NARAYANAN SANKARAN MOOSS versus THE STATE OF KERALA AND ANOTHER

Citation: [1974] 2 S.C.R. 60 · Decided: 12-10-1973 · Supreme Court of India · Bench: P. JAGANMOHAN REDDY · Disposal: Appeal(s) allowed
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Judgment (excerpt)

NARAYANAN SANKARAN MOOSS 
v. 
TIIE STAIB OF KERALA AND ANOTIIER 
'October 12, 1973 
(P. ]AGANMOHAN REDDY, S. N. DWIVEDI AND P. K. GOSWAMI, ]].] 
A 
Indian Electricity Act (9 o/ 1910) s. 4(1) and (3)-Consulrarion with State 
B 
Electricity Board before revocation of licenie of licensee-If mandatory. 
Section 4(1). Indian Electricty Act, 1910, as amended in 1958, provides that 
thC State Government may, if in its opinion the public interest so requires, and 
after consulting the State Electricity Board, revoke a licence ia. cenain casca.. 
Sub-section (3) provides that no licence shall be revoked under sub-8. (i) an--
less the State Government has given to the licensee not less than three moaths 
notice in writing stating the grounds on which it is · proposed to rev.ob the 
licence, :ind, has considered the cause shown by the licensee. 
On June 21. 1962. the respondent-Government wrote to the State Electricity 
Board that the respondent considered that tho licence of the ap;:iellant should be 
revoked under s. 4(l)(a) and requested the Board to commumcate its views. 
On July 26, the Board recommended the revocation. On August 17, the respon-
dent issued a notice to the licensee, of which the appellant was proprietor under 
s. 4(3). to show cause why the licence should not be revoked. On November 
s. 1962, within three months, the appellant sent his explanation. On April , 6, 
1963. the respondent Mote to the Board that they had considered the explana-
tion of tho licensee. that since the explanation was not satisfactory the respon· 
dent had decided to revoke the licence. and inquired if the Board was willing to 
purchase the undertaking. On 20th April, 1963, the Board expressed its will-
ingness to purchase the undertaking with effect from August 1, 1963. On May 
17. 1963. the respondent revoked the licence with effect from August 1, 1963, 
and directed the appellant to deliver the undertaking to the Board. 
ThO appellant's writ petition to the Jli8-h Court challenging the orders was 
dismisSed. 
Allowing the appeal to this Court, 
HEID : ( 1) Section 4 conte·mplates that the Board should make its recom-
mendation only after considering· the explanation of the licensee. When the 
covemment consults the Board on the question of revocation of a licenc:ee the 
Boa.rd is to make up its mind as to whether it should recommend, (i) to revoke 
the licence, or (ii) riot to revoke the licence, or (ill) to permit the licence to 
. remain in force subjer;t to such further terms and condition, as may be though 
c 
E. 
proper. The Board would not be able to make a choice out of these three 
F 
courses without considering the explanation of the licensee, because, the expla· 
nation mav make out case for not revokini:i; a licence. [n the present case, the 
Board was consulted much before the receipt of the appellant's explanation. The 
entire chain of correspondence between the Government and the Board shows 
that there was no second consultation between the Government and the Board ' · 
regarding the revocation of the licence after the Government had received the 
appellant's explanation to the show cause notice. Any telephonic consultation 
is out of question, because. such telephonic consultation could not be held With 
the three members of the Board at one and the same time, nor could the mem• . G 
bers bestow collective consideration -on the matter before giving the Board's 
opinion thereon. (640-E; 65F; 68F-H; 69A.C] 
·• 
. . 
(2) There is nO force in the contention that the consultation With the Board 
is only as regards 'public interest. [69C] 
• 
(3)-The words_ .. aft.er consulting the Board .. show .that the construction-. 
suggested by the respondent that the Board was to be consulted only at the stage -, 
when tl1.e Government takes_ a provisional decision is not correct. [690) 
_ 
' R 
( 4) Having .regard_ ~ the object and context the colldition of Consulti~g the 
. Board airer the licensee's e~planation was received-is mandatory and the breach 
of this condition wiII makes the order of revocation Yoid. 
[701:) 
' 
60 
A 
c 
D 
N. s. MOOSS v. KERALA (Dwived;, J.) 
61 
(a) The power of revoking a licence is a drastic power as it results in the. 
severe abridgment of the right to carry on a business. 
Having in 
mind~ die -
requirements of Art. 19( 1) (g) of the Constitution, Parliament has prescribed 
certain conditions to prevent the abuse of power and to ensure just ex:ercise of 
the power .. [ 69G] 
(b) When revoking a
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