Telangana High Court
M/S. Rajashree Enterprises vs Union Of India on 8 April, 2026
IN THE HIGH COURT FOR THE STATE OF TELANGANA AT
HYDERABAD
THE HONOURABLE SRI JUSTICE N.V.SHRAVAN KUMAR
WRIT PETITION No.32947 of 2024
DATE OF ORDER:08.04.2026
Between:
M/s. Rajashree Enterprises and 2 others
.....Petitioners
AND
Union of India, represented by its Secretary, Ministry of
Commerce & Industry, Petroleum and Explosives Safety
Organizations (PESO) Sastry Bhavan, New Delhi and three others
...Respondents
ORDER:
Heard learned counsel for the petitioners and Ms. L. Pranathi
Reddy, learned Standing Counsel representing learned Deputy
Solicitor General of India appearing for Central Government for
respondent Nos.1 to 4.
2. The petitioners are challenging the impugned proceedings dated
17.10.2024 issued by respondent No.2 as being illegal, arbitrary,
violative of Articles 14, 19 (1) (g) of the Constitution of India, and
contrary to Rules 118 of the Explosives Rules, 2018, with a
consequential prayer seeking direction to respondent No.2 and No.3 to
renew the license No.A/HQ/TG/P3/55(A1343), license
No.A/HQ/TG/P3/56(A1344), license No. A/HQ/TG/P1/3(A850) of
petitioner Nos.1 & 2 by updating the online status of licenses
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No.A/HQ/TG/P3/55(A1343), license No.A/HQ/TG/P3/56(A1344),
license No.A/HQ/TG/P1/3(A850) by PESO (Petroleum and Explosives
Safety Organization) to “Active” status.
BRIEF FACTS:
3. The petitioner No.1 firm was established in the year 2011 by the
petitioner No.3 as a sole proprietorship firm, primarily engaged in
trading of Sodium Nitrate and other chemical products. In the year
2014, the petitioner No.1 firm acquired license
No.A/HQ/TG/P3/55(A1343) for the possession and sale of
Ammonium Nitrate. The petitioner No.2 firm was established in the
year 2011 by the petitioner No.3 as a sole proprietorship firm engaged
in manufacturing sodium nitrate and other chemical products. In the
year 2014, the petitioner No.2 acquired two licenses i.e., license No.
A/HQ/TG/P1/3(A850) for the manufacturing/conversion and storage
of Ammonium Nitrate and License No. A/HQ/TG/P3/56(A1344) for
possession and sale of Ammonium Nitrate. The said licenses were
valid till 31 March, 2024. The petitioner had applied for renewal of
above licenses and paid requisite fees.
4. On 26.08.2019 an F.I.R.No.420 of 2019 was registered before
the P.S.RGI Airport, Cyberabad District stating that a DCM Van
bearing No.AP-03-TC-9707 was transporting Ammonium Nitrate in
200 bags from Bhuvanagiri to Madanapalli on e-way bill for sodium
nitrate material in the name of Sri Raja Rajeshwara Chemicals and
Allied from Bhuvanagiri to FSF Traders of Madanapalli. The said
3DCM was intercepted by police at ORR Toll Gate Exit No.16 at
Shamshabad. It is submitted that Raja Rajeshwara Chemicals and
Allied was registered for supply of non-explosive material but explosive
material like ammonium nitrate was supplied instead of sodium
nitrate. It was alleged that the petitioner No.3 was involved in the said
incident which led to filing of F.I.R.No.420 of 2019 against the
petitioner No.3. It is submitted that petitioner No.3 has no connection
with Sri Raja Rajeshwara Chemicals & Allied. The petitioner No.3 was
arrested by the police and was enlarged on bail by this Court.
Subsequently, received suspension of license letters for license
No.A/HQ/TG/P3/55(A1343), license No.A/HQ/TG/P3/56(A1344),
license No.A/HQ/TG/P1/3(A850) vide Order dated 15.10.2019 from
the 1st respondent whereby the license granted to the 1st and 2nd
petitioner to sell ammonium nitrate was suspended with immediate
effect by virtue of power conferred under Section 6E (3) of the
Explosives Act, 1884 read with rule 42 of the Ammonium Nitrate
Rules, 2012. Aggrieved by the same, petitioners filed W.P.No.23356 of
2019 seeking to set-aside the Order No.A/HQ/TG/P3/55(A1343)
dated 15.10.2019 and W.P.No.23355 of 2019 was filed seeking to set-
aside the Order No.A/HQ/TG/P3/56(A1344) dated 15.10.2019 and
Order No.A/HQ/TG/P1/3(A850). Both the writ petitions were
disposed of by a co-ordinate bench of this Court on 10.02.2021. The
operative portion of the order is extracted for reference:
“This Court, having considered the rival submissions made by
learned counsel for the respective parties, is of the considered view
that both these writ petitions can be disposed of setting aside the
4impugned orders, both dated 15.10.2019, cancelling the licenses of
the petitioners and the matter be remanded to respondent No.2 for
consideration of the case, afresh, by duly taking into account
explanation dated 03.10.2019 submitted by the petitioners and
respondent No.6 is also at liberty to file its objections and request for
return of the seized stock of Ammonium Nitrate within a period of two
weeks from the date of receipt of a copy of this order and upon such
objections being filed by respondent No.6, the petitioners are also
permitted to submit their explanation within two weeks thereafter
and upon receiving the same, respondent No.2 shall consider the
explanation being submitted by the petitioner as well as objections
being filed by respondent No.6 and pass appropriate orders in
accordance with law within a period of four weeks thereafter.”
5. Pursuant to the said orders, the petitioner made a
representation dated 17.02.2021 to the respondent No.2 requesting to
update the status of licenses Nos.A/HQ/TG/P3/55(A1343),
A/HQ/TG/P3/56(A1344), A/HQ/TG/P1/3(A850) to “Active” status,
for all licenses and to inform the police authorities to unseal the
godowns of petitioners and one M/s. Rajashree Enterprises located in
Bhongir, Yadadri Bhongir District to enable the petitioners to dispose
the material to valid license holders. The petitioners also issued a
letter on 24.02.2021 to the respondent No.2 informing the order dated
10.02.2021 passed by the Hon’ble Court in W.P.No.23356 of 2019 and
23355 of 2019 and requested to release the entire stock lying inside
the store house situated at Bhongir, Yadadri Bhuvanagiri District.
