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2001 DIGILAW 1117 (RAJ)

Shri Lal v. State of Rajasthan

2001-07-20

B.S.CHAUHAN

body2001
JUDGMENT 1. - The instant writ petition has been filed for quashing the order dated 4.4.2000 (Annx. 9) passed by the Excise Commissioner and the order dated 1.8.2000 (Annx. 10) passed by the Appellate Authority, i.e. the Divisional Commissioner, by which petitioner's licence had been cancelled with forfeiture of his license fee and confiscation of the liquor etc. 2. The case has a chequered history as it has already made several rounds before this Court. Petitioner had been granted a licence under the provisions of the Rajasthan Excise Act, 1950 (for short, 'the Act, 1950') read with the provisions of the Rajasthan Excise (Grant of Hotel, Bar/Club, Bar/Restaurant Beer Bar Licences), Rules, 1973 (hereinafter called 'the Rules, 1973') for running a bar in hotel Vijay Deep, Bhim, District Rajsamand. The licence was granted long back but it has been renewed from time to time for a tenure of one year. The respondent authorities made a spot inspection on 3.5.99 at the bar of the petitioner and the stock was found correct as per the Stock Register. However, the raiding party also inspected the other part of the same building (basement) owned and proposed by the petitioner but allegedly to have been rented out to one Radhey Shyam, wherein 922 pags of Whisky and 826.5 pags of Rum were found in the said restaurant. The said liquor was seized by the raiding party as is evident from the report (Annx. 2). Petition was served with a notice on 15.5.99 (Annx. 4) to show cause as why his licence be not cancelled and fee etc. may not be forfeited as per Clause (8) of the said licence dated 5.12.95 (Annx. 1). The notice basically contained two allegations, namely, the liquor had been recovered from the place other than the authorised for that purpose, and secondly, the quantity of liquor did not tally with stock entries. Petitioner filed reply to the said show cause and after considering the same, the Excise Commissioner decided the matter vide order dated 24.,125th May, 1999, by which it was held that storing the liquor outside the authorised place was in violation of the provisions of rule 72-B (a) of the Rajasthan Excise Rules, 1956 (for short, 'the Rules, 1956'). Petitioner filed reply to the said show cause and after considering the same, the Excise Commissioner decided the matter vide order dated 24.,125th May, 1999, by which it was held that storing the liquor outside the authorised place was in violation of the provisions of rule 72-B (a) of the Rajasthan Excise Rules, 1956 (for short, 'the Rules, 1956'). Moreso, the sub-letting of a part of the restaurant where the licence of the bar had been granted, was disbelieved and in view of the provisions of Section 34 of the Act read with Clause (8) of the Licence, the licence was cancelled and fee etc. were forfeited and the liquor recovered from the basement was also forfeited. Being aggrieved and dissatisfied, petitioner preferred an appeal before the Divisional Commissioner. Udaipur, which was disposed of vide judgment and order dated 15.6.99 (Annx. 6). The Appellate Authority had taken note of the facts and submissions made on behalf of the petitioner and particularly that the licence could not be cancelled without prior approval of the Government as required in Clause (8) of the licence itself. However, the Appellate Authority was not sure regarding the factual matrix but made an observation that the place, from where the liquor had been recovered, was at a distance from the place authorised for the purpose and there was nothing on record to show whether the said place (basement) was a part of the bar or not. There was nothing on record to show whether any action had been taken against the said person (Radhey Shyam), in whose possession the said liquor had been found and if so, there was no explanation as why the action was not Taken against said Radhey Shyam. Moreso, if there was no authorised transfer, sale or purchase of the liquor between the petitioner and said Radhey Shyam the provisions of rule 72-B (a) could not be made applicable but as the Excise Commissioner decided the matter- without affording an opportunity of hearing to the petitioner, the case was remanded to the Excise Commissioner to decide it afresh after giving an opportunity of hearing to the licensee. The matter was reconsidered and decided vide order dated 5.8.99 (Annx. The matter was reconsidered and decided vide order dated 5.8.99 (Annx. 7), wherein the Excise Commissioner recorded the finding of facts that petitioner himself was running the hotel and restaurant and there was no case of sub-letting of any part thereof; liquor recovered on 3.5.99 from the basement of the restaurant belonged to the petitioner and was a part of the stock of his hotel/bar; stock of liquor in the Bar room did not tally with the Stock Register; and petitioner had stored the said liquor outside the authorised place and violated the terms of the licence. Thus, in view of the provisions of Clause (8) of the licence and in exercise of the powers under the Act, 1950 and the Rules, 1973, the licence was cancelled and initial fees alongwith the fees deposited for the year 1999-2000 were forfeited and the entire liquor recovered in the bar on that date was also directed to be forfeited. Being aggrieved and dissatisfied, petitioner preferred Appeal No. 5/99 before the Divisional Commissioner, Udaipur, which was dismissed vide order dated 11.10.99 (Annx. 8). Hence this petition. 