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1956 DIGILAW 23 (KER)

M. M. Janardanan v. State

1956-02-20

VARADARAJA IYENGAR

body1956
Judgment :- 1. This is a petition under Art.226 of the Constitution by a foreign liquor wholesale licensee questioning the validity of an order passed by the 1st respondent-State directing the transfer of his shop from its original location for the purpose of accommodating the 2nd respondent, foreign liquor retail licensee. 2. The petitioner obtained sanction on 19.3.1955 for a license to vend foreign liquor in wholesale at a particular shop site in the Post Office road near the bus stand at Trichur. In due course he remitted the license fee of Rs. 3000/- and got license issued in his favour on 31.3.1955 for conducting his shop for the year 1955-56. The 2nd respondent got retail license for sale of foreign liquor for the same year 1955-56 on 30.3.1955 and started vending liquor near the private bus stand, Trichur, on 1.4.1955. It would appear that for the previous year the retail shop had been located in the very site taken by the petitioner for his wholesale shop as above mentioned and there was further no wholesale vending of foreign liquor nearby. The second respondent being afraid of severe competition from the wholesale shop of the petitioner complained by telegram dated 1.4.1955 and later by two petitions dated 4th and 25th April 1955 respectively to the First Member of the Board of Revenue, who functioned as the Excise Commissioner under the Abkari Act that the wholesale license may not be issued for that site or anywhere within its prohibited area. The Excise Commissioner refused to interfere and merely recorded his petition on 4.7.1955. The 2nd respondent thereafter took the matter before Government who by their order dated 27.9.1955 directed the shifting of the petitioner's shop to any other site in Trichur town at least half a mile away from the present site. This order of 27.9.1955 is filed as Ext. B and it is this order that is sought to be quashed herein by issue of proper writ. 3. Before proceeding to discuss the various grounds of challenge raised by the petitioner it will be useful to briefly set out the relevant rules governing the matter. This order of 27.9.1955 is filed as Ext. B and it is this order that is sought to be quashed herein by issue of proper writ. 3. Before proceeding to discuss the various grounds of challenge raised by the petitioner it will be useful to briefly set out the relevant rules governing the matter. These rules are framed by Government in exercise of the powers conferred on them by Ss.10, 24 and 25 of the Cochin Abkari Act, I of 1077 as subsequently amended and continued in force and are published at page 54 of the Statutory Rules and Notifications for 1953, Vol. 1. R.13 provided for the issue of licenses for sale of foreign liquor. There are six categories of these licenses and we are concerned with No. (1) and No. (2) under the rule. No. (1) is described as foreign liquor 1. Wholesale license which is to be issued by the Excise Commissioner for an annual fee of Rs. 3000/- subject to such instructions as may be issued by Government from time to time. Under this license the sale of liquor in any quantity less than one gallon at a time to one person is prohibited and liquor sold under this license shall not be consumed on the premises. This is the kind of license issued in favour of the petitioner under Ext. A. Then comes the foreign liquor 2 Retail (Tavern) license. The privilege of sale under this license is sold in public auction subject to the conditions of the sale notification published by Government from time to time. It is this kind of license that was issued to the 2nd respondent. R.16 provides that no premises shall be used for the sale of liquor unless they have been approved by the Excise Commissioner and R.24 says: "It shall be competent to the Excise Commissioner to permit or to order the transfer of any shop from one locality to another, within the town or taluk as the case may be, according as the shop is situated in a town or outside a town or to order any shop to be closed in the interests of public peace or morality or on grounds of expediency". R.39 forbids the issue of license for a shop which is constituted or is intended to be opened in a place where on grounds of public interest or expediency it is objectionable to permit any traffic in liquor, and finally R.40 says: "All orders passed by the Excise Commissioner under these rules shall be subjected to revision by Government". 4. It will be convenient at this stage to refer also to the provisions of the Travancore-Cochin Board of Revenue Act, IX of 1950 by virtue of which the First Member of the Board of Revenue functions as the Excise Commissioner within the meaning of the Abkari Act. By S.3 of the Act the Board of Revenue consists of one or more members as the Government may from time to time think fit to appoint and it may be added that as per order of the Government three members now constitute the Board. S.7, Cl.(1) says that the Board shall be the administrative head of the departments mentioned in the Second Schedule which among other departments includes that of Excise, Customs and Prohibition. S.9 finally provides for the powers of revision Government in the following words: "Government may at any time call for and examine the record of any case pending before, or disposed of by the Board and may pass such order in reference thereto as Government think fit". There is a proviso attached to this section viz., "that no order shall be passed under this section without notice to the party who may be affected by the order". 5. Learned Counsel for the petitioner has challenged Ext. B order directing the transfer of his wholesale shop mainly on the following grounds. Firstly under condition 18 of the license Ext. A corresponding to R.24 of the rules above noticed it was the Excise Commissioner alone who had the power to order the transfer. The order in this case is that of the Government and to that extent the order is ultra vires. Secondly under the said R.24 the transfer had to be directed if at all only in the interests of public peace or morality or on grounds of expediency. The ground which prompted the Government to grant the transfer here was the alleged adverse effects of the petitioner's shop on the expectation of the second respondent when he bid for his retail shop. The ground which prompted the Government to grant the transfer here was the alleged adverse effects of the petitioner's shop on the expectation of the second respondent when he bid for his retail shop. Extraneous considerations had therefore been imported into the matter and to that extent the order was 'mala fide'. Thirdly the proviso to S.9 of the Board of Revenue Act, IX of 1950 had not been conformed to, in any event the principles of natural justice had been violated to the extent that no opportunity had been given to the petitioner to be heard before the order in question was passed and further his application to be heard after notification of the order had also been summarily turned down, and fourthly the order was discriminatory for while there were a number of other wholesale licensees within half a mile of the second respondent's retail shop who could be shifted, the petitioner alone had been arbitrarily chosen for the purpose. These four grounds are questioned both by the State and by the 2nd respondent. I will take up these grounds seriatim. 