Judgment Akbar Husain, J. 1. In this application the petitioner who is a licensee of the Hajipur country spirit shop in the district of Muzaffarpur has challenged the order of the Member Board of Revenue, Bihar, Patna, dated the 15th May 1970 (Annexure 1) the order of the Commissioner of Excise, Bihar, Patna. dated the 11th January, 1970 (Annexure 2) and the order of the Collector of Muzaffarpur, dated the 12th January. 1969 (Annexure 3). 2. The facts of the case are as follows :- - It is stated that the petitioner has been a licensee of the country spirit shop for a long time and his license has been renewed from year to year. The Superintendent of Excise. Muzaffarpur, visited the petitioners shop on the 26th August, 1968 and found the following irregularities: (i) The contents of one drum consisting of 180 litres of 72.6 U. P. liquor was found diluted and weak in strength which was tested at 74.9 U. P . (ii) Shortage of 243.250 litres in 72.5 U. P. and 13.850 litres in 50 U. P. was found against the opening balance on the 26th August 1968. The petitioner in his explanation (submitted later) contended that due to the absence of the permanent salesman in the shop, the man who was temporarily in charge of the shop was not able to properly post the sales in the stock register, nor could he explain the same to the Superintendent of Excise, at the time of the inspection. As regards the weakness in the contents of the drum, the explanation given was that in all probability it was the result of hasty and imperfect mixing at the warehouse and it did not stand to reason why the petitioner would dilute the contents of the whole drum and make It weak, particularly when the shop was situated in the town of Hajipur and was likely to be inspected at any time. The petitioners explanations appear to have been rejected by the Superintendent of Excise who recommended to the learned Collector. Muzaffarpur, for cancellation of his license. A notice bearing No. 1857 dated the 28th December 1968 was served on (the petitioner directing him to show cause by the 6th January 1969. as to why his license should not be cancelled, but the petitioner applied for time. Muzaffarpur, for cancellation of his license. A notice bearing No. 1857 dated the 28th December 1968 was served on (the petitioner directing him to show cause by the 6th January 1969. as to why his license should not be cancelled, but the petitioner applied for time. In paragraphs 8 and 9 of the writ petition, it is stated that the Collector, who is the competent authority to cancel the license under Sec. 42 of the Bihar and Orissa Excise Act (hereinafter referred to as the Act), did not issue any notice to the petitioner directing him to show cause against the proposed cancellation of the license, nor any notice directing the petitioner to show cause against the forfeiture of the security deposit was served on him. Thereafter on the 12th January 1969, the learned Collector approved the recommendation of the Superintendent of Excise. Muzaffarpur, for the cancellation of the license and also for forfeiture of the security deposit amounting to Rs. 6,400/-. 3. Against the aforesaid order of the learned Collector, the petitioner filed an appeal before the Commissioner of Excise, Bihar, Patna. under Section 8 of the Act who by Ms order dated the 11th January 1970 dismissed the appeal. Thereafter the petitioner moved the Member Board of Revenue, Bihar, under Section 8 of the Act who by his order dated the 15th May, 1970. in Case No. 48 of 1970. rejected the petitioners application. The petitioner has assailed all the orders referred to above. Mr. Rajeshwari Prasad, learned Counsel appearing in support of the rule has made a number of submissions and formulated the following propositions:- - (i) The order of the learned Collector being based on the decision of the Superintendent of Excise who was himself the reporting officer, offends the principles of natural Justice, and, is, therefore, illegal and without jurisdiction. (ii) The license is not liable to cancellation under Sec. 42 of the Act because there was no violation of the terms and conditions of the license. (iii) The liquor not haying been bottled and exposed for sale or actually sold, there had been no violation of tine terms and conditions of the license. (ii) The license is not liable to cancellation under Sec. 42 of the Act because there was no violation of the terms and conditions of the license. (iii) The liquor not haying been bottled and exposed for sale or actually sold, there had been no violation of tine terms and conditions of the license. (iv) That no show cause notice having been issued against the forfeiture of the security deposit amounting to Rupees 6,400.00 the order for forfeiture of the security deposit was without jurisdiction, and amounted to confiscation of the property, and, therefore, hit by the provisions contained in Article 31 of the Constitution. (v) Weak liquor having been supplied from the warehouse, as found by the learned Commissioner, the petitioners licence on that ground has been illegally cancelled. The impugned order of the Collector dated the 12th January 1969 is in the following terms:- - "As proposed at "A" Sd. S. Patankar. 