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2002 DIGILAW 495 (CAL)

S. K. Chemical v. State of West Bengal

2002-07-26

P.N.Sinha, Samaresh Banerjea

body2002
JUDGMENT Samaresh Banerjea, J.: The present appellants moved a writ petition being W.P. No. 3188 of 2000 challenging a public notice dated 27th October, 2000 whereby the State-respondents invited application in prescribed form from the intending persons for grant of excise licence for establishment of a private warehouse or for the deposit and storage of rectified spirit for the purpose of denaturation in West Bengal Excise Form No. 28AA and storage of special denatured spirit for sale by wholesale for use of special denatured spirit in industrial purpose in West Bengal Excise Form 22. 2. It was the case of the writ petitioners who are 8 in number and are the manufacturers of N.C. Thinners, Varnish, Reducers, Special Shiners etc. in their individual factories located at different parts of West Bengal that for manufacturing of the aforesaid finished products, the petitioners require Special Denatured Spirit (hereinafter referred to as "SDS"). The production of alcohol and/or rectified spirit in West Bengal is negligible and West Bengal is a deficit State and Bihar, V.P. etc. have more production than the demand because of which the petitioners import SDS from such surplus States after having authorization from the Excise Department of the State of West Bengal. 3. It was the contention of the petitioners that the aforesaid impugned public notice inviting such applications was arbitrary, unreasonable, without jurisdiction and ultra vires the Bengal Excise Act, 1909 and also ultra vires the West Bengal Excise (Licensing Boards) Rules, 1950 and also offended the fundamental right of the petitioners under Article 19(1) of the Constitution. 4. It was the grievance of the petitioners that because of such public notice the petitioners now will be compelled to purchase SDS from the said wholesaler at a monopolistic rate. Such action of the Government amounts to creation of monopoly in trade, the result of which would be that the small-scale unit will be compelled to purchase SDS at a monopoly rate, which is bound to be a higher than the rate at which the petitioners have been importing SDS from the other States by negotiation. 5. It is also the contention of the petitioners that such a public notice issued and all the decisions in respect thereof could only be taken by the Excise Licensing Board under the West Bengal Excise (Licensing Boards) Rules, 1950 and the Excise Directorate or Excise Commissioner has no jurisdiction to grant licence. 5. It is also the contention of the petitioners that such a public notice issued and all the decisions in respect thereof could only be taken by the Excise Licensing Board under the West Bengal Excise (Licensing Boards) Rules, 1950 and the Excise Directorate or Excise Commissioner has no jurisdiction to grant licence. The impugned decision contained in the said public notice is therefore without jurisdiction and ultra vires the West Bengal Excise (Licensing Boards) Rules, 1950. 6. It was further contended that the aforesaid impugned public notice is also ultra vires the provisions of Bengal Excise Act, 1909 as it is sought to circumvent the provisions of Bengal Excise Act, 1909 or to short-circuit the procedure established by law. The said public notice was issued in colourable exercise of power. The decision contained in the public notice is an unreasonable restriction on the fundamental right of the petitioners to carry on trade and business and therefore it is ultra vires Articles 19(1)(g) and 20 of the Constitution. 7. The aforesaid writ petition was admitted by Justice D.K. Seth but no interim order was granted. 8. Subsequently, by the impugned order dated 2nd July, 2001, Justice Pinaki Chandra Ghose disposed of the writ application by directing that the writ petitioner shall apply before the authorities for sanction of the permit in respect of importation of the material in question and the said authority shall issue the permission if the petitioner was entitled to the same, in accordance with law. 9. It is the aforesaid order passed by Justice Pinaki Chandra Ghose which is the subject-matter of the present appeal before us. 10. Before proceeding any further it will be pertinent to record certain very important facts. 11. It appears from the affidavit of the added respondents filed before the trial court and the list of dates filed by the State-authority before us that even during the pendency of the writ petition, on 2nd March, 2001, licence to establish a private warehouse in West Bengal Excise Form No. 28AA was issued in favour of the added respondents being Eastern Distilleries and Chemical Ltd., which is a Government of West Bengal enterprise. 12. But the writ petitioners never challenged such grant of licence to the added respondents by amending the writ petition. 13. 