Dhirendra Nath Hazra v. Collector Of Excise — 1959 DIGILAW 155 (CAL)

JUDGMENT 1. THE facts in this case are shortly as follows: Since the year 1940, the petitioner had been working as Manager of a reputable firm of wine Merchants, viz., Messrs. International Stores and Agency, carrying on business at premises No. 8, Bhupendra Bose Avenue, Calcutta. On or about the 16th December, 1957, notice was issued by the Collector of Excise, Calcutta, inviting applications from candidates for re-settlement of a Foreign Liquor Public "off" License shop, at premises No. 15, Syed Ameer Ali Avenue, Calcutta, for the remaining period of the year 1957-58 under the Bengal Fixed-Fee System. Pursuant to this notice, the petitioner made an application for the issue of a license to him on or about 2nd January, 1958. A copy of the petitioner's application is annexed to the petition and marked with the letter' "a". Apart from the petitioner, diverse other persons, viz., Bhubaneswar Sarkar, Nemai Chandra Shaw, Narsingh Chandra Shaw the respondent No. 5 herein, Subarna Kumar Chatterji and others applied for a license in respect of the said shop. By his letter dated 17th May, 1958 the Collector of Excise, Calcutta, informed the petitioner that the vacant Foreign Liquor "off" license at premises No. 15, Syed Ameer Ali Avenue, Calcutta was settled with him, "provisionally", pending further enquiries as to his suitability for holding the license. He was directed to make the necessary deposit of security and fees and to take immediate steps to open the shop at the sanctioned site at premises No. 15, Syed Ameer Ali Avenue, Calcutta. On the same day, the Collector of Excise informed the Commissioner of Police, Calcutta that the vacant foreign liquor "off" license at No. 15, Syed Ameer Ali Avenue had been provisionally settled with Sri Dhirendra Nath Hazra, the petitioner herein. It was stated that the necessary police certificate might be issued in his favour on his applying for the same, if there was no objection from the police point of view. Pursuant to the said communication, the petitioner made the necessary deposits, but wrote to the Collector of Excise stating that he could not procure the old site at No. 15, Syed Ameer Ali Avenue, Calcutta but had acquired a very prominent site at premises No. 18/a, Syed Ameer Ali Avenue, Calcutta, which was just opposite to the previous site. On the 23rd May, 1958 the petitioner received what was described as a "parwana". On the 23rd May, 1958 the petitioner received what was described as a "parwana". It is in the following terms:- "Sri Dhirendra Nath Hazra is hereby allowed provisionally to carry on foreign liquor 'off' business at 18-A, Syed Ameer Ali Avenue, Calcutta with effect from 23rd May, 1958, pending production of Police Certificate and decision of Excise Licensing Board, Calcutta about the opening of the Foreign Liquor 'off' shop at the new site at 18-A, Syed Ameer Ali Avenue, Calcutta." This "parwana" was issued by the Collector of Excise, Calcutta. The petitioner thereupon began to carry on the shop at the said premises No. 18-A, Syed Ameer Ali Avenue, Calcutta. 2. THE said Bhubaneswar Sarkar Nemai Chandra Shaw, Narsingh Chandra Shaw and Subarna Kumar Chatterji, preferred appeals against the granting of the license in favour of the petitioner, to the Commissioner of Excise, West Bengal. The Commissioner, the respondent No. 2 herein, heard the said appeals and passed his order dated 29th September, 1958. A copy of the said order is annexed to the petition and included in annexure "a", at pages 6-7. The Commissioner stated that the Collector's order showed that Dhirendra Nath Hazra had been successfully and honestly conducting the "off" Foreign Liquor license styled "international Stores" for about 17 years as a salesman very satisfactorily. Hazra had stated that he was going to secure necessary finances from his wife, but the appellants averred that his wife was not in a position to furnish the necessary finance. The Commissioner stated that Hazra had been found acceptable to the Collector and he had per force to accept his view, but he proceeded to say as follows: "as to the other point, we are interested in seeing that money is not borrowed for running the license at Syed Ameer Ali Avenue on such forms as would give the lender a hold on its management and a share in the profits. I would request the Collector to make an enquiry and satisfy himself on this point. . . . . . . . . . . . . . . . . . . . In the circumstances, it is not possible to set aside the Collector's orders save and except if Collector's enquiry reveals that Sri Hazra has secured finances for the Ameer Ali Avenue shop on terms which the administration does not find desirable. . . . . . . . . . . . . . . . . . . . In the circumstances, it is not possible to set aside the Collector's orders save and except if Collector's enquiry reveals that Sri Hazra has secured finances for the Ameer Ali Avenue shop on terms which the administration does not find desirable. Collector's report on this