its communication to the agent or dealer -
Declaring the order as nullity being barred by limitation, would
not serve the purpose of the Control Order or Essential
CommoditiesAct, 1955.
G
H
Interpretation of Statues - Purposive interpretation -
Held: 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.
Allowing the appeal, the Court
STATE OF WEST BENGALAND OTHERS v. R.K.B.K. LTD.311
HELD: 1.1 As the scheme of the Control Order would A
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 B
fees, etc. The power 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. It
. is clear from paragraph 5 that the Director alone is
authorised to grant a licence to an agent whereas a C
dealer's licence can be granted either by the Director or
by the District M

## Text

_Characters 0–39,627 of 62,278. This is a partial read: ask again with offset=39627 for what follows._

[2015] 9 S.C.R. 309
STATE OF WEST BENGALAND OTHERS
A
v.
R.K.8.K. LTD. &ANR.
(Civil Appeal No.2825 of 2015)
SEPTEMBER 04, 2015
[DIPAK MISRA AND PRAFULLA C. PANT, JJ.]
West Bengal Kerosene Oil Control Order, 1968:
8
Paragraphs 5, 6, 7 and 9- Competent authority to initiate C
disciplinary action in terms of Paragraph 9-Against the agent
holding licence for carrying on business of superior kerosene
oil - Show Cause Notice issued to the agent by SubDivisional Controller, Food and Supplies (SCFS) (who
represents the District Magistrate) - Seeking explanation D
about the discrepancy found in distribution of superior
kerosene oil- Explanation submitted- SCFS forwarded the
record to Director of Consumer Goods - Director passed
order imposing penalty in exercise of power conferred on him
under paragraph 9(ii) - Jurisdiction of Director questioned E
by the agent- Held: The power to grant a licence to an agent
as per Paragraph 5 is Director and to a dealer as per
Paragraph 6 is the Director or the District Magistrate
[including the authon"ties mentioned in Paragraph 3(e)]- But F
the power to cancel or suspend such licence is given to the
Director as well as the District Magistrate (including authon"zed
officer) by a composite paragraph- s.21 of General Clauses
Act also indicates that issuing authority would exercise the
n"ght to cancel or suspend the licence unless the statute G
provides to the contrary- Therefore, it would be incongruous
to hold that even when the licence of an agent is granted by
a superior authority (Director), a District Magistrate in
309
H
310
SUPREME COURT REPORTS
[2015] 9 S.C.R.
A
exercise of concurrent jurisdiction can cancel or suspend that
licence - Such an interpretation of Paragraph 9 would be
contrary to legislative intent and would lead to absurdity and
anomaly- Instead of adopting literal interpretation, a logical
and reasonable interpretation, in consonance with the
B principles of harmonious construction has to be adopted -A
harmonious reading of Paragraphs 5, 6, 7 and 9 leads to the
interpretation of Paragraph 9 that it is Director alone who had
authority to show cause notice and pass an order in terms of
Paragraph 9 -
Interpretation of Statutes -
Literal
C interpretation; Harmonious construction - General Clauses
Act, 1897-s. 21.
Paragraphs 9 and 10 - Limitation for passing order
under Paragraph 9 - Prescribed as 30 days from the date
D the show cause notice was issued - The order in question
was passed within 30 days but communicated after 30 days
- High Court held that passing an order on the file would not
tantamount to an order unless communicated; and that the
order having not been communicated within 30 days was not
E within limitation and hence null and void - On appeal held:
An order comes into effect only when it is communicated -
The words "date of the order" used in Para 10 has to be given
purposive meaning- The expression "date of the order" would
F construe the date on which the order comes into effect i.e.
the date of its communication to the agent or dealer -
Declaring the order as nullity being barred by limitation, would
not serve the purpose of the Control Order or Essential
CommoditiesAct, 1955.
G
H
Interpretation of Statues - Purposive interpretation -
Held: 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.
Allowing the appeal, the Court
STATE OF WEST BENGALAND OTHERS v. R.K.B.K. LTD.311
HELD: 1.1 As the scheme of the Control Order would A
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 B
fees, etc. The power 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. It
. is clear from paragraph 5 that the Director alone is
authorised to grant a licence to an agent whereas a C
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. Sub0
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 E
authorities are also different as per the dictionary clause.
