Mohammad Khalil v. Excise Commissioner U. P. — 1986 DIGILAW 644 (ALL)

JUDGMENT B.L. Yadav, J. - This Potion is directed against the order dated 16-12-1981 passed by the Excise Commissioner. Further the non-compliance of the order dated 05-08-198i of the District Magistrate, Varanasi by the District Excise Officer was also challenged. 2. The facts of the case are few and simple. The Petitioner along with his elder brother started whole-sale vend of the denatured spirit m partnership. A license for the said purpose was granted in Form F.L. 16 as provided under the U.P. Excise Manual Vol. L the license was granted in the names of Moriammad Khahl, the Petitioner and Mohammad Abdul Hamid jointly on 15-04-1961. The business was carried on at a shop situated at Kachchi Sarai, varanasi till 18-03-1979, when Abdul Hammed died. The Petitioner being the surviving partner applied to the licensing authority on 23-03-1979 to delete the Dame of Abdul Hammed from the license as the latter has died and the petitioner requested that he may be allowed to continue to run the license for the remaining period. The District Excise Officer struck the name of Abdul Hammed from the license by his Order dated 18-04-1979 and renewed the license in the name of the Petitioner alone for the year 1979-80 by his order dated21-04-1979. The Petitioner continued to carry on business of whole-sale vend of the denatured spirit under the licence F.L.16 after the deletion of the name or Abdul Hammed for the year 1979-80. The Petitioner applied again for renewal of the license for 1980-81 after complying all the legal formalities and the license was renewed on 14-04-80. But all of a sudden the District Excise Officer Respondent No. 3 informed the Petitioner that the District Magistrate by his Order dated 24-05-1980 cancelled the license of the Petitioner and temporarily granted the same in the name of R.S. Tewari, Respondent No. 4. It is pertinent to mention that Sri R.S Tewari was already holding a license in his name under F.L. From 17 at Mughal Sarai, which is not at all permissible under Rule 680 of the U.P. Excise Manual Vol.? I? The said order of cancellation of license of the Petitioner was communicated to him by the District Excise Officer on 20-06-80. I? The said order of cancellation of license of the Petitioner was communicated to him by the District Excise Officer on 20-06-80. The District Magistrate considered the representation of the Petitioner after referring the matter to the Excise Commissioner, U.P. for his opinion and ultimately the Petitioner's representation was allowed and temporary license granted to Sri R.S. Tewari, Respondent No. 4 was cancelled. The District Magistrate obtained relevant opinion from the Law Section of the office of the Excise Commissioner. The Petitioner had to file a writ petition (being Writ Petition No. 221 of 1981) before this Court and on 18-05-1981 a Division Bench of this Court admitted the writ petition and directed the Respondents to file counter affidavit. But no counter affidavit was filed and in the meanwhile the order canceling the license of the Petitioner was withdrawn and the petitioner was granted a provisional license till 31-07-81 by the order of the District Magistrate. Another application was moved by the Petitioner on 30-07-1981 praying that his license may be renewed for the year 1981-82, but the license was renewed only up to 31-10-1981 and this was in pursuance of the order dated 05-08-1981 passed by the District Magistrate (Annexure 2). But the District Excise Officer did not renew the license of the Petitioner. The Petitioner had filed an appeal before Respondent No. 1, which was dismissed by the impugned order. 3. It was alleged by Respondent No. 4, Sri R.S. Tewari that after the death of other partner the license could not have been renewed in the name of the Petitioner and the license was correctly granted to him and the same has been illegally cancelled and that the impugned orders were correct. 4. Sri Pradeep Kumar appearing for the Petitioner urged that the appeal preferred by the Petitioner was decided behind the back of the Petitioner without hearing his counsel and without informing him. Reliance was placed on Rule 360 (f; of the U.P. Excise Manual, Vol. I, which states that when a license is jointly held by two partners, in the event of death of either of them the survivor shall continue to hold the license. Reliance was placed on Rule 360 (f; of the U.P. Excise Manual, Vol. I, which states that when a license is jointly held by two partners, in the event of death of either of them the survivor shall continue to hold the license. The notification dated 20-08-1975 relied upon by the Excise Commissioner was modified and by a notification dated 15-10-1975, a true copy of which has been filed as Annexure-4, it was provided that if any license is held in the name of two persons and one of them dies, the license can be renewed in the name of the remaining partner. It was urged that the impugned orders were erroneous. 