point is awaited. " On or about 17th December, 1958 the Collector made a report. The petitioner states that it was in his favour, but this is denied. On or about 10th March, 1959 the petitioner duly deposited a fee for Rs. 300/- in respect of the renewal of the said license for the year 1959-60, which deposit was accepted. Thereafter, the appellants preferred an application for revision of the order dated 29th September, 1958 passed by the Commissioner, to the Government of West Bengal, under section 8 of the Bengal Excise Act, 1909, being Bengal Act V of 1909 (hereinafter referred to as the 'act' ). On the 24th of April, 1959 the Government of West Bengal passed the following order:- "government have carefully considered the revision petition filed by Sri Nemai Chandra Shaw and others in the matter of settlement of the foreign liquor shop at 15, Syed Ameer Ali Avenue, Calcutta with Sri Dhirendra Nath Hazra and have examined the records of the case. Government are pleased to revise the decision of the Commissioner of Excise, West Bengal, as contained in his order dated 29th September, 1958 and to direct that the license of the aforesaid shop be settled with Sri Narsingh Chandra Shaw. " In this order, no mention is made of the Collector's order or to the report made by the Collector pursuant to the directions of the Commissioner, 3. THE present Rule was issued on the 1st May, 1959 and called upon the respondents to show cause why the order dated 24th of April, 1959 should not be quashed by a writ in the nature of certiorari and/or why a writ in the nature of mandamus should not be issued calling upon the said respondents to recall, cancel and withdraw the said order and to forbear from giving effect to the same. It was further ordered that the operation of the order dated 24th April, 1959 be stayed till the disposal of the Rule. It was further ordered that the operation of the order dated 24th April, 1959 be stayed till the disposal of the Rule. It was also ordered that the petitioner should not carry on business in the meanwhile. The petitioner made an application for renewal of the license for the year 1959-60. On the 31st March, 1959 an order was made to the effect that the existing "parwana" might continue as there was a stay order in connection with the revision case before the Government In this application, Mr. Roy appearing on behalf of the petitioner, has attacked the order of the Government of West Bengal dated 24th April, 1959 on the ground that the order of the Commissioner dated 29th September, 1958 was not a completed order. In his said order the Commissioner asked for a report from, the Collector on a certain point relating to the finances of the petitioner and stated in his order that although he was accepting the views of the Collector as regards the suitability of Hazra, he was awaiting the report of the Collector on the point mentioned above. Mr. Roy argues that until the Commissioner completed his order, or in other words, made his order, a revision would not lie to Government under section 8 of the said Act and no order in revision of the Commissioner's incomplete order, whereby virtually the order of the Collector was set aside and the license was directed to he settled with Narsingh Chandra Shaw, could be made. The learned Advocate General appearing on behalf of the respondent No. 5 has argued that the order of the Commissioner dated 29th September, 1958 was a completed order and that a revision lay to the Government of West Bengal, and that the order dated 24th April, 1959 was perfectly competent. He has however, put forward another argument which requires careful consideration. He says that the entire procedure adopted in the matter of the grant of license in this case is contrary to law, that is to say, contrary to the provisions of the said Act and the Rules made thereunder. Mr. He has however, put forward another argument which requires careful consideration. He says that the entire procedure adopted in the matter of the grant of license in this case is contrary to law, that is to say, contrary to the provisions of the said Act and the Rules made thereunder. Mr. Roy appearing on behalf of the petitioner also agrees that the procedure followed was not in accordance with law, as in fact he was compelled to do, because upon an examination of the facts of this case, it is apparent that the procedure adopted throughout has been in total disregard of the law. The matter however does not end there. The disturbing fact is that I have been informed that the procedure adopted by the Excise authorities in such matters is invariably of the description mentioned herein, and the provisions of law are generally thrown to the winds and utterly disregarded. They have both invited me to point out the manner in which the law has been flouted, so that the procedure in future may be altered and brought in accordance with the provisions of law. I shall proceed now to investigate the position as disclosed in the pleadings before me. Eventually of course I have to decide