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2001 DIGILAW 629 (KER)

Sunil K. v. State of Kerala

2001-11-06

K.A.ABDUL GAFOOR

body2001
Judgment :- K.A. Abdul Gafoor, J In this batch of Original Petitions the petitioners, licensees of FL-1 and FL-3 shops and/or their employees challenge the amendment to Rule 2 of the Foreign Liquor Rules introduced as per SRO No. 225/1998 Published in the Kerala Gazette dated 5.3.1998 in substitution of the then exist provision introduced on 29.3.1996 as per SRO 326/1996 and published in the Gazette on the same day. The amendment introduced as per SRO 326/1996 as well is also challenged. 2. Rule 2 of Foreign Liquor Rules originally issued on 17.1.1953 reads as follows: "The minimum strength at which imported and Indian made foreign spirits can be sold are 35 degree UP of gin and 25 degree UP for all other kinds of spirits." The Rule did not provide for any variation of the actual proof of spirit content. The authorities found that there is chance of variation of the spirit content and consequent variation in the proof of Indian made foreign liquor sold in the State. Therefore an amendment was introduced as per SRO 326/96 as follows: "However the actual proof spirit content of such liquor may be 1 degree proof under or over the above proof strength." So a variation between 34 to 36 degree UP in the case of gin and 24 to 26 degree UP in the case of other kinds of spirit was permitted. This formed as a condition in the licences issued subsequent to such amendment. Later some more modification was found necessary by the authorities and in place of the amendment brought in as per SRO 326/96 the following was substituted. "However the actual proof of spirit content of such liquor maybe 1.75 degree proof under or over the above proof strength in the line with the Indian standard specification (ISI) in this regard. Provided that because of efflux of time in storage, the degree under proof is likely to get deteriorated due to the chemical nature of ethyl alcohol, any punitive action under this rule shall be taken only wth the prior approval of Excise Commissioner." This was as per SRO 225/98 to be effective from 5.3.1998. All these Original Petitions were filed subsequent to the amendment effected as per SRO 225/98. All these Original Petitions were filed subsequent to the amendment effected as per SRO 225/98. Along with challenge to the this provision introduced in 1998, the provision that was brought to the statute book for the first time as per SRO 326/1996 is also impugned. The reason for impugning a deleted provision is that there were certain prosecutions pending at that time with regard to the variation of proof strength of the alcohol taken from the shops of some of the petitioners. 3. The petitioners, impugning these provisions contend that bulk quantity of Indian made foreign liquor sold in this State is brought from outside the State. They are bound by the standard insisted by ISI as revealed in Exts.P1,P2 and similar standards in respect of different types of Indian made foreign liquor. This specification was suggested by ISI on a scientific basis. With regard to the requirement of alcohol content Ext. P1 provides, concerning brandies, that "The ethyl alcohol content in brandies shall be 42.8 percent by volume (25 degrees under proof) at 15/15 degree Centigrade when determined according to the method prescribed in 3 of IS 3752:1998. The tolerance limits for ethyl alcohol content shall be + 3.0 percent of the declared strength. However, the ethyl alchol content and its tolerance may vary according to the Rules and Regulations prescribed by the State Excise rules." Thus a variation upto 3 percent of the declared strength is allowed. Three percent is equivalent, in terms of degrees to 5.25 degrees. This conversion is not disputed. Same Clauses is contained in other types of liquor as well. The petitioners contend that when they are selling Indian made foreign liquor manufactured outside the State for which the rules and regulations prescribed as per the Foreign Liquor Rules in Kerala are not applicable, it is possible that they may happen to sell Indian made foreign liquor having proof strength above or below 5.25 degree. It will be in excess of 1 degree specified in 1996 amendment or 1.75 degree specified in 1998 amendment. Therefore on selling Indian made foreign liquor manufactured outside the State in accordance with the specifications in that place, the petitioners may be prosecuted. A prosecution, if succeeds, in terms of Section 26, shall result in cancellation of the licence, adversely affecting the petitioners in their business prospects. Therefore on selling Indian made foreign liquor manufactured outside the State in accordance with the specifications in that place, the petitioners may be prosecuted. A prosecution, if succeeds, in terms of Section 26, shall result in cancellation of the licence, adversely affecting the petitioners in their business prospects. The wholesale distributor of the liquor to the petitioner is a State Agency. So the rule itself in comparison with Ext.P1 is not workable. The earlier amendment was introduced when this standard has not been prescribed by the ISI. It is, perhaps nothing that, when the subsequent amendment of 1998 was brought into force, the words" in line with Indian standard specification(ISI) in this regard" was added as a parenthesis, as extracted above. The Indian standard specifications, as mentioned above, permits a variation of + 3 percent equal to 5.25 degree. In such circumstances, the variation that may happen on the spirit standard prescribed in the original rule may be 20 to 30. In such circumstances when in the subsequent amendment the Indian standard specification is taken note of insisting that the variation in proof shall be "in line with Indian standard specification also". 