Dishonour of cheque issued as a security can also attract offences U/Sec 138 NI Act: SC - The Daily Guardian
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Dishonour of cheque issued as a security can also attract offences U/Sec 138 NI Act: SC

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In a very significant judgment which directly affects each and every citizen of India, the Supreme Court in a learned, laudable, landmark and latest judgment titled Sripati Singh (D) Through His Son Gaurav Singh vs The State of Jharkhand & Anr in Criminal Appeal Nos. 1269-70 of 2021 (Arising out of SLP (Criminal) No. 252-253/2020) delivered just recently on October 28, 2021 has observed in no uncertain terms that the dishonour of cheque issued as a security can also attract offence under Section 138 of the Negotiable Instruments Act. The Bench of Apex Court comprising of Justice MR Shah and Justice AS Bopanna made it clear that, “There cannot be a hard and fast rule that a cheque which is issued as security can never be presented by the drawee of the cheque.” It must also be apprised here that the Bench added that such contention would arise only in a circumstance where the debt has not become recoverable and the cheque issued as security has not matured to be presented for recovery of the amount if the due date agreed for payment of debt has not arrived.

To start with, the ball is set rolling in para 1 of this brief, brilliant, bold and balanced judgment authored by Justice AS Bopanna for a Bench of Apex Court comprising of himself and Justice MR Shah wherein it is put forth that, “The appellant is before this Court assailing the order dated 17.12.2019 passed by the High Court of Jharkhand at Ranchi in Criminal M.P. No. 2635 of 2017 and Criminal M.P. No. 2655 of 2017. Through the said order, the High Court has allowed the said Crl. Miscellaneous Petitions and has set aside the orders dated 04.07.2016 and 13.06.2019 passed by the Judicial Magistrate First Class, Palamau in Complaint Case No. 1833 of 2015. The learned Judicial Magistrate by the order dated 04.07.2016 had taken cognizance of the offence alleged against the respondent No. 2 herein. By the order dated 13.06.2019 the learned Judicial Magistrate had rejected the petition filed by the respondent No. 2 seeking discharge in the said criminal complaint.”

To put things in perspective, the Bench then while elaborating on the brief facts of the case envisages in para 2 that, “The brief facts leading to the present case as pleaded is that the appellant and the respondent No. 2 are known to each other inasmuch as the respondent No. 2 and the daughter of the appellant were pursuing their education together in London. On their return to India, the respondent No. 2 had settled in Bangalore and due to the earlier acquaintance, the cordial relationship amongst the families had continued. The respondent No. 2 on learning that the appellant was involved in business, had approached him at Daltonganj and sought financial business to the tune of Rs. 1 crore so as to enable the respondent No. 2 to invest the same in his business. Since the respondent No. 2 had assured that the same would be returned, the appellant placed trust in him and the appellant claims to have advanced further sum and in all a total sum of Rs. 2 crores during the periods between January 2014 to July 2014. The said amount was paid to respondent No. 2 by transferring from the account of appellant’s daughter and also from the account of the appellant. Towards the said transaction, four agreements are stated to have been entered acknowledging the receipt of the loan. The said agreements were reduced into writing on non-judicial stamp papers bearing No. B489155, B489156, B489157 and B489159.”

While continuing in the same vein, the Bench then points out in para 4 that, “The respondent No. 2 on appearance filed a miscellaneous petition seeking discharge from the criminal proceeding, which was rejected by the order dated 13.06.2019. It is in that background, the respondent No. 2 claiming to be aggrieved by the order dated 04.07.2016 and 13.06.2019 approached the High Court in the said criminal miscellaneous petitions. The High Court, through the impugned order has allowed the petitions filed by the respondent No. 2. The appellant therefore claiming to be aggrieved is before this Court in these appeals.”