6. Taking up the first ground as to the lack of power in the Government to intervene at all as it had done, the position of the State on this question is that the order impugned was properly passed by the Government in the exercise of its revisional jurisdiction reserved to it under R.40 and there was no question therefore of the State usurping a jurisdiction which had not been vested in it. The second respondent has taken the position that the order passed by the Government only pointed out the necessity for the transfer and it was the Excise Commissioner really that had ordered the same. In my judgment the order for transfer in this case was that of the Government and further was passed by it in the exercise of its revisional powers alone as claimed and there is no substance in the refinement suggested on behalf of the second respondent. If, as contended by learned Counsel for the petitioner, the rules in question vested the discretion in the Excise Commissioner alone and Government did not come into the picture at any stage then no doubt the Government's order would have been ineffective and that would be so even if the Excise Commissioner had acted as the authority for purpose of communicating the order. See Commissioner of Police v. Gordhandas, AIR 1952 SC 16 where the question was as to the power of Government to cancel the permission granted by the Commissioner of Police, Bombay, for constructing a cinema house and it was held that under the relevant rules the only person vested with authority to grant or refuse the license was the Commissioner of Police and the order of cancellation passed by Government was accordingly bad and further that the mere intimation by the Commissioner of the order passed by another authority, viz., the Government of Bombay would not convert the order as his own. Learned Counsel for the petitioner urged that the order appeared on its face to have been issued in the exercise of original jurisdiction and the present stand taken by Government ought not to be permitted. But looking into the substance of the matter it is clear that the Government were only exercising their over-riding authority for one of the papers referred to in the order as read, was Ext. 11 petition of the 2nd respondent to the State dated 4.8.1955 which had complained against the mere recording of the telegram and petitions which he had previously addressed to the 1st Member of the Board of Revenue. The first ground taken by the petitioner has therefore no substance. 7. Learned Counsel for the petitioner immediately suggested that if the Government were right in saying that Ext. B was a revisional order then that order was ultra vires the proviso to S.9 of the Board of Revenue Act, IX of 1950 and deserved to be quashed on that sole ground. Even otherwise it was quasi judicial order passed in violation of the maxim audi alteram partem which was one of the twin principles of natural justice and was on that ground also void. Learned Government Pleader appearing for the State contests both these positions. According to him, the provisions of the Act IX of 1950 had no relevancy. The revisional power was provided for under R.40 of the rules in the particular matter under the Abkari Act and so considered there was no provision, whether under R.24 or R.40 for any consultation with the licensee concerned and there was nothing wrong therefore in not having heard the petitioner before Ext. B order for transfer was issued. The revisional power was provided for under R.40 of the rules in the particular matter under the Abkari Act and so considered there was no provision, whether under R.24 or R.40 for any consultation with the licensee concerned and there was nothing wrong therefore in not having heard the petitioner before Ext. B order for transfer was issued. According to the learned Government Pleader it was a case of pure executive discretion which did not involve the application of the maxim referred to and in any event did not admit of a judicial review. 8. It seems to me that the contention advanced by the learned Counsel for the petitioner on this matter is correct and has to be accepted. For as above said the Board of Revenue has been constituted the administrative head of the department of Excise herein and any order of its First Member in the exercise of his jurisdiction as Excise Commissioner (under R.24 of the rules above referred to) must be deemed to be an order of the Board under S.9 even though the revisionary power is actually exercised under R.40 of the rules. We cannot therefore escape the conclusion that the proviso to S.9 which peremptorily requires a hearing of the party affected before final disposal, should be conformed to in its essentials. It cannot be denied that the petitioner is one who is affected by the order concerned. It follows therefore that Ext. B order passed without hearing the petitioner is bad and has got to be struck down. 9. There can be no doubt even otherwise that the order in question was of a quasi judicial nature particularly in view of its having been passed under the provision for revision and was not passed conformably to the principles usually governing such orders. Generally speaking a quasi judicial decision is only an administrative decision, some stage or element of which possesses judicial characteristics. Generally speaking a quasi judicial decision is only an administrative decision, some stage or element of which possesses judicial characteristics. The administrative element, which distinguishes it from a purely judicial decision, consists in the fact that, whereas it is of the essence of a judicial decision that the matter is finally disposed of by a finding upon the facts in dispute and an application of the law of the land to the facts so found, an officer making an quasi-judicial decision has, after ascertaining the facts and applying the law to them, to use his discretion whether he will or will not take administrative action and if so what action. Where they involve an interference with the person or property of the individual the courts have insisted that the substance of the maxim audi alteram partem is always to be observed and the principle had been applied even in proceedings which might appear at first sight to have been not even quasi judicial in character much less judicial. 10. In the view I have taken in this matter it is unnecessary to consider the rest of the questions raised by the petitioner and debated at the bar. I therefore allow the petition and order the issue of writ of certiorari as prayed for. The petition is thus allowed with costs, Advocate's fee Rs. 100/-.