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2002 DIGILAW 667 (ORI)

RAJ DAYAL SAHA v. STATE OF ORISSA

2002-10-11

A.S.NAIDU, P.K.BALASUBRAMANYAN

body2002
JUDGMENT : P.K. Balasubramanyan, C.J. - For the excise year 1.6.2001 to 31.3.2002, the petitioner was the licensee of two Indian Made Foreign Liquor 'Off shops. One was at Poda-Astia and the other was at Bisoi, both in Mayurbhanj district. As per the excise policy for the year 2002-2003, the petitioner was entitled to a renewal of the licences for these shops. The policy also provided that all existing IMFL. 'Off shops were to be renewed without any change in the licence fee and in the minimum guaranteed quota. Thus, on the terms of that policy, the petitioner was entitled to a renewal of his licence regarding both the shops. Even otherwise, under Annexure B/3, the sale notice for the shops during the year in which the petitioner bid for the two shops, the exclusive privilege once granted was to continue for consecutive three years including the year in which it was granted, subject to certain terms and conditions. Of course, the Government was entitled to change its policy and the petitioner has not rested his case on the sale notice, but has relied only on the policy for the year 2002-2003 providing for renewal of licences for all existing IMFL. 'Off shops. 2. The petitioner apparently thought that it would not be worthwhile running the IMFL. 'Off shop in Poda Astia, but that licence for IMFL, 'Off shop at Bisoi should be got renewed. He thereupon, applied for renewal of the licence for the excise year 2002-2003 only in respect of the 'Bisoi' shop along with the requisite challan. By the communication Annexure-6, he was informed by the Superintendent of Excise, Mayurbhanj that since he had sought a renewal of only one of the IMFL. 'Off shops i.e. at Bisoi, and had not duly applied for renewal of the licence for the IMFL. 'Off shop at Poda Astia, it could not be considered that there was a proper application for renewal. In the absence of a proper application for renewal of both the shops, he could not be granted a renewal for the shop at Bisoi only, in view of Rule 102(A) of the Board's Excise Rules and if he did not immediately apply for the 'Off shop at Poda Astia also, he would be liable for the loss that may be sustained by the Government. In the face of this stand adopted by the Superintendent of Excise, Mayurbhanj, the petitioner filed this writ petition seeking the issue of a writ of certiorari to quash the above intimation marked as Annexure-6 and for the issue of a writ of mandamus directing the opposite parties to renew the licence in respect of IMFL. 'Off shop at Bisoi for the year 2002-2003 without insisting on his applying for renewal of the licence for the shop at Poda Astia. According to the petitioner, Rule 102(A) relied on by the Superintendent of Excise, Mayurbhanj, was not a valid rule for the reason that it had never been published as contemplated by Section 92 of the Bihar and Orissa Excise Act and that it was beyond the rule making power of the Board of Revenue traceable to Section 90 of that Act. It is therefore, submitted by the petitioner that in view of the right that flows in his favour pursuant to the excise policy 2002-2003, he was entitled to a renewal of the licence for the Bisoi 'Off shop alone. The observations in the decision in Dusasan Behera Vs. State of Orissa and Others, on the impact of the excise policy on the right of the licensee, are relied upon. 3. Though learned counsel for the petitioner raised a contention that Rule 102(A) had not come into force since it was not published in the Gazette as contemplated by Section 92 of the Bihar and Orissa Excise Act, the said contention was not specifically put forward in the writ petition originally filed. But it was sought to be introduced by way of an amendment and also by way of some general pleading in the rejoinder of the writ petitioner. Since this aspect was not specifically pleaded in the writ petition, that aspect was not specifically traversed in the counter affidavit filed on behalf of the State. But the Additional Government Advocate submitted that the rule had come into force. We, therefore, called for the Gazette for the concerned period from the Library of the Court. It was then found that the rule had been notified in Part-IIIA of the Orissa Gazette July, 12, 1996. The notification is dated 3.7.1996. But the Additional Government Advocate submitted that the rule had come into force. We, therefore, called for the Gazette for the concerned period from the Library of the Court. It was then found that the rule had been notified in Part-IIIA of the Orissa Gazette July, 12, 1996. The notification is dated 3.7.1996. The said notification is quoted below : "No. 5427-LVlll-14/96-Ex.: !n exercise of powers conferred by Section 90(9) of the Bihar and Orissa Excise Act, 1915 (Act 2 of 1915) the Board of Revenue, Orissa do hereby make the following new Rules which shall be numbered as Rule 102(A) and will be placed below Rule 102 of