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Cites 22 docs - [View All]
Article 14 in The Constitution Of India 1949
The Indian Contract Act, 1872
Manager Govt. Branch Press &. Anr vs D. B. Belliawpa on 30 November, 1978
Olga Tellis & Ors vs Bombay Municipal Corporation & ... on 10 July, 1985
Chingleput Bottlers vs Majestic Bottling Company on 15 March, 1984
Citedby 5 docs
Sukhwant Singh vs State Of Punjab on 28 March, 1995
Sunil Chandra Roy And Anr. vs The State on 27 April, 1953
Sagar Chandra Saha vs The State on 13 March, 1961
Ramchandra Chamru vs State Of Madhya Pradesh on 5 June, 1953
State vs B. Hukam Chand And Anr. on 20 September, 1973

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Calcutta High Court
Birendra Nath De vs State Of West Bengal And Ors. on 5 May, 1989
Equivalent citations: (1991) IILLJ 360 Cal
Author: S K Sen
Bench: S K Sen

JUDGMENT Shyamal Kumar Sen, J.

1. It is the case of the writ petitioner that he was in Defence Service for 21 years from March 28, 1961 till he retired on March 31, 1982. Under the re-settlement of retired army personnel scheme the petitioner applied in the month of October 1981 for allotment of a Mother Dairy booth to him. In or about the month of January, 1982 the Director General of Re-settlement, Ministry of Defence, New Delhi gave the petitioner an interview and the petitioner was asked to see the Regional Director of the said Directorate at Eastern Zone in Fort William. Thereafter the petitioner met the Regional Director and the petitioner was asked to contact the Mother Dairy authorities. The petitioner contacted the Mother Dairy authorities accordingly and by a letter dated May 5, 1982 the petitioner was appointed Concessionaire for Mini Dairy with effect from May 7, 1982 and the petitioner was directed to deposit security money and comply with necessary formalities. In fact the petitioner was appointed Concessionaire in respect of the Mini Dairy outlet which was numbered as 018 and which has subsequently been changed to No. 216. The said Mini Dairy outlet is situated at 'J' Block, New Alipore, Calcutta-53. The work the petitioner has to do as Concessionaire is to supply milk to the local people of the area in which the petitioner's Milk Dairy is situated. The Mother Dairy authorities will supply requisite quota of milk daily and will fill the tank which is installed in the said Mini Dairy outlet. The customers who would come to collect the milk of Mother Dairy will have to drop a token which they will have to purchase against cash payment for their milk. Then after the dropping of the token, milk will come out from the machine which is installed in the said booth. It has been further alleged in the petition that since his appointment as Concessionaire in respect of the Mini Dairy Booth the petitioner has been carrying on his business as Concessionaire without any complaint from any quarters. It is the further case of the petitioner that sometimes some frivolous complaints have been made against the petitioner but the petitioner has all the time satisfied the authorities about the due discharge of his duties as a Concessionaire since 1982. The petitioner had to execute an agreement with the Mother Dairy authorities in respect of his appointment as Concessionaire. Such agreement is renewable at every six months. It has been alleged in the petition that when milk is supplied to the outlet of the petitioner there is no scope to check the quality of milk supplied by the said Mother Dairy authority. No test is made when the milk is filled in the tank from where milk is supplied to various customers. No sample is given to the petitioner about the standard of milk. But as soon as the milk is filled in the tank the petitioner has to sign a certificate about the standard of milk and about its fat content and other various properties of the milk. Such certificate has to be signed by the petitioner without ascertaining the quality of the milk supplied. It has further been alleged in the petition that the petitioner has to supply milk to various customers at the rate of 2 paise commission on sale of one litre of milk at Rs. 3.40. As such the commission which is given to the petitioner is much less than even 1% of the sale price. It is the further case of the petitioner that the petitioner has to carry on with his activities in the said milk booth for very long hours inasmuch as the said milk booth will have to be kept open for long hours throughout the day and for maintenance of the milk booth and also for cleaning the same some more time is required. The petitioner has to remain engaged in the said booth for more than 12 hours in the course of a day and the said booth has to be kept open all the time without any holiday. As such the petitioner found that the remuneration which he receives is far too inadequate for the number of hours which he has to put in to carry on the said business. As such the petitioner alongwith other Concessionaires formed a union which is known as Mother Dairy Concessionaire Dealer Union, Calcutta, Howrah and Hoogly. The said union is a registered one and its registered No. is 17745. One of the demands of the said union is to raise the said commission. The petitioner is the Joint Secretary of the said Union. It has been further alleged in the writ petition that as soon as the authorities who are respondents herein, came to know of the existence of the said union, they became determined to crush the same and for the said purpose the respondent went on terminating the agreements of various officebearers of the said union. It is the further case of the petitioner that the respondents are also determined to terminate the agreement of the petitioner and for the said purpose started raising some false and frivolous complaints against the petitioner mostly after the last renewal was granted to the petitioner in the month of June, 1986. The last renewal of the petitioner's agreement was granted on June 26, 1986. By a letter dated September 15, 1986, the petitioner was informed that in order to assess the quality of the milk sold from the petitioner's booth sample of milk was drawn in the presence of the petitioner's representative by the Mother Dairy people on September 14, 1986, it was alleged in the said letter that the petitioner's representative refused to put in signature of the same slip. The petitioner was advised to strictly follow the terms and conditions of the agreement The petitioner gave a reply to the said letter. In his reply the petitioner stated that in the newspaper dated August 28, 1986 it appeared that the quality of the milk can be tested in various milk booths with the help of a Lactometer. As such the petitioner requested the authority to adopt the said method for the purpose of testing the quality of milk.