12-1-1969". The objection to this order, as stated earlier, is that the Collector while cancelling the license under Sec. 42 of the Act ought to have applied his mind on the facts alleged against the licensee and, examined the truth or otherwise of the version. The learned Collector has merely endorsed the proposal of the Excise Superintendent contained in the report dated the 9th January, 1969. the concluding portion of which is as follows :- - "Under the facts and circumstances of the case, it is suggested that the licence of Hajipur c. s. shop standing in the name of Shri Qudrat Ali may be Cancelled and his whole security deposit may be forfeited under Sec. 42 of the Bihar and Orissa Excise Act. Submitted for orders. Sd. Illegible. Excise Superintendent". The order of the learned Excise Commissioner in appeal under Section 8 of the Act has been attacked specifically on the ground that no reasonable opportunity had been given to the petitioner to present his case either before the Collector, Muzaffarpur or before the Commissioner of Excise. It is stated that the learned Commissioner having found that there was some weakness in the liquor supplied from the warehouse, the possibility of diluted contents in the drum at source could not be excluded. Similarly, the order of the Member Board of Revenue in revision under Section 8 of tile Act, has also been assailed on substantially the same grounds. Similarly, the order of the Member Board of Revenue in revision under Section 8 of tile Act, has also been assailed on substantially the same grounds. One more objection, however, was taken before the Member Board of Revenue against the order of the Commissioner, and, that was that the learned Commissioner had called for the departmental papers and examined them behind the back of the petitioner. It. is also said that the entries in the documents and registers have been used against the petitioner without affording him a reasonable opportunity for explaining the same, causing great prejudice to the petitioner. Consequently the order of the Commissioner of Excise is illegal and against the principles of natural justice. 4. The learned Standing Counsel appearing for the State on the other hand, has supported the impugned orders on the grounds that the licensee was directed to explain the irregularities detected by the Superintendent of Excise on the 5th September 1968. and a written statement by the Manager of the petitioner was taken at the time of inspection. It is said that the licensee neither submitted his explanation nor filed any petition for time on the 5th September 1968. He was again given a notice dated the 10th September 1968, to submit his explanation by the 20th September 1968, on which date he filed a petition praving for time and the date was extended to the 10th October 1968, but even on that date he did not submit his explanation. Eventually the licensee submitted his explanation on the 20th November 1968. It is further stated in paragraph 9 of the counter affidavit that a notice was again issued by the Superintendent of Excise dated the 28th December 1968. asking the petitioner to show cause by the 6th January 1969, against cancellation of his license as well as whether he wanted to be heard in person before the Collector, but the petitioner neither submitted his explanation nor filed any petition for time. The Excise Superintendent under these circumstances submitted his findings and the recommendations on the 9th January, 1969, which became the basis for a considered order by the learned Collector under Sec. 42 of the Act. The Excise Superintendent under these circumstances submitted his findings and the recommendations on the 9th January, 1969, which became the basis for a considered order by the learned Collector under Sec. 42 of the Act. The order of the learned Collector has been defended on the ground that the learned Collector having considered the report of the Excise Superintendent and having agreed with the recommendation made by him, has passed the order of cancellation and a long order was not a necessary requirement of law. The learned Collector applied his mind on the report of the Excise Superintendent, and passed the order of cancellation which is perfectly valid. The learned Standing Counsel for the State has submitted that a notice against the forfeiture of the security deposit was not necessary as the forfeiture is not & punishment rather a consequence of the cancellation of the license under Subsection (3) of Sec. 42 of the Act. Lastly our attention was drawn to the conditions of the license held by the petitioner. The terms and conditions of the license regulate and govern the conduct of the holder of the license, and on the irregularities detected, it was submitted by the learned Standing Counsel on behalf of the State, condition no. VI of the license has been violated. The aforesaid condition is worded as follows :- - "VI. That he do not sell, expose for sale, or keep in his possession spirits of strengths other than those mentioned below or at prices above or below those prescribed against each strength:- - Prescribed strengths. Minimum prices Maximum prices per bottle" On the aforesaid grounds, the learned Standing Counsel has supported the orders under challenge. 