12. But the writ petitioners never challenged such grant of licence to the added respondents by amending the writ petition. 13. After disposal of the writ petition on 18th June, 2001, on 10th July, 2001 the Excise Commissioner issued an order inter alia, notifying all concerned that henceforth no import authorization or import permit for SDS for industrial use in the State of West Bengal would be issued to any licence holder except to M/s. Eastern Distilleries and Chemical Ltd. But in a special case import authorization or import pass might be issued. 14. The writ petitioners never challenged the impugned order dated 2nd July, 2001 by a separate writ petition. 15. The present appellants moved a stay petition being G.A. No. 2306 of 2001 in connection with the appeal filed by them against the aforesaid order of Justice Pinaki Chandra Ghose disposing of the writ application. 16. In the aforesaid stay application also no prayer was made in respect of the aforesaid order dated 10th July, 2001 which was issued by the Excise Commissioner after disposal of the writ petition or in respect of the licence which was granted in favour of the added respondents and on the said date an order was passed in term of prayer 'A' of the said petition, but no interim order was granted. Subsequently, on 8th August, 2001 the present appellant made the present application for appropriate order being G.A. No. 3074 of 2001 in the aforesaid appeal challenging the aforesaid order dated 10th July, 2001 passed by the Excise Commissioner after disposal of the writ petition and praying for stay in connection thereof whereupon a limited stay was granted, which was extended from time to time. 17. While considering the aforesaid application for appropriate order, and the question whether such stay can be granted and whether such application can at all be maintained, by consent of the parties the appeal was also heard out dispensing with all formalities. 18. 17. While considering the aforesaid application for appropriate order, and the question whether such stay can be granted and whether such application can at all be maintained, by consent of the parties the appeal was also heard out dispensing with all formalities. 18. It may also be recorded in this connection that elaborate arguments have been advanced by all the parties not only on the question as to the maintainability of the application for appropriate order and the legality and propriety of challenging the said order dated 10th July, 2001 in the present appeal, notwithstanding the fact that such order was passed after disposal of the writ petition, but also the merits of the writ petition and the appeal. 19. It may also be recorded in this connection that the added respondent has contested the proceeding by filing affidavit and the State authorities although have not filed any affidavit, they have addressed the court on question of law and for facts relied on such affidavit by the added respondent and also produced some documents before the court. 20. As to the issue whether in the present appeal against the impugned judgment and order, whether the order dated 10th July, 2001 admittedly passed after disposal of the application, can be challenged in the present application for appropriate order, after considering the respective submissions of the parties, we are of the view that such order could not have been challenged in the present appeal by the aforesaid applicant in the manner aforesaid or at all. 21. Although the learned Counsel appearing on behalf of the appellant has strenuously argued that such order dated 10th July, 2001 being a consequential order, can be challenged in the present appeal, we are unable to accept such contention of the appellants that such order is consequential to the impugned public notice which was challenged in the writ petition and/or the same can be challenged in the present appeal. 22. It has been preferred against the judgment and order disposing of the writ application before issue of the said order dated 10th July, 200l. 23. By the public notice impugned in the writ petition, applications were invited from the intending candidates in prescribed form for grant of excise licence for establishment of a private warehouse for deposit and storage of rectified spirit. 24. 23. By the public notice impugned in the writ petition, applications were invited from the intending candidates in prescribed form for grant of excise licence for establishment of a private warehouse for deposit and storage of rectified spirit. 24. Although the said public notification was challenged by the writ petitioner, they failed to obtain any interim order and subsequently licence was granted during the pendency of the writ petition to the added respondents for establishment of such warehouse. 25. Only subsequent to grant of such licence, the order dated 10th July, 2001 was passed subsequent to disposal of writ application where the writ petitioners were directed to apply for obtaining permit. 