as to whether the order of revision made by the Government of West Bengal dated 24th April, 1959 is legally valid or not. which entails an examination of the orders of the Collector and the Commissioner mentioned above. But before I do so, I will examine the procedure that has been adopted in this case, for the issue of the license. The matter of "licenses, Permits and Passes" is dealt with in Chapter VI of the said Act. Section 30 lays down how the Collector should prepare a list showing what licenses it was proposed to grant for the retail sale of spirit, for consumption on the vendors' premises, for the next period of settlement. Before the expiration of every period for which the existing licenses for the retail sale of spirit is in force, the Collector has to prepare a list in a form prescribed by the Commissioner of Excise, showing what licenses it was proposed to grant for the next period of settlement. This list is then published in the manner laid down in section 31. This list is then published in the manner laid down in section 31. Objections may then be preferred against the proposals contained in the list, by the persons mentioned in section 33. After considering such objections, the Collector settles the list and submits it to the Commissioner of the Division or the Excise Commissioner, as laid down in section 34. Where it is submitted to the Commissioner of the Division, it is transmitted to the Excise Commissioner. The Commissioner of Excise, under section 35, resettles the list and his decision is final, except as mentioned therein. I have already stated that this procedure is applicable in cases of what are called "on" licenses. So far as this case is concerned, it is an instance of an "off" license. An "on" license relates to a case where intoxicants are consumed within the premises, whereas in the case of an "off" license it is a condition of the license that the licensee should not allow any liquor to be consumed within the licensed premises. It appears that such a license is confined to certain kinds of foreign liquor only, which is not allowed to be sold except in sealed and capsule bottles. In such a case, the provisions of sections 30 to 34 of the said Act do not apply in terms. However, the sale of liquor, in this case foreign liquor, cannot be carried out except under a license issued under the Act. Under section 20, no intoxicant shall be sold except under the authority and subject to the terms and conditions of a license granted in that behalf by the Collector. Under sections 85 and 86 of the said Act, the State Government is given power to make Rules to carry out the objects of the Act. Under sub-section (9) of section 88, the State Government may prescribe restrictions under which, or the conditions on which, any license, permit or pass, may be granted. Rules have been framed in pursuance of the powers granted under the Act Rules 58 to 60 deal with the duration and number of licenses. Under Rule 58, license for the wholesale or retail vend of intoxicant may be granted for one year from the 1st April to the 3lst March following or for any shorter period within that year, subject to certain provisions mentioned therein. Under Rule 58, license for the wholesale or retail vend of intoxicant may be granted for one year from the 1st April to the 3lst March following or for any shorter period within that year, subject to certain provisions mentioned therein. The only provision that might apply in the case of foreign liquor is sub-rule (6) which lays down that a wholesale license for the supply and sale of intoxicant may be granted for any number of years not exceeding 5 years as the State Government may decide in each case. Rule 59 deals with the number of licenses to be issued. In any local area it should be issued only according to the needs of the people of that area. Rule 60 deals with the principles to be applied in fixing the number of retail licenses for the sale of liquor. Rules 61 to 66 deal with the location of shops. For example, it has been laid down that no new shop shall be licensed for the consumption of liquors on the vendors' premises, which may be situated in close proximity to a school, hospital or place of worship. Rules 73 to 79 lay down how local opinion should be ascertained prior to the grant of licenses for the retail sale of liquor. Rule 79 states that the method laid down for such ascertainment applies to all licenses for retail sale of intoxicants, except licenses of the classes specified in section 37 of the Act. One of such exceptions is the grant of a license to any person for the retail sale of any intoxicant, in substitution of a license which had been cancelled or surrendered before the expiration of the period for which it was granted. 