Trade Licence Cancellation Writ in Bangladesh: Notice, Natural Justice and Remedies in 2026

Trade licence cancellation writ: the legal basis

A trade licence cancellation writ is the fastest way to reverse a city corporation or municipality that cancels, suspends or refuses to renew a business licence without lawful authority or a fair hearing. In Bangladesh almost every shop, office, restaurant, factory and trading company needs a trade licence from the local authority where it operates. Losing it can close a business overnight, freeze banking relationships and invite enforcement action. Because city corporations and municipalities are local authorities, their licensing decisions can be reviewed by the High Court Division under Article 102 of the Constitution.

This guide explains when a trade licence cancellation writ succeeds, what natural justice requires before a licence is cancelled, how to deal with refusals to renew and with cancellations requested by other agencies, and what the 2025 to 2026 reforms to licensing mean for businesses in Dhaka and elsewhere.

Summary: A city corporation or municipality may cancel a trade licence only under the law that governs it, through an officer with authority, and after a genuine opportunity to answer the allegation. Cancellations issued by the wrong person, on two or three days' notice, or with no notice at all have been declared illegal by the High Court Division. Move quickly: delay can defeat even a strong petition.

Key point: In Md Idris Sardar v Bangladesh the High Court Division struck down a municipal licence cancellation issued two days after a three-day show-cause notice, by a person who had no lawful authority to act as mayor. It held that an order made without authority is open to writ review even where an alternative remedy exists.

At a glance

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Table of Contents

Trade licence cancellation writ: the legal basis

Trade licences are issued by local government bodies: city corporations, municipalities and union parishads, constituted respectively under the Local Government (City Corporation) Act 2009 (Act No 60 of 2009), the Local Government (Paurashava) Act 2009 and the Local Government (Union Parishad) Act 2009.[11] Municipal licences of this kind are granted under the Paurashava Act and its schedules.[3] The scale is significant. In August 2026 Dhaka South City Corporation said it had issued around 246,180 trade licences across 294 business categories, and said trade licence fees and holding taxes provide a major share of its revenue.[7]

Article 102(2) allows the High Court Division, if satisfied that no other equally efficacious remedy is provided by law, to direct a person performing functions in connection with the affairs of the Republic or of a local authority to refrain from doing what the law does not permit, or to declare an act of such a person to have been done without lawful authority and of no legal effect.[1] The words "or of a local authority" place city corporations and municipalities squarely within the court's reach. For the general mechanics of filing, see our guide to the writ petition in Bangladesh.

The constitutional right at stake

Article 40 provides that, subject to any restrictions imposed by law, every citizen possessing the qualifications prescribed by law has the right to enter upon any lawful profession or occupation and to conduct any lawful trade or business.[2] A trade licence is one of those lawful restrictions. But the restriction must come from law and be applied according to law. A cancellation that has no legal basis, or that is made in breach of the procedure the law requires, interferes with a fundamental right and engages Article 102(1) as well as the court's power to review administrative action.

What the court reviews

A trade licence cancellation writ is not an appeal on whether the business deserves a licence. The court asks whether the authority had power to cancel, whether the person who signed the order lawfully held that power, whether the procedure required by statute and natural justice was followed, and whether the reasons given are lawful and supported by the record. Most successful petitions turn on the first three questions.

Cancellation without notice and natural justice

The principle that no one should be condemned unheard applies with particular force to licences, because cancellation removes an existing right on which a business has been built. Where the governing statute prescribes a procedure, that procedure must be followed. Where it is silent, the courts imply a duty to give notice of the allegation and a fair chance to answer it before the licence is taken away.

The Bera Paurashava case

In Md Idris Sardar v Bangladesh, decided on 9 August 2023, the petitioner held a licence from Bera Paurashava to run a private bazar, obtained through a tender and paid for in advance. After a change of mayor, the licence was cancelled and the security money forfeited. The High Court Division found that the show-cause notice relied on was dated 20 March 2022 and gave three days to reply, yet the licence was cancelled on 22 March 2022, after only two days. It held that this was palpably illegal and a breach of natural justice.[3]

The court went further. The municipality could not prove that its earlier notices had been served at all: there was no peon book or postal receipt, and the signature said to be the recipient's differed from his signature on the licence agreement. The court described the notices as mere paper lying with the authority, and held that the cancellation without service and without an opportunity to reply was mala fide and of no legal effect.[3]

Who signed the order

The cancellation in Idris Sardar was signed by a panel mayor who signed as mayor while the elected mayor was in office. The municipality produced nothing to show how, from when, or under what authority he had taken charge. The court held that he did not hold the office on any lawful basis, that the actions taken through him were tainted with high-handedness and arbitrariness, and that an order issued by a person without authority or jurisdiction is amenable to writ jurisdiction even though an alternative remedy exists.[3]

This point matters in 2026. Many city corporations have been run by appointed administrators rather than elected mayors; in August 2026, for example, Dhaka South City Corporation was led by Administrator Abdus Salam.[7] The appointment itself may be perfectly lawful. But the petitioner should still check whether the officer who signed a cancellation was the person the law empowers, or someone acting under a valid delegation.