Thereafter, on 22.03.2021, the officials of the respondent No.2 sent a
mail to the Controller of Explosives, PESO regarding the decision
taken by PESO on disposal of ammonium nitrate stored in M/s.
Rajashree Enterprises and has enclosed the details of disposal for
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further action. Accordingly, the petitioners have disposed of the
ammonium nitrate to the suppliers. It is further submitted that the
Police Department also issued a letter dated 06.02.2021 requesting
the PESO Department to release the stock at any early date so as to
comply with the directions of Hon’ble High Court.
6. The respondent No.3 issued another show cause notice to
petitioner No.1 vide proceedings No.A/HQ/TG/P3/55(A1343), and
proceedings to the petitioner No.2 vide No.A/HQ/TG/P3/56(A1344)
and A/HQ/TG/P1/3(A850) both dated 02.07.2021 (received on
08.07.2021) alleging that the online record in Form R-9 of AN Returns
System comprising total stock of ammonium nitrate of all licenses
held by M/s. Rajshree ChemTech and M/s. Rajashree Enterprises is
5454.3 MT whereas, the quantity returned to supplier is 2062.1 MT
and there is shortfall of 3392.2 MT for which no records of
transactions were available and the quantity of 3392.2 of ammonium
nitrate is missing, as such the respondent No.3 had informed the
petitioners to show cause within 21 days as to why the subject license
should not be revoked/cancelled. Thereafter, the petitioners
submitted reply letter on 26.07.2021 mentioning the reasons for the
shortfall accumulated over the period of years and requested the
respondent No.3 to withdraw the show cause notice dated 02.07.2021
and update the status of the license as “Active” in the official PESO
website for all the licenses to enable the petitioners to use the store
houses for possession and sale of ammonium nitrate.
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7. Further, petitioner No.1 filed W.P.No.7474 of 2024 before this
Court seeking to set-aside the impugned Show Cause Notice
No.A/HQ/TG/P3/55(A1343) dated 02.07.2021 issued by respondent
No.3 seeking a direction to the respondent Nos.2 and 3 to update the
status of the licenses Nos.A/HQ/TG/P3/55(A1343) granted by PESO
to “Active” status, by suspending the operation of the impugned
proceedings vide No.A/HQ/TG/P3/55(A1343) dated 02.07.2021
issued by respondent No.3. Similarly, the petitioner No.2 also filed
W.P.No.7553 of 2024 seeking to set-aside the operation of the
impugned show cause notice Nos.A/HQ/TG/P3/56(A1344) and
A/HQ/TG/P1/3(A850) dated 02.07.2021. A co-ordinate bench of this
Court has disposed both the writ petitions on 09.07.2024. The
operative portion is extracted for reference:-
“10. In view of the said submissions and since it is the case of
the petitioners that the respondents have issued impugned
proceedings dated 02.07.2021, without considering their explanation,
the impugned proceedings (show cause notices) vide
Nos.A/HQ/TG/P3/55(A1344), A/HQ/TG/P3/56(A1343) &
A/HQ/TG/P1/3(A850), dated 02.07.2021 are set aside and the
respondents are directed to consider the explanation/representation,
dated 26.07.2021 submitted by the petitioners and pass appropriate
orders in accordance with law, within a period of three (3) weeks from
the date of receipt of a copy of this order.”
8. Thereafter, respondent No.2 in compliance with the orders dated
09.07.2024 passed by this Court in W.P.No.7474 of 2024 and 7553 of
2024 has issued notice No.A/HQ/TG/P3/55(A1343),
A/HQ/TG/P3/56(A1344), A/HQ/TG/P1/3(A850) dated 27.08.2024
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advising the petitioner to submit the details of licenses to whom
Ammonium Nitrate has been sold as per the representation submitted
by the petitioner and requested to inform about the status of Crime
No.420 of 2019. Aggrieved by the same, petitioner filed W.P.No.24443
of 2024 challenging the action of respondent No.2 in issuing the
impugned notice bearing Nos.A/HQ/TG/P3/55(A1343),
A/HQ/TG/P3/56(A1344), A/HQ/TG/P1/3(A850) dated 27.08.2024.
A co-ordinate bench of this Court on 03.10.2024 had passed the
following order:
“In view of the same, pending further orders, the petitioners are
directed to submit explanation before the respondents enclosing the
particulars of Crime No.420 of 2019 and the charge sheet filed therein
as reply the show cause notices issued by the respondents. On
submission of such explanation, the respondents are directed to
examine the same for grant/renewal of license to the petitioners, within
a period of one (1) week from the date of receipt of such explanation.”
9. Pursuant to the above order, the petitioner on 04.10.2024 had
submitted a detailed representation to the respondent No.2 and
requested to renew the licenses Nos.A/HQ/TG/P3/55(A1343),
A/HQ/TG/P3/56(A1344), A/HQ/TG/P1/3(A850) and to update the
status of licenses Nos.A/HQ/TG/P3/55(A1343),
A/HQ/TG/P3/56(A1344), A/HQ/TG/P1/3(A850) granted by PESO to
Active Status. Thereafter, respondent No.2 on 17.10.2024 has issued
impugned order, wherein it is mentioned that in view of registration of
Crime No.420 of 2019 under P.S.RGI Airport for which investigation is
in process and judgment of the Hon’ble Court has not been delivered
till date, revocation of suspension cannot be considered and that
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necessary action can be taken after the outcome of the judgment in
Crime No.420 of 2019 and as per the directions of Hon’ble Court in
C.C.No.3891 of 2021. On 11.11.2024, the petitioner has withdrawn
the W.P.No.24443 of 2024 with a liberty to challenge the impugned
order dated 17.10.2024 issued by respondent No.2, as the same has
been passed by respondent No.2 during the pendency of
W.P.No.24443 of 2024 and in view of the fresh proceedings dated
17.10.2024, the petitioner filed the present writ petition.