Thereafter the authorities did not give any reply nor the authorities informed the petitioner anything about the report in respect of the sample of milk drawn from the petitioner's booth. It has been alleged that the said allegation relating to the quality of milk drawn from the petitioner's booth is wholly baseless. Thereafter another letter was written to the petitioner by the said authority dated October 29, 1986 to the effect that the petitioner is not maintaining the Milk Stock Register. It was also stated in the last letter that not maintaining account is a violation of the agreement. The petitioner also gave a reply to the said letter. In the said letter the petitioner clarified his stand about such maintaing of record. In the reply given by the petitioner the petitioner made it clear that he has not violated any of the terms and conditions of the ; agreement and as such there is no basis for the allegations levelled in the letter dated October 29, 1986. The petitioner also received two letters dated November 18, 1986 and November 25, 1986 containing various allegations to which the petitioner gave a reply by his letter dated December 2, 1986 mentioning therein that the allegations contained in the aforesaid letters dated November 18, 1986 and November 25, 1986 are baseless and that he has not violated any of the terms of the agreement. By letter dated November 26, 1986 the petitioner was informed by the said authority that his cheque towards payment of milk supplied to him has been dishonoured. Immediately on November 27, 1986 the petitioner paid the amount of Rs. 7,527/- in cash to the said authority and the said authority granted a receipt. It has been alleged in the petition that the difficulty in encashment of the cheque was caused for the reasons beyond the control of the petitioner and the petitioner immediately paid the entire amount. Such an instance of single unintentional lapse on the part of the petitioner in making payment does not authorise the Mother Dairy authority, according to the petitioner, to terminate the agreement. By another letter written to the petitioner by the authorities on December 1, 1986 it was alleged by the authorities that there was lack of order-lines in respect of milk supply but no such particulars about the lack of orderliness was furnished to the petitioner and as such the petitioner could not give any effective reply to such letter. The agreement between the petitioner and the authorities was to continue till December 21, 1986 and for the purpose of renewal of agreement normally the bank guarantee forms were used to be delivered to the petitioner 1 1/2 months in advance for completing the normal formalities but no such bank guarantee form was given to the petitioner. As such the petitioner wrote a letter registered with A/D to the Officer-in-charge, City Office of the said Mother Dairy authority requesting him to send the said form at an early date so that normal formalities are completed. The petitioner, however, did not receive any bank guarantee form from the respondent authority. It is the case of the petitioner that on all previous occasions before renewal of agreement bank guarantee forms were used to be given to the petitioner well in advance for finalisation of normal formalities. This practice has been followed since 1982 when the petitioner was appointed as Concessionaire. Since then every six months the appointment of the petitioner as Concessionaire is being renewed. It is for the first time that such forms were not supplied to the petitioner even after written demand was made for the same. It has been alleged in the petition that the respondents really intend to enforce the clause relating to termination of agreement by automatic expiry of the period of six months and it is for that purpose the forms of bank guarantee were not supplied which was the usual practice on previous occasions. It has been further alleged in the petition that under the agreement the respondents are allegedly empowered under Clause 1 thereof to treat the same as terminated on expiry of six months from the date of last renewal unless the same is renewed and such termination will come into effect without any notice being served upon the petitioner. Under the said Clause 1 the authorities are also empowered to serve at its discretion a notice on the petitioner regarding the expiry of the agreement. There is provision under Clause II of the said agreement to serve one month's notice for termination of the said agreement. It has been alleged that the said agreement is wholly one sided and is unjust and is opposed to public policy. The said agreement has been entered into between parties of unequal bargaining power inasmuch as on the one hand it is the powerful authorities of the Mother Dairy and on the other hand persons like the petitioner entering into such agreement. It has been contended on behalf of the petitioner that the petitioner and/or persons similarly situtated like him are economically weak and have no option except to accept terms contained in the said agreement which are given to the petitioner on the basis of printed form. There is no discussion before entering into such agreement and the petitioner and/or persons similarly placed like him will have to accept the said agreement if they want to be appointed as Concessionaire. The petitioner has to accept all the terms of the said agreement - including various terms which are unconsionable and unjpst and unfair in so far as the petitioner is concerned. The term relating to termination of agreement contained in the said agreement purports to authorise the respondents to terminate the said agreement without any notice being given to the petitioner. Such an agreement is opposed to public policy and confers absolute, arbitrary and unguided power upon the authorities and as such cannot be sustained in law. The learned Advocate for the petitioner further submitted that clause relating to expiry of the said agreement is not only arbitrary but also discriminatory inasmuch as the same purports to authorise the respondents to dicriminate between one Concessionaire and another in the matter of terminating the agreement specially when they are not required to record reasons in justification of such termination. The said clauses specially the clauses 1,2 and 52 of the said agreement are thus violative of the provisions contained in Section 23 of the Contract Act as also Article 14 of the Constitution of India.

The learned Advocate further submitted that an adequate means of livelihood cannot be secured to the citizens by keeping the said means of livlihood dependent on the absolute whim, caprice or fancy of the respondent authorities. Securing the means of livelihood means and implies that there must be some security and predictability about earning which is the source of livelihood and also security and safety of the tenure of the agreement on which means of livelihood the citizens depend. It has been submitted further by the learned Advocate for the petitioner that in the instant case the meagre income earned by the petitioner on the basis of commission from the said agreement is the only source of livlihood of the petitioner. But the respondents have made the same to depend on mere vagaries and fancy of the authorities concerned by virtue of clauses 1, 2 and 52. Such clauses of the said agreement are, therefore, opposed to the Directive Principles of State Policy contained in Clause (a) of the Article 39 and Article 41 of the Constitution of India inasmuch as adequate means of livelihood and effective provisons for securing the right to work cannot be achieved if the aforesaid clauses of the said agreement are allowed to remain. The impugned clauses of the said agreement, namely Clauses 1, 2 and 52 are, therefore, wholly opposed to public policy and are also violative of provisions contained under Articles 39(a) and 41 of the Constitution of India. It has further been submitted that when the agreement with the petitioner was renewed from time to time, the petitioner has acquired the legitimate expectation and interest of getting the same renewed. The said expectation of the petitioner cannot be denied except on the ground of misconduct or except after giving the petitioner an opportunity of being heard in the matter. In the instant case according to the petitioner the respondents are seeking to terminate the petitioner's agreement without any proved ground of misconduct and without giving the petitioner any chance to refute the allegations against him but the respondents are seeking to terminate the said agreement on the basis of mere flimsy pretexts which are not existent and without giving any opportunity of being heard in the matter. The action of the respondent in applying the said clause is wholly arbitrary and the said action of the respondent in purporting to terminate petitioner's agreement is violative of the provisions contained in Article 14 of the Constitution of India. It has further been alleged that the respondents are acting on the basis of extraneous consideration, namely terminating the petitioner's agreement just for the reason that he is one of the office bearers of the said Union which demands improvement of conditions for work as Concessionaire of Mother Dairy. It is only because of the legitimate trade union activities of the petitioner that he is being victimised by the respondent authorities. It has been alleged that the action of the respondents in purporting to terminate the agreement of the petitioner is only malafide in character being vitiated both by malice in law and malice in fact. It has been alleged that even though the respondents have not in writing informed the petitioner that his agreement will not be renewed and the said ; agreement automatically lapsed on December 21, 1986 by virtue of the impugned clauses land 2 of the said agreement. According to the petitioner there is grave and imminent threat to the petitioner's fundamental right. Accordingly the petitioner claimed in the writ petition a declaration that the provisions of the agreement and clauses 1, 2 and 52 of the said agreement between the petitioner and the Mother Dairy, Calcutta are opposed to public policy and also violalive of provisions contained Section 23 of the Indian Contract Act and Articles 14, 39(a) and 41 of the Constitution of India and for issue of a writ in the nature of Mandamus commanding the respondents to renew the petitioner's appointment as Concessionaire and from December 21, 1986 and also to forbear from acting on the basis of the said clauses of the said agreement and further forbear from taking any step for terminating his appointment as Concessionaire.