Grounds that support a trade licence cancellation writ

Every case turns on its documents, but the grounds that recur in successful challenges can be grouped. A petition should identify which apply and prove each with annexures.

No notice, or notice not served

The authority must show that a show-cause notice was actually served, not merely issued. Proof of service such as a peon book entry, postal receipt or acknowledged email is the authority's burden in practice, and its absence was decisive in Idris Sardar.[3] A petitioner who first learned of the cancellation from a sealing team, a bank or a third party should say so clearly in the affidavit.

Unreasonably short time to reply

Even a served notice is defective if the time is too short to answer it, or if the decision is taken before the time expires. Cancelling before the reply period ends is a clear breach.[3]

No reasons, or reasons outside the law

A cancellation order should state the ground and the provision relied on. An order that gives no reason, or relies on a ground the governing law does not recognise, is vulnerable. So is an order based on an allegation the licensee was never asked to answer.

Disproportionate or blanket action

Cancellation is the most severe sanction a local authority can impose on a licensee. Where the problem could be cured, such as an unpaid instalment, an outdated address or a missing document, a petitioner can argue that the authority should have required the defect to be remedied before moving to cancellation. Blanket orders cancelling licences of every business in a building or market, without considering each licensee's position, are also open to challenge, because they rarely reflect an individual hearing. A trade licence cancellation writ framed around proportionality is strongest when it shows the licensee offered to cure the defect and the authority ignored that offer.

Bias, mala fides and collateral purpose

Cancellations that follow a change of local leadership, a political dispute or a private quarrel with an official deserve close scrutiny. In Idris Sardar the petitioner's case was that a newly elected mayor had pressured licensees appointed under his predecessor, and the court found the actions taken against him tainted with high-handedness, arbitrary and mala fide.[3] Evidence of motive must be concrete; bare allegations are not enough.

Refusal to renew and pending applications

Not every trade licence cancellation writ concerns a formal cancellation. Many concern a renewal that is refused or simply never decided, which has the same practical effect. Trade licences in most city corporations historically ran for one year, so renewal is the moment of greatest exposure. Dhaka South City Corporation began issuing five-year licences in September 2023, and in August 2026 announced plans for a five-year renewal facility through a single application.[8] [7]

A pending renewal is not a refusal

An authority that sits on a renewal application cannot treat the business as unlicensed without deciding it. In Md Insaf Ali Osmani v National Board of Revenue, a customs agent's licence renewal application had been pending since 2010; the licence was later suspended and renewal refused on the ground of a pending criminal case. The High Court Division found that no criminal proceeding was pending because no court had taken cognizance and final reports had cleared the petitioner, inferred mala fides from the years of inaction, and directed the licensing authority to consider the renewal positively within 30 days.[4] The case concerned a customs licence, but the reasoning applies equally to trade licences.

Late renewal and surcharges

Renewal deadlines and surcharges are set by the authority. Dhaka North City Corporation, for example, extended its 2024-25 renewal deadline without surcharge to 30 November 2024 and offered a 10 per cent rebate for online payment of all instalments.[9] A business that renews late pays more, but a late renewal does not by itself justify cancellation without notice. Pay what is due under protest if necessary, and keep the receipts.

Cancellations requested by other agencies

A trade licence can be targeted because of a problem elsewhere: a fire-safety failure, a building-code breach, an environmental complaint, a tax dispute or a banking default. In these cases the local authority often acts on a letter from another agency. A trade licence cancellation writ may then need to challenge both the request and the cancellation.

Wilful defaulters

Section 27Kha of the Bank Company Act 1991 allows Bangladesh Bank to send the list of wilful defaulters to the relevant agencies and request steps including a ban on issuing trade licences, and requires the government agency concerned to act. The same section requires a borrower to be given an opportunity to present its case before being finalised as a wilful defaulter, and gives a right of appeal to Bangladesh Bank within 30 days.[6] A business facing a licence refusal on this ground should first check whether it was properly identified and whether the appeal route was used. Our sibling guide on a writ against Bangladesh Bank explains how the central bank's decisions are reviewed.

Safety and regulatory closures

Where another regulator has lawfully ordered closure, a writ against the local authority alone will rarely help. The petition should identify the originating order, check whether that regulator followed its own statute, and seek relief against the right respondent. Where the local authority cancels the licence on its own initiative on safety grounds, it must still identify its legal power and give a hearing unless genuine urgency justifies immediate action followed by a prompt hearing.