4. IN this case, we find that one Abdur Rahaman Khundkar carried on business in foreign liquor, under the name and style of "circus Stores" at No. 15, Syed Ameer Ali Avenue, Calcutta for about 25 years with a Foreign Liquor Public "off" License. After his death, his son Ataur Rahaman Khundkar was granted a similar license, and carried on the said business for 9 years upto the 24th May, 1957 when his license was cancelled by the Collector of Excise, Calcutta for non-payment of gallon age fees. Thereupon, the licensee preferred an appeal which was rejected, and against that there was a revision petition to the Government and a stay-order. Thereupon, the licensee preferred an appeal which was rejected, and against that there was a revision petition to the Government and a stay-order. In the meantime, on the 16th December, 1957 the Collector of Excise, Calcutta, issued a notice inviting applications from candidates for resettlement of the said shop. As I have stated above, the proceedings were stayed pending the revision case, which was ultimately disposed of on the 17th April, 1958 and the stay-order was vacated and proceedings for fresh resettlement were revived. As a result of the notice dated 16th December, 1957, 42 applications were received for settlement of the said shop. The application made on behalf of the petitioner is dated 2nd January, 1958. The application of Narsingh Chandra Shaw was dated the 3rd January, 1958. I have enumerated above the facts relating to the grant of a "parwana" to the petitioner, and of the direction of the State Government to settle the license with Narsingh Chandra Shaw. I have also mentioned that the entire procedure adopted in this case has been contrary to the provisions of the Act and the Rules. I shall now proceed to state how I have come to this conclusion. This is a case of the issue of a Foreign Liquor "off" license, with regard to a 'site' in respect of which the license had been cancelled in the middle of the period known as the 'fixed Fee' period. When the time came for actually issuing the license, the period mentioned in the notice dated 16th December, 1957 had already expired. The position, therefore, was as follows: This was a case of a Foreign Liquor Public "off" License at the site, namely 15, Syed Ameer Ali Avenue, where there was an existing license which had been cancelled on or about 24th May, 1957. On the 16th December, 1957 applications were invited for resettlement of the license at the said site for the remaining period of the years 1957-58, under the Bengal Fixed Fee System. It was mentioned in the notice that candidates who were able to secure either the said site or another site in the vicinity suitable for foreign liquor "off" shop, "free from objections" need only apply. It was mentioned in the notice that candidates who were able to secure either the said site or another site in the vicinity suitable for foreign liquor "off" shop, "free from objections" need only apply. In his application dated 2nd January, 1958, a copy whereof is annexure "a" to the petition the 'site' for which the application was made by the petitioner was mentioned as 15, Syed Ameer Ali Avenue, Calcutta. On the 17th May, 1958 the petitioner was informed that the vacant foreign liquor "off" license at No. 15, Syed Ameer Ali Avenue, Calcutta was "settled with him provisionally, pending further enquiries as to his suitability for holding the license". On the same day, the Commissioner of Police, Calcutta was informed and it was stated that the necessary police certificate might be issued in his favour "on his applying for the same, if there is no objection from the police point of view". Yet, in the letter dated 17th May, 1958 to the petitioner, the Collector of Excise asked him to take immediate steps to open the shop at the "sanctioned site at No. 15, Syed Ameer Ali Avenue Calcutta. " It will be appropriate here to refer to sections 19 and 20 of the Calcutta Suburban Police Act, being Bengal Act II of 1866 (which corresponds to sections 36 and 37 of the Calcutta Police Act IV of 1866 ). Section 19 lays down that no license shall be granted under the provisions of the Bengal Excise Act, 1909 unless persons applying for such license shall produce a certificate from the Commissioner of Police, Calcutta stating that a license may be granted to him for the sale of spirituous liquors. . . . . . . . without risk or detriment to the preservation of peace and good order, and containing a full statement of such conditions as may have been imposed, or shall have remained in force, under the provisions contained in the said Act, at the date when such license shall be granted. No license so granted shall be renewable without a fresh certificate as aforesaid, previously obtained from the Commissioner of Police. The Commissioner of Police, in granting or refusing certificate under this section is subject to the direction and control of the State Government. No license so granted shall be renewable without a fresh certificate as aforesaid, previously obtained from the Commissioner of Police. The Commissioner of Police, in granting or refusing certificate under this section is subject to the direction and control of the State Government. Under section 20 of the Calcutta Suburban Police Act, 1866, the Commissioner of Police may limit the period for which the license may be granted, and also fix such conditions as he may deem necessary for securing the good behavior of the keepers of the house etc., and for prevention of drunkenness and disorder among the persons frequenting the same. It is specifically stated that no license granted under the Bengal Excise Act 1909 shall be valid unless it shall contain such conditions as shall remain in force for the time being under section 20. Section 6 of the said Act lays down expressly that nothing therein shall affect the provisions of the Calcutta Suburban Police Act 1866 or the Calcutta Police Act. 1866. 