Research › Browse › Judgment

Patna High Court · body

1983 DIGILAW 77 (PAT)

Ramnandan Prasad v. State of Bihar

1983-03-07

A.K.SINHA, B.S.SINHA, S.K.JHA

body1983
JUDGMENT : Brishketu Saran Sinha, J. By an ORDER :dated 21st December, 1982, a Bench of this Court observed that this case be heard by a larger Bench and that is how it has come before us. 2. The prayer, in this application, is to quash Annexures 1', 2' and 3', appended to it. Annexure 1' is an ORDER :dated 5th April, 1982, passed by the Collector of Rohtas, respondent no. 4, cancelling the licence of the petitioners of a Country spirit shop. Annexure 2' is an ORDER :, dated 18th May, 1982, passed by the Commissioner of Excise, respondent no. 3, in appeal, affirming the ORDER :of the Collector and Annexure 3' is a resolution of the Member, Board of Revenue, respondent no. 2, dated 30th July, 1982, passed in revision, upholding the ORDER :of the Commissioner of Excise. 3. The three petitioners are joint licensee in respect of a country spirit shop for ratail vend within the area specified in respect of Dehri No.2 country spirit shop. They were granted a licence by the Collector of Rohtas for one year beginning from 1st April, 1981 to 31st March, 1982. On 17th March, 1982, the Deputy Commissioner of Excise, respondent no. 5, visited the aforesaid country spirit shop at Dehri. He noticed over-dilution in spirit in some bottles and drums and short measure in others. The Deputy Commissioner recorded his inspection note and directed .the petitioners to submit their explanation in respect of the irregularities to the Superintendent of Excise on 20th March, 1982. The superintendent of Excise also issued notice to the petitioners to submit their explanation, copy of which is Annexure 4'. On 24th March, 1982, the petitioners filed their show cause before the Superintendent of Excise. On that very date the Superintendent of Excise passed an ORDER :, copy of which is Annexure ‘5’. He did not accept the explanation submitted by the petitioners and directed them to show cause as to why action should not be taken for cancellation of their licence under' the provisions of the Bihar and Orissa Excise Act, 1915. He further directed that the petitioners should submit their explanation on 5th April, 1982. Further explanation was submitted by the petitioners on 5th April, 1982, copy of which is Annexure 7'. He further directed that the petitioners should submit their explanation on 5th April, 1982. Further explanation was submitted by the petitioners on 5th April, 1982, copy of which is Annexure 7'. By an ORDER :passed on the same date, i.e., on 5th April, 1982, the Superintendent of Excise recorded his findings holding the petitioners guilty of dilution and short measure and he submitted the file to the Collector for ORDER :s. Copy of this ORDER :has been annexed as Annexure ‘8’. On 5th April, 1982, itself, the Collector who was the licensing authority passed the impugned ORDER :(Annexure 1') cancelling the licence of the petitioners after endorsing the views of the Superintendent of Excise and directed the Superintendent of Excise to take charge of the stock of the liquor in the shop of the petitioners. 4. It has further been stated in the writ petition that on 29th March, 1982, the Commissioner of Excise had accorded sanction for the renewal of the licence of the country spirit shops during the financial year ending on 31st March, 1982. A copy of this ORDER :is Annexure 9'. However, on 8th April, 1982, after the ORDER :of cancellation of the petitioner's licence had been passed by the Collector, the shop was settled, for the time being, with respondent no. 7, Habibur Rahman. 5. In support of this application it has been submitted that the ORDER :of cancellation of the licence, passed by the collector, cannot be sustained as it violates the principles of natural justice inasmuch as the petitioners were not given an opportunity by the cancelling authority to be heard in the matter. It was also urged that the haste with which the subsequent settlement was made with Habibur Rahman and which has been the subject of some criticism both by the appellate authority and the revisional authority, namely, the Commissioner of Excise and the Member, Board of Revenue, would indicate that the cancellation was not bona fide. 6. On behalf of the respondents, learned Government Pleader No. IV has, however, contended that the ORDER :of the Collector does not suffer from any illegality and there has been no violation of the principles of natural justice. 7. 6. On behalf of the respondents, learned Government Pleader No. IV has, however, contended that the ORDER :of the Collector does not suffer from any illegality and there has been no violation of the principles of natural justice. 7. Under section 20 of the Bihar and Orissa Excise Act, 1915, (hereinafter called as 'the Excise Act') the Collector is the authority competant to grant licence for country spirit shop and under section 42 of the Excise Act he has the power to cancel or suspend the licence on any of the grounds mentioned therein. In is not in dispute that the ORDER :of cancellation has been passed by the Collector under section 42 of the Excise Act. It is also not disputed that the impugned ORDER :is a quasi-judicial ORDER :. 