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1971 DIGILAW 18 (PAT)

Thakko Choudhary v. State of Bihar

1971-02-09

N.L.UNTWALIA, S.SARWAR ALI

body1971
JUDGMENT : N.L. Untwalia, J. 1. The petitioner has obtained a rule from this Court under Articles 226 and 227 of the Constitution of India against the respondents to show cause why the ORDER :of suspension of his licence of Kaidrabad country spirit shop standing in his name, made by the Collector on 1st September, 1967 (Annexure 'A') as affirmed in appeal by the Commissioner of Excise on 7th. October, 1967, (Annexure 'B') as also in revision by the ORDER :of the Member, Board of Revenue dated 8th January, 1968 (Annexure 'C') be not called up and quashed by grant of an appropriate writ. It appears that due to the alleged recovery of twenty drums of spirit of very high strength from certain premises appertaining to that of the petitioner's shop, his licence has been suspended by the Collector by his ORDER :dated 1st September, 1967. When the petitioner went up in appeal before the Commissioner of Excise he took three points before him (i) that the appellant should have been asked to show cause against the proposed suspension by the Collector, (ii) that the place of recovery has not been fixed on the licence, and, (iii) that since prosecution has been launched under Section 47(a) of the Excise Act, action under Section 42 of the Act should have been taken only after the disposal of the criminal case. The learned Commissioner has rejected the first point thinking that the ORDER :of suspension of the licence of the petitioner has been by way of interim measure and opportunity will have to be given to him to present his case when cancellation proceedings are started after due investigation. On the second point he does not seem to have recorded a definite finding but has expressed an opinion against the petitioner and on the third point his view is that suspension ORDER :can be made during the pendency of the prosecution case under Section 47 of the Bihar & Orissa Excise Act, 1915 (hereinafter called the 'Act'). The learned Member, Board of Revenue, seems to have rejected all the points argued before him on behalf of the petitioner and held that the petitioner had a fair opportunity of having his say before his licence was suspended and the Collector had the power to suspend his licence. The learned Member, Board of Revenue, seems to have rejected all the points argued before him on behalf of the petitioner and held that the petitioner had a fair opportunity of having his say before his licence was suspended and the Collector had the power to suspend his licence. No clear finding seems to have been recorded by him in support of the ORDER :of suspension. 2. On behalf of the petitioner his learned counsel has submitted on the basis of a Bench decision of this Court in (1) Ramnath Prasad V. The Collector of Darbhanga and others (A.I.R. 1955 Pat 345) that no ORDER :of suspension of the petitioner's licence could be made without giving him an opportunity of showing cause in the matter and that the Collector had no power to suspend. Learned counsel developed the second point with reference to Clause (d) of Sub-section (1) of Section 42 of the Act that before conviction the licence could not be suspended. Subsection (i) of Section 42 says-- Subject to such restrictions as the State Government may prescribe, the authority who granted any licence, permit or pass under this Act may cancel or suspend it" on any of the grounds mentioned in Clauses (a) to (g) of this Sub-section. I may quote two of the clauses therefrom, namely, Clauses (c) and (d): (c) In the event of any breach by the holder thereof, or by any of his servants, or by anyone acting on his behalf with his express or implied permission, of any of the terms or conditions thereof; or (d) if the holder thereof is convicted of any offence punishable under this Act or any other law for the time being in force relating to revenue, or of any cognizable and non-bailable offence, or of any offence punishable under the Dangerous Drugs Act, 1930 or under the Merchandise Mark Act, 1889, or under any section which has been introduced into the Indian Penal Code by Section 3 of that Act; or No restrictions have been prescribed by the State Government as envisaged in Sub-section (1) of Section 42 of the Act nor any rule could be brought to our notice to show that the ORDER :of suspension is by way of interim measure during the pendency of the proceeding for cancellation of the licence. The wordings of Section 42 of the Act, as they stand, are capable of only one interpretation that the authority who granted the licence may either cancel it or suspend it. Both are by way of punishment subject to the appeal or revision. It does not seem to be the intent of the Legislature that the ORDER :of suspension has to be followed by an ORDER :of cancellation. Suspension may be for a shorter term while if a particular licence is cancelled, it is cancelled for ever, that is to say, for the remainder of the period. That being so, as observed by Ramaswami, J. (as he then was) in the case of (1) Ramnath Prasad. Section 42 therefore grants power to the Collector or to the prescribed authority to cancel or suspend a licence. But the statute does not prescribe what is the procedure that the Collector has to adopt before passing final ORDER :. In a case of this description when the statute is silent what procedure will the law imply? Even if the statute is silent there is an obvious implication that some form of enquiry must be made for the Section requires the Collector to satisfy himself that there has been a breach of the conditions of the licence by the holder or any of his servant. The Collector is bound as a matter of principle to give a fair opportunity to the licensee of presenting his case. The Collector is under a duty to hear the matter in a judicial spirit for the question at issue is a matter of proprietary or professional right of an individual. The Collector should for instance give a fair opportunity to the licensee to make a relevant statement or to controvert any relevant statement made to his prejudice. I am inclined to think that the power to cancel or suspend a licence is by way of punishing the delinquent licensee. That being so, it follows that before the ORDER :of any kind is made an opportunity has got to be given to the licensee to have his say in the matter. If, as in service cases, suspension would have been by way of interim measure, prior to a proceeding for cancellation of licence, the matter would have been different. But that does not seem to be the scope of Section 42(1) of the Act. If, as in service cases, suspension would have been by way of interim measure, prior to a proceeding for cancellation of licence, the matter would have been different. But that does not seem to be the scope of Section 42(1) of the Act. That being so, not only an opportunity has got to be given to the licensee but a licence has got to be cancelled or suspended by recording facts to bring the case within the ambit of one or more of the Clauses (a) to (g) of Sub-section (1) of Section 42 of the Act. In this case it seems to me that neither of the two has been done by any of the authorities as, perhaps, the popular meaning of the word 'suspension' has been taken even in regard to the power to suspend a licence granted by authority under Sub-section (1) of Section 42. Before I part with this case I may observe that it is neither correct to say that when a prosecution has been launched then the power to cancel or suspend a licence cannot be exercised before a final ORDER :of conviction is recorded nor is it correct to say that if an ORDER :of conviction has been recorded by the trial court, cancellation or suspension must follow. Apart from Clause (d) suspension may be made under any other clause. We were informed at the Bar that the trial court has convicted the petitioner for an offence under Section 47 of the Act. That may be so, but the ORDER :of suspension as it is, cannot be upheld and must be quashed. It will he open to the authorities concerned to issue a show cause notice to the petitioner against the proposed cancellation or suspension of his licence and after hearing him, to pass such ORDER :as the authority may deem fit and proper under Section 42(1) of the Act. In the result, the application is allowed and by grant of a writ of certiorari the ORDER :s of the Collector, the Excise Commissioner and the Member, Board of Revenue (Annexures 'A', 'B' and 'C') are quashed subject to the observations made above. There will be no ORDER :as to costs. S. Sarwar Ali, J. I agree. Application allowed.