5. WE are now in a position to understand the illegalities that have been committed herein. What was done in this case was to issue a notice for the resettlement of a license for the remaining period of the year 1957-58 for a 'site' which was mentioned as 15, Syed Ameer Ali Avenue. It was also mentioned in the notice that applications would be considered in respect of a site in the vicinity, provided it was suitable for a foreign liquor "off" shop, free from objections. Perhaps, if it was a question of issuing a license within the unexpired period the question of the selection of a site may not have arisen. In this case, however, when the time for issue of the license came the period had already expired and the actual "parwana" that was issued was for a different site altogether, namely, 18-A, Syed Ameer Ali Avenue, Calcutta. Firstly, there is nothing to show that this new site was ever fixed in accordance with the provisions of the Act and the Rules mentioned above. In other words, there is nothing to show that any objections were called for or considered, in respect of this new site. Firstly, there is nothing to show that this new site was ever fixed in accordance with the provisions of the Act and the Rules mentioned above. In other words, there is nothing to show that any objections were called for or considered, in respect of this new site. Secondly, there is no provision at all in the Act or the Rules for the granting of a "provisional" license or a "parwana" as it is called, pending the production of the police certificate or decision of the Excise Licensing Board or pending enquiries as to the suitability of the applicant for a license. As stated above, a license can only be granted for a period of one year or for a less period mentioned in the license, and only after obtaining a certificate from the Commissioner of Police, Calcutta. I am told that the Excise Authorities have been issuing this kind of "parwana" for sometime now. In my view, the practice is entirely illegal and should forthwith be stopped. Looking at this curious document which is called a "parwana", a copy whereof is annexed to the petition, we find that not only is it a document unknown to the said Act and Rules, but it also does not contain any mention of the period for which it is issued. Of course, the certificate of the Commissioner of Police was never obtained. Then again, we find that the notice originally issued was in respect of a license for the unexpired portion of 1957-58. By the time the license was to be issued that period had expired. The "parwana" when granted did not mention any period, but it could only relate to the period 1958-59. Later on, even that period expired, and an application was made for a renewal for the period 1959-60 and the fee therefor was accepted, although no such renewal was sanctioned by the Commissioner of Police, Calcutta. This is the state of affairs with regard to the petitioner's "parwana". I now come to the other point taken in this application regarding the revisional order passed by the Government of West Bengal. As I have mentioned above, the Collector intimated to the petitioner that the foreign liquor "off" license at 15, Syed Ameer Ali Avenue, Calcutta had been settled with him provisionally. Against this order there was an appeal to the Commissioner of Excise. As I have mentioned above, the Collector intimated to the petitioner that the foreign liquor "off" license at 15, Syed Ameer Ali Avenue, Calcutta had been settled with him provisionally. Against this order there was an appeal to the Commissioner of Excise. I have already referred to his order dated 29th September, 1958. In respect of this order I must uphold the contention of the petitioner that it was not a completed order. The Commissioner expressly stated that he was prepared to uphold the views of the Collector, but on one point he wanted further information, namely, as regards his proposal to procure finance from his wife. The order expressly states that the Commissioner was awaiting the report of the Collector upon this point. In fact, the Collector later on made a report, although it is disputed in the affidavits as to whether it supports the petitioner or not. Now, under section 8 of the said Act, the Government could certainly have revised the original order of the Collector. But that is not what it did. It appears from the face of the order dated 24th April, 1959 that Government