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2004 DIGILAW 658 (CAL)

MAHENDRA SHIVLAL GANDHI v. STATE OF WEST BENGAL

2004-09-28

ASOK KUMAR GANGULY, TAPAN KUMAR DUTT

body2004
ASOK KUMAR GANGULY, J. ( 1 ) THIS appeal has been filed againyt an order dated 19. 5. 04 passed by the learned Judge of the Writ Court refusing to grant any order staying the operation of an order passed by the appellate authority under the Bengal Excise Act, 1909. The learned Judge instead of granting any stay directed the matter to be heard upon affidavits. ( 2 ) BEFORE this Court, all the contesting parties submitted and orayed for final hearing of the entire matter including the writ petition. Affidavits were filed by the parties. As much, this Court, with the consent of parties, heard the matter finally and by this judgement, both the appeal and writ petition are disposed of. ( 3 ) THE dispute is over the running of the retail business of Indian made foreign liquor by the parties and the various orders passed by the Excise authorities from time to time in the matter. ( 4 ) INITIALLY, one Dhirendra Kumar Vyas, the husband of Bhanumati Vyas, the respondent No. 6, carried on the said business. The excise licence was in his name. ( 5 ) THE petitioners' case is that as the said Dhirendra Kumar needed financial assistance, he approached Tushar Gandhi and the petitioner No. 1 to join him as partners. A partnership was, thus, entered into between the said Dhirendra kumar, Tushar Gandhi and the petitioner No. 1 on or about 30. 11. 1980 under the name and style of "m/s. New Wine Palace". That was a partnership-at-will. ( 6 ) THAT partnership continued for 14 years and in January, 1994, Dhirendra kumar died. After his death, his wife Bhanumati became a partner along with one Jayashree R. Vyas, J. P. Thakkar, Tushar Gandhi and the petitioner No. 1. Bhanumati also became the licensee. ( 7 ) THE deed of partnership was reconstituted on a number of occasions and ultimately a deed of partnership was reconstituted consisting of Bhanumati, sunil D. Vyas, Brijesh B. Vyas, Kalpen Kumar Tripathy and petitioner No. 2 and the petitioner No. 1. Of these partners, Sunil and Brijesh are sons of bhanumati and Kalpen is the cousin of Bhanumati. ( 7 ) THE deed of partnership was reconstituted on a number of occasions and ultimately a deed of partnership was reconstituted consisting of Bhanumati, sunil D. Vyas, Brijesh B. Vyas, Kalpen Kumar Tripathy and petitioner No. 2 and the petitioner No. 1. Of these partners, Sunil and Brijesh are sons of bhanumati and Kalpen is the cousin of Bhanumati. ( 8 ) WHILE the business was thus continued, the Additional District magistrate (General) by a memo dated 9th April, 2003 issued a show-cause notice on Bhanumati asking her to show-cause why the licence shall not be suspended or cancelled for entering into partnership business without prior permission from the licensing authority. As already noted, the licence was in the name of bhanumati Vyas, respondent No. 6 herein, but the business was carried as a partnership business in view of the partnership, which has been reconstituted from time to time and the particulars of which have been given above. Since no notice was given to the petitioners who were also partners in the said partnership business, the petitioners made an intervener application in the proceedings initiated by Additional District Magistrate (General), by the show-cause notice dated 9th April, 2003. ( 9 ) THE petitioners also filed the suit being 0. S. No. 65 of 2003 in the First court of Civil Judge, Senior Division, Midnapore, praying for a declaration that they are partners of the firm "m/s. New Wine Palace" at 11, Railway Market, golebazar, Kharagpur. A prayer was also made for the permanent injunction restraining Bhanumati and others from obstructing the petitioners in their taking part in the business and also from restraining the petitioners from entering the business premises. The learned Judge granted an interim order directing the defendant Nos. 1 to 4 who are Bhanumati, her two sons and her cousin, who are partners in the said partnership farm, to maintain status quo regarding the suit premises till the disposal of the petition for temporary injunction. ( 10 ) HOWEVER, Bhanumati as a partner of the said partnership firm wrote a letter on 30th April, 2003 to the Manager, Punjab National Bank, advising the said Bank to stop operation of the account maintained with the said Bank. ( 10 ) HOWEVER, Bhanumati as a partner of the said partnership firm wrote a letter on 30th April, 2003 to the Manager, Punjab National Bank, advising the said Bank to stop operation of the account maintained with the said Bank. In the meantime an order dated 22nd September, 2003 was issued by the A. D. M (General), Paschim Midnapore, and the same was addressed to Bhanumati as the licensee, purporting to suspend the Licence No. 4/86-87 of F. L. off-shop in the name and style of "new Wine