Most significantly, the Bench then observes what forms the cornerstone of this extremely commendable judgment in para 16 that, “A cheque issued as security pursuant to a financial transaction cannot be considered as a worthless piece of paper under every circumstance. ‘Security’ in its true sense is the state of being safe and the security given for a loan is something given as a pledge of payment. It is given, deposited or pledged to make certain the fulfillment of an obligation to which the parties to the transaction are bound. If in a transaction, a loan is advanced and the borrower agrees to repay the amount in a specified time-frame and issues a cheque as security to secure such repayment; if the loan amount is not repaid in any other form before the due date or if there is no other understanding or agreement between the parties to defer the payment of amount, the cheque which is issued as security would mature for presentation and the drawee of the cheque would be entitled to present the same. On such presentation, if the same is dishonoured, the consequences contemplated under Section 138 and the other provisions of N.I. Act would flow.”

Be it noted, the bench then makes it clear in para 17 that, “When a cheque is issued and is treated as ‘security’ towards repayment of an amount with a time period being stipulated for repayment, all that it ensures is that such cheque which is issued as ‘security’ cannot be presented prior to the loan or the installment maturing for repayment towards which such cheque is issued as security. Further, the borrower would have the option of repaying the loan amount or such financial liability in any other form and in that manner if the amount of loan due and payable has been discharged within the agreed period, the cheque issued as security cannot thereafter be presented. Therefore, the prior discharge of the loan or there being an altered situation due to which there would be understanding between the parties is a sine qua non to not present the cheque which was issued as security. These are only the defences that would be available to the drawer of the cheque in a proceedings initiated under Section 138 of the N.I. Act. Therefore, there cannot be a hard and fast rule that a cheque which is issued as security can never be presented by the drawee of the cheque. If such is the understanding a cheque would also be reduced to an ‘on demand promissory note’ and in all circumstances, it would only be a civil litigation to recover the amount which is not the intention of the statute. When a cheque is issued even though as ‘security’ the consequence flowing therefrom is also known to the drawer of the cheque and in the circumstance stated above if the cheque is presented and dishonoured, the holder of the cheque/drawee would have the option of initiating the civil proceedings for recovery or the criminal proceedings for punishment in the fact situation, but in any event, it is not for the drawer of the cheque to dictate terms with regard to the nature of litigation.”

Of course, the Bench then enunciates in para 18 that, “If the above principle is kept in view, as already noted, under the loan agreement in question the respondent No. 2 though had issued the cheques as security, he had also agreed to repay the amount during June/July 2015, the cheque which was held as security was presented for realization on 20.10.2015 which is after the period agreed for repayment of the loan amount and the loan advanced had already fallen due for payment. Therefore, prima facie the cheque which was taken as security had matured for payment and the appellant was entitled to present the same. On dishonour of such cheque the consequences contemplated under the Negotiable Instruments Act had befallen on respondent No. 2. As indicated above, the respondent No. 2 may have the defence in the proceedings which will be a matter for trial. In any event, the respondent No. 2 in the fact situation cannot make a grievance with regard to the cognizance being taken by the learned Magistrate or the rejection of the petition seeking discharge at this stage.”

As a corollary, the bench then observes in para 19 that, “In the background of the factual and legal position taken note supra, in the instant facts, the appellants cannot be non-suited for proceeding with the complaint filed under Section 138 of N.I. Act merely due to the fact that the cheques presented and dishonoured are shown to have been issued as security, as indicated in the loan agreement. In our opinion, such contention would arise only in a circumstance where the debt has not become recoverable and the cheque issued as security has not matured to be presented for recovery of the amount, if the due date agreed for payment of debt has not arrived. In the instant facts, as noted, the repayment as agreed by the respondent No. 2 is during June/July 2015. The cheque has been presented by the appellant for realisation on 20.10.2015. As on the date of presentation of the cheque for realisation the repayment of the amount as agreed under the loan agreement had matured and the amount had become due and payable. Therefore, to contend that the cheque should be held as security even after the amount had become due and payable is not sustainable. Further, on the cheques being dishonoured the appellant had got issued a legal notice dated 21.11.2015 wherein interalia it has been stated as follows:

“You request to my client for loan and after accepting your word my client give you loan and advanced loan and against that you issue different cheque all together valued Rs One crore and my client was also assured by you will clear the loan within June/July 2015 and after that on 26.10.2015 my client produce the cheque for encashment in H.D.F.C. Bank all cheque bearing No. 402771 valued Rs. 25 Lakh, 402770 valued Rs. 25 lakh, 402769 valued Rs. 50 lakh, (total rupees one crore) and above numbered cheques was returned with endorsement “in sufficient fund”. Then my client feel that you have not fulfil the assurance.””