26. The order dated 10th July, 2001 was issued by the Excise Commissioner informing the general public that a licence in prescribed form No.28AA for establishment of private warehouse for deposit and storage of rectified spirit has been granted to the added respondents and henceforth no import authorization and import permit for special denatured spirit for industrial use in the State shall be issued to any licence holders except to the said added respondents and henceforth the users of the special denatured spirit holding licences for special denatured spirit may take the issue of the same from the added respondents, although in a special case import authorization and the import permit for import of denatured spirit may be issued. 27. The order dated 10th July, 2001, in our view, therefore is an independent order creating a fresh cause of action, which could have been challenged by the writ petitioner by a fresh writ petition. 28. But even assuming the order dated 10th July, 2001 could have been termed as an order ancillary to the aforesaid public notice which was challenged in the writ petition, but in view of the fact that even during the pendency of the writ petition a licence was granted to the added respondents for establishment of a warehouse and thereafter such an order dated 10th July, 2001 was passed subsequent to the disposal of the writ petition, the same created a fresh cause of action which could have been challenged by the writ petition which he however, did not. 29. 29. Even during the pendency of the writ petition, in our view, because of grant of such licence to the added respondents for establishment of warehouse the writ petition became infructuous and could not have been maintained unless such grant of licence would have been challenged by the writ petitioner by amending the writ petition, which again the writ petitioner did not do. 30. In our view, because of the failure of the appellants to challenge the aforesaid grant of licence in the aforesaid writ petition actually made the writ petition infructuous and consequently the appeal preferred against the judgement and order passed by Justice Pinaki Chandra Ghose disposing the writ application also, in our view, has become infructuous. 31. It has been submitted by the learned Counsel appearing on behalf of the parties that such licence was not challenged amending the writ petition as in the relevant point of time it was not known to the writ petitioner that such licence was granted. Even assuming such fact was not known to the writ petitioner at the relevant point of time that cannot change the consequence of not challenging the said grant of licence by amending the writ petition. 32. It appears to us that the petitioners although had opportunity to challenge the order dated 10th July, 2001 wherefrom the writ petitioner came to know the licence had already been granted to the added respondents for establishment of such warehouse, yet the writ petitioner did not choose to challenge the said order by a fresh writ petition although they were entitled to do so. 33. Not having done so the writ petitioner, in our view, cannot challenge the said order, now in the present appeal by an interlocutory application which again has really become infructuous because of the reasons stated above. 34. The learned Counsel appearing for the appellant in support of his submission that the aforesaid order dated 10th July, 2001 can be challenged in the present appeal by the said applicant has relied on the decision of the Supreme Court in the case of Pasupuleti Venkateswarlu vs. The Motor & General Traders, reported in A.I.R. 1975 S.C. 1409 and in the case of Jai Mangal Oraon vs. Mira Nayak (Smt.) & Ors., reported in 2000(5) S.C.C. 141 . In our view, although there cannot be any dispute to the proposition of law as laid down by the Supreme Court in the aforesaid two cases the same will not have any application in the present case. 35. The ratio of the decision in the aforesaid two cases was that the Court can take notice of subsequent event to do real, effective and substantial justice or to prevent a miscarriage of justice. 36. The aforesaid order dated 10th July, 2001, however, cannot be termed as a subsequent event which can be taken note of by, the Court. Such event did not take place after filing of the writ petition, during the pendency of the writ petition. Such event took place after disposal of the writ proceeding. There was no scope therefore for the writ court to take notice of such event as subsequent event, the same having taken place subsequent to the disposal of the writ petition. 37. So far as the Appellate Court is concerned such event again cannot be termed as an event which has taken place subsequent to the filing of the appeal and therefore cannot be taken note of by the Appeal Court. Such an event, in fact, has taken place prior to the filing of the appeal. 