2. Mr. Ganguly learned Advocate for the ppetitioner relied upon the following decisions in support of his contention:

1. Ramana Dayaram Shetty v. The International Airport Authority of India and Ors. reported in (1979-I-LLJ-217)

2. Central Inland Water Transport Corporation Ltd. & Anr. v. Brojonath Ganguly and Anr. reported in (1986-II-LLJ-171)

3. Laxminarayan Ram Gopal & Son Ltd. v. Govt. of Hyderabad through the Commissioner, Excess Profits Tax

4.Olga Tellis & Ors v. Bombay Municipal Corporation and Ors. .

5. The Manager, Govt Branch Prss & Anr. v. D.B. Belltappa reported in (1979-I-LLJ-156)

6. Chingleput Bottlers v. Majestic Bottling Co. .

3. The learned Advocate for the petitioner referred to the observations of the Supreme Court in the case of Ramana v. International Airport Authority of India (supra) to the effect inter alia that when the Government is trading with the public, "the democratic form of Government demands equality and absence of arbitrariness and discrimination such transactions..... The activities of the Government have a public element and, therefore, there should be fairness and equality. The State need not enter into any contract with any one, but if it does so, it must do so fairly without discrimination and without unfair procedure." This proposition would hold good in all cases of dealing by the Government with the public, where the interest sought to be protected is a privilege. It must, therefore, be taken to be the law that where the Government is dealing with the public, whether by way of giving jobs or entering into contracts or issuing quotas or licenses or granting other forms of largesse, the Government cannot act arbitrarily at its sweet will and like a private individual, deal with any person it pleases, but its action must be in confromity with standard or norm which is not arbitrary, irrational or irrelevant. The power or discretion of the Government in the matter of grant of largesse including award of jobs, contracts, quotas, licenses etc. must be confined and structured by rational, relevant and non-discriminatory standard or norm and if the Government departs from such standard or norm in any particular case or cases, the action of the Government would be liable to be struck down, unless it can be shown by the Government that the departure was not arbitrary, but was based on some valid principle which in itself was not irrational, unreasonable or discriminatory.

4. Relying upon the said observations the learned Advocate argued that the Government cannot act arbitrarily. It has been contended that there cannot be any dispute that the respondent is an instrumentality of the State and its action will be open to challenge if the same suffers from vice of arbitrariness.

5. Mr. Ganguly, learned Advocate, placed strong reliance on the decision in the case of Central Inland Water Transport Corporation Ltd. v. Brojonath Ganguly & Anr. and Central Inland Transport Corporation Ltd. & Anr v. Tarun Kanti Sengupta (supra). This is a landmark judgment relating to the service contracts. On interpretation of the relevant Service Rule the Supreme Court held that the rule empowering the Government Corporation to terminate service of its permanent employees by giving notice or pay in lieu of notice period is opposed to public policy and violative of Article 14 and Directive Principles contained in Articles 39(a) and 41.

6. A company carrying on the business of maintenance and running of river service entered into a scheme of arrangement with the Central Inland Water Transport Corporation Ltd. a Government company owned by Central Government and two State Governments and is 3 therefore 'State' within the meaning of Article 12. That scheme was approved of by the High Court and the company was dissolved by me order of the High Court. The officers of the company had no real choice when they accepted the job with the Corporation as, in the alternative, they would have received a meagre sum by way of compensation and would have been required to search for alternative jobs. They had no real choice when the rules were framed by A the Corporation for the officers as refusal to accept the rules would have resulted in termination of their services. A Sub-clause in a rule provided for termination of services of the officers by giving three months' notice. The clause in the rule was struck down by the High Court and the Supreme Court also approved the decision of the High Court by observing that considering the inequality in the bargaining power of the parties, the clause in the contract of employment was void under Section 23 of the Contract Act as opposed to public policy besides being ultra vires Article 14.

7. Learned Advocate for the petitioner also relied upon the decision in the case of Olga Tellis and Ors. v. Bombay Municipal Corporation A Ors (supra) wherein it was held by the Supreme Court as hereunder:

"The right to life includes the right to livelihood. The sweep of the right to life conferred by Article 21 is wide and far reaching. It does not mean merely that life cannot be extinguished or taken away as for example by the imposition and execution of the death sentence, except according to procedure established by law. That is but one aspect of the right to life. And equaly important facet of that right is the right ot livelihood because, no person can live without the means of living that is, the means of livlihood. If the right to livlihood is not treated as a part of the constitutional right to life, the easiest way of depriving a person of his right to life would be to deprive him of his means of livelihood to the point of abrogation. Such deprivation would not only denude the life of its effective contents and meaningfulness but it would make life impossible to live. And yet, such deprivation would not have to be in accordance with the procedure established by law. If the right to livelihood is not regarded as part of the right to life, that, which alone makes it possible to live, leave aside what makes life livable, must be deemed to be an integral component of the right to life. Deprive a person of his right to livlihood and you shall deprive him of his life.

In view of the fact that Articles 39(a) and 41 require the State to secure to the citizens adequate means of livelihood and the right to work, it would be sheer pedantry to exclude the right to livelihood from the content of the right to life. The State may not, by affirmative action, be compilable to provide adequate means of livelihood or work to the citizens. But, any person, who is deprived of his life or to livlihood except according to just and fair procedure established by law, can challenge the deprivation as offending the right to life conferred by Article 21 The procedure prescribed by law for the deprivation of the right conferred by Article 21 must be fair, just and reasonable. Just as a mala fide act has no existence in the eye of law, even so, unreasonableness vitiates law and procedure alike. It is, therefore, essential that the procedure prescribed by law for depriving a person of his fundamental right must conform to the norms of justice and fair play. Procedure, which is unjust or unfair in the circumstances of a case, attracts the vice of unreasonableness, thereby vitiating the law which prescribes that procedure and consequently the action taken under it. Any action taken by a public authority which is invested with statutory powers has, therefore, to be tested by the application of two standards: the action must be within the scope of the authority conferred by law and secondly, it must be reasonable. If any action, within the scope of the authority conferred by law, is found to be unreasonable, it must mean that the procedure established by law under which that action is taken is itself unreasonable. The substance of the law con-not be divorced from the procedure which it prescribes for, how reasonable the law is, depends upon how fair is the procedure prescribed by it. If a law is found to direct the doing of an act which is forbidden by the Constitution or to compel in the performance of an act, the adoption of a procedure which is impermissible under the Constitution, it would have to be struck down."