Needless to say, the Bench then adds in para 20 that, “The notice as issued indicates that the appellant has at the very outset after the cheque was dishonoured, intimated the respondent no. 2 that he had agreed to clear the loan by June/July 2015 after which the appellant had presented the cheque for encashment on 26.10.2015 and the assurance to repay has not been kept up.”

Simply put, the Bench then hastens to add in para 21 that, “In the above circumstance, the cheque though issued as security at the point when the loan was advanced, it was issued as an assurance to repay the amount after the debt becomes due for repayment. The loan was in subsistence when the cheque was issued and had become repayable during June/July 2015 and the cheque issued towards repayment was agreed to be presented thereafter. If the amount was not paid in any other mode before June/July 2015, it was incumbent on the respondent No. 2 to arrange sufficient balance in the account to honour the cheque which was to be presented subsequent to June/July 2015.”

Rest of the article is avaolable on www.thedailyguardian.com

Quite forthrightly, the Bench then observes in para 22 that, “These aspects would primafacie indicate that there was a transaction between the parties towards which a legally recoverable debt was claimed by the appellant and the cheque issued by the respondent No. 2 was presented. On such cheque being dishonoured, cause of action had arisen for issuing a notice and presenting the criminal complaint under Section 138 of N.I. Act on the payment not being made. The further defence as to whether the loan had been discharged as agreed by respondent No. 2 and in that circumstance the cheque which had been issued as security had not remained live for payment subsequent thereto etc. at best can be a defence for the respondent No. 2 to be put forth and to be established in the trial. In any event, it was not a case for the Court to either refuse to take cognizance or to discharge the respondent No. 2 in the manner it has been done by the High Court. Therefore, though a criminal complaint under Section 420 IPC was not sustainable in the facts and circumstances of the instant case, the complaint under section 138 of the N.I. Act was maintainable and all contentions and the defence were to be considered during the course of the trial.”

As a corollary, the Bench then holds in para 23 that, “In that view, the order dated 17.12.2019 passed by the High Court of Jharkhand in Cr.M.P No. 2635 of 2017 with Cr.M.P No. 2655 of 2017 are set aside. Consequently, the order dated 04.07.2016 and 13.06.2019 passed by the Judicial Magistrate are restored. The complaint bearing C.C. No. 1839 of 2015 and 1833 of 2015 are restored to the file of the Judicial Magistrate, limited to the complaint under Section 138 of N.I. Act to be proceeded in accordance with law.”

For the sake of clarity, the Bench then states in para 24 that, “All contentions of the parties on merit are left open. We make it clear that none of the observations contained herein shall have a bearing on the main trial. The trial court shall independently arrive at its conclusion based on the evidence tendered before it.”

All said and done, the Apex Court has made it absolutely clear as to the indisputable fact that dishonour of the cheque issued as a security can also attract offences under Section 138 of the Negotiable Instruments Act. This is best elaborated in para 16 as already discussed hereinabove. So it is the bounden duty of all citizens to always ensure that they comply entirely with what has been stated very recently in this notable judgment delivered by a Bench of Apex Court comprising of Justice AS Bopanna and Justice MR Shah so elegantly, eloquently and effectively! There can be just no denying it!

Sanjeev Sirohi, Advocate,V

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Legally Speaking

‘FAILURE TO PROVIDE EVIDENCE OF DECEASED’S INCOME DOES NOT JUSTIFY ADOPTION OF LOWEST TIER OF MINIMUM WAGE IN MOTOR ACCIDENT’

The bench comprising of Justice Jyotsna Rewal Dua observed while deciding the appeal preferred by an insurance company against award of Rs 15,85,000 compensation to the bereaved mother by the Claims Tribunal.

