The Bombay High Court has affirmed that the cancellation of a street vendor’s license solely due to the cessation of business by the original product supplier violates the right to livelihood under the Street Vendors (Protection of Livelihood and Regulation of Street Vending) Act, 2014. The Court directed the Municipal Corporation to permit licensees to adapt their inventory, recognizing that rigid enforcement of outdated licensing conditions undermines statutory protections for informal sector workers.
Background & Facts
The Dispute
The petitioners, Rambux Vishvanath Singh and Prashant Umakant Paralkar, held Hawkers and Squatter Licences issued under Sections 313, 313(A), and 313(B) of the Mumbai Municipal Corporation Act, 1988. These licences permitted them to operate permanent stalls at designated locations in Mumbai, where they sold products of MAFCO, a company with which they held dealership agreements. The petitioners began operating these stalls in 1988 and, with the permission of the Assistant Engineer (Maintenance), G/North Ward, upgraded their temporary structures into permanent stalls. They were also registered under the Maharashtra Shops and Establishments Act, 1948.
Key Facts
- The petitioners operated their stalls continuously from 1988 until 2016-2017
- MAFCO ceased its business operations in 2016-2017, rendering the petitioners’ authorized goods unavailable
- The Mumbai Municipal Corporation (MCGM) issued notices cancelling the petitioners’ licences on the ground that MAFCO was no longer in business
- The petitioners filed representations to the Senior Inspector (Licence Department) and the Chief Minister of Maharashtra, arguing that the cancellation deprived them of their livelihood
- The petitioners were not given an opportunity to change the goods sold or to adapt their business model
- The petitioners remained in physical possession of their stalls throughout the dispute
Procedural History
- 1988: Petitioners granted Hawkers and Squatter Licences under the Mumbai Municipal Corporation Act, 1988
- 2016-2017: MAFCO ceased operations; MCGM issued notices cancelling licences
- 2017: Writ Petition No. 1021 of 2017 filed by Rambux Vishvanath Singh
- 2018: Writ Petition No. 2692 of 2018 filed by Prashant Umakant Paralkar
- Before the Court: Both petitions were heard together; parties directed to maintain status quo regarding the stalls
- 10.01.2019: MCGM issued a circular (marked X-1) and adopted a policy decision (marked X-2) permitting hawkers to change the commodities sold, subject to compliance with the Street Vendors Act, 2014 and the Maharashtra Street Vending Scheme, 2017
The Parties' Positions
For the Petitioners
The petitioners contended that their licences were not tied to MAFCO as a permanent condition but were granted for the purpose of vending goods at designated locations. They argued that the cancellation of their licences for reasons beyond their control violated their fundamental right to livelihood under Article 21 of the Constitution and the protections under the Street Vendors Act, 2014. They emphasized their long-standing, lawful operation and the absence of any violation of municipal regulations.
For the Respondents
The Municipal Corporation and the State contended that the licences were issued specifically for vending MAFCO products and that the cessation of MAFCO’s business rendered the licences invalid. They relied on the licensing framework under the Mumbai Municipal Corporation Act, 1988, and argued that the cancellation was a lawful exercise of administrative discretion.
Relief Sought
The petitioners sought quashing of the cancellation notices, restoration of their licences, and directions to the MCGM to permit them to change the goods sold from their stalls in accordance with the Street Vendors Act, 2014.
The Legal Issue
The central question was whether the Mumbai Municipal Corporation could lawfully cancel a street vendor’s licence solely because the original product supplier ceased operations, without offering the vendor an opportunity to adapt by changing the goods sold, in light of the protections under the Street Vendors (Protection of Livelihood and Regulation of Street Vending) Act, 2014.
Arguments Presented
For the Petitioner
The petitioners relied on the object and scheme of the Street Vendors Act, 2014, which aims to protect the livelihood of street vendors and ensure their inclusion in urban planning. They cited the Act’s preamble, which recognizes street vending as a legitimate economic activity and mandates that licensing authorities facilitate adaptation rather than impose rigid conditions. They argued that the cancellation was arbitrary and disproportionate, especially since the petitioners had operated lawfully for nearly three decades and had invested in permanent infrastructure. They further pointed to the MCGM’s own policy decision dated 10.01.2019, which implicitly acknowledged the need for flexibility.
For the Respondent
The respondents argued that the licences were issued under the Mumbai Municipal Corporation Act, 1988, and were conditional upon the vendor selling goods of the designated supplier. They contended that the cancellation was a legitimate exercise of administrative control over public spaces and that the petitioners had no vested right to continue vending the same goods indefinitely. They claimed that the petitioners could apply for new licences if they wished to change their trade.
The Court's Analysis
The Court examined the purpose and legislative intent behind the Street Vendors Act, 2014, and found that the Act was enacted to protect the livelihood of street vendors, not to lock them into outdated commercial arrangements. The Court noted that the Act mandates the formation of Hawkers Committees and the formulation of a Street Vending Scheme, both of which contemplate flexibility in the nature of goods sold.
"The Act is not merely a regulatory framework but a protective mechanism designed to ensure that street vendors are not rendered destitute due to external economic shifts beyond their control."
The Court observed that the MCGM itself had recognized this principle through its circular dated 10.01.2019, which explicitly permitted hawkers to change the commodities sold, provided they complied with the 2014 Act and the 2017 Scheme. The Court held that the cancellation of the licences in the face of this policy was inconsistent and arbitrary.
The Court further emphasized that the petitioners had operated lawfully for decades, had invested in permanent structures, and had registered under the Maharashtra Shops and Establishments Act. The cancellation, therefore, was not merely an administrative action but a deprivation of livelihood without due process.
The Court rejected the respondents’ argument that the licences were tied to MAFCO as a permanent condition, noting that no such condition was recorded in the original licence documents. The Court held that the Corporation’s own policy, once adopted, became binding on its officers and could not be selectively ignored.
The Verdict
The petitioners succeeded. The Court quashed and set aside the impugned cancellation notices. The Court directed the petitioners to approach the Senior Inspector (Licences) of their respective wards to intimate the proposed change in goods to be sold. The MCGM was directed to communicate approval or rejection of the change within four weeks. The Court emphasized that the authorities must act in accordance with the policy adopted on 10.01.2019 and the provisions of the Street Vendors Act, 2014. The petitioners are permitted to continue operating their stalls during this period.
What This Means For Similar Cases
Licensing Conditions Must Be Flexible Under the Street Vendors Act
- Practitioners representing street vendors must argue that any licensing condition that ties a vendor to a specific supplier or product is invalid if it contradicts the protective intent of the Street Vendors Act, 2014
- Municipal authorities cannot cancel licences for reasons outside the vendor’s control without offering a reasonable alternative
- The Act’s requirement for a Hawkers Committee means that decisions affecting livelihoods must be made through participatory mechanisms, not unilateral administrative orders
Policy Circulars Bind Municipal Authorities
- Municipal corporations cannot issue policy circulars permitting flexibility and then ignore them when convenient
- Once a policy is formally adopted and placed on record, it becomes part of the administrative framework and must be applied uniformly
- Legal challenges against arbitrary cancellations should cite the policy circular as evidence of the authority’s own recognition of the need for adaptation
Livelihood Rights Trump Technical Violations
- Courts will prioritize the right to livelihood over technical breaches of licensing conditions, especially where the vendor has operated lawfully for decades
- The burden shifts to the authority to demonstrate that the vendor’s continued operation poses a public nuisance or violates zoning laws, not merely that the product has changed
- Documentation of long-term operation, investment in infrastructure, and registration under other laws (e.g., Shops and Establishments Act) strengthens the claim for protection