Part-l of Chapter-VIII of Board's Excise Rules, 1965 : AMENDMENT Rule 102(A) : No licence for Retail, wholesale or sale to trade for any intoxicant shall be granted to any person, Company or Firm or their associates or family members of that person within the same district or anywhere else in the State, if that person, Company or Firm omits wilfully or otherwise, to renew his existing licence on terms and conditions generally prescribed for all or to obtain fresh licence on being successful in any settlement by tender-cum-auction or otherwise. Names of such defaulters shall be circulated by Collectors to all concerned at the earliest. This notification shall take immediate effect." On the notification being brought to the notice of counsel for the petitioner, he did not pursue his argument that Rule 102(A) had not been duly notified in terms of Section 92 of the Act. Since the point was raised, by way of answer to that point, we hold that there has been a proper publication of Rule 102(A) in terms of Section 92 of the Bihar and Orissa Excise Act and the rule had been brought into force with effect 3.7.1996. 4. As can be seen, the rule provides that no licence shall be granted to a licensee who omits wilfully or otherwise, to renew his existing licence on terms and conditions generally prescribed for all to obtain fresh licences, on being successful in any settlement by tender-cum-auction or otherwise. 4. As can be seen, the rule provides that no licence shall be granted to a licensee who omits wilfully or otherwise, to renew his existing licence on terms and conditions generally prescribed for all to obtain fresh licences, on being successful in any settlement by tender-cum-auction or otherwise. It is therefore, the case of the opposite parties that the petitioner was a licensee of two IMFL 'Off shops, was bound to have his licences renewed for both the shops and in view of the fact that the petitioner had not sought a renewal of the licence of Poda Astia shop, the licence for the 'Bisoi' shop alone could not be renewed. Confronted with this situation, learned counsel for the petitioner contended that the rule was beyond the rule making power of the Board of Revenue, It is not disputed that the power of the Board to make rules is traceable to Section 90 of the Act. Section 90 provides that the Board may make rules for regulating the manufacture, supply or storage of any intoxicant and in particular, and without prejudice to the generality of this provision, also for regulating the authorised establishment referred to in that Section. Under Section 90(9) of the Act, the Board could make rules prescribing the restrictions under which or the conditions on which any licence may be granted and without prejudice to the generality of that provision, make rules also for regulating the transfer of licences. It is the submission of the learned counsel that Section 89 of the Act concerns power on the State Government to make rules to carry out the objects of the Act and u/s 89(2)(g), the State Government alone could make rules for prohibiting the grant to specified classes of persons of licences for the retail sale of any intoxicant. According to the counsel, the prohibition contained in Rule 102(A) of the Board's Excise Rules can only be traced to the power to make rules u/s 89(2)(g) of the Act and if so, the power to make such a rule rested with the State Government and not with the Board. According to the counsel, the prohibition contained in Rule 102(A) of the Board's Excise Rules can only be traced to the power to make rules u/s 89(2)(g) of the Act and if so, the power to make such a rule rested with the State Government and not with the Board. Counsel sought to support his argument by reference to Rule 45 of the Orissa Excise Rules, 1965 indicating the category of persons to whom a licence for sale of intoxicants was not to be granted and submitted that the said Rule was in exercise of power u/s 89(2)(g) of the Act and the prohibition contained therein was not attracted to the case on hand and hence the petitioner could not be denied a renewal of his licence for the shop at Bisoi alone. Counsel also emphasized that under the excise policy 2002-2003, the petitioner was entitled to a renewal of his licence for the Bisoi shop and he could not be denied the same, by reference to Rule 102(A) of the Board's Excise Rules. 