10. The petitioners submits that respondent No.2 cannot deny the
renewal of explosive licenses due to pendency of C.C.No.3891 of 2021
inspite of the fact that this Court has set-aside the said suspension
orders on 10.02.2021 and further submits that petitioners have no
connection with the alleged transportation of 10 tons of the
ammonium nitrate which is a subject matter of C.C.No.4076 of 2021
arising out of Crime No.420 of 2019. As per the charge sheet in
C.C.No.3891 of 2021 (Crime No.420 of 2019), 10 tons of ammonium
nitrate seized on 26.08.2019 does not belong to the petitioner i.e.,
M/s.Raja Shree Chem Tech or M/s Rajashree Enterprises instead, it
belongs to one M/s Raja Rajeshwari Chemicals and Allied, owned by
Mr. Ravindra Tatipalli, which is located 8 kilometers away from the
petitioner’s factory at 1-5-12, Sruthi Nagar, Yadadri, Bhongir,
Telangana (GST No.36AZZ PT344 7Q1ZZ). It is further submitted that
respondent No.2 cannot deny the renewal of explosive licenses due to
pendency of C.C.No.3891 of 2021 as it is in contravention to Rule 118
9
of the Explosives Act, 2008. It is further submitted that as per Rule
118 (1) (b), the license will be cancelled only if the person is convicted
or sentenced in any criminal offence. It is further submitted that a
third party affidavit was also filed by the said M/s Raja Rajeshwari
Chemicals and Allied stating that he is not uncle or relative of the
petitioner and he is not connected with the business of the petitioners
as he had a separate entity with GSTIN No.36AZZ PT344 7Q1ZZ and
his warehouse is located at 8 kilometers away from the petitioners
factory. It is submitted that Petitioner No.3 is Accused No.1 in
C.C.No.3891 of 2021 and has nothing to do with the alleged crime in
C.C.No.3891 of 2021 and the petitioner No.3 has not been convicted
in the said crime and the respondent No.2 keeping in view of the
registration of the crime in C.C.No.3891 of 2021 against the petitioner
No.3 is not revoking the suspension of license. The petitioner further
submits that respondent No.2 has revoked the licenses of similarly
placed entities/individuals who have pending criminal cases and one
such entity being M/s Eswar Enterprises whose license was renewed
pending F.I.R.No.621/G1/2021 dated 26.04.2021. As such the
conduct of respondent No.2 is discriminative, arbitrary and in
violation of Article 14 of the Constitution of India. The petitioners
further submit that as per Rule 112 (5) of the Explosive Rules, 2008
there is a deeming provision, as such the Licenses are deemed to be in
force. The petitioner further submits that the shell life of ammonium
nitrate is between six months to one year and the petitioners are not
in business for the last five years, though they possess proper
10
infrastructure to run its business and have sustained huge losses on
account of suspension of Licenses and Seizure of stock and Godown.
It is further submitted that the Staff, labour and all stake holders and
are on the verge of bankruptcy, as such the licenses are to be renewed
by the respondents at the earliest.
11. The respondent No.2 vide proceedings dated 17.10.2024
informed the petitioners referring to letter dated 22.03.2021 that
necessary action can be taken after out come of the judgment in
Crime No.420 of 2019 and as per the directions of the Court in
C.C.No.3891 of 2021. Questioning the proceedings dated 17.10.2024,
the present writ petition has been filed.
12. The respondent No.3/Deputy Controller of Explosives has filed
counter and would submit that the licenses granted to the petitioners
was granted under Ammonium Nitrate Rules, 2012 and does not
attract the provision of Rule 118 of Explosives Rules, 2008. It is
submitted that the Deputy Commissioner of Police, Shamshabad
Zone, Cybderabad vide letter dated 28.08.2019 and 09.09.2019
informed the office regarding registration of case against petitioner
No.3, proprietor of M/s. Rajashree Enterprises in RGI Airport P.S for
illegal sale of Ammonium Nitrate and further the Deputy
Commissioner of Police, Cyberabad visited the office on 31.08.2019
and informed that the consignment of Ammonium Nitrate (quantity 10
tons) was being transported on 26.08.2019 from M/s. Rajashree
Enterprises/Rajashree Chemtech firms in Bhongir to FSF Chemicals
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in Madanapalle, Andhra Pradesh showing as consignment of Sodium
Nitrate. Based on the said facts, further actions were taken as per
provisions of Ammonium Nitrate Rules, 2012 and the licenses were
suspended vide suspension orders dated 15.10.2019 for violation and
contravention of provisions of Ammonium Nitrate Rules, 2012 under
which the subject licenses were granted. Further, The Deputy
Commissioner of Police, Shamshabad Zone, Cyberabad vide his letter
dated 28.06.2019 and 19.09.2019 informed regarding the registration
of crime against petitioner No.3, proprietor of M/s. Rajashree
Enterprises in RGI Airport P.S for illegal sale of Ammonium Nitrate, as
such an explanation was called from M/s Rajashree Enterprises vide
show cause notice dated 13.09.2019. The petitioner No.1 has replied
to the show cause notice on 03.10.2019 denying that the said
consignment belong to him and that the reply to the show cause
notice was not found satisfactory since no documents/online records
in Form R-6, R-7, R-11 (a) and R-11 (b) of transaction of purchase and
sale of Ammonium Nitrate were submitted to prove the genuineness of
the sale and receipt of Ammonium Nitrate. It is further submitted
that as per Ammonium Nitrate Rules, 2012 having more than 45%
Ammonium Nitrate by weight has been brought under licensing for
regulating the manufacturing, conversion, import, export, bagging,
transport and possession for sale or use of Ammonium Nitrate. It is
further submitted that Crime No.420 of 2019 has been registered
against the subject firm and no information has been received from
the Police Authorities regarding disposal of the case. It is further
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submitted that pilferage of Ammonium Nitrate, being an explosive, is
serious in nature and endanger the security of Public and Nation. It
is further submitted that Deputy Commissioner of Police, Cyberabad
vide letter dated 28.08.2024 has communicated that one Akkanpally
Raj Kumar (petitioner No.3) was arrested on 28.08.2019 and sent to
judicial remand and charged on 31.08.2021 and obtained
C.C.No.3891 of 2021, and the case is pending trial. It is further