[Paras 17 and 18] [326-E-F; 328-A-D]
1.2 Paragraph 9 of the Control Order is rather loosely
and ambiguously worded. While paragraph 5 deals with F
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 G
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 H
312
SUPREME COURT REPORTS
[2015) 9 S.C.R.
A provision of the Control Order or conditions applicable,
etc. A literal reading of paragraph 9, may convey 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
B granted to an agent or a dealer. However, such an
interpretation could not be occurred with the legislative
intent and would lead to absurdity and anomaly.
Therefore, such kind of an interpretation has to be
C avoided. [Para 19] [328-D-H; 329-A,B]
1.3 To place a construction on Paragraph 9 that the
Director as well as the District Magistrate would have
concurrent jurisdiction would be inapposite. A logical
and reasonable interpretation to paragraph 9 of the
D Control Order has to be preferred instead of adopting
the loose meaning in the literal sense. Such an
interpretation would be in consonance with the
principles of harmonious construction, that is,
harmonious reading of paragraphs 5, 6, 7 and 9 of the
E 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. [Para 19] [329D-F]
F
Reserve Bank of India v. Peerless General Finance and
Investment Co. Ltd. and Ors. (1987) 1 SCC 424: 1987 (2)
SCR 1 - relied on.
1.4 The intent of the Control Order is to totally prohibit
G 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. The words of a statute, when there is a
H doubt about their meaning are to be understood in the
sense in which they best harmonise with the subject of
STATE OF WEST BENGALAND OTHERS v. R.K.B.K. LTD.313
the enactment and the object which the legislature has A
in view. Therefore, it would be incongruous to hold that
even when the licence of an agent at the State level is
Qranted 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 B
cancel the State level licence. 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. The said provision is indicative that generally
unless the statute or rule provides to the contrary, either C
expressly or impliedly, issuing or appointing authority
would also exercise the right to cancel or suspend the
licence. [Paras 20 and 21] [330-F-G; 331-B, D-F]
Workmen v. Dimakuchi Tea Estate AIR 1958 SC 353: D
1958 SCR 1156 - relied on.
1.5 The expres"sion "District Magistrate having
jurisdiction" in Paragraph 6, reflects the legislative intent
that District Magistrate having jurisdiction under E
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, it is
· the Director alone who could have issued the show
cause notice under paragraph 9 and has the authority F
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 G
notice by SCFS could not have culminated in the order
under 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 H
314
SUPREME COURT REPORTS
[2015] 9 S.C.R.
A the Director for action, if required, in terms of paragraph
9 of the Control Order. (Para 21) (332-A-D]
·
2.1 Paragraph 9 of the Control Order requires the
competent authority to pass an order within 30 days from
B 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 order passed
under Paragraph 8 or 9 within 30 days to the State
C Government in Food and Supplies Department [Para 24)
[335-8-D]
2.2 It is desirable that the authority shall pass an
order within 30 days from the date of show cause. The
o order will take effect from the date when it is served. 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,
E .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
F intention behind the object and reasons behind the
Control Order and the Essential Commodities Act, 1955
would be frustrated. Apart from above, the words used
in Paragraph 10 are "date of the order". There has to be
a purposive construction of the words "from the date of
G order". To place a construction that the date of an order
would· mean passing of the order, though not made
effective, would lead to an absurdity. In the scheme of
the Control Order, the order comes into effect from the
H date of receipt by the agent or the dealer. Once that
becomes the decision, the commencement of limitation
STATEOFWESTBENGALANDOTHERSv. R.K.B.K. LTD.315
of 30 days for the purpose of Paragraph 10 would be the A
date when the order is effective. 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 B
Paragraph 10 to treat the order as null and void is neither
correct nor sound. [Paras 28 and 29] [340-G-H; 341-A]
2.3 The respondent No.1 is granted liberty to prefer
an appeal within the prescribed period before the State C
·Government. The Control Order has been amended in
2014 whereby the period of limitation has been extended.