3. It has been urged by Mr. Lodha that the impugned orders suffer from illegality as the impugned orders could not have been passed in terms of Clause (8) of the licence, which mandatory requires prior approval of the Government of Rajasthan and as the approval has not been sought, the orders cannot be given effect to and, thus, liable to be quashed. Moreso, Section 34 of the Act does not empower the Authority to forfeit the fees and impose penalties etc. 4. Clause (8) of the Licence reads as under : "In case of default or infringement by the licensee or his servant, any condition of this licence or of any provisions of the Rajasthan Excise Act, 1950....with the previous approval of the State Government to cancel his license and to forfeit the initial fee and the licence fee and to impose on the licensee a penalty which may extend to Rs. 500/- (five hundred) and to recover from him the amount of penalty as arrears of land revenue." 5. There can be not quarrel to the settled legal proposition that if Statute provides for approval of the higher Authority, the order cannot be given effect to unless it is approved and the same remains inconsequential and unenforceable. (Vide Trilochan Mishra etc. 500/- (five hundred) and to recover from him the amount of penalty as arrears of land revenue." 5. There can be not quarrel to the settled legal proposition that if Statute provides for approval of the higher Authority, the order cannot be given effect to unless it is approved and the same remains inconsequential and unenforceable. (Vide Trilochan Mishra etc. v. State of Orissa, AIR 1971 SC 733 ; Union of India & ors. v. M/s. Bhimsen Walaiti Ram, ( AIR 1971 SC 2295 ; State of Orissa v. Harinarayan Jaiswal, AIR 1972 SC 1816 ; State of U.P. v. Vijay Bahadur Singh, AIR 1982 SC 1234 ; and Laxmikant & ors. v. Satyawan & ors., AIR 1996 SC 2052 ). However, Mr. Maheshwari has raised the serious objection to this proposition and submitted that undoubtedly Clause (8) of the Licence provided for prior approval but there has been some typographical error in this Clause as the licence had to be issued in Form-D appended to the Rules, 1973, the relevant Clause thereof reads as under : "In case of default or infringement by the licensee or his servant any condition of this licence or any provision of the Rajasthan Excise Act, 1950 or the provisions of the Opium Act, 1878 or rules framed thereunder or any order passed by the Excise Commissioner it shall be competent for the Excise Commissioner to cancel this licence and to forfeit the initial fee and the licence fee and to impose on the licensee a penalty which may extend to Rs. 500/- (Rupees five hundred) and to recover from him the amount of penalty as arrears of land revenue." Section 31 of the Act, 1950 reads as under : "Form and Condition of Licence etc.Every licence, permit or pass granted under this Act, shall be granted : (a) by such authority; (b) ............. (c)...............(d) in such form and containing such particulars; and (e) .................... as the State Government may prescribe by rules.......... 6. Thus, it is submitted by Mr. Maheshwari that the Rules stood amended long back with effect from 18.5.83 and the requirement of previous approval of the State Government was done away, therefore, the licence granted to the petitioner has to be read in consonance with the provisions of Section 31 of the Act read with Statutory Rules and the Appendix thereto. Maheshwari that the Rules stood amended long back with effect from 18.5.83 and the requirement of previous approval of the State Government was done away, therefore, the licence granted to the petitioner has to be read in consonance with the provisions of Section 31 of the Act read with Statutory Rules and the Appendix thereto. The Form appended to the said Rules has been made as required by rule 3 (1) and 3 (8) of the Rules, 1973. Moreso, Mr. Maheshwari has submitted that Section 34 of the Act, 1950 is an enabling provision for cancellation and suspension of license on the pre-requisite conditions contained therein. However, the procedure to deal with a defaulter has been laid down in the Rules, 1973 and, therefore, even if Section 34 of the Act does not provide for forfeiture of initial fees or liquor etc. and imposing the penalty it is permissible under the Rules, 1973. The Licence should have been issued in the proforma contained in Form-D, which does not require previous approval of the State Government. 