submitted that the Chief Controller of Explosives, Nagpur issued letter
dated 22.03.2021 to petitioner No.1 instructing not to purchase and
sell ammonium nitrate other than the return of stock to the supplier
i.e., M/s Smartchem Technologies Limited along with request to the
Commissioner of Police, Cyberabad to dispose off the stock of
ammonium nitrate (10 MT) seized by him in Crime No.420 of 2019 of
RGI Airport P.S. from the vehicle presently stored in the magazine of
M/s Patel Mining Services in the interest of Public safety. It is further
submitted that the status of the license as active in the PESO portal
can only be updated after the revocation of the suspension as
C.C.No.3891 of 2021 is pending trial. It is further submitted that to
the Show cause notice dated 27.07.2021 issued by the Chief
Controller of Explosives, as per the records, the petitioner had not
submitted any reply. It is further submitted that the subject licenses
were suspended as per the provision of the Rule 42 of the Ammonium
Nitrate Rules, 2012 in exercise of the powers conferred under Section
6 (E) of the Explosives Act, 1884 for contravention of the Rules and
Condition of the subject license. It is further submitted that as
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ammonium nitrate is an explosive as defined under Rule 2 (b) of
Ammonium Nitrate Rules, 2012, pilferage of Ammonium Nitrate is of
serious nature as the same can be used in combination to produce a
practical effect by explosion endangering public life/national security
and also referred to the explosion occurred in Beirut in the year 2020
as an example which caused huge loss to human life and property and
eventually prayed to dismiss the writ petition.
13. The petitioners have filed reply reiterating the submissions
made in the writ petition and would submit that the petitioners prior
to the expiry of the licenses has made an application for renewal of the
licenses on 04.03.2024 by paying requisite fees, therefore, the licenses
of the petitioners are deemed to be renewed and in force as on this
date, and despite the same, the respondents have not uploaded the
status of the petitioners as “Active” on PESO portal and the
respondents have neither replied nor rejected the renewal applications
dated 04.03.2024. Further, as per Section 6 E (6) of the Explosives
Act, 1884 read with Rule-118 of the Explosive Rules, 2008, if the
court convicts the holder of a license of any offence under this Court
or the rules made thereunder, may suspend or revoke a license and if
the conviction is set-aside on appeal or otherwise, the suspension or
revocation shall become void and in the present case, the petitioner
No.3 was not convicted in the aforesaid crime, therefore the
contentions of the respondents that the revocation of suspension of
license can be considered only after the outcome of C.C.No.3891 of
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2021 against the petitioner No.3 is unsustainable. It is further
submitted that the petitioners have supplied the ammonium nitrate to
the license holders who generally uses for agricultural purposes and
the police have only seized 10 tons of ammonium nitrate that does not
belong to the petitioners but belongs to Raja Rajeshwari Chemicals &
Allied, Bhongir and in fact if ammonium nitrate is mixed with other
substances to form AN-based explosives, slurry explosives etc., causes
imminent danger to the public and in the present case police had
seized only ammonium nitrate and not an AN-based explosive, which
causes imminent danger to the public, as such the petitioners have
not violated the provisions of Section 6E (6) of the Explosives Act,
1884 read with Rule-118 of the Explosive Rules, 2008 and Rule 42 of
Ammonium Nitrate Rules, 2012 and the petitioner as on date is not
convicted.
SUBMISSIONS OF PETITIONERS:
14. Sri B. Chandrasen Reddy, learned senior counsel appearing for
petitioners would submit that the respondent No.4 has granted three
licenses to possess and manufacture Ammonium Nitrate to petitioner
Nos.1 and 2 initially valid till 31.03.2019 and were extended till
31.03.2024. A charge sheet dated 31.08.2021 was filed in
C.C.No.3891 of 2021 in F.I.R.No.420 of 2019 for the offences under
Sections 419, 420, 468, 473 of IPC and Section 9 (B) read with 5 of
Explosive Act, 1884 and 6 (6), 9 and 22 of Ammonium Nitrate Rules,
2012. The respondent No.2 has issued 1st show cause notice on
13.09.2019 calling upon the petitioner why the subject license should
15
not be suspended. Petitioner replied to the said show cause notice on
03.10.2019 and on 15.10.2019, the license of the petitioners was
suspended as an interim measure by respondent No.2. The said
suspension was challenged by petitioner by way of filing
W.P.No.23355 of 2019 and 23356 of 2019 and this Court by vide
common order dated 10.02.2021 was pleased to set-aside the
suspension order dated 15.10.2019 and remanded back to respondent
No.2 directing to consider the issue afresh taking into account the
explanation dated 03.10.2019. Thereafter, the respondent No.3 on
02.07.2021 issued 2nd show cause notice alleging that there is a
shortfall of 3392.2 MT of Ammonium Nitrate and why the license of
the petitioners should not be revoked. The petitioner has replied to
the said show cause notice on 26.07.2021. The petitioner filed
W.P.No.7474 of 2024 and 7553 of 2024 challenging the action of the
respondent No.2 in not complying the orders dated 10.02.2021 of this
Court and updating the status of the petitioner as ACTIVE in PESO
website and this Court vide common order dated 09.07.2024 disposed
of the said writ petitions by setting aside the show cause notices dated
02.07.2021 and directed respondents to pass appropriate order
considering the representation dated 26.07.2021. The respondent
No.2 on 27.08.2024 has issued notice directing the petitioners to
submit details of sale and purchase of ammonium nitrate as there is a
difference of 3392.2 MT of Ammonium Nitrate and also sought the
status of Cr.No.420 of 2019. This Court in W.P.No.24443 of 2024 by
order dated 03.10.2024 directed the petitioners to submit an
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explanation enclosing particulars of Cr.No.420 of 2019 and the charge
sheet and further directed the respondents to consider the same. On
04.10.2024 the petitioner submitted detailed explanation and would
submit that as per findings in C.C.No.3891 of 2021 arising out of