was revising the decision of the Commissioner of Excise, West Bengal "as contained in his order dated 24th September, 1958". Therefore, it was revising an order even before it was completed. In my opinion, this cannot be permitted. It is but an elementary principle that before revising an order that order must be made. I could have even understood if the revisional authority struck down the procedure and held that the Commissioner should not have asked the Collector to make a report and directed him to decide the case for himself. But I do not see, how, at that stage, the Government could revise the decision of the Commissioner and direct the license to be issued to Sri Narsingh Chandra Shaw. The Commissioner had never come to a decision. The learned Advocate General argued that the correct interpretation of the order of the Commissioner of Excise would be to hold that he had upheld the order of the Collector and that there was nothing further to be done. I am afraid, I cannot accept this interpretation. In my view, that is not the purport of the order. The learned Advocate General argued that the correct interpretation of the order of the Commissioner of Excise would be to hold that he had upheld the order of the Collector and that there was nothing further to be done. I am afraid, I cannot accept this interpretation. In my view, that is not the purport of the order. The order shows on the face of it that the Commissioner was inclined to accept the views of the Collector, but he wanted further information on one point before coming to a final decision, and for which, he ordered the Collector to make a report. Before this order was completed, it could not be revised, and Government could not direct a license to be settled with Narsingh Chandra Shaw, which, by the way, would be a license for the year 1959-60, for which no notice had ever been issued. In the revisional order of Government, it is mentioned that the settlement relates to a license for a foreign liquor shop at 15, Syed Ameer Ali Avenue, and it is the license of the "aforesaid shop" that has been directed to be settled with Narsingh Chandra Shaw. The whole thing is incorrect, because the license proposed to be issued is in respect of a foreign liquor shop at 18-A, Syed Ameer Ali Avenue, a 'site' which had never been determined in accordance with law. Therefore, this order of the Government cannot be given any effect at all. As a matter of fact, all the parties appearing before me agree that the procedure adopted and the orders made could not be supported in law, except that the learned Advocate General tried to justify the order of revision, only in so far as the objection was advanced that it was in respect of an incomplete order. The learned Advocate General himself argued with emphasis that the procedure that had been adopted throughout the case by the Excise authorities, was in total disregard of the Act and the Rules, and it was most unfortunate that the Excise authorities should follow this practice in a large number of cases. The question is, what should be done under the circumstances? So far as the "parwana" that has been granted to the petitioner and/or the application for the renewal thereof is concerned, the whole thing is contrary to law and must be struck down. The question is, what should be done under the circumstances? So far as the "parwana" that has been granted to the petitioner and/or the application for the renewal thereof is concerned, the whole thing is contrary to law and must be struck down. The incomplete order of the Commissioner automatically lapses with it. The revisional order dated 24th April, 1959 is also, in my opinion incompetent and must be struck down The result is, and I am informed that this is a position acceptable to all the parties appearing before me, that this Rule should be made absolute and the order of the Government dated 24th April, 1959 as also the order of the Collector of Excise contained, or referred to, in the letter dated 17th May 1958 as also the "parwana" dated 23rd May, 1958, should all be quashed and/or set aside, and a writ in the nature of certiorari should be issued for that purpose. There will also be issued a writ in the nature of mandamus directing the respondents not to give effect to any of them 6. THE position, therefore, remains as follows: there was an approved site for a foreign liquor "off" license at 15, Syed Ameer Ali Avenue. That license having been cancelled, the Excise authorities may now issue the requisite notice for issuing a license at that 'site', or if in respect of another 'site', then after approving that 'site' in accordance with law. Such notice must be issued in respect of the proper period, and the license should be issued in accordance with law, and not in the shape of a. "parwana" and/or "provisional" license, for which there is no provision in the Act or the Rules. It should also be in accordance with the provisions of the Calcutta Suburban Police Act. Interim orders, if any, are vacated. There will be no order as to costs.