Industrial zones under the 2026 investment law

The Invest Bangladesh Act 2026 allows the government, by gazette notification, to exempt developers, operators and enterprises in an industrial zone from all or any provisions of listed laws, including the Local Government (City Corporation) Act 2009 and the Paurashava Act, or to apply them with modifications.[11] Businesses in zones should check whether such a notification applies before assuming that local trade licence rules govern them.

Trade licence cancellation writ procedure, delay and interim relief

Writ relief is discretionary. In Msaharaf Hossain v Dhaka City Corporation, 2 SCOB [2015] HCD 70, the High Court Division restated that the court does not ordinarily assist the tardy and the indolent, and may decline relief where inordinate delay is not satisfactorily explained, because late intervention can cause confusion and new injustice.[5] A business that waits months after a cancellation before filing, while a new licensee or tenant takes its place, weakens its own case.

What to plead

The petition should set out the licence history, every renewal and payment, the show-cause notice if any, the reply, the cancellation order and the date the petitioner learned of it. It should name the local authority, the officer who signed, and any agency whose request triggered the action. If no show-cause notice was received, say so in terms.

The prayer should ask the High Court Division to declare the cancellation without lawful authority and of no legal effect, and to direct the local authority to treat the licence as subsisting. Where renewal was refused or left undecided, add a prayer directing the authority to decide the renewal according to law within a fixed time. A trade licence cancellation writ that pleads these facts in order, with annexures, allows the bench to see the defect at the first hearing.

Interim stay

The most valuable relief is often a stay of the cancellation order so that the business can keep trading while the rule is heard. Courts are more willing to grant it where the petitioner can show an established business, regular payment of fees, and a clear procedural defect on the face of the order. Offer to keep paying fees and to comply with any reasonable condition the court sets.

Internal remedies

Check whether the governing Act, the licensing schedule or the relevant rules provide an appeal or review within the authority. Where one exists and is effective, the court may expect it to be used first. Where the order was made without authority, as in Idris Sardar, the existence of an alternative remedy does not bar the writ.[3]

Digital licensing and evidence

Licensing is moving online. In May 2025 the Bangladesh Investment Development Authority signed agreements with the Dhaka and Chattogram city corporations, among others, to bring trade licence applications into a single application on its One Stop Service platform.[10] Online systems create records of submission, payment and status. Download and preserve them: they are often the best proof that an application was made and ignored, or that a licence was valid when it was cancelled.

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Common mistakes to avoid

The first mistake is ignoring a show-cause notice because it seems unfair; reply in writing, within time, and keep proof of delivery. The second is continuing to trade without challenging a cancellation, which exposes the business to fines and sealing. The third is waiting too long to file.[5] The fourth is suing only the city corporation when the real decision was taken by another agency. The fifth is arguing the merits of the business instead of the legal defect in the order.

A trade licence cancellation writ is most effective when it is filed promptly, on a complete record, against the right authority, and focused on a clear breach of power or procedure. TRW's constitutional and writ litigation practice acts for businesses against city corporations, municipalities and licensing agencies. For licensing basics, see our guide to the trade licence in Bangladesh.

Frequently asked questions

Can I file a trade licence cancellation writ against a city corporation?

Yes. Article 102 expressly covers persons performing functions in connection with the affairs of a local authority, which includes city corporations and municipalities.[1]

Can a trade licence be cancelled without notice?

Generally no. The High Court Division has struck down a licence cancellation made without proper service of a show-cause notice and before the reply period expired.[3]

How much time must I be given to reply?

Enough to answer the allegation meaningfully, and the authority must wait until the period expires. Cancelling two days into a three-day notice period was held palpably illegal.[3]

What if the person who cancelled my licence had no authority?

The order is void and can be challenged by writ even if an internal remedy exists.[3]

What can I do if my renewal application is never decided?

Seek a direction compelling the authority to decide it. The High Court Division has directed a licensing authority to consider a long-pending renewal within 30 days.[4]

Does the Constitution protect my right to trade?

Yes. Article 40 protects the right to conduct any lawful trade or business, subject to restrictions imposed by law.[2]

Can a bank default stop my trade licence?

It can if you are finalised as a wilful defaulter. Bangladesh Bank may ask agencies to ban issuing trade licences, but you must first be heard and you may appeal within 30 days.[6]

How long does a Dhaka trade licence last?

Dhaka South began issuing five-year licences in 2023 and in August 2026 announced plans for a five-year renewal facility; check the current terms of your authority.[7] [8]

Will delay affect my writ petition?

Yes. Writ relief is discretionary and the court may refuse it where inordinate delay is not satisfactorily explained.[5]

Do businesses in industrial zones need a city corporation trade licence?

Not necessarily. The Invest Bangladesh Act 2026 allows the government to exempt zone enterprises from the City Corporation Act by gazette notification.[11]