5. Learned Counsel for the Respondents, on the other hand, urged that it was the privilege of the State to grant license to any person and the Petitioner has no legal right. He placed reliance on Note to Rule 680(1) of the U.P. Excise Manual, Vol. I, which lays down that in the case of grant of a new license in Form F.L. 16 or whenever an existing license is vacated (including cases of mutation of names) and its continuance and settlement must be referred to the State Government for approval, and as it was not done in the instant case, the license cannot be renewed in the name of the Petitioner. 6. Having heard the learned Counsel for the parties I am of the view that the writ petition cannot be said to be without substance. In fact, the appeal was statutory right of the Petitioner and the impugned order affected the legal rights of the Petitioner, hence before deciding the same the Petitioner must have been heard through his counsel. But the same does not appear to have been done and consequently the impugned order in appeal has been passed in violation of the principles of natural justice. Further the First proviso to Section 11(2) of the U.P. Excise Act, 1920 provides that no order adversely affecting the parties shall be passed under this Section unless he has been given reasonable opportunity of making representation. Apart from it, as the appeal was filed by the Petitioner, opportunity of hearing must have been given to him under the general principle in the maxim of 'AUDIAL TFIRA Nl PARTEM', which was not done. Hence the order in appeal cannot be sustained. 7. Apart from it, as the appeal was filed by the Petitioner, opportunity of hearing must have been given to him under the general principle in the maxim of 'AUDIAL TFIRA Nl PARTEM', which was not done. Hence the order in appeal cannot be sustained. 7. No doubt in view of provisions of Section 24B of the Excise Act, the State Government has exclusive right and privilege to manufacture and sale of Country liquor and foreign liquor. But this privilege may be granted to other persons in the form of licence after having received the consideration. This license has to be granted either by auction sale or by surcharge system. In the instant case it was by surcharge system. It was granted in Form F.L. 16. Note to Rule 680 of the U.P. Excise Manual, Vol. I, enact the procedure about the grant of new license in F.L. Form 16. It has been laid down that whenever an existing license is vacated (including the cases of mutation of names) and its continuance and settlement with some other party is considered necessary, the case should be referred to the State Government. In the instant case it was not a case of grant of a new license in Form F.L. 16 and consequently Note to Rule 680 relied upon by the learned Counsel for the contesting Respondent would not apply. 8. The correct procedure appears to have been laid don Under Rule 360 which provides that when a license is jointly held by two partners, in the event of death of either of them the survivor shall continue to hold the license. In the instant case the other partner died, and hence the Petitioner should have been permitted to continue to hold the licence. Further the notification relied upon in the appellate order appears to have been modified by the notification dated 15-10-1975 (Annexurc-5). In this view of the matter the notification relied upon in the appellate order was not correctly relied upon. 9. In Writ Petition No. 5925 of 1973 (Miraj & Sons v. Excise Commissioner, U.P.), decided on 01-01-1981 by a Division Bench of this Court, Honble M.N. Shukla, J. (as he then was), held that after considering the relevant rules and paragraphs of the U.P. Excise - Manual, Vol. 9. In Writ Petition No. 5925 of 1973 (Miraj & Sons v. Excise Commissioner, U.P.), decided on 01-01-1981 by a Division Bench of this Court, Honble M.N. Shukla, J. (as he then was), held that after considering the relevant rules and paragraphs of the U.P. Excise - Manual, Vol. I that in case of death of a partner the license should be renewed continued in the name of the remaining partners. In that case relevant record was perused by this Court and it was held than there was no justification to cancel the license in the name of surviving partner. 10. In view of what has been stated above, the impugned orders cannot be sustained. 11. In the result, the petition succeeds and is allowed with costs. The impugned Orders dated 16-12-1981 passed in appeal (Annexure-4) and the order not renewing the license of the Petitioner beyond 31-10-1981 is hereby quashed. It is, however, made clear that in future the license would be granted in accordance with the provisions of Act and relevant Rules.