8. Principles of natural justice are based on the twin concepts of impartiality and fairness and the two are distinct concepts. In the words of Hegde, J. "concept of rule of law would lose its validity if the instrumentalities of the State are not charged with the duty of discharging their functions in a fair and just manner" (see the case of A.K. Kraipak v. Union of India, A.I.R. 1970 Supreme Court 150). His Lordship further observed that what was considered as an administrative power some years back is now being considered as a quasi-judicial power. The right to be heard before an adverse ORDER :is passed, which entails civil consequences, is by implication, a duty to act fairly. The audi alteram partem principle is intended to do justice but what fairness demands must depend, to a great extent, on the facts and circumstances of each case, the frame-work of the law under which the enquiry is held etc. and, therefore, whenever a complaint is made before a Court that principle of natural justice has been contravened, the Court has to decide whether observance of that rule was a necessity for a just decision on the facts of the case. In State of Orissa v. Dr. (Miss) Binapani Dei (A.I.R. 1967 Supreme Court 1269) Shah, J. In dealing with the enquiry regarding the correct age of a Government servant, observed as follows ;- "We think that such an enquiry and decision were contrary to the basic concept of justice and cannot have any value. In State of Orissa v. Dr. (Miss) Binapani Dei (A.I.R. 1967 Supreme Court 1269) Shah, J. In dealing with the enquiry regarding the correct age of a Government servant, observed as follows ;- "We think that such an enquiry and decision were contrary to the basic concept of justice and cannot have any value. It is true that the ORDER :is administrative in character, but even an administrative ORDER :which involves evil consequences as already stated, must be made consistently with the rules of natural justice after informing the first respondent of the case of the State... ..." In re: H.K. (An Infant), (1967-2 Q.B. 617) Lord Parker, C.J., after holding that an immigration officer does not act in judicial or quasi-judicial capacity, observed that he must give the immigrant an opportunity to know what his immediate impression is so that the immigrant can disabuse him. 9. Therefore, on the basis of the above two decisions, it follows that in the instant case, the Collector, being the competent authority who had the power to cancel the licence should have, before passing the impugned ORDER :, informed the petitioners of the case against them and, should have given an opportunity to say whatever they had to say in the matter. In the instant case, while the Superintendent of Excise given notice to the petitioners to show cause why their licence should not be cancelled, the Collector did not give the petitioners that opportunity. I have already pointed out above that after the second explanation was submitted by the petitioners on 5th April, 1982, the Superintendent of Excise, on that very day, by a lengthy ORDER :, recommended that the licence of the petitioners be cancelled and the Collector also, on that very day, i.e. on 5th April, 1932 itself, without giving an opportunity to the petitioners, cancelled their licence by the impugned ORDER :(Annexure 1') The petitioners were not only given no opportunity to have their say before the Collector, the competent authority, but were also deprived of meeting the reasonings given by the Superintendent of Excise for the cancellation of the licence. Before the ORDER :of cancellation of the licence was passed by the Collector, the petitioners were not given a copy of the recommendation of the Superintendent of Excise, copy of which is Annexure 8'. 10. Before the ORDER :of cancellation of the licence was passed by the Collector, the petitioners were not given a copy of the recommendation of the Superintendent of Excise, copy of which is Annexure 8'. 10. I am, therefore, constrained to hold that the cancellation of the petitioners' licence by Annexure 'I' cannot be sustained in law as it violates the principles of natural justice. 11. The question that still survives consideration is whether the illegality in the ORDER :of the Collector, copy of which is Annexure 1', is cured by the fact that the petitioners got an opportunity to say, whatever they had to say, when they went up in appeal before the Commissioner of Excise and in revision before the Member, Board of Revenue. Admittedly, the petitioners had received the copy of the recommendation of the Superintendent of Excise, which is Annexure ‘8’, before they went up in appeal to the Commissioner of Excise, who affirmed the decision of the Collector. In Farid Ahmed Abdul Samad and another v. The Municipal Corporation of the City of Ahmedabad and another (A.I.R. 1976 Supreme Court 2095) it was held that when the ORDER :at its inception is invalid, the invalidity cannot be cured by its approval of the Standing Committee or by confirmation of the State Government. Therefore, if the ORDER :, at the inception, is invalid, approval by the superior or appellate authority cannot cure it of its initial invalidity. Similarly, in M/s. Kashiram Dalmia v. The State of Bihar and others (A.I.R. 1978 Patna 264) a Bench of this Court held that the fact that adequate opportunity was afforded to the aggrieved party at the appellate stage did not cure the defect of want of notice by the original authority. Therefore, I am inclined to take the view that once the initial ORDER :cancelling the licence by the Collector is held to be invalid, such invalidity cannot be cured by the fact that the petitioners had an opportunity to say, whatever they had to say, before the appellate or revisional authority. 