38. Reference may be made in this connection in the decision of the Supreme Court in the case of Pralhad Lalchand Chavan vs. Iqbal Hussain Inayat Hussain Badri, reported in 1996(5) S.C.C 428 (para 12). In the said case the Supreme Court following its own earlier decision in the case of D.K. Soni vs. P.K. Mukherjee, reported in 1988(1) S.C.C. 29 and in the case of Hasmat Rai vs. Raghunath Prasad, reported in 1981(3) S.C.C. 103 , held that once a decree or order has become final, the tenant is precluded from saying that in view of subsequent events the need or requirement no more existed. 39. It may also be recorded in this connection that admittedly after disposal of the writ petitioners applied before the respondents for special permission in terms of order of Justice Pinaki Chandra Ghose. Such writ petitioners, therefore, could not have maintained the appeal. 40. For the reasons stated above the appellants cannot challenge the order dated 10th July, 2001 in the present appeal. The application for appropriate order therefore stands dismissed. The interim order stands vacated. Such writ petitioners, therefore, could not have maintained the appeal. 40. For the reasons stated above the appellants cannot challenge the order dated 10th July, 2001 in the present appeal. The application for appropriate order therefore stands dismissed. The interim order stands vacated. The appeal has also become infructuous for the reasons stated above and is liable to be dismissed. 41. But even on merits it appears to us that the appeal is not liable to succeed. 42. It appears that the decision for appointment of whole sellers was taken by the State Government as a matter of policy long ago. The same was challenged by 17 writ petitioners who were engaged in various manufacturing activities and for the aforesaid purpose they were using denatured spirit. 43. In the writ petition being C.O. No. 13220(W) of 1991 filed by them such challenge was made on the same ground as in the present writ petition. 44. In the said writ proceeding the State Government in their affidavit explained the necessity of making such control. It was contended inter alia, that denatured spirit was being misused which has led to number of deaths in various parts of the country including Uttar Pradesh and therefore it was imperative to bring some control over the distribution system. 45. Such contentions of the respondents were upheld by Justice Suhas Chandra Sen (as His Lordship then was) and the contention of the writ petitioner in the said case was rejected. 46. At the same time His Lordship was of the view that the West Bengal Government could not have appointed as a whole-seller without any advertisement. 47. Accordingly the writ application was disposed of directing that a public advertisement should be issued inviting applications for appointment of such whole seller so that other may get also opportunity to apply. 48. Pursuant to the aforesaid judgment ultimately such public notice was issued inviting applications for appointment of such whole-seller. Such fact the present writ petitioners have completely suppressed from the Court. 49. Such public notification therefore having issued under the aforesaid order of the Court and the aforesaid judgment of Justice Suhas Chandra Sen never having been set aside by the appeal, it is not open to the present petitioners now to challenge the issue of such public notice inviting application for appointment of whole-sellers. 50. The appeal therefore is liable to fail on that ground. 51. 50. The appeal therefore is liable to fail on that ground. 51. We do not also find any merit in the submission of the appellants that the appointment of such whole sellers will affect the fundamental right of the appellant to carryon business under Article 19 of the Constitution and because of such decision of the State Government a monopoly will be created in favour of such whole-seller to be appointed which is not permissible. 52. First, the writ petitioner/appellants do not carryon any business of selling such SDS, but admittedly they purchase the same as it is issued by them for manufacturing purposes. 53. That apart right to carry on such business under Article 19 of the Constitution is subject to reasonable restriction under Article 19(6) of the Constitution. Reasonable restriction in the matter relating to trade or business, storage etc. inter alia, of the said denatured spirit have been made by an enactment namely, under the provisions of the Bengal Excise Act and the Rules thereunder. Under section 15 of the Bengal Excise Act, 1909 the Excise Commissioner is empowered subject to any restrictions imposed by the State Government to establish or authorize the establishment of warehouse, wherein any intoxicant may be deposited and kept without payment of duty and also discontinue any such warehouse. 54. Such Regulation therefore of the alleged right of the petitioner having been made by valid enactment, it cannot be said that any right of the petitioner under Article 19 of the Constitution has been violated. 