Cr.No.420 of 2019 the 10 tons of ammonium nitrate seized on
26.08.2019 does not belong to the petitioner i.e., M/s. Raja Shree
Chem Tech or M/s Rajashree Enterprises and it belongs to a separate
entity i.e., M/s Raja Rajeshwari Chemicals & Allied, a proprietary
concern owned by Mr. Ravindra Tatipalli, which is 8 kilometers away
from the petitioner factory. The respondent No.2 on 17.10.2024
issued speaking order in compliance to the order of this Court dated
03.10.2024 wherein it was mentioned that in view of registration of
Crime No.420 of 2019 under P.S.RGI Airport for which investigation is
in process and judgment by the Court has not been delivered till date,
revocation of suspension cannot be considered and necessary action
would be taken against the petitioner after outcome of the judgment in
Crime No.420 of 2019 and as per the directions of Hon’ble Court in
C.C.No.3891 of 2021. Learned senior counsel would further submit
that Third party affidavit has been filed by Mr. Ravindra Tatipalli on
18.10.2024 of M/s. Raja Rajeshwari Chemicals and Alied stating that
it is a separate entity. Thereafter, on 11.11.2024 W.P.No.24443 of
2024 was withdrawn as impugned proceedings dated 17.10.2024 was
passed with a liberty to challenge the same by virtue of a fresh writ
petition. Learned senior counsel further submits that suspension was
revoked in a case of M/s. Eswar Enterprises despite crime No.167 of
17
2021 pending for far more serious offence of high explosive
composition of Penta Erythritol Nitrate (PETN) seized as per charge
sheet. Learned senior counsel further submits that as per Section 6 E
(6) of the Explosives Act, 1884 read with Rule-118 of the Explosive
Rules, 2008, if the Court convicts the holder of a license of any offence
under this Court or the rules made there under may suspend or
revoke a license and if the conviction is set aside on appeal or
otherwise, the suspension or revocation shall become void and in the
present case, the petitioner No.3 was not convicted as such the
contention of the respondents that the revocation of suspension of
license can be considered only after the outcome of C.C.No.3891 of
2021 against the petitioner No.3 is not sustainable. In support of his
case, learned senior counsel for the petitioners relied on a decision of
Hon’ble Supreme Court in MOHINDER SINGH GILL V. CHIEF
ELECTION COMMISSIONER 1. Learned senior counsel further
submits that ammonium nitrate is used for agriculture,
pharmaceuticals and to make it an explosive it requires catalyst and
the petitioner requires an active access to PESO for doing business
and the petitioner is ready to comply with any of the conditions that
are imposed and subject to result of the criminal case. Learned senior
counsel draws attention of this Court to Rule 118 of the Explosive
Rules, 2008 which is extracted for reference:
“Suspension and revocation or cancellation of licence: (1)
Every licence granted under these rules shall—
(I) stand cancelled, if—
1
(1978) 1 SCC 405
18
(a) the licensee has ceased to have any right for the lawful
possession over the licensed premises;
(b) the licensee is convicted and sentenced under any criminal
offences or ordered to execute under Chapter VIII of the Code of
Criminal Procedure, 1973 (2 of 1974), a bond for keeping peace for
good behavior.
(II)xxx
(III) be liable to be suspended or cancelled by an order of the
licensing authority for any contravention of the Act or these rules or
of any condition contained in such licence, or by order of the Central
Government, if it is satisfied that there are sufficient grounds for
doing so:
Provided that before suspending or cancelling a licence under
this rule, the holder of the license shall be given an opportunity of
being heard.”
Learned senior counsel would further draw attention to Section
6 (E) (3) and (6) of the Explosive Act, 1884, which is extracted for
reference:
“6E. Variation, suspension and revocation of licences:—
(1)xxx
(2)xxx
(3) The licensing authority may, by order in writing, suspend a
licence for such period as it thinks fit or revoke a license:—
(a) if the licensing authority is satisfied that the holder of the
licence is prohibited by this Act or by any other law for the time being
in force to manufacture, possess, sell, transport, import or export any
explosive, or is of unsound mind, or is for any reason unfit for a
licence under this Act;
(b) if the licensing authority deems it necessary for the
security of the public peace or for public safety to suspend or revoke
the licence; or
( c ) if the licence was obtained by the suppression of material
information or on the basis of wrong information provided by the
holder of the licence or any other person on his behalf at the time of
applying for the licence; or
(d) if any of the conditions of the licence has been
contravened; or
19
(e) if the holder of the licence has failed to comply with a
notice under sub-section (1) requiring him to deliver-up the licence.
(6) A court convicting the holder of a licence of any offence
under this Act or the rules made thereunder may also suspend or
revoke a licence:
Provided that if the conviction is set-aside on appeal or
otherwise, the suspension or revocation shall become void.”
15. Learned senior counsel further draws attention of this Court to
Rule 36 (5) of Ammonium Nitrate Rules, 2012, which is extracted for
reference:
“36. Renewal of licence:
xxx
(5) If the application for renewal reaches the renewing or
licensing authority on or before the date of expiry, the licence shall be
deemed to be in force until such date as the licensing authority
renews the licence or until an intimation that the renewal of the
licence is refused has been communicated to the applicant and if no
application is received till the date of validity of the licence, the
licence shall stand expired.”
16. Learned senior counsel for the petitioners would submit that the
petitioners had made an application for renewal of the licence to
possess and for sale Ammonium Nitrate on 04.03.2024 for the period
from 01.04.2024 to 31.03.2029 under the Ammonium Nitrate Rules,
2012 and paid requisite fees, which means that the licence of the
petitioner was deemed to be in force. As such the communication of
the respondent No.2 dated 17.10.2024 that the necessary action
would be taken as per directions of the Hon’ble Court in C.C.No.3891
of 2021 is not sustainable since the matter is pending trial and the
petitioner has not been convicted as on date.
