FPS Licence Cannot Be Transferred Through Partnership Or Will; Original Licensee’s Name Cannot Be Removed: Bombay High Court
The High Court held that a Fair Price Shop Licence is governed strictly by statutory policy, and cannot be transferred indirectly through partnership arrangements or testamentary instruments, especially during the lifetime of the licensee.
The Bombay High Court has held that a Fair Price Shop Licence (FPSL) cannot be transferred in the name of a partnership firm, nor can a partner be recorded as a joint licensee, and the name of the original licensee cannot be removed from the licence through such indirect mechanisms.
The Court was hearing a writ petition challenging an order of the state minister recalling an earlier decision which had permitted transfer of the FPS licence in favour of the petitioner through a partnership arrangement.
Justice Ajit B. Kadethankar observed: “Firstly, an FPSL cannot be transferred in the name of a Partnership Firm. Secondly, the name of a Partner cannot be recorded as a joint licensee. And thirdly, the name of the original licensee cannot be annihilated from the license itself.”
Advocate P. S. Dighe appeared for the petitioner, while Advocate A. A. A. Khan represented the State authorities, and Advocate S. D. Hiwrekar appeared for the original licensee.
Background
The dispute arose from a Fair Price Shop Licence originally held by the husband of Respondent No.5, which devolved upon her after his demise in accordance with government policy. The petitioner was engaged as a caretaker assisting in running the shop.
Subsequently, Respondent No.5 executed a registered will expressing her intention to transfer the FPS licence to the petitioner after her death. An application was made to transfer the licence based on the will, which was rejected by the authorities for want of any enabling policy.
Thereafter, a partnership deed was executed between the petitioner and Respondent No.5. In revision, the then Minister permitted incorporation of the petitioner’s name in the licence based on the partnership and directed that the name of the original licensee be deleted. Acting on this order, the licence came to be recorded solely in the name of the petitioner.
Respondent No.5 later challenged this arrangement in review proceedings, disputing the validity of the will and the partnership deed. The Minister, in review, recalled the earlier order and restored the licence in her name. This order was challenged by the petitioner before the High Court.
Court’s Observation
The Court first addressed the claim based on the will deed. It held that under the Indian Succession Act, a will becomes operative only after the death of the testator and remains revocable during their lifetime.
It observed that since the original licensee was alive, “no right is accrued in favor of the Petitioner on the basis of the Will,” and any claim founded on such instrument was untenable at the threshold.
The Court noted that an FPS licence is granted under the Maharashtra Scheduled Commodities (Regulation and Distribution) Order, 1975, and is subject to strict eligibility criteria and government policy.
It emphasised that such a licence is not a transferable commercial asset but a regulated permission linked to the qualifications and suitability of the licensee.
Examining the effect of the partnership deed, the Court held that while a licensee may enter into a partnership for operational purposes, such an arrangement cannot override the statutory scheme governing transfer of licences. It was observed that the State does not recognise partnership firms or partners as licensees for FPS licences, and the licence continues to remain in the name of the original licensee.
The Court critically examined the earlier ministerial order, which had permitted transfer of the licence by first incorporating the petitioner’s name and then removing the name of the original licensee.
It held that such an approach amounted to an indirect method of transfer which is impermissible in law. Applying the legal maxim, the Court observed that what cannot be done directly cannot be permitted to be done indirectly.
“The Honourable then Minister explored this innovative way to transfer the FPSL in the name of the Petitioner, taking exception to the Law and the Government policy. This way of exercising the power to revise the orders passed by the Authorities under the 1975 Order cannot be approved. This is why the maxim ‘what you cannot do directly, you even can not do it indirectly’ needs to be applied in this case”, the Bench remarked.
The Court further held that neither the will deed nor the partnership deed conferred any enforceable right upon the petitioner in respect of the FPS licence. It was observed that even if the petitioner had rendered assistance or entered into a partnership, such an arrangement does not translate into a legal entitlement to the licence under the governing statutory framework.
Conclusion
The Bombay High Court held that the earlier order permitting transfer of the FPS licence through a partnership arrangement was contrary to law and could not be sustained.
It upheld the order passed in review, restoring the licence in the name of the original licensee and dismissed the writ petition.
The Court clarified that while the petitioner may pursue independent remedies in respect of any partnership claims, no right to the FPS licence could be asserted on that basis.
Cause Title: Gulabsingh v. State of Maharashtra & Ors. (Neutral Citation: 2026:BHC-AUG:13810)