5 Mr. That he do not sell, expose for sale, or keep in his possession spirits of strengths other than those mentioned below or at prices above or below those prescribed against each strength:- - Prescribed strengths. Minimum prices Maximum prices per bottle" On the aforesaid grounds, the learned Standing Counsel has supported the orders under challenge. 5 Mr. Rajeshwari Prasad appearing for the petitioner has relied on a decision of the Supreme Court in the case of Mahabir Prasad Santosh Kumar V/s. State of U. P. ( AIR 1970 SC 1302 (1305) ) for the proposition which is laid down in the following terms:- - "The appellants have a right not only to have an opportunity to make a representation, but they are entitled to have their representation considered by an authority unconcerned with the dispute and to be given information which would show the decision was reached on the merits and not on considerations of policy or expediency....." The other case cited was the case of A.K. Kraipak V/s. Union of India, ( AIR 1970 SC 150 (157)), and the observations contained in paragraph 21 of the decision quoted below were relied upon:- - "21. It was next urged by the learned Attorney General that after all the selection board was only a recommendatory body. Its recommendations had first to be considered by the Home Ministry and thereafter by the U. P. S. C. The final recommendations were made by the U. P. S. C. Hence grievance of the petitioners have no real basis. According to him, while considering the validity of administrative actions taken, all that we have to see is whether the ultimate decision is just or not. We are unable to agree with the learned Attorney General that the recommendations made by the selection board were of little consequence. Looking at the composition of the board and the nature of the duties entrusted to it we have no doubt that its recommendations should have carried considerable weight with the U. P. S. C. If the decision of the selection board is held to have been vitiated, it is clear to our mind that the final recommendations made by the Commission must also be held to have been vitiated. The recommendations made by the Union Public Service Commission cannot be disassociated from the selections made by the selection board which is the foundation for the recommendations of the Union Public Service Commission. In this connection reference may be usefully made to the decision in 1967-2 QB 864 (supra)." Mr. Prasad referred to another case of Shauqin Singh V/s. Desa Singh, ( AIR 1970 SC 672 ) and placed reliance on the portion of the iudgment at page 674 which is as follows:- - "..... The relevant satisfaction is a jurisdictional fact on the existence of which alone the power may be exercised. A superior authority or the High Court in a writ petition would, therefore, be entitled to consider whether there was due satisfaction by the Chief Settlement Commissioner on materials placed before him and that the order was made not arbitrarily, capriciously or perversely." Yet another decision of the Supreme Court in the case of Sm. Gunwant Kaur V/s. Municipal Committee Bhatinda, ( AIR 1970 SC 802 (804)) has been relied upon on the question of jurisdiction of the Collector. The case arose under the land acquisition proceedings and the question was as to whether the correctness of the Collectors opinion could be challenged and whether the appellants could contend that the jurisdiction of the Collector depended upon an issue of a valid notification. "and the mere fact that the Collector was satisfied that the true area of the land demarcated "Corresponded to the area notified" whatever that expression may mean did not prevent the owners of the lands from contending before the High Court that they had no opportunity of making their representations under Sec. 5-A of the Act and of satisfying the Collector that their lands should not be acquired....." In my opinion, the decisions cited at the Bar referred to above, have no direct bearing on the facts of the instant case. 6 In the instant case, however, the material issue is as to whether the petitioner got an opportunity of making a representation and was served with notices for submitting show cause in respect of the irregularities alleged and found on the test of a sample taken from the warehouse on the 21st November 1968, and its comparison with the sample taken on the 19th August, 1968. 7. 