20
SUBMISSIONS OF RESPONDENTS:
17. Per contra learned standing counsel appearing for the
respondents would submit that the Deputy Commissioner of Police on
09.09.2019 addressed a letter to the Deputy Chief Controller,
Petroleum stating that the petitioner No.3/A-1 with 4 other accused
persons were involved in illegal transportation of Explosive material.
That petitioner No.3/A-1 used to supply Ammonium Nitrate to his
previous customers and created a firm in the name of Rajarajeshwari
Chemicals and allied, in the name of Ravinder who is his uncle, and
obtained GST licence for the said firm. That A-1 was sending sodium
nitrate requisition from Rajshree Chem Tech to Rajarajeshwari
chemicals later creating way bills and invoices in the name of his
customers who intend to take ammonium nitrate by mentioning as
transporting sodium nitrate but physically sending ammonium nitrate
to customers in the name of sodium nitrate resorting to cheating. The
licence bearing No.A/HQ/TG/P3/55(A1343) was granted to M/s
Rajashree Enterprises, Prop. Sri A. Raj Kumar and licence
Nos.A/HQ/TG/P3/56(A1344) and A/HQ/TG/P1/3(A850) was granted
to proprietor and Occupier Sri A. Raj Kumar, M/s. Rajashree Chem-
Tech under Ammonium Nitrate Rules, 2012 and the subject licences
were suspended. Learned standing counsel further submits that the
Deputy Commissioner of Police, Shamshabad Zone, Cyberabad vide
letters dated 28.08.2019 and 09.09.2019 informed the respondents
regarding registration of case against Sri A. Raj Kumar, Proprietor of
M/s. Rajashree Enterprises in RGI Airport P.S. for illegal sale of
21
Ammonium Nitrate. The consignment of Ammonium Nitrate (quantity
10 tons) was being transported on 26.08.2019 showing the
consignment as Sodium Nitrate. On receipt of the report from the
Deputy Commissioner of Police, Shamshabad Zone, Cyberabad an
explanation was called from the petitioner vide show cause notice
dated 13.09.2019 to which the petitioner M/s. Rajshree Enterprises
had submitted reply to show cause notice dated 03.10.2019.
However, the reply to show cause notice was not found satisfactory
since no documents/online records in Form R-6, R-7, R-11 (a) and R-
11 (b) of transaction of purchase and sale of Ammonium Nitrate were
submitted to prove his genuineness regarding sale and receipt of
Ammonium Nitrate. Further, no online documents in Form R-11 (b) of
AN Rules, 2012 pertaining to pass issued by the consignor for
transport of consignment of Ammonium Nitrate to consignee has been
generated and submitted to the respondent’s office. Further, the Chief
Controller of Explosives, Nagpur issued letter dated 22.03.2021 to
petitioner instructing him to purchase and sell ammonium nitrate and
ordered return of stock to the supplier i.e., M/s Smartchem
Technologies Limited along with request to the Commissioner of
Police, Cyberabad to dispose off the stock of ammonium nitrate (10
MT) seized by him in Crime No.420 of 2019. Learned standing
counsel would further submit that the status of the license as active
in PESO portal can only be updated after the revocation of the
suspension as C.C.No.3891 of 2021 which is pending trial in the
Court of law as informed vide Deputy Commissioner of Police letter
22
cited above. It is further submitted that the show cause notice dated
27.07.2021 has been issued by the Chief Controller of Explosives as
per records, to which petitioner has not submitted any reply and in
compliance to the Hon’ble High Court direction in W.P.No.24443 of
2024, a representation was received from the petitioner by post on
09.10.2024, and a speaking order dated 17.10.2024 was issued to the
petitioner and the subject licenses were suspended as per the
provision of the Rule 42 of Ammonium Nitrate Rules, 2012 in exercise
of the powers conferred under Section 6 E(3) of Explosives Act, 1884
for contravention of the Rules and Condition of the subject license. In
view of the serious nature of the case and violation of Rule 4, 13, 14,
20 (3) and 27 (2) of Ammonium Nitrate Rules, 2012 and Conditions 10
& 11 of the license in Form P-3 of the said rule, the suspension of the
license pertaining to possession for sale of Ammonium Nitrate was
necessary. Learned standing counsel would further refer to the
notification No.1749 dated 15.12.2008 issued by Ministry of Home
Affairs wherein the Central Government has specified “Ammonium
Nitrate or a Combination thereof” as a “special category explosive
substance”. Learned standing counsel further submits that as
Ammonium Nitrate is an explosive as defined under Rule 2 (b) of
Ammonium Nitrate Rules, 2012, pilferage of Ammonium Nitrate is of
serious nature as the same can be used in combination to produce a
practical effect by explosion endangering public life/national security
and the explosion occurred in Beirut in the year 2020 is an example
which caused huge loss to human life and property. Learned standing
23
counsel further submits that as regards to Eswar Enterprises Case,
violations or contravention of rules are different in the case of M/s.
Eswar Enterprises and M/s. Rajashree Enterprises. Since the
petitioner No.3 is shown as A-1, the respondents are awaiting for the
outcome of the result in pending case before the learned trial Court.
Learned standing counsel would further submit that the petitioner is
not generating records through online system provided by this
Organization to track the sale/receipt of Ammonium Nitrate in order
to prove the genuineness of the transaction of the sale/receipt of
transaction. Moreover, the allegations made in the F.I.R are serious in
nature as the Police Authorities have informed that petitioner is
selling Ammonium Nitrate in the name of Sodium Nitrate and the case
in C.C.No.3891 of 2021 is pending in the Hon’ble Court. It is further
submitted that the licenses were issued in Form-3 with statutory
warning which reads as under:
“Statutory Warning:
Mis-use of ammonium nitrate shall constitute serious criminal
offences under the law.”
