Labour LawAdvocate Tanwar

Introduction

Licensing and registration are core mechanisms through which the State regulates activities involving public interest, safety, health, security, and fair commerce. Section 6 in various legislations often plays a pivotal role in granting, approving, or rejecting licenses or registrations to individuals or entities seeking to conduct regulated business or professions. This article explores Section 6, in its typical formulation across key Indian regulatory frameworks, with a focus on the legal standards, procedures, judicial scrutiny, and the balance between individual rights and public welfare.

The Concept of Licensing and Registration

Licensing refers to the formal permission granted by a competent authority to engage in an activity that is otherwise restricted. Registration, on the other hand, involves the official recording of an entity or individual in a recognized database or system, which serves as a form of approval, record-keeping, and oversight.

Both mechanisms ensure:

  • Compliance with statutory norms.
  • Verification of eligibility and qualifications.
  • Control over public health, environment, arms, trade, transportation, etc.

Whether it is the Arms Act, 1959, the Motor Vehicles Act, 1988, the Drugs and Cosmetics Act, 1940, or the Legal Metrology Act, 2009, Section 6 commonly emerges as the operative clause for approval or rejection of applications, laying down the process and standards for granting licenses or registrations.

Structure and Interpretation of Section 6

A generic version of Section 6 may read:

“The licensing authority may, after making such inquiry as it deems necessary, and having regard to the object of the Act and the rules made thereunder, approve or reject an application for grant or renewal of license or registration.”

This phrasing appears, with modifications, in:

  • Section 6 of the Arms Act, 1959 (in context of arms license transfer and registration),
  • Section 6 of the Legal Metrology Act, 2009 (regarding licensing of manufacturers and dealers),
  • Section 6 of the Motor Transport Workers Act, 1961 (relating to registration of establishments).

ELEMENTS OF SECTION 6

1. Discretion of the Authority

Section 6 generally grants discretionary powers to a designated authority to approve or reject applications. However, such discretion is not absolute and must be exercised in accordance with:

  • The object and purpose of the Act.
  • Principles of natural justice.
  • Established administrative norms and policy guidelines.

2. Inquiry and Verification

Before granting approval, the authority is expected to conduct a due inquiry. This may include:

  • Background check of the applicant.
  • Inspection of premises (where applicable).
  • Verification of credentials or documents.
  • Consultation with other regulatory bodies.

For instance, under the Arms Rules, the licensing authority is bound to check antecedents through police verification before granting approval under Section 6.

3. Reasons for Rejection Must Be Recorded

Where an application is refused, the reasons must be recorded in writing and communicated to the applicant. Courts have repeatedly emphasized that arbitrary rejection violates Article 14 of the Constitution and may be set aside on grounds of irrationality or unreasonableness.

4. Appeal Mechanism

Most statutes provide an appellate remedy against rejection under Section 6. The applicant can challenge the decision before a higher authority or tribunal. For example:

  • Under the Arms Act, appeals may be made to the district magistrate or state government.
  • Under the Legal Metrology Act, appeals lie before the Controller of Legal Metrology.

Judicial View

Indian courts have consistently upheld that while licensing authorities have discretion, the power must be exercised fairly and objectively, and public interest must guide all decisions under Section 6.

Important Judgments

  1. A.K. Kraipak v. Union of India, AIR 1970 SC 150
    The Supreme Court held that administrative actions involving discretion must conform to natural justice, especially where rights are affected.
  2. State of Haryana v. Bhajan Lal, 1992 Supp (1) SCC 335
    Although a criminal law case, it laid down standards of mala fide and abuse of power, which apply equally when licenses are arbitrarily denied or revoked.
  3. Ram Krishna Dalmia v. S.R. Tendolkar, AIR 1958 SC 538
    The Court emphasized that equal protection under Article 14 prohibits arbitrary classification or discretion in granting privileges like licenses.
  4. Modern Dental College v. State of M.P., (2016) 7 SCC 353
    Reiterated that regulatory frameworks can impose licensing conditions in the interest of public welfare, but cannot violate the proportionality principle.

Challenges in Implementation

Despite a clear statutory framework, issues persist:

  • Delays in approval: Often applications are kept pending without decisions, violating the time-bound requirements in the rules.
  • Corruption and red-tapism: Licensing processes are sometimes influenced by bribes or political pressure.
  • Lack of transparency: Many applicants are not told why their license was rejected or delayed.
  • Unclear criteria: Vague rules give unstructured discretion to authorities, leading to inconsistency.

The Role of Technology and Reforms

To address inefficiencies in licensing under Section 6-type provisions, governments are adopting:

  • Single-window clearance systems (e.g., for industrial or environmental licenses),
  • Online licensing portals with real-time tracking,
  • Mandatory disclosure norms to ensure reasoned orders and time-bound decisions,
  • Use of Aadhaar and PAN for digital verification and reduction in paperwork.

Reforms like faceless licensing, as seen in GST and FSSAI frameworks, may soon become the norm across other sectors too.

Conclusion

Section 6, as seen in various Indian legislations, serves as a gatekeeping provision—empowering the government to control access to certain regulated activities while ensuring public safety and lawful conduct. While it provides necessary discretion to licensing authorities, the exercise of such power must align with the principles of transparency, fairness, and accountability.

As regulatory oversight increases in India’s growing economy—especially in sectors like fintech, pharma, arms, and environmental protection—the importance of fair and lawful implementation of Section 6 will only rise. Judicial scrutiny and legislative reform must work together to ensure that the power to approve or deny licensing does not become a tool of harassment, but remains an instrument of governance in public interest.

CONTRIBUTED BY : LAKSHAY NANDWANI (INTERN)