8. Relying upon the aforesaid observations of the Supreme Court, the learned Advocate for the petitioner submitted that the Clause 1 in the said agreement providing for authomatic termination of the same on the expiry of the period of six months i.e. December 21, 1986 unless extended or renewed for any further period by mutual agreement is arbitrary and unreasonable and should be struck down. It has been submitted that the said clause confers arbitrary and excessive power upon the authority who, without any valid or cogent reason, may not renew the agreement and as a result thereof the right to livlihood of the petitioner will be lost.

9. The learned Advocate for the petitioner also relied upon the decision in the case of The Manager, Government Branch Press and Anr. v. D.B. Belliappa reported in (1979-I-LLJ-156) wherein it has been held that the rule of master and servant in its original absolute form is not applicable to Government servants. The Supreme Court while disposing of the said case observed as follows (pp. 161-162):

"Another fact of Mr. Veerappa's contention is that the respondent had voluntarily entered into a contract of service on the terms of employment offerd to him. One of the terms of that contract, embodied in the letter of his appointment, is that his service was purely temporary and was liable to termination at the will and pleasure of the appointing authority, without reason and without notice. Having willingly accepted the employment on terms offered to him, the respondent cannot complain against the impugned action taken in accordance with those mutually agreed terms. The argument is wholly misconceived. It is borrowed from the archaic common law concept that employment was a matter between the master and servant only. In the first place, this rule in its original absolute form is not applicable to Government servants. Secondly, even with regard to private employment, much of it has passed into the fossils of time. This rule held the field at the time when the master and servant were taken more literally than they are now and when, as early Roman Law, the rights of the servant, like the rights of any other member of the household, were not his own but those of his "eater familion." The overtones of this ancient doctrine are discernible in the Anglo-American Jurisprudence of the 18th Century and the first half of the 20th Century, which rationalised the employer's absolute right to discharge the employee. "Such a philosophy", as pointed out by K.K. Mathew, J. (vide his treatise: "Democracy, Equality and Freedom", page 325) "of the employer's dominion over his employee may have been in tune with the rustic simplicity of bygone days. But that philosophy is incompatible with these days of large, impersonal, corporate employees." To bring it in tune with vastly changed and changing socio-economic conditions and modes of the day, much of this old, antiquated and unjust doctrine has been eroded by judicial decisions and legislations, particularly in its application to persons in public employment to whom the Constitutional protection of Articles 14, 15, 16 and 311 is available. The argument is, therefore, overruled.

Coming back to the point, we have a vague feeling that it was, perhaps, open to the appellant to say in view of the complaint alluded to in the show-cause notice against the integrity and fidality of the respondent, that the former had lost confidence in the latter and considered him unsuitable to be continued in the post which was one of trust and confidence. But it will be hazardous for us to base our decision on any such speculation, when the appellant himself instead of taking any such plea, has, with obdurate persistency stuck to the position that the respondent's service has been terminated without any reason which comes perilously near to admitting that the power reserved to the employer under the conditions of the employment has been exercised arbitrarily.

In the absence of any information from the appellant indicating that the repondent was marked off for discharge on the basis of an intelligible differentia having a reasonable nexus with the object of maintaining the efficiency and integrity of the public service, we are constrained to hold, in agreement with the High Court, that the impugned order suffers from the vice of unfair discrimination and is violative of Articles 14 and 16(1) of the Constitution. Accordingly, we uphold the decision of the High Court and dismiss this appeal with costs."

10. Relying upon the said finding of the Supreme Court the learned Advocate for the petitioner submitted that the Court should extend the principle to the case of the petitioner in the instant writ petition inasmuch as the petitioner has suffered because of the wrong and arbitrary act of the respondent by not extending the contract for further term thereby virtually terminating the contract.

11. The learned Advocate for the petitioner also relied upon the decision in Chingleput Bottlers v. Majestic Bottling Company (supra). The said decision was with regard to the refusal to grant permit for liquor licence and the question involved was if the Court would interfere in the exercise of discretion on the part of the State Government in not granting licence to the petitioner. While disposing of the said matter the Supreme Court made a distinction between the forfeiture cases or cancellation cases and cases for grant of licence. At page 1041 of the said judgment the Supreme Court referring to the decision in the case of Mclnnes v. Onslow Fane 1978 (3) ALL ER 211 observed as follows: "V.C. has drawn a distinction between initial applications for grant of licence and the revocation, suspension or refusal to renew licences already granted. The learned Vice-Chancellor says that there is a substantial distinction between application cases and forfeiture cases. He observes that while an applicant for grant of licence has neither a right to such a grant nor reasonable expectation that such grant would be made in his favour, but cancellation or forfeiture of an existing licence or refusal to renew licence, involves a right to a hearing as the applicant has what may be called 'reasonable expectation'. Megarry, V.C. dealt with the question - whether the grant or refusal of licence by the Board of Control was subject to any requirement of natural justice or fairness which would be enforced by the Courts. In dealing with the nature of the right to claim a licence, he said that it was nothing but a privilege. The three distinct categories can best be discerned in his own words:

"First, there are what may be called the forfeiture cases. In these, there is a decision which takes away some existing right or position, as where a member of an organisation is expelled or a licence is revoked. Second, at the other extreme, there are what may be called the application cases. These are cases where the decision merely refused to grant the applicant the right or position that he seeks, such as membership of the organisation, or licence to do certain acts. Third, there is an intermediate category, which may be called the expectation cases, which differ from the application cases only in that the applicant has some legitimate expectation from what has already happened ] that his application will be granted. This head includes cases where an existing licence holder applies for a renewal of his licence, or a person already elected or appointed to some position seeks confirmation from some confirming authority.

12. The learned V.C. went on to say that there was a substantial distinction between forfeiture cases and application cases. In forfeiture cases, there is a threat to take something away for some : reason. In such cases, the right to an unbiased tribunal, the right to notice of the charges and the right to be heard in answer to the charges which were the three features of natural justice are plainly apt. In application cases, on the other : hand, nothing is being taken away, and in all normal circumstances there are no charges and so no requirement of an opportunity of being heard in answer to the charges. Indeed, there is the far wider and less defined question of the : general suitability of the applicant for membership or licence. The distinction is well recognised for in general it is clear that the Courts will require natural justice to be observed for expulsion from a social club, but not on an application for admission to it. The intermediate category i.e., of the expectation cases, may atleast in some respects be regarded as being more akin to forfeiture cases, than application cases; for although in form there is no forfeiture but merely an attempt at acquisition that fails, the legitimate expectation of a renewal of the licence or confirmation of the membership is one which raises the question of what it is that has happened to make the applicant unsuitable for the membership or licence for which he was previously thought suitable.