Palace". The said order of suspension was passed by the A. D. M. (General) in exercise of power under the Bengal Excise act (hereinafter referred to as the sad 'act' ). ( 11 ) CHALLENGING the said order of suspension, Bhanumati filed a statutory appeal before the Excise Commissioner but the petitioners were not impleaded in the said appeal. Ultimately an application was filed by the petitioners for being impleaded and they were so impleaded by an order dated 30th September, 2003 passed by the Excise Commissioner, West Bengal and the matter was fixed for hearing on 17th October, 2003. In the meantime the operation of the order of suspension dated 22nd September, 2003 was kept in abeyance by the excise Commissioner. Thereafter on 17th October, 2003 the matter was heard by the Commissioner in the presence of the parties including the petitioners and the Excise Commissioner was pleased to pass the following order : "in view of this position, I am inclined to agree with the views put forth by the learned counsel of the private respondent and the observation of the hon'ble Supreme Court in the case of Morgan Stanley Mutual Fund vs. Kartick Das [scc 225 of 1994 (4)] and modify my earlier order of keeping in abeyance the operation of the order of A. D. M. (G), Paschim Medinipur, issued under No. 548-E dated 22. 09. 03. The same is ordered accordingly and the shop will be suspended. I had earlier observed that it would be advisable to await the decision of the civil suit for a reasonable time before forming a view on the specific aspect of the partnership and consequences therefrom. 09. 03. The same is ordered accordingly and the shop will be suspended. I had earlier observed that it would be advisable to await the decision of the civil suit for a reasonable time before forming a view on the specific aspect of the partnership and consequences therefrom. In view of the fact that an Excise licence has got revenue implications and consequently, a site should not be left unoperational for long, I hold the view that a further period of two months would be a reasonable time to await the decision of the Civil Suit. Accordingly, it is ordered that present proceedings will be kept pending for two months and the concerned parties may make an application before me for continuing with these proceedings after a period of two months, if the civil suit is not finalised within that period. " ( 12 ) AGAINST the said order dated 17th October, 2003 Bhanumati preferred an appeal before the Principal Secretary, Excise Department, Government of west Bengal in the month of November, 2003. The appeal was taken up by the principal Secretary on 21st November, 2003 but no interim order passed. Thereafter, on 5th December, 2003 the said Principal Secretary passed an interim order staying the operation of the order dated 17th October, 2003 passed by the excise Commissioner. ( 13 ) THEREAFTER, Bhanumati made a representation to the Principal Secretary for sympathetic consideration of the case. On the basis of such representation being made by Bhanumati, the matters were taken up for further hearing by the Secretary, Excise Department, Government of West Bengal and the hearing was concluded on 18th February, 2004. Thereafter on 25th March, 2004 the secretary, Excise Department allowed the appeal and passed a fairly long order, challenging the said order a writ petition has been filed before this Hon'ble court. ( 14 ) IT is the legality of the said order dated 25th March, 2004 which is impugned in the writ petition on various grounds. ( 15 ) DR. Pal, learned Counsel for the writ petitioners, first argued that the appeal which was filed to the Principal Secretary, Excise Department, Govt. of west Bengal, by Bhanumati is incompetent inasmuch as the said appeal was an appeal from an interim order and this is clear from paragraph 41 of the appeal-petition filed by Bhanumati. ( 15 ) DR. Pal, learned Counsel for the writ petitioners, first argued that the appeal which was filed to the Principal Secretary, Excise Department, Govt. of west Bengal, by Bhanumati is incompetent inasmuch as the said appeal was an appeal from an interim order and this is clear from paragraph 41 of the appeal-petition filed by Bhanumati. In paragraph 41, it is clearly stated that the appeal was filed from the order dated 17th October, 2003 passed by the excise Commissioner and the said order was an interim order. ( 16 ) DR. Pal further submitted that the appeal to the Principal Secretary, excise Department, lies only in view of the recently introduced Rule 4, which has come into effect by way of a notification dated 2nd December, 2002 and the said notification was placed before this Court. ( 17 ) THIS Court, after considering the said recent amendment introduced by the aforesaid notification, is of the view that an appeal does lie even from an interim order to the Principal Secretary, Excise Department. The amended rule is to the following effect: "in the said rules, - (1) For rule 4, substitute the following rule:-"appeal to 4. An appeal shall lie to the Secretary. Excise secretary, Excise Department. Government of West Bengal department from an order made under the Act, by the excise Commissioner". ( 18 ) ON a perusal of the provisions made in the said Rule, it shows that an appeal shall lie to the Secretary, Excise Department, Govt. of West Bengal, from an order made under the Act by the Excise Commissioner. The expression 'an order' in the absence of any provision to the contrary, would also mean an interim order. It was sought to be submitted by the learned Counsel that the expression 'an order' would only mean a final order. This Court is unable to accept the said interpretation. If the expression 'an order' is to be construed only as a final order, in that case, the Court will have to read something into the said provisions, which is not there. This Court is unable to accept the said interpretation. If the expression 'an order' is to be construed only as a final order, in that case, the Court will have to read something into the said provisions, which is not there. ( 19 ) THE provision for appeal made under the recently introduced Rule 4 is clear and, when the statutory provision is clear, the cardinal rule of statutory construction is that the Court must give effect to the ordinary meaning and will not try to interpret it in any other way which the Court does, in a given situation, when the statutory rule or the provision of any Act is ambiguous and suggests two possible constructions. ( 20 ) IN case of such ambiguity, the Court may adopt one of the two possible meaning following the principles of interpretation of statute, but whether the statutory intention is clear, as in the instant case, the Court should not interpret it in any way other than what is mandated by its ordinary meaning. Following the aforesaid principle, the Court holds that an appeal against an interim order is a competent appeal and the instant appeal filed by Bhanumati is maintainable and the contention of Dr. Pal is not acceptable. ( 21 ) BUT Dr. Pal has raised some other important contentions which deserve serious consideration by this Court. By drawing the attention of this Court to various documents, the learned Counsel submitted that the partnership of bhanumati with others including the writ petitioners is admitted factually. In support of such contentions, Dr. Pal has referred to the following materials, which are on record: (A ). The Deed of Partnership dated 30th November, 1980, which is signed by Bhanumati. (b ). The subsequent Deed of Partnership dated 8th February, 1994, which is also signed by Bhanumati. (c ). The subsequent Deed of Partnership dated 1st April, 1999, also signed by Bhanumati. (d ). A kind of certificate dated 10th March, 2003 given by Punjab National bank to the effect that M/s. New Wine Palace, is maintaining its Current account with the said Bank and the same is operated by one Mahendra gandhi, who is one of the partners of the said Firm. (e ). (d ). A kind of certificate dated 10th March, 2003 given by Punjab National bank to the effect that M/s. New Wine Palace, is maintaining its Current account with the said Bank and the same is operated by one Mahendra gandhi, who is one of the partners of the said Firm. (e ). Letter dated 30th April, 2003 written by Bhanumati as partner on behalf of the said Firm to the Bank asking for stopping the operation of the bank A/c. (f) Challan filed on behalf of M/s. New Wine Palace in connection with west Bengal Sales Tax and Profession Tax and the said Challan was signed on behalf of the said Firm by one of its partners. (g) Intimation given under section 143 (1) (a) of the Income-tax Act, 1961 to the Income-tax Department, West Bengal, which shows that the status of the said firm has been recorded in connection with the return files in the year 1995 as a Partnership Firm-assessee and abbreviated form of which is 'pfas'. (h) The audit report under section 44b of the Indian Income-tax Act, 1961 issued by a Chartered Accountant and the said audit report is signed by Bhanumati as a partner of the said Firm. (i) The accompanying statement in Form 3cd was also signed by bhanumati. The said Form, was filed for the Assessment Year 2002 -03 for the period ending 31st March, 2002 and the shares of different partners have been disclosed and Bhanumati's shares have been disclosed as 20 per cent in the said Firm. (j) Capital Account, which was filed by a Chartered Accountant in connection with the Income-tax Return of the said Firm for the year ending on 31st March, 2002 and the same was also signed by Bhanumati. Mahendra S. Gandhi vs. State of W. B. (A. K. Ganguly, JJ.) 17 (k) Bhanumati also filed her Income-tax Return for the Assessment Year 2002 - 03 disclosing her Return from 20 per cent of her share in the said firm. (1) The said Income-tax Form and the accompanying statement have