5. Learned Additional Government Advocate submitted that the right to farm out the right to sell liquor for a consideration was conferred on the Government by Section 29 of the Act and that the sale notice Annexure B/3 in Clause (9) thereof had already provided for a condition similar to one found in Rule 102(A) of the Board's Rules and even if Rule 102(A) of the Board's Rules was found to be not valid or not applicable, the petitioner was bound by condition No. 9 of the sale notice on the basis of which he acquired the right in respect of both the shops and the stand adopted by the Excise Authorities in Annexure-6 was justified. Condition No. 9 of the sale notice referred to by learned Additional Government Advocate is more or less the same as Rule 102(A) of the Board's Excise Rules. He further submitted that u/s 90 of the. Act, the Board did have the power to issue a rule like Rule 102(A) and the contention that it was beyond the rule making power of the Board of Revenue was unsustainable. He pointed out that the power to make rules for regulating manufacture, supply or storage of any intoxicant vested with the Board and the present rule would certainly come within that power. He pointed out that the power to make rules for regulating manufacture, supply or storage of any intoxicant vested with the Board and the present rule would certainly come within that power. He further submitted that even going by Section 90(9) of the Act, the Board had the power to prescribe the restriction or the condition on which the licences can be renewed and therefore, there was no lack of rule making power in the Board of Revenue. 6. We find on a reading of Section 90 of the Act, that the power available to the Board of Revenue to make rules would certainly enable it to make a rule regulating the grant or renewal of a licence to sell intoxicants and that Rule 102(A) cannot be said to be beyond the Rule making power of the Board of Revenue. The fact that u/s 89 of the Act the State Government may make a similar rule cannot by itself deprive the Board of its power, if such a power has been conferred on it by Section 90 of the Act. We find on a scrutiny of Section 90 of the Act, that Rule 102(A) cannot be said to be beyond the rule making power conferred on the Board of Revenue. Therefore, the argument of learned counsel for the petitioner that the rule was beyond the rule making power of the Board of Revenue cannot be accepted. 7. Excise policy for a particular excise year only generally indicates the policy that the Government intends to follow for that particular year. The Government decided that the existing licences should be renewed. But that does not mean that the rules governing such renewals are given a go by, by the Government. The policy has necessarily to be understood in the context of the Act and the Rules governing the grant of renewal of licences. Therefore the argument that in view of the policy, the petitioner was entitled to a renewal in respect of the Bisoi shop which alone he wanted, notwithstanding whatever may be contained in Rule 102(A) of the Board's Excise Rules, cannot be accepted. We find no conflict between the policy for the year 2002-2003 and Rule 102(A) or even the sale notice under which the petitioner originally acquired the right to vend liquor. Therefore, nothing turns on the argument based on the Excise Policy 2002-2003. 8. We find no conflict between the policy for the year 2002-2003 and Rule 102(A) or even the sale notice under which the petitioner originally acquired the right to vend liquor. Therefore, nothing turns on the argument based on the Excise Policy 2002-2003. 8. The argument that Rule 102(A) is too wide and hence must be found to be unreasonable cannot be accepted. Obviously, Rule 102(A) was brought into the statute book with a view to prevent licensees who acquired disqualification during a particular excise year and hence became disentitled to have their licences renewed, getting the same knocked down in the name of a relative, family member or associate or firm of which he is a partner or in the name of a company in which has a substantial interest. It could happen and it did happen that when a licensee who had failed to lift the minimum guaranteed quota and had not paid the consideration he was bound to pay and was in arrears to the Government and as a result disqualified to have a renewal of the licence by himself or to bid for a licenses, obtaining the licence in the name of his wife or a member of his family or in the name of an association or company in which he had a substantial interest, thereby getting over the bar created by Rule 45 of the Bihar and Orissa Excise Rules. There was also the mischief of a licensee of more shops than one not taking the renewal of the licensee of more shops than one, not taking the renewal of the licence of a loss making shop even while taking a renewal of the licence of a profit making shop leading to the non-renewed shop having to be re-auctioned leading to non-settling of that shop for the year or at least to delay in settling that shop and the consequential loss of revenue. This mischief was sought to be remedied by the introduction of Rule 102(A) of the Board's Excise Rules. While considering the scope of a rule like Rule 102(A) of the Rules, one has necessarily to advert to the mischief that was sought to be remedied when making the rule. This mischief was sought to be remedied by the introduction of Rule 102(A) of the Board's Excise Rules. While considering the scope of a rule like Rule 102(A) of the Rules, one has necessarily to advert to the mischief that was sought to be remedied when making the rule. So understood, it is clear that what the rule, intends is that a person who is