13. In such cases, Megarry, V.C. felt that much help cannot be had from discussing whether 'natural justice' or 'fairness' was the more appropriate term. He observes that if one expects that natural justice is a flexible term which imposes different requirements in different cases, it is capable of applying appropriately to the whole range of situations indicated by the terms such as 'judicial', 'quasi-judicial' and 'administrative'. The content of the 'duty to act fairly' did not impose on the Board to give either oral hearing to the applicant or to disclose the case against him nor was it under any obligation to give reasons for a decision. The learned judge then went on to say that there was no obligation for the Board to give the applicant even the gist of the reasons while they refused his application, or proposed to do so, and added:

"The concepts of natural justice and the duty to be fair must not be allowed to discredit themselves while making unreasonable requirements and imposing undue burdens"

In such cases, the right to hearing has been denied on the ground that the claim or interest or legitimate expectation is a mere 'privilege' or 'licence'. This is in consonance with the 5 decision of a Constitution Bench of this Court in Kishan Chand Arora v. Commissioner of Police Calcutta following the judgment of the Privy Council in Makkuda Ali v. M.F. De S. Jayaratne's case 1951 SC 66.

14. It is now well settled that, while considering the question of breach of the principles of natural justice, the Court should not proceed as if there are inflexible rules of natural justice of universal application. Each case depends on its own circumstances. Rules of natural justice vary with the varying constitutions of statutory bodies and the rules prescribed by the legislature under which they have to act.

15. It has further been argued on behalf of the petitioner that in the affidavit in opposition filed on behalf of the respondent a case has been made out that the petitioner committed several irregularities for which the respondent did not consider it fit and proper to renew the agreement and in fact there is no termination according to the respondent. In the affidavit of Sk. Nisar Ahmed affirmed on January 7, 1987 and also on January 22, 1987 on behalf of the Mother Dairy authorities, it has been mentioned that the Mother Dairy authorities had from time to time brought to the notice of the petitioner the various lapses committed by him in violation of the said 5 agreement, petitioner, however, failed and neglected to take steps to rectify such lapses and/or adhere to the provisions of the agreement. The petitioner explained the said lapses by his letters which are annexures to the affidavit affirmed by the said Nisar Ahmed on January 7, 1987. In any event in case the petitioner's contract has not been renewed on the basis of such charges the petitioner should have been given an opportunity of hearing. The learned Advocate for the petitioner submitted that because of non-renewal of the said contract the petitioner has been adversely affected financially and as such the petitioner should have been given an opportunity of hearing before final decision was taken for not to renew the said contract which virtually amounts to termination of the said contract.

16. Mr. Hirak Mitter, learned advocate on behalf on the Mother Dairy authorities submitted that the relationship between the Mother Dairy authorises and the petilioner was not that of master and servant. The petilioner was not an employee of the Mother Dairy. He was self employed, an independent contractor. None of the essential conditions of labour, namely provisions for leave, wage/salary, pension, gratuity, overtime, travelling allowance, periodical increments in salary, bonus, age of superannuation was or could be present. Chance of profit and risk of loss attended equally on the contractor Concessionaire. Mother Dairy sold a given quantity of milk to the petitioner at a fixed rate. The petitioner in turn was to sell the same to customers at a higher price as stipulated by . Mother Dairy. The aforesaid contractual relationship is clear from, inter alia, Clauses 10, 16, 19, 26, 27, 33, 41, and 44 of the agreement dated June 21, 1986 which is annexure to the said affidavit-in-opposition.

17. As stipulated in Clause 1 of the agreement, the contract is valid for a period of 6 monlhs. After the 6 month period, the contract automatically ceases/expires unless renewed by Mother Dairy. Whether a contract is to be renewed or not is entirely at the discretion of the authority.

18. The petitioner by his conduct having more than once accepted the clauses of the agreement is estopped from challenging Clause 1 or any other clause.

19. The learned advocate for the respondent Mother Dairy further submitted that in any case, any contract having an option clause of this nature cannot and should not be held to be bad. The authority is entering into a commercial activity as opposed to any executive action. For maintaining an efficient system of distribution and supply of milk as a matter of business policy the authority should have power to enter into contracts of this nature. This action is not arbitrary. It is required in the interest of business. Hence, there is no violation of Article 14 or any other Article of the Constitution. The relevant clauses in this regard are Clauses 10, 19, 41 and 44 of the contract. The learned Advocate further submitted that no stigma has been or can be said to have been attached by reason of non renewal/refusal to enter into fresh agreement. The refusal to renew cannot, by any stretch of imagination, be said to be an illegality in the circumstances of the case. It is a power vested in Mother Dairy under the contract. It has also been submitted that in any event Mother Dairy energises the Administration by shedding such unreliable Concessionaires who commit breaches and remain adamant. Mother Dairy ought to be allowed a free hand in choosing its Concessionaires considering public interest.

20. It has been contended that refusal to renew/enter into fresh contract involves no civil consequence. Clause 1 of the contract merely embodies one of the facts of pleasure doctrine embodied in Article 310. One of the main considerations that weighed with Mother Dairy authorities while exercising the power under Clause 1 is that in public interest a person of undoubted integrity alone should be allowed to function as a Concessionaire. The balance between the rights of the individual Concessionaire and the interests of the public tilts clearly in favour of the latter. Mother Dairy cannot be said to have acted wrongfully/illegally in forming the opinion that the petitioner should not be there as a Concessionaire in public interest.

21. It has also been submitted that institutions like Mother Dairy involved in supply of 5 milk in very sensitive areas and when one Concessionaire commits breach, as she petitioner did, there is a liklihood of his committing breach again. Mother Dairy would surely not be justified in having a Concessionaire on whom this confidence, which is usually reposed in him, is lost. Besides, as noted earlier, the petitioner was cautioned by reason of his lapses. Opportunity was given to him to rectify the breaches and/or to improve his performance. But he failed. The 1 representations he made were considered by Mother Dairy authorities and the decision not to renew was made and communicated to the petitioner.