1.75 percent variation becomes unworkable , the petitioner submits. Pointing out the averments in paragraph 7 of the counter affidavit, it is contended that even the department is also not consistent as to whether this 1.75 percent shall be worked either on the spirit of 35 percent UP or 25 percent UP as the case may be mentioned in Rule 2 or whether it shall be worked out for the purpose of loss of spirit while supplied in piecemeal quantity in a retail shop. In Paragraph 7 of the counter affidavit, it is averred as follows: "As regards the averments in para 13-14 it is submitted that even if it is agreed that there is possibility of loss of strength when the liquor bottle is opened several times, the allowance of 1.75 degree proof over and under the declared strength is enough and more to meet that loss. The meaning of this averment is that this 1.75 degree variation allowed as per the amendment is for the purpose of application of the proviso intended to meet exigencies of situation or change in the spirit content due to "efflux of time in storage, the degree under proof is likely to get deteriorated due to the chemical nature of ethyl alcohol etc." Thus even the respondents have not fixed up the mind to understand the real impact of the rules, the petitioners submit. Anyhow the existence of Indian standard as contained in Exts.P1 and P2 is not denied. It is internationally accepted. The respondents did not have a case that Indian made foreign liquor manufactured outside the State of Kerala is not sold in the State. In such circumstances when an outside manufacturer, manufactures Indian made foreign liquor based on the standard specified in the Indian standards, necessarily there is all possibility of plus or minus 3% equal to 5.25 degree UP variation in the alcohol content of the liquor concerned. In such circumstances if one degree mentioned in 1996 amendment or 1.75 degree menioned in 1998 amendment is reckoned based on 35 degree UP or 25 degree UP as contained in Rule 2 itself, the petitioners will be prosecuted and convicated for no fault of theirs. They will have no control over the manufacture of the liquor in tune of the speicification prescribed by Indian Standard specification, which is also statutorily accepted when the 1998 amendment was brought in. Necessarily the 1.75 variation shall be read with reference to or in line with the Indian Standard specification in this regard. But the prosecution launched against the petitioners is based on the chemical analysis report in which variation is worked out with reference to the 25 degree or 35 degree UP and not with reference to the Indian standard Specification. Therefore this rule is ununderstandble and consequently unworkable. What is the relevance of Indian Standard Specification taken note of as per the 1998 amendment is not discernible in such situation. In other words, the words in line with Indian standard Specification (ISI) are rendered meaningless, the petitioners submit. Necessarily this is a valid contention to be examined. 4. The Government Pleader submits that even in the Indian standard specification the corresponding Excise Rules are saved. In other words, the words in line with Indian standard Specification (ISI) are rendered meaningless, the petitioners submit. Necessarily this is a valid contention to be examined. 4. The Government Pleader submits that even in the Indian standard specification the corresponding Excise Rules are saved. The amendment introduced as per 1996 amendment and 1998 amendment had to be read into Indian standard specification. So there is no unworkability. If it is so, there was no necessity to read ISI standard in the rules because the ISI standard is subject to Foreign Liquor Rules. Therefore that contention cannot be accepted. Moreover the liquor manufactured outside the state of Kerala is not in tune with Excise Rules applicable in Kerala. Actually 1.75 percent is no concern for the manufacturers outside Kerala. They are much concerned with the + 3% which is equal to 5.25 degree as contained in Indian standard Specification. Therefore in respect of the liquor manufactured outside the State and sold in the as supplied by a State agency, the fifth respondent, necessarily the ISI standard will have application and in such case difference may come to 5.25 degree and it is possible that the petitioners may be prosecuted and convicated for no offence committed by them. 5. No doubt, the words 'in line with Indian Standard Specification' in this regard is introduced in the rule with some meaning. Therefore the specifications as contained in Exts. P1 and P2 do have some application. That is plus or minus 3 percent equal to 5.25 degree. In such circumstances what shll be the variation with regard to the spirit content whether it is actual 1.75 degree or 1.75 degree with reference to the ISI specification is not discernible from the rule. The words in line with Indian Standard Specification (ISI) in this regard cannot be rendered inoperative and meaningless. Because ISI standard is accepted all over the world. Therfore this is a case of, as contended by the petitioners, unworkability of the rule resulting in unreasonableness. 6. Unreasonableness can be attributed to subordinate legisalation while considering its constitutionality, is an accepted proposition. In Pankajakshi v. George Mathew (1987 (2) K.L.T.723) this court had held that the rule made under a statute can be challenged on the ground that it is unreasonable and thereby resulting in manifestly arbitrary and unjust. 6. Unreasonableness can be attributed to subordinate legisalation while considering its constitutionality, is an accepted proposition. In Pankajakshi v. George Mathew (1987 (2) K.L.T.723) this court had held that the rule made under a statute can be challenged on the ground that it is unreasonable and thereby resulting in manifestly arbitrary and unjust. In Supreme Court Emplooyees Welfare Association v. Union of India (AIR 1990 SC 334) also the Supreme court held that "Validity of subordinate legislation, that it open to question if it is ultra vires the constituon or the governing Act or repugnant to the general principles of the laws of the land or it is so arbitrary or unreasonable that no fair minded authority could ever be made it." Unworkability and consequently resulting in unreasonableness therefore are grounds for challenging a subordinate legislation. I have already held that the rule is unworkable in the circumstances as mentioned above. Naturally it shall result in arbitrariness and is violative of Article 14 of the Consistution. The unworkability results in arbitrariness. Consequently the rule has to be struck down. 7. But it is, as already mentioned above, to be pointed out that the amendment brought in 1996, is being challenged only after 1998 amendment has been brought in. By reason of 1998 amendment ,the 1996 amendment does not subsist, of course the prosecution based on 1996 amendment may continue. As at present the 1996 provision is not on statute book. The petitioners did not, after the 1996 amendment had been brought in to the statute book, challenge the 1996 amendment. Therefore at this distance of time, having failed to challenge the 1996 amendment in time and having allowed it to work out until 1998 amendment is brought in, a challenge against a provision which is not on statute book when such challenge is made shall necessarily fail. 8. Based on the reasoning mentioned above, finding that the amendment brought in is so unreasonable and therefore shall be offending Article 14 of the Consitution, the said amendment introduced in the Foreign Liquor Rules as per SRO 225/1998 and published in the Kerala Gazette No. 402 with effect from 5.3. 1998 is declared unconstitutional. The Original Petitions are allowed.