7. The other question which falls for decision is as to whether the order of the Collector purporting to be under Sec. 42 of the Act and the other subsequent orders passed by the learned Commissioner of Excise and the Member Board of Revenue are in accordance with the provisions of Sec. 42 of the Act. The initial order is that of the Collector dated the 12th January, 1969. The objection to the order of the Collector contained in Annexure 3 that it was not a valid order under Sec. 42 of the Act because on the face of it, it does not show that the Collector was satisfied about the truth of the allegations, is not well founded and must be rejected. It is not necessary to dispose of the question of cancellation of the license in a separate judgment if the Collector agreed with the recommendations of the inspecting officer. Merely because the order is in these terms, i.e. "As proposed", it is not exposed to the criticism which Mr. Prasad has made. It, however, remains to be examined as to whether the other courts namely, the Excise Commissioner and the Member Board of Revenue have conducted the proceedings in appeal and revision respectively in accordance with the requirements of Sec. 42 of the Act while upholding the order of cancellation passed by the Collector. The Commissioner and the Member Board of Revenue have both concurrently overruled the contention of the petitioner and found as a fact that he was given an opportunity of representation and to submit his explanation in regard to the irregularities which are alleged to have been detected. This being, a disputed question of fact cannot be the subject of investigation by this Court in its writ jurisdiction. The other irregularity alleged is about the dilution in the liquor found in the drum and on this point the Commissioner has observed "that when the sample bottle issued by the warehouse officer, Hajipur, was examined on the 21st November 1968, in presence of the licensee, it was found that the strength of the liquor was 73.7 U. P. as against 72.5 U. P. which is the prescribed strength. The order of the Member Board of Revenue does not deal with the contention of the petitioner about the alleged weakness of the liquor having been from the source of the supply itself, namely, the warehouse and the finding thereon by the learned Excise Commissioner. Whatever may have been the merits of this contention, could have been considered by the Member Board of Revenue and a finding recorded thereon, because that is certainly a material question to be considered for conclusively fixing the liability of the dilution on the petitioner, and to cancel his license under Sec. 42 of the Act. 8. In the instant case the most important and determining factor to be considered for the purposes of answering the question as to whether the cancellation of the petitioners license under Sec. 42 of the Act is valid or not, is the alleged dilution of the liquor by the petitioner in his shop. On this question there are three findings beginning from the report of the Excise Superintendent dated the 9th January, 1969. It may be observed at this stage that the findings of the Excise Superintendent has been accepted by the learned Collector in the initial order and that is the basis of cancellation of the petitioners license. According to this report the strength of the liquor should have been 72.5 but was found at 74.9 U. P. on the 26th August 1968 at the shop. The other comment in the aforesaid report is that the licensee had kept the shop in a most mismanaged way and he is out to make illegal profits by cheating the customers and suppressing the sales which ultimately affects the revenue. The following considerations appear to have weighed with the Excise Superintendent for recommending the cancellation to the Collector as quoted below:- - "The consumption of this shop and revenue derived therefrom has been going down with quite a faster Pace due to such irregularity on the part of the licensee. Hence, both in the interest of customer and Government revenue, it is essential that the licence is cancelled." Then he proceeds to record the finding about the strength of the liquor in the following terms:- - "..... Hence, both in the interest of customer and Government revenue, it is essential that the licence is cancelled." Then he proceeds to record the finding about the strength of the liquor in the following terms:- - "..... Since the liquor was found diluted and weak as it was weak by more than allowable margin of one degree from the strength of the sample) and no satisfactory explanation was given by the licensee for this or shortage found in the stock, the licensee was directed to show cause by 6-1-1969 vide this office No. 1857 dated 28-12-1968, as to why his licence should not be cancelled. He was also directed to inform whether he wants to be heard in person before you. The licensee has neither submitted his show cause nor has submitted petition for time. Under the facts and circumstances of the case it is suggested that the licence of Hajipur c. s. shop standing in the name of Shri Qudrat Ali may be cancelled and his whole security deposit may be forfeited under Sec. 42 of the Bihar and Orissa Excise Act." The finding on the question of dilution of the learned Commissioner on the other hand is as follows:- - "5. ..... There is some force in the statement that weak liquor was supplied from the warehouse. This is evident from the fact that when the sample bottle issued by the warehouse officer, Hajipur, was examined on 21-11-1968 in presence of the licensee