ORDER
1.This writ petition has been filed on behalf of the petitioner Company challenging the proceedings No.PP.II(5) 189/ 98, dated 27th June, 1998 by which the petitioner Company has been ordered to withdraw its entire stocks in the State of Andhra Pradesh as the renewal of the Principal Certificate has been refused.
2. Counter has been filed and I have heard the learned Counsel for the parties indetail and with their consent this petition is finally disposed of by this order.
3. The controversy is very short as to whether a Principal Certificate issued by a Manufacturer to its dealers can be refused to be renewed after dealership licences were issued to the dealers. There are certain provisions in the Insecticides Act, 1968 and the Rules framed thereunder which require the examination by this Court in the context of the controversies raised in this petition.
4. In terms of Section 9 of the Insecticides Act, 1968 (hereinafter referred as 'the Act') it is incumbent that, any person desiring to import or manufacture an' insecticide has to apply for registration of such insecticide to the Registration Committee appointed under Section 5 of the Act. Section 10 lays down that an appeal can be filed against non-registration or cancellation which would show that if a Company was registered, the registration can even be cancelled. Under Section 12 of the Act the State Governments have been empowered to appoint officers as Licensing Officers and under Section 13 of the Act a licence can be granted to manufacture or to sell, stock or exhibit for sale or distribute any insecticide. Under Section 14 power has been given to the licensing officer to revoke, suspend or make amendment in the licence. Remedy by way of appeal is provided under Section 15 against the orders of licensing officer passed under Section 13 or Section 14.
5. From the perusal of the above provisions it becomes clear that the competent officers can issue licences for manufacture, sales, stock or exhibit for sale or distribute. The modalities which have to be followed for obtaining a licence for manufacture of insecticides are laid down in Rule 9 of the Insecticides Rules, 1971 (hereinafter referred as 'the Rules') and the modalities to be followed for grant of licence for sale etc., of insecticides are laid down in Rule 10. Rule 10(4-A) is important for the controversy at hand, therefore it is reproduced below :
'10. (4-A) (i) Every person shall along with his application for grant or renewal of a licence to undertake, operations or shall, stock or exhibit for sale or distribute insecticides, file a certificate from the principal whom he represents or desires to represent.
(ii) The certificate to be issued by the Principal shall be addressed to the licensing officer of the concerned area and shall contain full particulars of the principal including their registration and manufacturing licence numbers, full name and address of the person proposed to be authorised and also the type of formulations to be used in commercial pest control operations, sold, stocked or exhibited, for sale or distribution.
(iii) In order to verify the genuineness or otherwise of the certificate, the principal shall send to the licensing officer of the State where he intends to sell his products an adequate number of copies of the specimen signatures of the persons authorised in writing to issue the principal's certificate.
(iv) In case of suspension, revocation or cancellation of the certificate, the principal shall forthwith initmate the licensing officer having jurisdiction.'
It is submitted that there were certain allegations against certain dealers of the petitioner Company therefore a show-cause notice was issued and finally the impugned order was passed. The impugned order states :
'In view of the above position the Principal certificate of your manufacturing unit cannot be considered for renewal. As such your request for renewal of Principal Certificates is refused as per the provisions ofRule 10(4-A) of Insecticides Rules, 1971. You are therefore directed to withdraw your entire stocks in this State of Andhra Pradesh immediately.'
Some of the licences issued to the dealers were produced at the time of hearing.I have perused the licence issued in favour of M/s. Kaveri Agro Agencies who is one of the dealers of the petitioner Company. The licence has been issued to him, on 23-9-1997 and shall remain in force till 31st December, 1998, but because of the impugned order the petitioner Company cannot sell the products through M/s. Kaveri Agro Agencies who is a dealer of the petitioner Company.
6. Now the question which needs to be addressed by this Court is, after a dealership licence is issued by the competent authority whether a certificate issued under Rule 10 (4-A) by the Manufacturer to his dealer can be cancelled by the licensing authority.
7. After reading Rule 10 (4-A) along with relevant provisions of the Act one comes to a conclusion that there are two different matters which are to be looked into by the licensing authority. Before a dealer gets a licence in terms of Rule 10 along with other formalities he has to file a certificate from the Principal whom he represents or desires to represent which in other words would mean that a dealership licence would not be given unless there is a certificate from the principal, in this case it would be the manufacturer. Once this certificate is given to the dealer the licensing authority will consider his case for issuance of licence and once a licence is granted by the licensing authority there is no question of revoking the certificate issued by a principal, by the licensing authority. Rule 10(4-A) (iv) clearly lays down that the certificate issued by a principal can be suspended revoked or cancelled by the Principal. This also looks reasonable that a certificate can be suspended, revoked or cancelled by the person who has issued the certificate. Therefore, the licensing authorities who grant a licence of dealership under Rule-10 cannot after grant of licence cancel the certificate issued by the Principal in favour of the dealer. Once a licence is not granted the licensing authorities for reasons may refuse to act on the certificate issued by the Principal but once he acts upon it and issues a licence he has no authority in law tocancel the certificate issued by the Principal. That does not mean that if there is an unscrupulous dealer breaking the laws he cannot be dealt with by the licensing authority. Rule 10(5) itself gives a power to licensing officers to refuse grant of licence. Since he is the licensing authority and he has power to refuse grant of licence, therefore it should be presumed that he has a power to cancel the licence also. But as far as cancelling of certificate in concerned, that decidedly is outside the power of the licensing authority. Besides, there is a specific provision- in the Act itself being Section 14. If the respondents had any grievance against the licensed dealers, they could have proceeded against them in accordance with the provisions of Section 14 for cancellation of licence and not cancellation of the certificate issued in their favour by the Principal.
8. For these reasons, this writ petition is allowed and the impugned order dated 27th June, 1998 is quashed. However, this order will not be a bar for the respondents to proceed against the dealers of the petitioner Company in accordance with law. No costs.