GORAKHNATH versus STATE OF UTIAR PRADESH AND ORS.

Citation: [1996] SUPP. 7 S.C.R. 590 · Decided: 11-10-1996 · Supreme Court of India · Bench: B.P. JEEVAN REDDY · Disposal: Dismissed

Judgment (excerpt)

A 
B 
c 
GORAKHNATH 
v. 
STATE OF UTIAR PRADESH AND ORS. 
OCTOBER 11, 1996 
[B. P. JEEVAN REDDY AND S.C. SEN, JJ.) 
U.P. Excise Act: Section 34-F! 16 Licence-Grant/renewal, etc.-Hear-
ing-Cancellation of licence without notice-Held : No Cancellation within 
the meaning of Section 34-Hence, No notice necessary. 
Prior to 1961, F/16 licence stood in the name of A, brother of K • the 
fifth respondent. In that year, the name of fifth respondent was also added. 
'A' died in March, 1979. Accordingly, the licence for the excise year 1979-80 
was renewed in the name of fifth respondent alone. On May 24, 1980, the 
licence in favour of fifth respondent was cancelled and a temporary licence 
D was issued to one 'R'. Fifth respondent complained and took several 
proceedings in that behalf. Ultimately, he filed a writ petition in the High 
Court which was allowed and the licence in favour of the fifth respondent 
was renewed and continued to be renewed till and including the excise year 
1991-92. For the excise year 1992·93, the fifth respondent applied for 
E renewal in the usual course, but on the report submitted by the office, the 
District Excise officer cancelled the licence in favour of the fifth respondent 
with the result that the licence in respect of the said shop was deemed to 
be vacant. 
A notification was issued on October 16, 1993 calling for applications 
F 
for the grant of a regular licence in respect of the said area. Eleven persons 
including appellant applied. The licence was granted to appellant against 
which .the fifth respondent again took proceedings before the excise 
authorities. On May 20, 1994, the District Magistrate accepted the fifth 
respondent's case and directed the renewal of the licence, for the year 
G 1994-95, in his favour. The appellant preferred an appeal against the order 
which was dismissed by the Additional Excise Commissioner. A revision 
was also dismissed, whereupon appellant approached the High Court by 
way of a writ petition. 
The writ petition was dismissed by the High Court on the ground 
H that once it was rightly held that the order of cancellation was competent 
590 
. , 
GORAKHNATH~STATE 
591 
and erroneous, it must follow that there was no vacancy in the licence and A 
hence, calling for applications for grant of licence and the consequential 
grant of licence was incompetent in law. However, the High Court rejected 
the appellant's plea that cancellation of his licence without hearing him 
was illegal being violative of principles of natural justice. it opined that 
the licence granted to the appellant has to be treated as an interim or B 
temporary arrangement, subject to the claims of the fifth respondent. 
In appeal to this court, the appellant assailed the order on the 
grounds that fifth respondent had no licence at all, hence there was no 
question of cancelling his licence; that since fifth respondent had not even 
applied for licence, there could be no question of renewal or grant of C 
licence; that a permanent/regular licence can be cancelled only on any of 
the grounds specified in Section 34 of the U.P. Excise Act; and that as the 
licence was also not cancelled with notice, the order was violative of 
principles of natural justice. 
Dismissing the Appeal, this Court 
HELD : 1.1. The order dated July 3, 1993 expressly purports to 
cancel the licence of the fifth respondent. On that date_, the fifth respondent 
was holding a temporary licence. It was that licence which was cancelled . 
D 
The order of the District Magistrte clearly mentions that fifth respondent E 
was having a temporary licence on that date. (594-F] 
1.2. If the fifth respondent was holding a licence on July 3, 1993, there 
is no substance in the argument that he did not apply for renewal of the 
licence for 1993-94. (594-G] 
1.3. The fifth respondent was agitating against the cancellation of his 
licence throughout. It was during the pendency of the proceedings taken 
by him that a notification was issued calling for applications for a fresh 
grant and licence was granted to the appellant. The said exercise was on 
F 
the supposition that by virtue of the cancellation of the fifth respondent's G 
licence, a vacancy has arisen. Once the said supposition is not true - in the 
sense that the said cancellation was found to be illegal - the grant of licence 
to the appellant must be deemed to be provisional and a temporary 
arrangement, as rightly held by the High Court, notwithstanding the f

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