12. I will now, refer to some of the decisions cited by the learned Government Pleader in support of the ORDER :s. Great reliance was placed upon a decision of this Court in Sheopujan v. State (I.L.R. XXXV Patna 268), a JUDGMENT : of Ramaswami, J. on difference of opinion between Rai and Sinha, JJ. 12. I will now, refer to some of the decisions cited by the learned Government Pleader in support of the ORDER :s. Great reliance was placed upon a decision of this Court in Sheopujan v. State (I.L.R. XXXV Patna 268), a JUDGMENT : of Ramaswami, J. on difference of opinion between Rai and Sinha, JJ. In that case also the licence had been cancelled by the Deputy Commissioner without giving an opportunity of hearing to the licensee. The appeal and revision by the licensee had been dismissed after hearing. Ramaswami, J. held that there had been no violation of the principles of natural justice. In coming to this conclusion, his Lordship was of the view that although the Deputy Commissioner did not issue a fresh notice to the licensee and did not give him an oral hearing, but the Deputy Commissioner had before him not only the report of the Superintendent of Excise but also the explanation of the licensee refuting the allegation. He further held that the petitioner having taken the advantage of the statutory right of appeal and revision it was not the requirement of the principle of audi alteram partem that the party, adversely affected, should be heard at each and every stage of administrative process and concluded that the principle is satisfied if the party, adversely affected, is given sufficient opportunity to know the case i.e. has to meet and to answer that case at some stage and not at all at the stages of administrative proceedings. It was, therefore submitted by learned Government Pleader that in the instant case, as the explanations of the petitioners, refuting the allegation were before the Collector and also because they had an opportunity to say all that they wanted to say before the appellate and the revisional authorities, there had been no violation of the principle of audi alteram partern. I have already pointed out above, relying on the case of State of Orissa v. Dr. (Miss) Binapani Dei (supra) that the petitioners were entitled to be informed of the case of the Excise Department and that was not only the inspection report of the Deputy Commissioner of Excise but also the report of the Superintendent of Excise, copy of which is Annexure 8', which were before the Collector when he passed the impugned ORDER :. (Miss) Binapani Dei (supra) that the petitioners were entitled to be informed of the case of the Excise Department and that was not only the inspection report of the Deputy Commissioner of Excise but also the report of the Superintendent of Excise, copy of which is Annexure 8', which were before the Collector when he passed the impugned ORDER :. That report of the Superintendent of Excise had not been given to the petitioners. Further the authority who had to be disabused was not the Superintendent of Excise but the Collector, the competent authority. Therefore, the first reason given by Ramaswami, J. cannot be said to be good law now. Besides, in view of the decision of the Supreme Court in Farid Ahmed Abdul Samad's case (supra), the second reasoning given by Ramaswami, J. also cannot be sustained. It has, therefore, to be held that the decision in Sheopujan v. State (I.L.R. XXXV Patna 268) is no longer a good law. 13. The other four decisions relied upon by learned Government Pleader are in State of Punjab and others v. Ajudhia Nath and another (A.I.R. 1981 Supreme Court 1374); The Chairman, Board of Mining Examination and Chief Inspector of Mines and another v. Ramjee (A.I.R. 1977 Supreme Court 965); State of Gujarat and others v. Ambalal Haiderbhai etc. (A.I.R. 1976 Supreme Court 2002); and, Fazal Bhai Dhala v. The Custodian General, Evacuee Property, New Delhi, and another (A.I.R. 1961 Supreme Court 1397). In the case of State of Punjab and others (supra) it was held that where the demands were for payment of the still head duty which had become due under the contracts accepted by the licencee himself and had resulted from the terms of those contracts, no question of affording to the licencee any opportunity of being heard arose. However, it was pointed out in that very case that an opportunity of being heard has to be given to a liquor vendor when his licence is to be cancelled. In the case before me, as the licence of the vendors, namely, the petitioner was being cancelled, they had to be given an opportunity to be heard. 14. In the case of the Chairman, Board of Mining Examination and Chief Inspector of Mines (supra) the respondents shot firer's certificate had been cancelled. In the case before me, as the licence of the vendors, namely, the petitioner was being cancelled, they had to be given an opportunity to be heard. 14. In the case of the Chairman, Board of Mining Examination and Chief Inspector of Mines (supra) the respondents shot firer's certificate had been cancelled. The relevant statutory rules provided that the Regional Inspector would have the power to suspend a certificate after obtaining a written explanation from the person concerned and then, within a week, to report to the Beard, and the Board, after making such enquiry, as it thinks fit, either confirm or modify or reduce the period of suspension of the certificate, or cancel the certificate. The Regional Inspector had obtained a written explanation from the shot firer and before the Board also he had submitted an •explanation which the respondent had styled as 'appeal'. In such circumstances, it was held that there had been no violation of the principles of natural justice. So even this decision does not support the contention of the learned Government Pleader. 