7. In M/s. S.K. Kakkar v. All India Institute of Medical Science & Ors., JT 1996(8) SC 513 , the Hon'ble Supreme Court held that any resolution or order which is inconsistent with the Statutory Rules, cannot be permitted to have any role to play or has any legal efficacy and, therefore, any order which is inconsistent with the Statutory Rules, has to be ignored. 8. In Union Territory of Chandigarh Admn. & ors. v. Managing Society, Goswami G.D.S.D.C. (1996) 7 SCC 665 , the Hon'ble Supreme Court categorically held as under : "A contract in violation of the mandatory provisions of law can only be read and enforced in terms of the law and in no other way. The question of equitable estoppel does not arise....... because there can be no estoppel against a Statute. 9. In view of the above, the requirement of prior approval of the Government, as provided in Clause (8) of the licence, deserves to be ignored as it cannot be said to be a requirement under the law. 10. I further find no force in the submission made by Mr. because there can be no estoppel against a Statute. 9. In view of the above, the requirement of prior approval of the Government, as provided in Clause (8) of the licence, deserves to be ignored as it cannot be said to be a requirement under the law. 10. I further find no force in the submission made by Mr. Lodha that the State Government and the Excise Commissioner are empowered to frame the Rules under Sections 41 and 42 of the Act and while framing the said Rules, if the Excise Commissioner has imposed the restriction upon himself that he will not cancel or suspend a licence without prior approval of the Government, the same have to be enforced for the reason that it is the Statutory Authority alone which has to pass the order. Providing for requirement of prior approval of the State Government amounts to legislation, which is not permissible in law. The Legislature in its wisdom has done away with such a requirement, therefore, it cannot be permitted to be incorporated by the Subordinate Authority. Under the Statute and the Rules, the Excise Commissioner is the Competent Authority to pass the order of cancellation and suspension of a licence, therefore, he cannot be held to be Competent to add a further rider that his order would be subject to the approval of the State Government. 11. It is settled proposition of law that when Statute confers power on a particular Authority or person to perform certain functions. It cannot be exercised by any other person. (Vide Toda Ram v. State of Rajasthan & Ors., 1998 RLW 1603 ; Karan Singhji Jadeja & Anr. v. State of Gujarat & ors., JT 1995 (6) SC 146 ; State of U.P. & ors. v. Ram Naresh Lal, AIR 1970 SC 1263 ; Central Inland Water Transport Corporation Ltd. v. Brojo Nath Ganguli & Anr., (1986) 3 SCC 156 ; Board of High School and Intermediate Education, U.P.. Allahabad v. Ghanshyam Das Gupta, AIR 1962 SC 1110 ; Smt. Maneka Gandhi v. Union of India & Anr, AIR 1978 SC 597 : and Chandrika Jha v. State of Bihar & ors., AIR 1984 SC 322 ). 12. Allahabad v. Ghanshyam Das Gupta, AIR 1962 SC 1110 ; Smt. Maneka Gandhi v. Union of India & Anr, AIR 1978 SC 597 : and Chandrika Jha v. State of Bihar & ors., AIR 1984 SC 322 ). 12. In Purtabpur Company Ltd. v. Cane Commissioner of Bihar, AIR 1970 SC 1896 , the Hon'ble Supreme Court has observed as under : "The powers exercisable by the Cane Commissioner under Clause 6 (1) is statutory power. While exercising that power, he cannot obligate his responsibilities in favour of any one; not even in favour of the State Government or the Chief Minister ........The Executive Officers, entrusted with statutory discretion, may, in some cases, be obliged to take into account consideration of public policy and in some context the policy of the Minister or the Government as the whole when it is relevant factor in weighing the policy but this will not absolve them from the duty to exercise the personal judgment in individual case unless explicit statutory provisions have been made for them to be given binding instructions by a superior." 13. Thus, the requirement of prior approval of the Government is meaningless as the Excise Commissioner alone is competent to pass the impugned orders. 