1982 (10) TMI 210 - SC - Indian Laws

Summary

Issues:
1. Renewal of restaurant license in a residential building.
2. Violation of principles of natural justice in decision-making process.

Analysis:
Issue 1: The petitioners were running a restaurant in a residential building and had applied for the renewal of their license as required by Section 421 of the Delhi Municipal Corporation Act, 1957. The Corporation had accepted the license fee deposits for previous years, indicating a deemed renewal of the license. However, for the period April 1, 1979, to March 31, 1980, the Corporation refused to accept the license fee and subsequently sealed the premises, citing that running a restaurant in a residential building was impermissible. The court found that the Corporation's decision not to renew the license was in violation of natural justice principles as no opportunity was given to the petitioners to represent their case before the decision was made. The court held that such a decision, made without following the principles of natural justice, would be void.

Issue 2: The primary contention raised in the petition was that the decision not to renew the license was made in violation of principles of natural justice, rendering it liable to be quashed. The court agreed with this contention, emphasizing that when a license is required to conduct business, the refusal to renew or revoke such a license should be preceded by a notice and an opportunity for the affected party to present their case. In this case, the Corporation failed to provide such an opportunity before deciding not to renew the license, leading to the court's decision to quash the decision based on this violation of natural justice principles.

In conclusion, the court ruled in favor of the petitioners, holding that the decision not to renew the restaurant license was void due to the Corporation's failure to adhere to the principles of natural justice. The court directed the Corporation to proceed according to law before making any decision regarding the license renewal in the future. The interim order allowing the petitioners to continue operating their business remained in effect until the Corporation made a fresh decision in compliance with the law.