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The Himachal Pradesh High Court in the case United India Insurance Company Ltd v. Smt. Sumna Devi recently observed that merely because the claimants were unable to produce documentary evidence to show the monthly income of the deceased and the same should not justify for adoption of lowest tier of minimum wage while computing the income.

The bench comprising of Justice Jyotsna Rewal Dua observed while deciding the appeal preferred by an insurance company against award of Rs. 15,85,000/- compensation to the bereaved mother by the Claims Tribunal.

It was observed that the Tribunal had assessed deceased’s monthly income as 10,000/- whereas the Appellant argued that in absence of any documentary evidence to show the deceased’s income and as per the minimum wage rate, i.e., Rs. 7,000- per month, the award must be calculated.

Further, the deceased’s mother informed the Court that her son was earning Rs. 10,000/- per month only from agricultural pursuits. It was submitted by her that he had completed two-year NCVT course in Mechanic (Motor Vehicle) Trade and would have definitely earned much more than Rs. 10,000/- per month, had he lived.

It was noted by the court that where the deceased had an NCVT CTS course diploma in Mechanic (Motor Vehicle) Trade from a Government Industrial Training Institute and was also carrying out agricultural works, Rs. 10,000/- per month has been correctly assessed as his income which he would have earned on attaining the age of 25 years.

The court placed reliance on Chandra alias Chanda alias Chandra Ram & Anr. vs. Mukesh Kumar Yadav & Ors., wherein it was held that in absence of salary certificate the minimum wage notification can be a yardstick but at the same time cannot be an absolute one for fixing the income of the deceased. Thus, in absence of documentary evidence on record some amount of guesswork is required to be done. But at the same time the guesswork for assessing the deceased income should not be totally detached from reality.

Accordingly, the court dismissed the petition.

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VIOLATION OF RETRENCHMENT PROCEDURE U/S 25F & 25G OF INDUSTRIAL DISPUTES ACT WARRANTS REINSTATEMENT, NOT MERE COMPENSATION: GUJARAT HIGH COURT

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The Gujarat High Court in the case Rameshbhai Bhathibhai Pagi v/s Deputy Executive Engineer observed and has reiterated that once a Labour Court comes to the conclusion that Sections 25F, G and H of the Industrial Disputes Act have been violated and reinstatement of workman ought to follow.

The bench comprising of Justice Biren Vaishnav observed while hearing several petitions challenging the Labour Court’s order wherein compensation of Rs. 72,000 was awarded to each of the workmen-Petitioner rather than reinstatement with back wages.

It was submitted by the petitioner that their services were put to an end in August 2010 without following the procedure and without awarding compensation. It was pleaded by them that there was a clear violation of Sections 25(G) and (H).

However, the court stated that the Labour Courts had found the termination bad for each of the petitioners. While drawing an adverse inference against the Respondents, it has been awarded by the Labour Court the compensation which was meagre in the eyes of the petitioner, even as work was available. The Court observed that the Reliance was placed on Kalamuddin M. Ansari vs. Government of India, wherein similar facts and circumstances, the High Court ordered reinstatement of employees with continuity of service and had set aside the order of compensation.

The decision of the Labour Court was supported by the AGPs on the ground that there was a delay in raising the dispute. Further, the work had been outsourced at the canal. Therefore, the reinstatement was not possible.

The bench of Justice Vaishnav noted that the Labour Court had clearly concluded that there was a violation of sections 25(F), (G) and (H) of the ID Act. The only question raised was weather the Labour Court should have fallen short of awarding reinstatement with or without backwages.

In the present case, reference was made to Gauri Shanker vs. State of Rajasthan, wherein order of Labour Court had been modified by the Supreme Court of granting compensation in lieu of reinstatement. Further, Justice Vaishnav recalled the following observations of the Top Court:

The Division bench and the learned Single Judge under their supervisory jurisdiction should not have modified the award by awarding compensation in lieu of reinstatement which is contrary to the well settled principles of law laid down by this Court, in catena of cases.