14. It has next been urged by Mr. Lodha that the show cause notice served upon the petitioner was not in consonance with the provisions of rule 72-B (a) of the Rules, 1956, which put an embargo to part with the liquor without obtaining previous permission in writing from the Licensing Authority. Mr. Dinesh Maheshwari has raised the objection that petitioner had not raised this issue before the Excise Commissioner or the Appellate Authority. The petitioner had been served with a composite notice containing allegations of transferring the liquor unauthorisedly to Radhey Shyam and once petitioner. understood what were the allegations against him and filed reply to the same and the transfer of liquor in favour of Radhey Shyam had always been an issue in the case, such a plea cannot be raised at this stage. It is apparent from the record of the case that the transfer of liquor in favour of Radhey Shyam has always been an issue. It is apparent from the record of the case that the transfer of liquor in favour of Radhey Shyam has always been an issue. Since the finding of facts have been recorded that the liquor was recovered from the basement allegedly let out to Radhey Shyam, his plea that he had purchased the liquor for conception in the marriage of his sister, was disbelieved on the grounds that the amount he paid could not be even a part consideration of such a huge quantity of liquor. Radhey Shyam had stated that he had purchased the said liquor for Rs. 6500/- and the Authority came to the conclusion that the market value of the said liquor could not be less than Rs. 14,000/-. Moreso, the liquor was recovered containing bottling date as April, 1999 and the purchase had been told to be prior to that date. It was further held by the Authority that the basement, from where the liquor was recovered, was in actual physical possession of the petitioner and the theory of sub-letting to Radhey Shyam was disbelieved and, therefore, storing of liquor out-side the authorised place was found proved. Moreso, the date of bottling of the liquor recovered from his possession was subsequent to the alleged date of purchase by him. It is not permissible for this Court to enter into the factual controversy in this respect in a limited jurisdiction of the judicial review. Thus, no interference is required on this count. 15. Mr. Lodha has submitted that the punishment imposed by the Authority, vide impugned order, is disproportionate to the offence, even if admitted to have been committed by the petitioner, as the impugned order provides for cancellation of the licence alongwith forfeiture of licence fees and initial fees etc. In view of the statutory provisions contained in the Rules, 1973, it cannot be held to be an excessive punishment. 16. It is settled legal proposition that judicial review is permitted only against the decision-making process and not against the decision. The quantum of punishment can be examined in a rare case where it shocks the judicial conscience. (Vide Bhagat Ram v. State of Himachal Pradesh, AIR 1983 SC 454 ; S.K. Giri v. Home Secretary, Ministry of Home Affairs & ors., 1995 (Supp) 3 SCC 519 ; Union of India v. Girriraj Sharma, 1994 (Supp) 3 SCC 755 ; Bishan Singh & Ors. (Vide Bhagat Ram v. State of Himachal Pradesh, AIR 1983 SC 454 ; S.K. Giri v. Home Secretary, Ministry of Home Affairs & ors., 1995 (Supp) 3 SCC 519 ; Union of India v. Girriraj Sharma, 1994 (Supp) 3 SCC 755 ; Bishan Singh & Ors. v. State of Punjab, (1996) 10 SCC 461 ; Ranjeet Thakur v. Union of India & Ors., (1987) 4 SCC 611 ; B.C. Chaturvedi v. Union of India & ors., AIR 1996 SC 484 ; Union of India v. G. Ganayutham, AIR 1997 SC 3387 ; Government of Andhra Pradesh v. B. Ashok Kumar, AIR 1997 SC 2447 ; Municipal Committee, Bahadurgarh v. Krishnan Bihari, AIR 1996 SC 1249 ; U.P.S.R.T.C. & ors. v. A.K. Parul, (1988) 9 SCC 416 ; General Court Martial & ors. v. Col. Aniltej Singh Dhaliwal, AIR 1998 SC 983 ; and Council of Civil Services Union v. Minister for Civil Service, 1984 (3) All. E.R. 935 ). 17. In the facts and circumstances of this case, it cannot be held that punishment of cancelling the licence, forfeiting the initial fee and licence fee is not commensurate with the offence under the provisions of the Act, 1950 and 1956 and 1973 Rules. 18. In the last, Mr. Lodha has submitted that there is no provision under the Act or the Rules providing for forfeiture of the liquor recovered, therefore, the respondents ought to have permitted the petitioner to dispose of the liquor seized by them by selling it to the other licensee and even now he is entitled to be compensated in terms of money. Section 69 (1) (a) of the Act, 1950 provides that every excisable article, in respect of which an offence is committed, is liable to confiscation. Therefore, it cannot be held that the forfeiture of the liquor was without jurisdiction or an authority of law. I find no force in the submission made by Mr. Lodha that the provisions of Section 69 are attracted only in a case where the liquor is being manufactured illegally, for the reason that Clause (c) thereof provides for confiscation of every excisable article, even lawfully imported, transported, manufactured, held in possession or sold alongwith or in addition to any excisable article liable to confiscation under Clause (a). 19. In view of above, the petition is devoid of any merit and accordingly dismissed. 19. In view of above, the petition is devoid of any merit and accordingly dismissed. There shall be no order as to costs.Writ Petition Dismissed. *******