ANALYSIS & CONCLUSIONS:
18. In the counter filed by the respondents, as per the
communication of the Deputy Chief Controller of
Explosives/respondent No.3 dated 26.08.2024 in compliance to the
Hon’ble Court Order in W.P.Nos.7474 of 2024 and 7553 of 2024 dated
09.07.2024, it is submitted that petitioner has violated the
ammonium nitrate rule 4, 13, 20 (3), 27 of Ammonium Nitrate Rules,
2012 which was communicated vide show cause notice for which the
24petitioner has submitted explanation regarding the violations vide
reply dated 26.07.2021 and has admitted that in the communication
there was a short fall of stock of 3392.20 MT of Ammonium Nitrate
continuing from the date of grant of license and that in future they
will not commit such mistake and requested to condone the mistake
that time. It is noted that the respondent No.3 in the said letter has
highlighted that the petitioners have admitted that there is a
difference in online and stock return and were directed to submit a
detailed documentary evidence regarding sale and purchase of
Ammonium Nitrate in the form of bills for justification and also
requested to inform the office regarding the status of Crime No.420 of
2019. The respondents have suspended the licenses as per provisions
of Section 6 (E) of Explosives Act, 1884 and Rule 42 of Ammonium
Nitrate Rules, 2012 for contravention of the rules and conditions of
the subject licenses. The Assistant Commissioner of Police,
Shamshabad, Cyberabad in the charge sheet dated 31.08.2021 filed
before the XIV Additional Metropolitan Magistrate, Cyberabad at
Rajendranagar, Rangareddy District, recorded that the petitioner
No.3/A-1 and A-2 one T. Ravinder on thorough interrogation have
confessed to have committed the offence, admitted their guilt and
prayed to punish the accused under Sections 419, 420, 468, 473 of
IPC and Sections 9 (B) read with 5 of Explosive Act, 1884 and Section
6 (6), 9 and 22 of Ammonium Nitrate Rules, 2012. The Assistant
Commissioner of Police, Shamshabad, Cyberabad had prima-facie
found that A-1 and A-2 have found to have committed the offences.
25
Further, on a perusal of the communication of the Joint Chief
Controller of Explosives (HOD) to the petitioners vide letter dated
22.03.2021, it was informed to the petitioners that the licenses were
suspended on 16.10.2019 as an interim measure. It is further
observed that the petitioner has made a representation dated
04.10.2024 as per the orders passed by this Court in W.P.No.24443 of
2024 dated 03.10.2024 wherein it is submitted that the petitioner has
no connection with the alleged transportation of 10 tons of ammonium
nitrate which is a subject matter of C.C.No.4076 of 2021 in Crime
No.420 of 2019 and that the petitioner on 26.07.2021 has given a
detailed representation stating that there is no shortfall of ammonium
nitrate however, in the said communication it is stated that the
shortfall of 3392.20 of MT of Ammonium Nitrate stock is continuing
from the date of granting license and any excess fee is required would
be paid immediately and requested that in future they would not
commit such misstate and requested for its consideration.
19. On a perusal of the order dated 15.10.2019, issued by the
Deputy Chief Controller of Explosives/respondent No.2 in exercise of
powers conferred under Section 6 E (3) (d) of the Explosive Act, 1884
read with Rule 42 (5) (i) of the Ammonium Nitrate Rules, 2012 license
was granted in Form P-3 under Ammonium Nitrate Rules 2012 to
petitioner for storage of Ammonium Nitrate is suspended as an
interim measure with immediate effect till further orders and the
26
violations were also recorded in the said order and were
communicated to the petitioner on 15.10.2019.
20. Further, referring to the letter of the Deputy Commissioner of
Police, dated 09.09.2019 in RGI Airport P.S and seizure of
consignment of Ammonium Nitrate and non-satisfactory compliance
report, the following violations of ammonium nitrate are extracted for
reference:
“1. Sale of Ammonium Nitrate to firms without possession of
license and receipt of indent in Form R10, in violation of Rule 4 and
Condition 27 (2) of Ammonium Nitrate Rules, 2012.
2. Illegal sale of Ammonium Nitrate in the name of other
chemicals viz. Sodium Nitrate through the firm M/s. Rajarajeshwari
Chemicals and allied, who do not possess licence under Ammonium
Nitrate Rules, 2012 in violation of Rules 4 and 13 of Ammonium
Nitrate Rules, 2012.
3. Sale of Ammonium Nitrate without giving prior intimation
in Form R.11 (a) and Ammonium Nitrate Rules, 2012 to respective
District Superintendent of Police of the place of dispatch and place of
destination before supply in violation of Rule 131 of Ammonium
Nitrate Rules, 2012.
4. Illegal Sale of Ammonium Nitrate by passing the online
system in violation of Rule 14, Condition 10, 11 of licence in Form P3
of Ammonium Nitrate Rules, 2012. The subject license was granted
to you with statutory warning stating any misuse of Ammonium
Nitrate shall constitute serious criminal offence under the law.”
21. The petitioner was further directed to declare the stock of
ammonium nitrate in their possession and submit the below
mentioned online records of purchase and sale of ammonium nitrate
under the subject licenses, vide show cause notice dated 13.09.2019.
The information sought is extracted for reference:
27
“Form R-6 (Record of Ammonium Nitrate transported by
vehicle)
Form R-7 (Account of sale of Ammonium Nitrate)
Form R-9 (Monthly returns of Ammonium Nitrate)
Form R-10 (Indent of Ammonium Nitrate)
Form R-11(b) (Pass issued for transport of Ammonium Nitrate)
Form R-11(a) Form of intimation to be given to the District
Superintendent of Police before dispatch of consignment of
Ammonium Nitrate.”
22. Further, by letter dated 09.09.2019 of Deputy Commissioner of
Police, Shamshabad Zone, Cyberabad requested the respondent No.2
for cancellation of licenses and for necessary action under relevant
rules against illegal transportation of Ammonium Nitrate which as
submitted is an explosive substance. On a perusal of the said
communication, it is clear that petitioner No.3 who is A-1 has nexus
with other four accused persons who were involved in illegal
transportation of explosive material. The relevant paragraph is
extracted for reference:
“A1: Akkinapally Rajkumar and along with 4 other accused
persons were involved in illegal Transportation of Explosive material.