15. In the State of Gujarat and others v. Ambalal Haidarbhai etc. (A.I.R. 1976 Supreme Court 2002) it was observed as follows :- "What particular rule of natural justice should be implied and what its content should be for a given case must depend to a great extent on the facts and circumstance, of that case, the frame work of the law under which the enquiry is held, and the constitution and nature of duties of the Tribunal or the body of persons appointed for that purpose." But in that case also it was held that if the land owners whose lands were to be acquired were not given an opportunity to be heard, the ORDER :for acquisition would be bad. Similarly in the case of Fazal Bhai Dhala (supra) it was observed that "What the law requires is that the person concerned should be given a reasonable opportunity of being heard before any ORDER :prejudicial to him is made in revision.” It was, however, pointed out that if responsible opportunity of being heard cannot be given without the service of the notice the omission to serve the notice would be fatal; where proper hearing can be given without service of notice, it dose not matter at all, and all that has to be seen is whether even though no notice was given, a reasonable opportunity of being heard was giving. In that case the party aggrieved was already before the Custodian and therefore, on the facts of that case, it was held that non-service of formal notice would not vitiate the ORDER :. In the case before us, I have already pointed out that the petitioners were given no opportunity to show cause by the Collector, nor were they given a copy of the report of the Superintendent of Excise. 16. Lastly, it was submitted by the learned Government Pleader that in the preset case the petitioners had said all that they had to say before the Superintendent of Excise and, therefore, it would have been a mere formality for the Collector to have given the petitioners another opportunity of having their say in the matter. In rejecting this argument I cannot do better that to quote a paragraph from the JUDGMENT : of Megarry, J. in John v. Rees (1970 (1) L.R. Chancery Division 345). At page 402 of the report, the learned Judge observed as follows:- "It may be that there are some who would decry the importance which the courts attach to• the observance of 'the rules of natural justice. ‘When something is obvious, they may say, why force everybody to go through the tiresome' waste of time involved in framing charges and giving an opportunity to be heard? The result is obvious from the start. Those who take this view do not, I think, do themselves justice. ‘When something is obvious, they may say, why force everybody to go through the tiresome' waste of time involved in framing charges and giving an opportunity to be heard? The result is obvious from the start. Those who take this view do not, I think, do themselves justice. As every body who has anything to do with the law well knows, the path of the law is strewn with examples of open and shut cases which, somehow, were not; of unanswerable charges which, in the event, were completely answered; of inexplicable conduct which was fully explained; of fixed and unalterable determinations that, by discussion, suffered a change. Nor are those with any knowledge of human nature who pause to think for a moment likely to underestimate the feelings of resentment of those who find that a decision against them has been made without their being afforded any opportunity to influence the course of events." 16. Mr. Shivanand Prasad Sinha, appearing for respondent no. 7, has submitted that both the Collector. and the Superintendent of Excise have the power to issue licence for country spirit under the Excise Act and, therefore, the Superintendent of Excise could also cancel the licence and hence, in the present case, as the Superintendent of Excise had given an opportunity to the petitioners to be heard, there has been no violation of the principles of natural justice. This argument cannot be sustained because even if it is assumed that the Superintendent of Excise also has the power to cancel the licence, in the instant case, the Superintendent of Excise had not cancelled the licence. The licence has been cancelled by the Collector and, therefore, it was incumbent upon the Collector to have given the petitioners an opportunity to be heard before the ORDER :of cancellation was passed. 17. Although I have referred earlier that there are references in the writ petition to the effect that after the cancellation' of the petitioners' licence, licence has been granted to Habibur Rahman, respondent no. 7, in hot haste, I have refrained from making any observation with regard to it as we were informed at the Bar that the grant of the licence in favour of Habibur Rahman is subject matter of a separate writ petition which is pending in this Court. 18. 7, in hot haste, I have refrained from making any observation with regard to it as we were informed at the Bar that the grant of the licence in favour of Habibur Rahman is subject matter of a separate writ petition which is pending in this Court. 18. In the result, this application is allowed and Annexures ‘1’, 2' and 3', appended to it, are quashed. However, I would make no ORDER :as to costs.