Keeping in view the fact and the precedents that compensation would be detrimental to the Petitioners who had worked for more than 20 years. The order of the Labour Court was modified by the High Court of granting lump-sum compensation and ordered the employer to reinstate the workmen in service with continuity of service.

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CENTRE NOTIFIES APPOINTMENT OF ELEVEN ADDITIONAL JUDGES IN PUNJAB & HARYANA HC

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On Sunday, the Central Government notified the appointment of 11 advocates as Additional Judges of the Punjab and Haryana High Court.

The Advocates appointed as additional judge of Punjab and Haryana High Court are namely:

1. Nidhi Gupta,

2. Sanjay Vashisth,

3. Tribhuvan Dahiya,

4. Namit Kumar,

5. Harkesh Manuja,

6. Aman Chaudhary,

7. Naresh Singh,

8. Harsh Bunger,

9. Jagmohan Bansal,

10. Shri Deepak Manchanda,

11. Alok Jain

The present appointment will take the actual strength of the High Court to 57 judges against a sanctioned strength of 85.

The judges have been appointed for a period of two years with effect from the date they assume charge of their respective offices, an official notification read.

In its meeting held on July 25, 2022, the Supreme Court Collegium headed by Chief Justice of India NV Ramana had recommended the names of these 11 advocates for elevation as Additional Judges of the Punjab and Haryana High Court.

In 2021, the appointment tally in High Courts was 120 in addition to 9 appointments in the Supreme Court. However, the entire appointment process in higher judiciary has been put on a fast track.

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KERALA HC: BAIL GRANTED TO A DOCTOR ACCUSED OF POSTING DEFAMATORY ARTICLES AGAINST LAKSHADWEEP ADMINISTRATIVE OFFICERS

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The Kerala High Court in the case Dr K P Hamsakoya vs Union Territory of Lakshadweep observed and granted an anticipatory bail to a senior doctor who has been accused of posting on facebook defamatory articles against officers of the Administration of Lakshadweep.

The bench comprising of Justice Viju Abraham observed and was essentially dealing with the pre-arrest bail plea of Dr. K P Hamsakoya, who is one of the senior-most doctors serving the Lakshadweep Administration and that presently, he is under suspension.

The Court observed that Dr. Hamsakoya has been accused of posting defamatory articles on Facebook against officers of the Administration of Lakshadweep, thus causing a negative effect amongst the public against the Administration. He has been booked under Sections 505 (1) (b), 505 (2) and 500 of the IPC and Section 66 (A) (b) of the Information Technology Act.

Before the Court, the Counsels Ajit G Anjarlekar, G.P.Shinod, Govind Padmanaabhan, and Atul Mathews appearing argued that he has been falsely implicated in the case and has been booked under the offence punishable under Section 66 (A) (b) of the IT Act (a provision which has been struck down in its entirety by the Apex Court).

It was contended by the court that the offences under Section 500 IPC cannot be registered without a complaint being filed by a person who has been defamed.

The Court while considering the facts and circumstances of the case and the nature of the allegations, the pre-arrest bail was granted by the court to the petitioner and the court dismissed his plea with the following directions:

On August 29, 2022, the petitioner shall surrender before the investigating officer and shall co-operate with the investigation.

The court stated that in the event of the petitioner, he shall be produced before the jurisdictional Magistrate and shall be released on bail on his executing a bond for Rs.50,000/- with two solvent sureties each for the like sum as per the satisfaction of the jurisdictional Court.

It was stated by the court that if any of the aforesaid conditions are violated, the Investigating Officer of Minicoy Police Station, Union Territory of Lakshadweep has been given the liberty to file an application for cancellation of bail before the jurisdictional court.

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GUJARAT HC GRANTS RELIEF TO DIPLOMA HOLDERS: STUDENTS CAN’T BE FAULTED FOR PHARMACY COUNCIL’S FAILURE TO APPROVE MEDICAL STORES FOR IMPARTING TRAINING.