They are A2: Thatipalli Ravinder S/o late Venkataiah, aged 62 yrs, occ:
employee of A1 company, R/I H.No.3-11-273/, near Brahmamgari
Temple, L.B.nagar, Bhuvanagiri Town & Dist, A-3: Saleem C/o FSF
traders, Madanapally, Chittoor, AP State, A-4: Venkatesh @ Venkat, A-
5: Shaik Habeeb Basha, S/o Shaik Kahadar Sab, age 38 yrs, Occ:
Driver, R/o Dadamvaripalli (V), Mudivedu (M), Kurabalakota, Chotoor
(D) of Andhra Pradesh State. A-1, A-2 and A-5 were arrested and send
to judicial remand on 28.08.2019. They are running company at Muthi
Reddy Gudem village, Bhongiri on the name of Rajashree Enterprises
and Rajashree Chem Tech they are doing illegal transportation of
Explosive material to other companies.”
28
23. It is pertinent to note that the respondent No.3 on behalf of
respondent No.2 vide proceedings dated 15.10.2019 suspended the
licenses of the petitioners as an interim measure, the same was
confirmed by the respondent No.2 vide impugned proceedings dated
17.10.2024 stating that further action in the subject matter would be
taken as per the directions of the Hon’ble Court in C.C.No.3891 of
2021. The Hon’ble Supreme Court in Santosh De V. Archana Guha 2
held that interference in criminal proceedings is called for only in case
of grave illegality. The relevant paragraph is extracted for reference:
“15. The facts of this case impel us to say how easy it has
become today to delay the trial of criminal cases. An accused so
minded can stall the proceedings for decades together, if he has the
means to do so. Any and every single interlocutory is challenged in
the superior courts and the superior courts, we are pained to say, are
falling prey to their stratagems. We expect the superior courts to
resist all such attempts. Unless a grave illegality is committed, the
superior courts should not interfere. They should allow the court
which is seized of the matter to go on with it. There is always an
appellate court to correct the errors. One should keep in mind the
principle behind Section 465 CrPC. Any and every irregularity or
infraction of a procedural provision cannot constitute a ground for
interference by a superior court unless such irregularity or infraction
has caused irreparable prejudice to the party and requires to be
corrected at that stage itself. Such interference by superior courts at
the interlocutory stages tends to defeat the ends of justice instead of
serving those ends. It should not be that a man with enough means
is able to keep the law at bay. That would mean the failure of the very
system.”
24. Since the case of the petitioners is pending before the trial
Court, as there are disputes with regard to the identity of the parties,
2
(1994) 2 Supreme Court Cases 420
29
classification of the seized material and also violations recorded by the
respondents, as such in the present writ petition there are serious
disputed question of facts which requires consideration on leading
meaningful evidence, which is now on record pending before the trial
Court. Since there are disputed question of facts, the same cannot be
adjudicated in summary proceedings under Article 226 of the
Constitution of India as per the judgment of Hon’ble Apex Court in
Shubhas Jain V. Rajeshwari Shivam 3 and Radha Krishan
Industries V. State of Himachal Pradesh 4.
25. Further, this Court cannot sit in an appeal over the decision
vide impugned proceedings dated 17.10.2024 issued by respondent
No.2 and the Writ Court cannot interfere with a plausible or possible
view taken by the authorities below as per the judgment of Hon’ble
Apex Court in West Bengal Central School Service Commission
and Others V. Abdul Halim and Others 5. The relevant paragraph is
extracted for reference:
“32. The sweep of power under Article 226 may be wide
enough to quash unreasonable orders. If a decision is so arbitrary
and capricious that no reasonable person could have ever arrived at
it, the same is liable to be struck down by a writ Court. If the
decision cannot rationally be supported by the materials on record,
the same may be regarded as perverse.
33. However, the power of the Court to examine the
reasonableness of an order of the authorities does not enable the
Court to look into the sufficiency of the grounds in support of a3
2021 SCC OnLine SC 562
4
(2021) 6 SCC 771
5
(2019) 18 SCC 39
30decision to examine the merits of the decision, sitting as if in appeal
over the decision. The test is not what the Court considers
reasonable or unreasonable but a decision which the Court thinks
that no reasonable person could have taken, which has led to
manifest injustice. The writ Court does not interfere, because a
decision is not perfect.”
26. Having regard to the entire narrative of events and on a perusal
of the various communications and noting the submissions of the
learned counsel on either side, this Court is of the prima-facie opinion
that petitioner No.3 appears to have been involved in the crime which
is registered in F.I.R.No.420 of 2019, wherein a charge sheet is
already filed on 31.08.2021 and the matter is pending before the trial
Court vide C.C.No.3891 of 2021 and considering the impugned
proceedings dated 17.10.2024, wherein the respondent No.2 had
informed the petitioner that necessary action would be taken after the
outcome of the judgment in C.C.No.3891 of 2021 and since there are
disputed question of facts involved in this writ petition, and further
considering the communication of the respondent No.3 to the effect
that the licenses suspended are only as an interim measure and as
the petitioners are already pursuing the case before the trial Court,
this Court in exercise of its jurisdiction under Article 226 of the
Constitution of India, declines to interfere at this stage, as any
interference may prejudice the pending proceedings before the trial
Court. As such no mandamus can be issued to the respondents at
this point of time. The petitioners may work out their remedies
before the trial Court and before the respondent authorities. It is
31
made clear that any observations made herein are only for the
purpose of disposal of this writ petition and shall not have any
bearing on the proceedings pending before the trial Court, which shall
decide the matter independently in accordance with law.
27. The writ petition is devoid of merits, fails and accordingly
dismissed.
Miscellaneous applications, if any pending, shall stand closed.
_________________________________
JUSTICE N.V.SHRAVAN KUMAR
Date:08.04.2026
VRKS
32
428
THE HONOURABLE SRI JUSTICE N.V.SHRAVAN KUMAR
WRIT PETITION No.32947 of 2024
Date:08.04.2026
VRKS