it was found that the strength of liquor was 73.7 U. P. as against 72.5 U. P. which is the prescribed strength. The warehouse officer was thereupon directed to appear before the Excise Superintendent on 26-11-1968 with the hydrometer set of the warehouse. The liquor was tested again with the warehouse set and the first sample tested on 19-8-1968 was found to be 73.5 U. P. as against 73.7 U. P. found on the previous occasion and when tested with the District Standard Set it was found to be 73.8 U. P. Thus there was some weakness in the liquor supplied by the warehouse. This was. however, far less than the liquor taken from the drum which was found to be 75 U. P. and over. The case of deliberate dilution against the Licensee therefore stands proved....." The learned Member Board of Revenue, however has not. This was. however, far less than the liquor taken from the drum which was found to be 75 U. P. and over. The case of deliberate dilution against the Licensee therefore stands proved....." The learned Member Board of Revenue, however has not. in my opinion, carefully considered the findings of the Excise Superintendent and the learned Commissioner and has disposed of the issue in the following terms:- - "I have examined the records and considered the arguments. I have also found out from the registers that the liquor of 72.5 strength was taken out by the licensee on 19-8-1968. It is also admitted that the sample of the liquor taken from the warehouse on that date showed the strength of 73.7. Even if some deterioration is allowed, it should not exceed 74.7 whereas the actual strength detected was 75.0. The quantity involved is not small but one full drum containing 180 litres." He has lastly recorded the finding that he was convinced that there was actually dilution. 9 It is evident, therefore, that the learned Member Board of Revenue has overlooked the finding of the learned Commissioner that there was some weakness in the liquor supplied by the warehouse. Similarly the learned Member Board of Revenue has committed an error of record bv not noticing that the inspection note dated the 9th January 1969 of the Excise Superintendent has found the strength of the liquor in the shop at 74.9 U. P., and has wrongly observed that the actual strength was at 75.0. He has also wrongly ignored the finding of the learned Commissioner that the liquor supplied at the warehouse was weaker than the prescribed strength and has referred to the registers to show that the liquor of 72.5 strength was taken out by the licensee on the 19th August, 1968. The learned Member Board of Revenue has arrived at the aforesaid conclusions apparently without considering the findings of the learned Commissioner and the inspection note of the Excise Superintendent on the points mentioned above. 10. Further more the objection of the petitioner that the Excise Commissioned looked into certain registers behind the back of the petitioner without giving him an opportunity was also not met by the learned Member Board of Revenue. 10. Further more the objection of the petitioner that the Excise Commissioned looked into certain registers behind the back of the petitioner without giving him an opportunity was also not met by the learned Member Board of Revenue. This argument has been disposed of in the following manner:- - "An argument was also advanced that the Excise Commissioner examined some registers and the Licensee should have been given another opportunity. I examined this contention also. The Excise Commissioner apparently looked into the issues in the warehouse registers and no new points arise with regard to these entries. There was nothing before him to ask for any explanation or any discrepancy with regard to the entries in the warehouse register." In my opinion, if the learned Commissioner proposed to examine the registers, he should have given an opportunity to the petitioner to explain the entries made therein; and that would have met the ends of justice. The impugned orders having been passed under Sec. 42 of the Act, must clearly show as to how the petitioner has contravened the terms of the contract and the licence. The orders do not show under which of the various clauses of Sub-section (1) of that Section, the case of the petitioner fell. I have carefully examined all the clauses of Sec. 42, and, in my opinion, the only clause which can be said to apply on the allegations is Clause (c) of Sub-section (1) of Sec. 42 of the Act, which reads as follows:- - "(c) In the event of any breach by the bolder thereof, or by any of his servants, or by any one acting on his behalf with his express or implied permission, of any of the terms or conditions thereof," XX XX XX the Collector, the Commissioner and the Member Board of Revenue should have applied their mind to the various clauses given in the form (form No. 26, Licence for the retail vend or country spirit supplied from the warehouse) as well as the general conditions applicable to all excise licences in order to find out that the act complained of came under a particular clause of Sec. 42 (1) of the Act so as to entitle the