55. The submission of the appellants that such restrictions cannot be said to be reasonable or in public interest or the same has been made only to create a monopoly in favour of the added respondent is also without any merit. 56. As pointed out hereinbefore that the decision to distribute such denatured spirit through appointment of a whole-seller by the State Government was taken as a matter of policy long ago with a view to prevent misuse of such denatured spirit which, in fact, was done in various parts of the country including Uttar Pradesh and such decision of the State Government was upheld in the earlier writ proceeding by Justice Suhas Chandra Sen, which was not challenged. 57. 57. The issue of the impugned notice for the aforesaid purpose as also the said decision also certainly cannot be said to be arbitrary but the same is very much in public interest. 58. Even assuming the same creates a monopoly for the added respondents, the same certainly is not impermissible as the added respondents is a Government undertaking. 59. Although it was sought to be contended by the appellant that the added respondent is not a Government undertaking, it appears from The Eastern Distilleries (P) Ltd. (Acquisition and Transfer of Undertakings) Act, 1983 that under the provision of the said Act the undertaking of the said company was acquired and from the appointed day, under section 3 of the said Act, the undertakings of the said company and the right, title and interest of the company in relation to its undertaking stood transferred to and vested in the State Government. 60. It was also sought to be argued that the public notification could not be issued by the Commissioner for the aforesaid purpose as under the provision of the Act it is only the State Government which has such power. 61. We do not find any substance in such contention–– 62. Section 7(2)(e) of the Bengal Excise Act itself empower the State Government to delegate some power under the Act to the Excise Commissioner. Rule 15(2) of the Rules empowers the Excise Commissioner to issue licence to deposit or keep any rectified spirit and country spirit in a bottling plant and warehouse in West Bengal Excise Form No. 28AA. 63. In this connection reliance may be made in the decision reported in 1973(2) S.C.C. 617 where the monopoly created in favour of State Trading Corporation of India in the matter of import and export of certain goods was upheld by the Supreme Court. A scheme of canalization of mica was also upheld by the Supreme Court in the said case. In the instant case such scheme of the State Government is nothing but a scheme for canalization of denatured spirit through State undertaking. 64. The prejudice which allegedly the writ petitioners will suffer because of such decision is more of imagination than reality. No particular has been furnished as to how in the matter of manufacturing where such denatured spirit, will be used, they will suffer. 64. The prejudice which allegedly the writ petitioners will suffer because of such decision is more of imagination than reality. No particular has been furnished as to how in the matter of manufacturing where such denatured spirit, will be used, they will suffer. The petitioners will be entitled to draw from the whole seller the supply of denatured spirit to carryon their manufacturing business and therefore their right to carry on such manufacturing business is not at prohibited or affect in any manner whatsoever. 65. The further contention of the petitioner that any restriction can be made only in terms of Schedule VII List 2 Entry 8 of the Constitution read with Article 13(3) and Article 47 of the Constitution is not tenable in view of the provisions contained in section 86 of the Bengal Excise Act, 1909 which gives power to the State to make rules for regulating deposit of intoxicant in the warehouse. 66. Although it was also sought to be contended that on a combined reading of Entry 84 and the Entry 97 of List 1 it is clear that the State Legislature has no authority, power or jurisdiction to legislate relating to industrial alcohol and/or alcohol which is not fit for human consumption, the provisions of the Bengal Excise Act and the Rules made thereunder never having been challenged by the writ petitioner on the ground that they are bad because of lack of legislative competence, such question need not be gone into by this Court. 67. That apart it will appear that the said Act has been passed by the Governor General of India in Council with the previous sanction of the Governor General obtained under section 5 of the Indian Council Act, 1892. 68. For the reasons stated above we find the present appeal as also the application to be wholly misconceived and the same are hereby dismissed with cost assessed at 200 G.Ms. to be paid by each of the writ petitioners to the added respondents and the State-respondent. P.N. Sinha, J.: I agree. Appeal dismissed.