However, it is directed that the period of limitation shall
commence from the date of this judgment. [Para 31] [342D-E]
D
MCD v. Qimat Rai Gupta and Ors. (2007) 7 SCC 309:
2007 (8) SCR 570; Kai/ash v. Nankhu andOrs. (2005) 4 SCC
480; CCE v. M.M. Rubber and Co. (1992) Supp. (1) SCC
471; Surendra Singh v. State of U. P AIR 1954 SC 194: 1954 E
SCR 330; Harish Chandra Raj Singh v. Dy. Land Acquisition
Officer AIR 1961SC1500: 1962 SCR 676; K.Bhaskaran v.
Sankaran Vaidhya Ba/an (1999) 7 SCC 510: 1999 (3) Suppl.
SCR 271 - relied on.
Rani Safi Kerosene Supply Company and Ors. vs. The
State of West Bengal and Ors. 2005 (4) CHN 264 - held
inapplicable.
F
3. As the Director alone has the jurisdiction to pass G
the order, the passed by SCFS in a fresh show cause
notice for the self-satne alleations order remains a valid
order and can be challenged in an appeal under
Paragraph 10 and the appellate authority would be the
State Government. [Para 30] [342-C-D]
H
316
A
B
c
D
E
SUPREME COURT REPORTS
[2015] 9 S.C.R.
Case Law Reference
200·5 (4) CHN 264
held inapplicable. Paras 7
and 26
1987 (2) SCR 1
relied on.
Para 19
1958 SCR 1156
relied on.
Para 20
2007 (8) SCR 570
relied on .
Para 24
.
(1992) Supp. (1) sec 471relied on.
Para 24 ·
1954 SCR 330
relied on.
Para 25
1962 SCR 676
relied on.
Para 25
1999 (3) Suppl. SCR 271 relied on.
Para 25
1966 SC 1313
relied on.
Para 25
CIVIL APPELLATE JURISDICTION: Civil Appeal No.
2825 of 2015.
From the Judgment and Order dated 29.08.2014 of the
High Court of Calcutta in AST No.177 of2013.
Mohan Parasaran, Anip Sachthey, Saakaar Sardana for
F the Appellants.
G
Vivek K. Tankha, Ramanand Agarwal, Pijush K. Roy,
Nibedita Pal, Kakali Roy, Rajan K. Chourasia for the
Respondents.
The Judgment of the Court was delivered by
DIPAK MISRA, J.1. 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
H Court of Calcutta in AST No. 17712013 whereby it has
STATE OF WEST BENGAL AND OTHERS v. R.K.B.K. LTD. 317
[DIPAK MISRA, J.]
overturned the decision of the learned Single Judge requiring
A
the respondent-writ petitioner to knock at the doors of the
alternative forum by way of appeal, on the foundation that 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 B
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 C
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 D
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,
E
"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 issued a notice seeking
F
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 G
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 H
318
SUPREME COURT REPORTS
[2015] 9 S.C.R.
A
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,
B 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 law and accordingly prayer was made to
C 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
D 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
E 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
F 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.
4. The order passed by the Director was assailed by the
G 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
H 6.9.2013, the appellate authority shall dispose of the same by
31.12.2013. The learned Single Judge further directed that
STATE OF WEST BENGAL AND OTHERS v. R.K.B.K. LTD. 319
[DIPAK MISRA, J.]
the agent shall maintain with utmost care an inventory of stocks A
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
B
of 2013 before the Division Bench. It was urged in the intracourt appeal that the proceeding before the Director of
Consumer Goods was p~tently without jurisdiction, for power C
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 paragraph 9 of the
Control Order and not the Director of Consumer Goods; that D
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 E
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.
F
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?
G
H
320
SUPREME COURT REPORTS
[2015] 9 S.C.R.
A
b. \/Vhether 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
B
communicated to 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
C 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
D ·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
E 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
F 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
G 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:-
H
1 2005 (4) CHN 264
STATE OF WEST BENGAL AND OTHERS v. R.K.B.K. LTD. 321
[DIPAK MISRA, J.]
"For the reasons discussed hereinabove, we hold thatthe A
Sub-Divisional Controller, Food and Supplies. Burdwan
lawfully initiated the proceeding against the appellanVwrit
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,
B
1968.