22. It has been submitted that if Clause 1 is held to be valid, the question of renewal will be entirely at the discretion of Mother Dairy. And Mother Dairy after taking into consideration all material facts used its discretion bona fide and in the interest of its goodwill and keeping with its business policy and decided not to renew the contract or enter into any fresh contract with the petitioner and if on the contrary Clause 1 is held to be bad the contract becomes one of indefinite duration. This militates against the basic business policy of the authorities. The rest of the contract cannot be saved if this clause is struck down. It has been contended that the instant case is not one of termination and hence challenge to clauses 2 and 52 is misconceived. According to the learned Advocate for the Mother Dairy authorities the instant proceeding under Article 226 is not an appropriate remedy for the grievance of the petitioner. The petitioner failed to show that he had any legal right which has been infringed. All that he enjoyed was a privilege under the contract. In support of the contention of the petitioner the petitioner relied upon a judgment in the case reported in (AIR)1985 SC 1030. But the learned Advocate for the respondent argued that the instant case is not one where the authorities used any discretion in exercise of any statutory or sovereign power. The making of the decision not to renew or enter into fresh contract is an act qua licensor and in exercise of their powers under the agreement and/or in exercise of their powers under the authorities as a party to the agreement. It has been submitted on behalf of the respondent that whether the act complained of is arbitrary, is wholly irrelevant because such act remains in the realm of contract between the parties. It has also been contended on behalf of the respondent that in the instant case, Mother Dairy chose not to exercise the wide power of termination which it could have in the circumstances, but allowed the petitioner to continue till the expiry of the term and thereafter not to renew the same. It has also been submitted that the disputes raised are fully covered by the arbitration clause, being clause No. 54 of the agreement and the petitioner is bound by the said clause. It has been further contended that even in a suit in view of the provisions of the Specific Relief Act no court would have passed an order for mandatory injunction directing Mother Dairy to supply milk in violation of the provisions of the agreement. Accordingly it has been submitted in a writ proceeding also the court should not ignore or disregard the mandatory or express provision of the Specific Relief Act. It has also been contended that the charges and counter charges have been made by both the parties have controverted the same. Under such circumstances disputed questions of fact arise. It has been submitted that the writ court should not enter into such disputed questions of facts. It has been also submitted that the petitioner was given ample opportunity of making representations. The specific charges against him regarding his lapses have been repeatedly brought to his notice. He did make some representations admitting therein most of the charges. The representations and the explanations sought to be given by the petitioner were all taken into consideration before the decision not to renew was made. In the circumstances and in any event the petitioner had no right to be heard for obtaining renewal of contract. It has been urged that the rules of justice are not inflexible proposition and limitations are well-known. The principle of audi alterem partem is not applicable in the instant case inasmuch as opportunity to explain his conduct was clearly given to the petitioner and the petitioner failed to avail of it. It has been submitted that further hearing particularly in view of the admissions of the petitioner would be a mere wastage of time. It has also been submitted that in any case the petitioner did not ask for any hearing or further hearing prior to 5 the filing of the writ petition. The learned Ad vocate for the respondent Mother Dairy sub mitted that by letter dated December 15, 1986 the said decision was communicated to the petitioner. The reasons why no fresh contract would be entered into with the petitioner were also mentioned therein. It has been contended that no principle of law dictates that just because the reasons for not renewing the contract were communicated to the petitioner, the petitioner should be given any hearing or fresh hearing.

From the practical point of view also no purpose would be served by giving any hearing par ticularly at this stage. It has been submitted that on the other hand the petitioner could not have any cause to be aggrieved if the reasons for not renewing the contract were not communicated to him. In support of his said contention the learned Advocate for Mother Dairy relied upon the following decisions:

1. The Chairman, Board of Mining Examination and Chief Inspector of Mines & Anr. v. Ramjee .

2. The Kesava Mills Co. Ltd. and Ors. v. Union of India & Ors. .

3. Maharashtra State Board of Secondary Education & Anr. v. Paritosh Bhupesh Kumarsheth etc. etc. .

4. Bishnu Ram Borah & Anr. v. Parag Saikia and Ors. .

5. R.S. Dass v. Union of India & Ors. and Mrs. K. Goyal etc. v. Union of India & Ors. etc. with Pitam Singh & Ors. v. Union of A India & Ors. .

6. Reported in (1972) 1WLR 531

23. It has been further submitted that the suitability of the petitioner as a prospective licensee is dependent on the determination of personal qualifications. The authority is the most competent judge in the circumstances and the writ court should not interfere with such decisions of the authority. It has been argued on behalf of the respondent that the petitioner, in any event was and still is under an obligation to make over the booth/premises and by not making over the same respondent committed further breach. This court should not lend any assistance by allowing him to retain the premises. Besides, the machineries which are the properties of Mother Dairy are extremely valuable. They will be reduced to junk if allowed to remain any longer in the same condition and the petitioner should be directed to forthwith make over possession of the booth of Mother Dairy. The learned Advocate further submitted that it cannot be said that the Mother Dairy has waived its rights under the contract relating to renewal. It is within its rights not to renew the said contract and in that event the contract would automatically lapse. It has been further submitted that the case of Central Inland Water Transport Corporation Ltd. & Anr. v. Brojo Nath Ganguly & Anr. (supra) and Central Inland Water Transport Corporation Ltd. & Anr. v. Tarun Kanti Sengupta & Anr. (supra) do not apply. In that case only Rule 9(ii) termination on the ground of "Services no longer required" was challenged. The relationship was that of master and servant/employer and employee. Paragraph 90 makes it clear that the principle of unconscionable bargain etc. would not apply where both parties are businessmen and the contract is a commercial transaction. The judgment also recognises contracts for limited period and upholds that not all such contracts are unconscionable. It has also been argued that the case of The Manager, Govt. Branch Press and Anr. v. D.B. Belliappa (supra) is a case of master-servant relationship. Upon a perusal, particularly of paragraphs 26 and 27 of the said decision it is amply manifest that it supports the case of respondent authority rather than that of the petitioner. It has been also pointed out by the learned Advocate for the respondent that the case of Chingleput Bottlers v. Majestic Bottling Co. (supra) has no application. It is the case of licence which is again distinct from a contract of the present type. The learned Advocate placed reliance upon paragraph 41 of the said judgment at page 1042 of the said report and submits that the same leans rather in favour of Mother Dairy's contention. The Olga Tellis case (supra) is a public interest litigation. The . learned Advocate for the respondent argued that in any event the learned Judges of the Supreme Court came to the conclusion that any further hearing would not advance the case. It has been submitted that the case of Laxminarayan Ram Gopal and Son Ltd. v. Govt. of Hyderabad through the Commissioner, Excess Profits Tax (supra) is a case of employee as opposed to independent contractor/self-employed and as such the facts in the case are totally different and the principles decided therein should not apply to the facts of the instant writ petition. The learned Advocate for the resopondent accordingly submitted that the writ petition should be dismissed with costs and the petitioner should be directed to make over possession of the booth that is, mini dairy No. 216 including all machineries immediately. A sum of Rs. 5,000/- which is lying deposited with the Advocate on record of the writ petitioner in terms of the order dated December 22, 1986 should also be directed to be refunded to Mother Dairy.