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The Gujarat High Court in the case Oza Nikun Dashrathbhai v/s State Of Gujarat observed and has come to the rescue of D.Pharm students who were denied registration as ‘Pharmacist’ by the State Pharmacy Council on the ground that they have not undertaken training from medical stores approved the Pharmacy Practice Regulations, 2015.

The Single bench comprising of Justice AS Supehia observed and noted that the Pharmacy Council of India has not approved any medical store under the Regulation for the purpose of imparting practical training of Diploma to the students in Pharmacy Course like the present petitioners.

Court Observations:

It was observed that the petitioners cannot be faulted for the action of the respondent authorities in not approving the medical stores under regulation 4.4 of the Regulation of 2015 and hence, no option was there to the petitioner to take their training from the respective medical stores.

It was claimed by the petitioner’s student that the State Council was not registering them as Pharmacists despite having undertaken the necessary training of 500 hours for three months from the respective medical stores.

Further, it was observed that the State had admitted that all documents of the Petitioners were genuine, however, the registration was denied solely for the aforesaid reason. Further, one of the governmental circulars had clarified that the process for granting approval of Chemist/ Pharmacy and Druggist will be notified through the online mode. But the same was targeted only at “prospective students” .

It was noted by the High Court that in order to avoid hardship to current students, who had already undergone or undergoing the D.Pharm course while taking the practical training under the Pharmacy, Chemist and Druggist licensed under the Drugs and Cosmetics Act, 1940, as per precedence students will be considered for the registration, provided the students had undergone the D.Pharm course in an institution approved under PCI under section 12 of the Act.

Accordingly, the High Court directed the State Council to register the Petitioners as Pharmacists within three months.

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UTTARAKHAND HC SAYS UTTARKASHI’S BAN ON “MEAT SHOPS” WITHIN 500 METRES OF “RIVER GANGA” IN LINE WITH CONSTITUTIONAL SCHEME

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It is interesting to note that while fully, firmly and finally very rightly and commendably upholding the ban that was imposed on meat shops that was enacted by the Zila Panchayat of Uttarkashi District, the Uttarakhand High Court in an extremely remarkable, robust, refreshing and rational judgment titled Naved Qureshi vs State of Uttarakhand & Ors in Writ Petition (MS) No. 2073 of 2016 that was pronounced recently on July 20, 2022 has expressed its consonance with a bye-law of Zila Panchayat, Uttarkashi to the effect that no shop for butchering animals and selling meat within 500m from the bank of river Ganga shall be permitted. It must be noticed here that the Single Judge Bench of Hon’ble Mr Justice Sanjaya Kumar Mishra said quite clearly that keeping in view the “special status” of Uttarakhand and the river Ganga that emerges from District Uttarkashi and the sanctity attached with the river Ganga by majority of population of Uttarakhand, the decision taken by the Zila Panchayat by making the said bye-laws is in line with the scheme of Constitution of India, as envisaged in Part IX. It very rightly ruled that the District Magistrate had not committed any error in not issuing a no objection certificate to the petitioner to run a mutton shop, at a premises situated at 105 metres distance from the bank of Ganga.

At the outset, this extremely laudable, learned, landmark and latest judgment authored by a Single Judge Bench of the Uttarakhand High Court comprising of Hon’ble Mr Justice Sanjaya Kumar Mishra sets the ball rolling by first and foremost putting forth lucidly in para 1 that, “By filing this writ petition, the petitioner has prayed for the following reliefs:

“i. Issue a writ, order or direction in the nature of certiorari calling for the original record and pleased to quash the impugned order dated 08.06.2016 (Annexure – 2) passed by the respondent no. 2 i.e. District Magistrate, Uttarkashi, District Uttarkashi.

ii. Issue a writ, order or direction in the nature of Mandamus directing and commanding the respondents that they shall not interfere in the peaceful business activities i.e. in running the mutton shop in his house situated at the roadside of Gangotri National Highway without any valid reason.

iii. Issue a writ, order or direction in the nature of Prohibition making declaration to the effect that after central enactment of the Food Safety and Standards Act, 2006 the bye-laws no. 3 framed by the respondent Zila Panchayat became illusionary and same are not applicable for the purpose of regulating food safety activities in rural area, therefore, no license from respondent Zila Panchayat is required to do business.””