We further hold that the Director of Consumer Goods had
no jurisdiction and/or authority to initiate any proceeding
against the appellanVwrit petitioner no. 1 in terms of C
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 July, 2013
passed by the Director of Consumer Goods cannot survive
and is liable to be set aside since the said Director had
D
no authority and/or jurisdiction to pass any order under
paragraph 9 of the West Bengal Kerosene Control Order,
E
1968 in respect of S.K. Oii 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.
F
8. We have heard Mr. Mohan.Parasaran, learned senior
counsel along with Mr. Anip Sachtey, learned counsel for the G
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 H
when the final hearing of the appeal took place, we were
322
SUPREME COURT REPORTS
[2015] 9 S.C.R.
A 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:~
B
"In course of hearing we have been apprised that the SubDivisional Controller, Food and Supplies, 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
C
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
D
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
E 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
F 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 0) of sub-section 2 of
that Section and Section ?'(1) of the said Act and the Order
No. 26(11)-Com.Genl/66, dated ·1a1h June, 1966 feeling the
G 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:-
H
"3(a) "agent" means a person who has been appointed
STATE OF WEST BENGAL AND OTHERS v. R.K.B.K. LTD. 323
[DIPAK MISRA, J.]
as an agent of an oil distributing company by such company A
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:-
B
"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 C
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 D
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.
E
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,
F
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:-
G
"5. Grant of licence to agent - (1) The Director may
grant a licence to any agent in West Bengal authorising
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[2015] 9 S.C.R.
A
him to carry on trade in kerosene as such agent.
(2)Alicence 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
B
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
c
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:-
D
"6. Grant of licence to dealer- (1) the Director or the
District Magistrate having jurisdiction may grant a licence
to any person authorsing such person to carry on trade in
kerosene as a dealer.
E
(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
F
kerosene."
G
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
H
any condition of the licence or any direction given under
STATE OF WEST BENGAL AND OTHERS v. R.K.B.K. LTD. 325
[DIPAK MISRA, J.]
paragraph 12 of this Order, he may forthwith as the Agent A
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
B
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.
C
(i)
He may let off the Agent or Dealer if sufficient cause
has been shown.
(ii)
He may pass an order by imposing a penalty which 0
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:-
E
F
"10. Appeal - (a) Any person aggrieved by an Order G
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.
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[2015] 9 S.C.R.
A
(b) elsewhere, -
B
c
(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.
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
D the Director to grant licence to any ag_ent 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
E 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:-
F
G
H
"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 31s1 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:
Provided that -
STATE OFWEST BENGALAND OTHERS v. R.K.B.K. LTD. 327
[DIPAK MISRA, J.]
(i) the Director may, by notification in the Official Gazette,
A
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
B
(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,
C
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
D
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
E
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.
F
(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".
G
18. On a reading of that paragraph it is clear that power
conferre·d 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
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[2015) 9 S.C.R.
A
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 grc:inted either by the Director or by the DistriG1
Magistrate. Sub-para 3 of Paragraph 5 of the Control Order
B 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
C 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.
D
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
ambiguously worded. It becomes obvious when we appreciate
the Control Order on the bedrock of schematic interpretation.
E 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
F 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
G 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
H paragraph 3(e), have concurrent jurisdiction to cancel or
STATE OF WEST BENGAL AND OTHERS v. R.K.B.K. LTD. 329
[DIPAK MISRA, J.]
suspend the licence granted to an agent or a dealer. However,
A
such an interpretation could not be occurred with the legislative
intent and would lead to 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 B
kerosene within the entire State. But a dealer, cannot supply,
sell or transfer kerose.ne 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 subC
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
D .
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 E
Control Order has to be preferred instead of adopting the loose
meaning in the literal sense. Such an interpretation would 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
F
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
2 (1987) 1 sec 424
G
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330
A
B
c
D
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[2015] 9 S.C.R.
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 f~t into the scheme of the 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
F
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
G 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 DisputesAct,
H ' AIR 1958 SC 353
STATE OF WEST BENGALAND OTHERS v. R.K.B.K. LTD.