Collector to cancel the licence. The contention raised on behalf of the petitioner was that the act complained of did not come within the purview of any of the clauses mentioned in the form of the licence or under the general conditions applicable to the excise licences. Mr. Prasad has canvassed this proposition on the authority of a decision of this Court in Misc. Judicial Case No. 578 of 1961 (Aminuddin V/s. State of Bihar) D/- 26-2-1965 (Pat.) in which broadly speaking the order of cancellation of the licence was set aside on similar grounds. The reasons for setting aside the order of cancellation of the licence in this case are as follows:- - "5. It appears to me that the Collector, the Commissioner and the Board of Revenue did not examine the action complained of in the light of the provisions given above, and all that we find from their orders is that the order was passed under the general Sec. 42. From the order of the Board of Revenue it, however, appears that the order of cancellation of licence was affirmed because of certain irregularities which were admitted to have been committed by the petitioner. The irregularity consisted of only keeping of 48 packets of Ganja being short in weight. The question to be decided before us is not that such an act of the petitioner was not irregular and, as a matter of fact, Mr. Rajeshwari Prasad, appearing for the petitioner, has not challenged the finding of fact before us knowing the limitations in a writ application. The question to be decided really was whether such an irregularity was contemplated by the provisions quoted above for being applicable for cancellation of a licence. As there is no discussion of the point in any of the three judgments, my view is that the Collector, Commissioner and the Board of Revenue have missed to consider the same, though its consideration was relevant for the purpose of supporting the order of cancellation." 11. The other irregularity alleged against the petitioner was "the shortage of 243.250 in 72.5 U. P. and 13.850 litres in 50 U. P. against the opening balance on the 26th August, 1968." On an examination of the provisions of Sec. 42 of the Act, I find that none of the clauses cover this allegation. Consequently, the cancellation of the licence on the ground of shortage cannot be defended. Consequently, the cancellation of the licence on the ground of shortage cannot be defended. Although the allegation of shortage is mentioned as irregularities (a) and (b) at the very outset of the order of the learned Member Board of Revenue, there is no finding thereon and the order is significantly silent on this point. It appears that the Member Board of Revenue did not find any merit in this allegation and could not hold it as violative of any of the provisions of Section 42 of the Act. 12. Lastly it was contended that in any event the order of the learned Collector for the forfeiture of the security deposit amounting to Rs. 6,400.00 without a notice to show cause and without affording an opportunity to the petitioner of being heard on the question of forfeiture is bad and must be struck down. The relevant provision about the forfeiture of the security deposit is Sec. 42 (3) of the Act and it runs as follows:- - "(3). The holder of a licence, permit or pass shall not be entitled to any compensation for its cancellation or suspension under this section, or to the refund of any fee paid or deposit made in respect thereof." It is admitted that the petitioner did not get a notice for the proposed forfeiture of the security deposit, but it has been submitted by the learned Standing Counsel, as I have stated before, that no separate show cause is necessary for an action under Sec. 42 (3) of the Act and this is merely an order consequent upon the cancellation of the licence. I do not feel persuaded to accept this contention. In my view if the petitioner is not entitled to a refund of the security deposit in respect of the licence, he is surely entitled to a notice when an order to that effect is proposed. It may, however, be that the petitioner may not have yet claimed the refund of his deposit and the order of forfeiture of the security deposit has been passed prematurely. From the wording of Sub-section (3), it is evident that the question of not refunding the deposit may arise when there is a claim for the refund and the order of forfeiture along with the order of cancellation, as in this case, may not be tenable in law. From the wording of Sub-section (3), it is evident that the question of not refunding the deposit may arise when there is a claim for the refund and the order of forfeiture along with the order of cancellation, as in this case, may not be tenable in law. 13 For the reasons stated above, in the exercise of the powers conferred under Article 227 of the Constitution, I allow this application, set aside the order of the Member Board of Revenue dated the 15th May, 1970, and remand the case to the Board of Revenue for a fresh decision in accordance with law and in the light of the observations made above. The cost will abide the result. Untwalia, J. 14 I agree.