The Justice Corner

The Justice Corner 07 Jul, 2025

Restaurant License Cancelled? - Proper Guide by Top Law Firm in Dhaka

A trade license for a restaurant in Dhaka, Bangladesh, can be cancelled under several circumstances to ensure public safety, compliance with regulations, and ethical business practices. The primary reasons for the cancellation of a restaurant's trade license are :

Operating Without Proper Approval/Unauthorised Operations:

If a restaurant is operating in a residential or commercial building without the necessary approval from the Rajdhani Unnayan Kartripakkha (RAJUK) for restaurant use in the building's design. This is particularly emphasized for rooftop restaurants operating without authorization. Operating in buildings not designed for restaurant use poses significant safety risks.

Violation of Laws and Regulations: Contravention of any provisions of The Bangladesh Hotels and Restaurants Ordinance, 1982, or any rules or orders made under it. Violation of other local codes, ordinances, or state and federal laws.
Safety Concerns and Public Nuisance: Existence of unsanitary conditions, excessive noise, disturbances, or other conditions at or near the premises that create a public nuisance or injuriously affect public health, safety, or welfare. Failure to ensure proper security arrangements for the safety of customers and their property. Premises being declared a fire hazard or unsafe for business occupancy according to applicable building and fire codes.
Improper Procurement of License: Obtaining the trade license through unethical means or by providing false or incomplete information. Concealment or misrepresentation during the application process for the trade license.
Discontinuation or Suspension of Business: Wholly or partly discontinuing or suspending the restaurant business without the approval of the Controller (except for repairs, renovations, or seasonal breaks for seasonal businesses).
Failure to Meet Registration Requirements: (a). Ceasing to conform to the requirements for registration. (b).In the case of hotels, failing to meet the prescribed minimum criteria for their assigned class.
Zoning Violations: Using the premises for a restaurant business that violates the zoning ordinances or regulations of the city.
Failure to Maintain Proper Records (for Hotels): For hotels, failing to enter the names and other particulars of guests in the prescribed register format and manner.
Non-Renewal: Failure to renew the trade license within the stipulated time.
Business Misconduct: Engaging in fraudulent practices and misrepresentation in the operation of the business.
Failure to Pay Fees, Taxes, or Judgments: Not fulfilling financial obligations related to the business.

Recent Emphasis on Rooftop Restaurants (Dhaka South City Corporation Example):

As of April 28, 2025, the Dhaka South City Corporation (DSCC) has specifically announced the cancellation of trade licenses for all rooftop restaurants and establishments operating restaurants in buildings not designed for such use. This decision was made due to significant safety risks and the observation that many such businesses obtained licenses unethically.

Process of Cancellation (General):
While the specific process might vary depending on the issuing authority (e.g., City Corporation), generally, it may involve:
•    Identification of Non-Compliant Businesses: Authorities identify restaurants operating without proper authorization or violating regulations.
•    Issuance of Notice: An official notice of intent to cancel the license is usually sent to the restaurant owner, outlining the reasons for the proposed cancellation.
•    Opportunity for Explanation/Compliance: In some cases, the restaurant owner may be given a period to provide necessary documentation, rectify the issues, or cease operations. For instance, DSCC mentioned that restaurants with approvals within the building design could reinstate their licenses by providing proper documents.
•    Final Cancellation: If the response is unsatisfactory or the violations are severe, the trade license is officially cancelled.
•   Legal Action: Businesses continuing to operate with a cancelled license may face legal consequences.
It is crucial for restaurant owners in Dhaka to ensure they have the necessary approvals, comply with all relevant regulations, and prioritize safety to avoid the risk of their trade license being cancelled.

Legal recourse for a restaurant owner against cancellation of Trade License:

The potential remedies against the cancellation of a restaurant's trade license in Dhaka, Bangladesh are:

1. For Unauthorized Operations: If the cancellation was due to operating without proper approval in a building not designed for a restaurant, and if the building's design actually has approval for restaurant use, providing the relevant building approval documents from RAJUK or other relevant authorities might lead to the reinstatement of the license after verification. If the notice of cancellation specifies certain violations (e.g., safety issues, non-compliance with regulations), taking immediate steps to rectify these deficiencies and providing evidence of the same to the issuing authority might lead to a review of the cancellation decision. For instance, if the issue was unsanitary conditions, demonstrating that these have been thoroughly addressed could be a remedy.

2. Responding to the Notice and Seeking a Hearing:
Upon receiving a notice of intent to cancel the trade license, it is crucial to respond promptly to the issuing authority. Request a formal hearing to present your case, explain any misunderstandings, provide additional information, or argue against the grounds for cancellation. During the hearing, you can submit evidence, legal arguments, and commitments to rectify any issues. The authorities are expected to provide an opportunity to be heard before a final cancellation.

3.Appealing to Higher Authorities: If the initial hearing or response does not result in the revocation of the cancellation, there might be an internal appeal process within the City Corporation or the relevant licensing authority. Inquire about the specific appeal procedures, timelines, and the designated appellate authority. Prepare a formal appeal outlining the reasons why the cancellation was unjustified or how the issues have been resolved.

4. Seeking Legal Recourse (Writ Petition in the High Court): If all internal avenues for appeal are exhausted or if the cancellation is deemed to be arbitrary, without due process, or in violation of the law, the affected restaurant owner can consider filing a writ petition with the High Court Division of the Supreme Court of Bangladesh.

5. Grounds for a writ petition could include:

 Violation of natural justice: If no proper notice or opportunity for a hearing was provided.
 Action without lawful authority: If the cancellation was based on reasons not supported by the relevant laws or regulations.
 Arbitrary or biased decision: If the decision-making process was unfair or prejudiced.
 Infringement of fundamental rights: If the cancellation unjustly infringes upon the right to carry on a lawful business.

The High Court can review the decision-making process of the licensing authority and may issue directives to reinstate the license if it finds the cancellation to be unlawful.

Important Considerations:

•    Timeliness: It is crucial to act quickly upon receiving a notice of cancellation. Delays can negatively impact the chances of a successful remedy.
•    Documentation: Maintain thorough records of all relevant documents, licenses, approvals, communications with authorities, and evidence of compliance.
•    Legal Counsel: It is highly advisable to seek legal counsel from an experienced lawyer who can guide you through the specific procedures, help prepare your case, and represent you in hearings or court proceedings.
•    Specific Reasons for Cancellation: The available remedies and their likelihood of success will heavily depend on the specific reasons cited for the cancellation. Addressing the root cause of the cancellation is paramount.

Recent Context (Rooftop Restaurants in Dhaka South):