To put things in perspective, the Bench then envisages in para 2 that, “The facts of the case, not disputed at this stage, are that petitioner is a resident of village Hina Gaon, Police Station – Maneri, District – Uttarkashi. His father was recorded tenure holder having bhumidhari land bearing Khasra Nos. 1555 and 15556, situated in the aforesaid village. He was running a mutton shop since 2006 in a rented accommodation in village – Hina Gaon, after getting license from Zila Panchayat. Though, according to him, license was not required after enforcement of Food Safety and Standards Act, 2006 (hereinafter referred to as “FSS Act, 2006” for brevity). In the year 2012, he also obtained a license from the designated authority under the FSS Act, 2006. Till the year, 2015, he ran his shop at aforesaid rented premises and after construction of his own shop over the bhumidhari land, he shifted his business of butchering and selling mutton into it. On 27.02.2016, respondent no. 3 – Zila Panchayat, Uttarkashi, through Additional Mukhya Adhikari, issued a notice to the petitioner to shift his mutton shop, within 7 days to another place, as his shop is situated 105 metre away from the bank of river Ganga, which is violative of the existing by-laws. As per the by-laws, operation of mutton/chicken shop within 500 metres from the bank of river Ganga is prohibited. On 15.03.2016, petitioner being aggrieved by the notice, preferred a Writ Petition (MS) No. 651 of 2016, which was disposed of, in limine, by this Court by giving opportunity to the petitioner to file a representation before the Authorities and with a direction to the Authorities to dispose of the same. Thereafter, on 09.05.2016, the petitioner served a copy of the aforesaid order on respondents no. 2 and 3 and prayed for issuance of license for the next financial year 2016-17 but the respondent no. 2 – District Magistrate, Uttarkashi vide order dated 09.05.2016 rejected the representation of the petitioner on the basis of the Resolutions of meeting held on 04.05.2016.”

In this same para 2, it is then further mentioned that, “Feeling aggrieved by the aforesaid order dated 09.05.2016 and minutes of meeting dated 04.05.2016, the petitioner preferred a Writ Petition (MS) No. 1383 of 2016 wherein respondents were directed to file counter affidavit within four weeks and the said writ petition is still pending. In the meantime, petitioner again represented before respondent no. 2 – District Magistrate, Uttarkashi to grant him no objection certificate, which was again rejected. The said order of the learned District Magistrate, Uttarkashi is assailed in this writ petition.”

On the one hand, the Bench then points out in para 3 that, “Learned counsel for the petitioner would submit that the only ground on which his application for grant of no objection certificate has been rejected by the District Magistrate, Uttarkashi is that his shop is situated within 500 metre from the bank of river Ganga. According to the petitioner, after passing of the FSS Act, 2006, the jurisdiction of Zila Panchayat is ceased to operate and it is only the Designated Authority, under the FSS Act, 2006 has authority to grant license or reject it in favour of the petitioner for running a shop for selling and butchering the animals. Therefore, he prayed that annexure no. 2 to the writ petition be quashed and it be declared that FSS Act, 2006 shall have overriding effect on the by-laws issued by the Zila Panchayat.”

On the other hand, the Bench then mentions in para 4 that, “Learned counsel for the State would submit that petitioner was granted license by the Designated Authority to run the shop at a particular place but he shifted his shop, after getting the license from the Designated Authority under the FSS Act, 2006, to another place, which came within 500 metre from the bank of river Ganga, therefore, no objection certificate was not granted to him and order passed by District Magistrate, Uttarkashi does not have any infirmity or perversity and requires no interference.”