been signed by Bhanumati. (m) The Notice of Assessment under section 11 of the Bengal Finance (Sales tax) Act, 1941 was also issued in the name of the said Firm, viz. M/s. New Wine Palace. (1) The said Income-tax Form and the accompanying statement have been signed by Bhanumati. (m) The Notice of Assessment under section 11 of the Bengal Finance (Sales tax) Act, 1941 was also issued in the name of the said Firm, viz. M/s. New Wine Palace. (n) Notarial Certificate issued by a Notary Public in respect of the partnership Deed of the said Firm dated 1st April, 1999, which is signed by Bhanumati. ( 22 ) RELYING on such series of documents, many of which have been filed in connection with the requirement under different statutes, Dr. Pal submitted that the Principal Secretary, Excise Department, should have accepted that the said Firm is a Partnership Firm and the story, which has been presented by Bhanumati that without knowing anything she signed the papers presented to her by Mahendra Gandhi, when she was a helpless widow, should have been totally rejected. ( 23 ) THE learned Counsel pointed out repeatedly that as late as in the year 2002, Bhanumati signed papers to show that she is a partner of the said Firm and by that time, her sons have attained majority she was not a helpless widow. ( 24 ) THIS Court finds that there is a lot of substance in the aforesaid contentions of the learned Counsel. But since the main dispute is pending with the Excise Commissioner, this Court does not make any positive finding on those materials. ( 25 ) THE other submission of the learned Counsel is that the appeal which was filed to the Principal Secretary, Excise Department, being an appeal from an interim order, the Principal Secretary, Excise Department, should not have disposed of the entire matter which is pending with the Excise Commissioner. This is a point, which this Court is bound to uphold. ( 26 ) IT goes without saying that the authority of the Principal Secretary, excise Department, as an appellate authority, is created under the statute. Such statutory authority always functions as inferior Tribunal and as an inferior tribunal, such authority must act within the four corners of the statute. The appeal, which was filed before the Principal Secretary, Excise Department, was an appeal from an interim order. Therefore, the authority of the Principal secretary, Excise Department, is confined to the question whether the interim order should have been granted or not by the Excise Commissioner. The appeal, which was filed before the Principal Secretary, Excise Department, was an appeal from an interim order. Therefore, the authority of the Principal secretary, Excise Department, is confined to the question whether the interim order should have been granted or not by the Excise Commissioner. In deciding the said question the Principal Secretary cannot decide the whole matter and allow Bhanumati to run the business in the usual manner. In fact, suspension order issued by Additional District Magistrate also gets quashed in the process even though a substantive appeal against the same is pending with the Excise commissioner. Thus, under the impugned order, the Principal Secretary, Excise department, has acted beyond his authority and jurisdiction. ( 27 ) IT is well-settled that inferior Tribunals do not have any inherent power, which is vested with in a Civil Court of plenary jurisdiction, which is a superior tribunal. The distinction between the jurisdiction of an inferior Tribunal and that of a superior Tribunal is well-recognized in law. Prima facie, no matter is beyond the jurisdiction of a superior Tribunal, unless it is expressly shown to be so. But nothing is within the jurisdiction of an inferior Tribunal, unless it is expressly shown to be so on the face of the statute, which confers power on such an inferior Tribunal. ( 28 ) GOING by this age-old principle, which is accepted both in English Law and in our jurisprudence, this Court is bound to hold that the sweeping order passed by the Principal Secretary, Excise Department, disposing of the entire us between the Excise Department, the appellant before us and Bhanumati is obviously beyond the jurisdiction of the Principal Secretary, Excise Department. On this ground alone the order of the Principal Secretary, Excise Department is liable to be quashed. ( 29 ) MR. Ajit Kumar Panja, learned Counsel appearing for Bhanumati and also on behalf of two other partners, namely respondent Nos. 7 and 9, did not chose to refute the aforesaid contentions of Dr. Pal, but Mr. Panja raised a few technical objections. The learned Counsel submitted that the civil suit filed by the appellant is not maintainable inasmuch as the said Partnership Firm is not a registered one. Therefore, in view of the bar under section 69 of the partnership Act, 1932, such a civil suit is not maintainable. Pal, but Mr. Panja raised a few technical objections. The learned Counsel