24. I have considered the facts on record as also the respective submissions of the parties. It appears that a letter of appointment was issued by Mother Dairy authorities in favour of the petitioner appointing him as Concessionaire with effect from May 7, 1982. On June 21, 1982 an agreement was entered into by and between Mother Dairy and the petitioner in respect of Booth No. 216 at New Alipore. In terms of the renewal clause provided in the said agreement, the said agreement was renewed from time to time after the expiry of six months and last such renewal was made on June 21, 1986. The said agreement was valid for six months and duly expired on December 20, 1986. From August 26, 1986 to December 2, 1986 several correspondences were exchanged between the parties wherein Mother Dairy authorities made allegations against the petitioner. It was alleged in letter dated August 26, 1986 by Mother Dairy that the cheque sent by the petitioner was dishonoured. On September 15, 1986 it was further alleged that the petitioner was absent in the Booth on September 14, 1986 and the representative of the petitioner refused to acknowledge the lapsed memo. It was also alleged in letter dated October 19, 1986 that the petitioner did not maintain Milk Stock Register. On November 14, 1986 the petitioner sent reply explaining why representative did not sign sample slip etc., denying violation of the terms. On November 14, 1986 another reply was sent by the petitioner to the letter dated October 29, 1986 with regard to non-maintenance of Milk Stock Register. On November 25, 1986 letter was sent from Mother Dairy authorities to the petitioner mentioning therein that the explanation offered by the petitioner is not acceptable to the Mother Dairy authorities. On November 26, 1986 letter was sent from Mother Dairy to the petitioner mentioning about dishonoured cheque and requesting to make payment. On November 29, 1986 another letter was sent by Mother Dairy authorities to the petitioner complaining of dishonour of two cheques (i) bearing No. 642139 dated November 23, 1986 for Rs. 3,731.66 and (ii) bearing No. 642141 dated November 25, 1986 for Rs. 3,795.88. It has been submited on behalf of the petitioner that on being intimated that the said cheques were dishonoured by non-payment the amounts due on the said cheques were duly paid in cash on next date.

Regarding sample checking the petitioner intimated the authorities should provide Lactometer for the purpose of checking of samples. It was also explained that the petitioner because of his illness was absent on a particular day leaving his employee at the booth. It was not stated on behalf of the Mother Dairy authorities that the explanation offered by the petitioner was inadequate. In any event it was suggested that if the allegations are really the basis for non-renewal then the petitioner should have been given an opportunity of hearing to enable the petitioner to defend the allegations in a proper manner. Without giving such hearing it was wrong on the part of the authorities not to renew the licence which really amounts to termination of the contract. In terms of Clause 52 it was open for the Mother Dairy authorities to terminate the agreement and forfeit the deposit money in case of breach of the agreement. But the Mother Dairy authorities after receiving the explanation of the petitioner did not terminate the agreement but allowed the petitioner to continue until the expiry of the term. The Clause 1 of the said agreement provides as follows:

"This agreement shall remain operative for a period of six months only from June 21, 1986 to December 20, 1986 and it shall automatically stand terminated on expiry of the said period of six months, that is on December 21, 1986 unless extended or renewed for any further period of mutual agreement. No separate notice will be served by the Dairy on the Concessionaire in this regard. The Dairy may at its sole discretion, serve a notice on the Concessionaire regarding the expiry of this agreement"

It appears that the aforesaid clause itself provides that the agreement shall automatically stand terminated on the expiry of six months unless renewed. Since the respondent Mother Dairy authorities refused to renew the agreement the same amounts to automatic termination. Under such circumstances it cannot be said as contended by the respondent Mother Dairy authorities that the contract has not been terminated at all but only it is a case of mere non-renewal. Such termination really affects the petitoner financially. In fact the petitioner a retired army personnel is depending very much on this for his livelihood. The termination or non-renewal in the present case has been sought to be explained on the alleged ground of some misconduct or irregularities on the part of the petitioner. The petitioner, as I have observed, was informed of such grounds which the petitioner explained. No decision was taken at that time but the petitioner was allowed to continue. Under the circumstances it would be improper to terminate or not to renew merely on the same grounds without giving any opportunity to the petitioner to appear and explain. Considering the facts on record in my opinion the petitioner should be given an opportunity to explain, if any, on the irregularities or grounds on the basis of which the petitioner's termination has been called for in this case. Mr. Mitter, learned Advocate for the Mother Dairy authorities, submitted that itwould not be proper to apply the principles in the case of Central Inland Water Service (supra) inasmuch as that was a case with regard to the termination of employment or of service of the petitioner, but the instant case is not a case relating to service and the petitioner is an independent contractor. I am unable to accept such contention of Mr. Mitter inasmuch as the contract in the instant case is actually in the nature of a service contract and the petitioner's livelihood very much depends as a supplier of milk of Mother Dairy authorities and if the petitioner is not allowed to supply milk or his service is not renewed or contract is terminated he would be very much affected financially. Under such circumstances in my opinion the Mother Dairy being State authority cannot arbitrarily refuse to renew and /or thereby terminate the contract of the petitioner causing serious prejudice to the petitioner fincancially. Although the Clause 1 of the said agreement provides for automatic termination on the expiry of the period of six months unless extended or renewed for any further period by mutual agreement the respondents have really sought to terminate the said agreement by not renewing the same on the ptea of certain alleged irregularities as disclosed in the affidavit of Sk. Nisar Mohammed affirmed on January 7, 1987 and also on January 22, 1987 on behalf of the Mother Dairy authorities. It has been mentioned that the Mother Dairy authorities from time to time brought to the notice of the petitioner the various lapses committed by him in violation of the said agreement. It has been alleged further that the petitioner failed and neglected to take steps to rectify such iapses and/or adhere to the provisions of the agreement. The petitioner explained the said lapses and thereafter continued to act. The agreement provides that for breach of any of the terms and conditions of the agreement on the part of the Concessionaire or if the Concessionaire acts against the interest of the Dairy or acts in any manner which may adversely affect dairy's business and reputation or i commits act which is incompatible with the provisions of the agreement, the authorities shall terminate the agreement. After receiving replies from the petitioner the authorities did not terminate the agreement nor forfeit the security money as provided in Clause 52 of the agreement but allowed the petitioner to continue in terms of the agreement. It does not also appear from the record that the authority has not been satisfied with the explanation given by the petitioner. Under such circumstance it is not open for the respondent authorities to contend that the agreement has not been renewed because of the irregularities committed by the petitioner as alleged. It has been sugested on behalf of the respondent authority that there is no question of further giving opportunity to the petitioner as the petitioner did not rectify the irregularities. As I have already observed that there is nothing on record to show that the respondent authorities did not accept the explanation given by the petitioner to the charges nor did the respondent authorities point out at any time after the explanation was offered that the petitioner failed to act in terms of the agreement any time thereafter. In my opinion it would amount to arbitrary refusal to renew the agreement on the alleged plea as made out in the said affidavit of Sk. Nisar Mohammed affirmed on January 7, 1987 and January 22, 1987 without giving any opportunity to explain to the charges made out therin. Although Clause 1 of the contract provides for such automatic termination without any hearing but since the authorities themselves did not renew the contract on the basis of such allegations as already noted, it would be unfair not to give an opportunity to the 2 petitioner to explain the irregularities or misconduct referred to therein which led to such non-renewal. It is well settled that even in a case where a person has no right to continue his service cannot be terminated on the basis of certain allegations or by attaching stigma to his character without giving him due opportunity to explain the same. There is no reason why the same principle should not be made applicable to the facts of the instant writ petition. Under such circumstances it is not necessary to make a finding whether Clause 1 of the agreement is valid or not. In my opinion the case of Board of Mining Examination v. Ramji (supra) relied upon by the learned Advocate for the respondent Mother Dairy is of no assistance to him. In the said case the facts inter alia were that the respondent was a shot firer in a colliery and being a risky, technical job had to possess a certificate for which he handed over an explosive to an unskilled hand who fired it, and accident occurred and one Bhadu employed in the mine was injured. The Regional Inspector of Mines enquired into the cause of the accident and found on the respondent's virtual admission, qualified by some pre-verification that the shot were fired not by himself but by a cutter unauthorised person wrongfully entrusted to the work. Therby he contravened the relevant coal mine regulation. The Regional Inspector gave him an opportunity for explanation and after considering the material before him forwarded the papers to the Chairman of the Board together with the recommendation for cancellation of the certificate under Regulation 26. The Board bestowed its judgment on the materials gathered by the Regional Inspector at the enquiry which included the delinquent's admission and cancelled the shot firing certificate. The said cancellation was challenged in the High Court and the High Court set aside the said cancellation in a writ proceeding against which the Board of Mining Examination preferred appeal. The Supreme Court allowed the appeal and held that requirements of Regulation 26 were complied with and it cannot be said that there is any violation of natural justice. In the said case there was really an enquiry. In my opinion the facts and circumstances in the instant writ petition are absolutely different and does not assist the respondent at all.