Furthermore, the Bench then succinctly discloses in para 5 that, “Learned counsel for the State further submits that as per Section 106 (1) of the Uttarakhand Panchayati Raj Act, 2016, the Zila Panchayats have powers to make by-laws. Section 106 of the Uttarakhand Panchayati Raj Act, 2016 is quoted as under:

“106 Powers of Zila Panchayat to make bye-laws (1) A Zila Panchayat may, and where required by the State Government shall, make bye-laws for its own purposes and for the purposes of {Kshettra Panchayats}, applicable to the whole or any part of the rural area of the district, consistent with this Act and with any rule, in respect of matters required by this Act to be governed by bye-laws and for the purposes of promoting or maintaining the health, safety and convenience of the inhabitants of the rural area of the district and for the furtherance of the administration of this Act in the Khand and the district.””

Needless to state, the Bench then notes explicitly in para 6 that, “Article 243 (Part IX) of the Constitution of India provides for formation of Gram Sabha and Gram Panchayat. Article 243 G provides for the powers, authority and responsibilities of Panchayats. For better appreciation of the matter, it is quoted below:

“243G. Powers, authority and responsibilities of Panchayats – Subject to the provisions of this Constitution the Legislature of a State may, by law, endow the Panchayats with such powers and authority and may be necessary to enable them to function as institutions of self government and such law may contain provisions for the devolution of powers and responsibilities upon Panchayats, at the appropriate level, subject to such conditions as may be specified therein, with respect to –

(a) the preparation of plans for economic development and social justice;

(b) the implementation of schemes for economic development and social justice as may be entrusted to them including those in relation to the matters listed in the Eleventh Schedule.””

Quite ostensibly, the Bench then enunciates in para 7 that, “Thus, it is apparent from the aforesaid Article that the Constitution recognises the Zila Panchayats, as sovereign authorities, having powers to plan for economic development and social justice, as may be entrusted to them including those in relation to the matters listed in the Eleventh Schedule. Article 243 G also provides that the Legislature of a State, may by law, endow the Panchayats with such powers and authority as may be necessary to enable them to function as institutions of self government. Entry 4 in the Eleventh Schedule of the Constitution of India provides for animal husbandry, dairying and poultry. Entry 22 provides for markets and fairs. Thus, it is clear that as far as markets and fairs and animal husbandry, dairying and poultry are concerned, the Zila Panchayat, as an institution of self government, may function to regulate animal husbandry etc. as mentioned above.”

Be it noted, the Bench then quite forthrightly holds in para 8 that, “Therefore, the contention of learned counsel for the petitioner that after passing of the FSS Act, 2006, the powers of Zila Panchayat ceased to operate with respect to food items does not appears to be correct. Since, the Zila Panchayats have been granted powers to act as institutions of self government, the provisions made by Zila Panchayat has to be harmoniously constructed with the provisions of the FSS Act, 2006.”

Most significantly, what truly constitutes the cornerstone of this notable judgment is then encapsulated in para 9 wherein it is held that, “In view of the above, this Court is of the opinion that no objection certificate is mandatory to be obtained from the Zila Panchayat or the District Magistrate for running a mutton shop in the present matter. At the same time, keeping in view the special status of State of Uttarakhand and the river Ganga that emerges from District Uttarkashi and the sanctity attached with the river Ganga by majority of population of Uttarakhand, the decision taken by the Zila Panchayat by making by-laws to the effect that no shop for butchering the animals and selling the meat within 500 metres from the bank of river Ganga appears in line with the scheme of Constitution of India, as envisaged in Part IX. Hence, this Court is of the view that respondent no. 2, District Magistrate, Uttarkashi has not committed any error in not issuing no objection certificate to the petitioner to run a mutton shop within 500 metres from the bank of river Ganga.”

Finally, the Bench then concludes aptly by directing in para 10 that, “Accordingly, the writ petition fails and is hereby dismissed. It is observed that any person, who runs a meat shop for selling and butchering the animals in District Uttarkashi, shall obtain no objection certificate from the concerned authority, in the light of by-laws made by the Zila Panchayat and also obtain license from the designated authority.”

In sum, the Uttarakhand High Court has very rightly held that Uttarkashi’s ban on meat shops within 500 meters of the river Ganga is in line with constitutional scheme. So it definitely merits no reiteration of any kind that the same has to be complied with accordingly in its entirety! No denying it!

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