submitted that the civil suit filed by the appellant is not maintainable inasmuch as the said Partnership Firm is not a registered one. Therefore, in view of the bar under section 69 of the partnership Act, 1932, such a civil suit is not maintainable. ( 30 ) THE learned Counsel also submitted that no excise licence can be granted to the appellants in view of Rule 12 of the West Bengal Excise (Selection of new Cites and Grant of Licence for Retail of Spirit, etc.) Rules, 1993. The learned counsel further submitted that the appellants have other licence and as such is disqualified for having a licence in view of Rule 12 (c) of the said rules. ( 31 ) THE learned Counsel also referred to paragraph 16 of the plaint and submitted that the prayers in the writ petition and the prayers in the plaint are identical and the suit is pending and, as such, this Court should not entertain the writ petition. ( 32 ) INSOFAR as the aforesaid contention of Mr. Panja is concerned, this Court does not wish to make any finding on the maintainability of the suit as the said question if raised may be decided by the learned Civil Court where the suit is pending. But, insofar as the prayer in the writ petition is concerned, the main prayer is for quashing of the order dated 25th March, 2004 passed by the Principal secretary, Excise Department. Such a prayer is certainly maintainable and the said order is not the subject-matter in the pending civil suit. ( 33 ) INSOFAR as the question of grant of excise licence to the appellant in view of the provisions of Rule 12 of the said rules is concerned, the same is to be decided by the Excise authorities not by this Court on the basis of this proceeding. As such, the points raised by Mr. Panja unfortunately are not relevant for deciding the legality of the order dated 25th March, 2004 passed by the Principal Secretary. As such, the points raised by Mr. Panja unfortunately are not relevant for deciding the legality of the order dated 25th March, 2004 passed by the Principal Secretary. ( 34 ) THE learned Counsel for the State, without filing any affidavit, despite opportunity being given to do so, merely submitted that the order dated 22nd day of September, 2003, which was passed by the Additional District Magistrate (General) was an order passed by the ADM on his own and the said order was not passed on anybody's application. The learned Counsel also submitted that the offence committed by Bhanumati by inducting partners in the liquor business without permission of the Excise authorities is an offence, which is compoundable under section 65 of the Excise Act and from the order dated 25th march, 2004, which is challenged in this proceeding, it appears that the said offence has been compounded by the authorities by accepting fine. The learned counsel did not make any other submission in the facts of this case. ( 35 ) FOR the reasons discussed above, the order of the Principal Secretary dated 25th March, 2004 is quashed. The matter is remitted to the Commissioner of Excise for a decision on merits. The Commissioner of Excise while deciding the matter need not be influenced by any observation made in this judgement. The Commissioner of Excise need not wait till the outcome of the suit. The validity of the licence is in issue before him and the issue in the suit is different. ( 36 ) FROM the facts and circumstances of the case and the materials on record, the Commissioner of Excise may decide whether or not the offence said to be committed by licensee Bhanumati is compoundable. If the Commissioner finds that the offence in this case can be compounded, the Commissioner may pass appropriate order by converting the sole licence to a joint licence in the facts and circumstances of the case. But the matter is left entirely to the discretion of the commissioner. The Commissioner may dispose of the matter pending before him, after hearing the parties and by passing an appropriate reasoned order as early as possible preferably within a period of six weeks from the date of presentation of this judgment before him. Since the order dated 25th March, 2004 stands quashed, the running of the shop cannot continue. The Commissioner may dispose of the matter pending before him, after hearing the parties and by passing an appropriate reasoned order as early as possible preferably within a period of six weeks from the date of presentation of this judgment before him. Since the order dated 25th March, 2004 stands quashed, the running of the shop cannot continue. Its running will depend on the order to be passed by the Commissioner. The order to be passed by the Excise commissioner will not, in any way, affect the pending suit before the Civil Court. ( 37 ) THUS, the writ petition and the appeal are disposed of, as above. ( 38 ) THERE will be no order as to costs. ( 39 ) URGENT xerox certified copy, if applied, may be given to the parties expeditiously. Writ petition and appeal disposed of.