25. Although in my opinion the judgment in the case of Central Inland Water Transport Corporation Ltd. v. Brojanath (supra) is not wholly applicable to the facts and circumstances of this case inasmuch as it appears from the facts in the said case that there was really no choice or option open for the employees of the erstwhile company which was dissolved by an order of winding up and ultimately the employees had to accept the scheme or arrangement wherby the appellant company was formed and the erstwhile company was taken over and the services of the erstwhile employees came to be regulated under the new arrangement or scheme, there was practically no option left for the employees to accept the said scheme and under such circumstances the Supreme Court held that the clause giving right to the employer to terminate the service of the permanent employees as matter of course was unreasonable and had to be struck down. It cannot be said in the instant case that the petitioner was compelled to enter into such an agreement which provides for automatic termination of the contract with the petitioner on non-renewal thereof. However, since it appears from record as also from the affidavit that the respondent authorities have not renewed the contract leading to termination on the basis of certain allegations against the petitioner, the petitioner is entitiled to have an opportunity to explain the allegations made against him. Accordingly, I am of the opinion that although the said clause need not be struck down, however, opportunity should be given to the petitioner to explain the allegations on the basis of which the petitioner's contract has not been renewed and the Mother Dairy authorities will be at liberty to lake appropriate steps after giving him such opportunity of hearing in the matter.

26. Clause 1 of the said contract which provides for automatic termination on the expiry of the term in case of non-renewal is an enabling provision in the contract which confers discretionary power on the authority not to renew a contract in appropriate cases. That discretion, however, has to be exercised by a public authority in my opinion in a reasonable manner so as to comply with the Constitutional mandate that the procedure accompanying the performance of a public act must be fair and reasonable so as to dispense with any notice and enables the authority not to renew the contract. In the case of Olga Tellis v. Bombay Municipal Corporation (supra) wherein the pavement dwellers were sought to be evicted without notice on the basis of provision contained in Section 314 of the Bombay Municipal Corporation Act which provides by Clause (a) that the Commissioner may without notice take steps for the removal of enroachment in or open any street, channel drain etc. While interpreting the said Section 314 the Supreme Court obseA'ed as follows;

"Section 314 is in the nature of enabling provision and not of a compulsive character. It enables the Commissioner in appropriate cases to dispense with previous notice to the persons who are likely to be affected by the proposed action. It docs not require and cannot be read to mean that, in total disregard of the relevant circumstances pertaining to a given situation that the Commissioner must cause the removal of an enroachment without previous notice. The primary rule of construction is that the language of the law must receive its plain and natural meaning. What Section 314 provides is that the Commissioner may without notice cause an encroachment to be removed. It does not command that the Commissioner shall without notice cause an encroachment to be removed Putting it differently, Section 314 confers on the Commissioner the discretion to cause an encroachment to be removed with or without notice. That discretion has to be exercised in a reasonable manner so as to comply with the Constitutional mandate that the procedure accompanying the performance of a public act must be fair and reasonable. We must lean in favour of this interpretation because it helps to sustain the validity of the law. Reading Section 314 as containing a command not to issue notice before removal or encroachment will make the law invalid"

27. It was contended on behalf of the Municipal Corporation in the aforesaid decision of the said report "that the legislature may well have intended that no notice need be given in any case whatsoever because no useful purpose could be served by issuing a notice as to why an encroachment on a public property could not be removed. We have indicated above that far from so intending, the legislature has left it to the discretion of the Commissioner whether or not to give notice, a discretion which has to be exercised "reasonably". The Supreme Court further observed that "the contention of the Corporation that no notice need be given because there can be no effective answer to it, betrays a misunderstanding of the rule of hearing, which is an important element of the principles of natural justice. The decision to dispense with notice cannot be founded upto a presumed impregnability of the proposed action". It was held by the Supreme Court that "the position that notice need not be given of a proposed action because, there can possibly be no answer to it is contrary to the well-recognised understanding of a real import of the rule of hearing. That proposition overlooks that justice must not only be done but must manifestly be seen to be done and confuses one for the other. The appearance : of injustice is the denial of justice. It is the dialogue with the persons likely to be affected by the proposed action which meets the requirement that the justice must also be seen to be done". On the basis of the above principles I am : unable to accept the contention of the learned Advocate for the respondent that no useful purpose would be served by giving further hearing to the petitioner since the petitioner was already informed of the lapses committed by him and : the petitioner gave answer to the same.

28. Accordingly, the writ petition is disposed of by directing the Mother Dairy Authorities to give hearing to the petitioner on the allegations made against him and to come to a finding after : such hearing if the renewal should be effected or not. Such proceeding should be disposed of within four weeks from the date of communication of this order.

29. Till the disposal of the hearing by the Mother Dairy Authorities and the decision taken within the period aforesaid the status quo will continue.

30. The Respondents, Mother Dairy Authorities, are directed not to proceed on the basis of the letter issued by them dated December 15, 1986 and the same is set aside.

31. There will be no order as to costs.

32. In view of this order no stay, as prayed, is called for.