otherwise not entitled to a licence or to its renewal, should not have the benefit of the licence though not directly, but indirectly. On a plain reading of Rule 102(A) of the Board's Excise Rules, it is clear that a person who wilfully or otherwise, omits to renew his existing, licence or licences on the terms and conditions prescribed, is not entitled to a renewal of his licence or licences. Here, the petitioner had obtained the right to run the IMFL 'Off shops at Poda Astia and Bisoi and had refused to have a renewal of the licence relating to the shop at Poda Astia while at the same time seeking a renewal of the licence of the shop at Bisoi. Thus, there was failure on the part of the petitioner to seek a renewal of his licence and this results in his being deprived of the right to have the renewal for one of the shops alone. We may notice here that an argument initially raised that Rule 102(A) can affect the right of renewal, only in a case where the shops are sold in a lot and the licensee acquired it in a lot and not when he holds two separate licences on the basis of two independent auctions was not seriously pursued by counsel at the final hearing, presumably in view of the wide amplitude of Rule 102(A) of the Board's Rules. The petitioner was an existing licensee of two shops and the petitioner had not sought renewal of both the licences. In this context, the Excise Authorities refused the renewal of the licences of one of the shops alone. In view of our conclusion that Rule 102(A) of the Board's Excise Rules is not beyond the rule making power of the Board, the action of the Excise Authorities has necessarily to be upheld. In this context, the Excise Authorities refused the renewal of the licences of one of the shops alone. In view of our conclusion that Rule 102(A) of the Board's Excise Rules is not beyond the rule making power of the Board, the action of the Excise Authorities has necessarily to be upheld. That would mean that the petitioner is not entitled to have Annexure-6 quashed and since he has not come forward to have a renewal of both the licences, he would not be entitled to a renewal of the licence for Bisoi shop alone. 9. We had earlier on 16.5.2002, passed an interim order directing the Excise Authorities to renew the licence of IMFL 'Off shop at Bisoi on the same terms and conditions as last year, pending a final decision on this writ petition, but in that order, we had imposed a condition on the petitioner that in case the petitioner did not succeed in the writ petition, he would be liable to pay the damages caused to the State by the non-licencing of the IMFL 'Off shop at Poda Astia. In other words, we had directed that the State would be entitled to recover from the petitioner, the loss sustained by it and as quantified by it. Now, it is brought to our notice that the concerned Excise Authority did not implement our interim direction dated 16.5.2002 and did not renew the licence of the IMFL 'Off shop at Bisoi as directed by us. On the other hand, on 5.7.2002, one application, Miscellaneous Case No. 7226 of 2002, was filed praying for a recall of the order dated 16.5.2002. Of course, the petitioner has made an application praying that action must be taken against the Excise Authorities for not implementing the interim direction of this Court. Of course the petitioner has insisted that action must be taken. But in the circumstances of the case, we are not satisfied that any action should be taken against the Excise Authorities, though we must record our displeasure at their not implementing our direction dated 16.5.2002. We think that their conduct also justifies our relieving the petitioner of the obligation imposed on him by our interim order dated 16.5.2002, as a consequence of the dismissal of the writ petition by us. We think that their conduct also justifies our relieving the petitioner of the obligation imposed on him by our interim order dated 16.5.2002, as a consequence of the dismissal of the writ petition by us. In view of our dismissal of the writ petition, the petitioner would have been liable for the loss caused by the non-opening of the IMFL 'Off shop at Poda Astia for the period up to now. But, since the authorities did not implement our order, we do not think that it is fair or proper to pin down the petitioner alone to his obligation. Therefore, we relieve the petitioner and the opposite parties, of their obligations under the interim order of this Court in Miscellaneous Case No. 4001 of 2002. We "make it clear that if the State has any other claim or remedy against the petitioner under the Act or under law, the same would not in any manner be affected by this position adopted by us, since we are here concerned only with the rights and obligations arising out of the interim order dated 16.5.2002, on the terms of that order. Any other right available to the State can be enforced by it. In view of the interpretation placed by us on Rule 102(A) of the Board's Rules, we dismiss the writ petition. We make no order as to costs. Final Result : Dismissed