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2005 DIGILAW 231 (PAT)

Shree Baidyanath Glass Works Pvt. Ltd. v. State Of Bihar

2005-03-01

NAGENDRA RAI, S.N.HUSSAIN

body2005
Judgment Nagendra Rai, J. 1. The points involved in all the three cases are one and the same and as such they have been heard together and are being disposed of by a common order. 2. The petitioner in CWJC No. 15614 of 2004 is a private limited company and the petitioner in CWJC No. 158 of 2005 is a partnership firm and both the petitioners are engaged in the business of manufacture of bottles by semi automatic plants which are used in the bottling of country and spiced country liquor and the petitioner in CWJC No. 15621 of 2004 is engaged in the business of manufacture and wholesale of country and spiced country liquor and intending to participate in the tender which has been challenged in the cases. 3. The petitioners have challenged the tender notice dated 18.11.2004 advertised in the daily newspaper "Hindustan Times" inviting application for grant of exclusive/ exclusive privilege for manufacture and wholesale supply of country and spiced country liquor in bottles for the period from 1.4.2005 to 31st March, 2008 as well as Rule 17(1) of the Bihar Country Liquor Bottling Rules, 2004 (hereinafter referred to as the Rules). 4. Two separate tenders have been invited; one for the country liquor and other for the spiced country liquor and they have been annexed as Annexures-1 and 2 to the writ application. The main grievance of the petitioners is with regard to condition No. 3 (e) read with rule 17(1) of the Rules made under section 90 of the Bihar Excise Act (hereinafter referred to as the Act) by the Board of Revenue for bottling and wholesale supply of country liquor. Their challenge is on the ground that earlier provision was for supply of wholesale countrymade liquor in sachets and now the provision has been to supply the same in bottles of a particular specification to be manufactured by automatic plants and prohibiting its use which in substance creates a monopoly in favour of automatic plants and thus depriving the semi automatic plants of their business and also making the country-made liquor costlier. Their further objection is that the Rules have not been framed by the Board of Revenue but by the Government and purported to have been issued by the Board of Revenue. 5. Their further objection is that the Rules have not been framed by the Board of Revenue but by the Government and purported to have been issued by the Board of Revenue. 5. The stand of State on the other hand is that right to deal in liquor is not a fundamental right and governed by statutory rules and the Act is valid piece of legislation and the Rules has been made in exercise of power under section 90 of the Act and the same is valid one. No monopoly is being created in favour of any particular firm and the Company and there are automatic plants in the country and as such the challenge to the Rules and the said condition of the advertisement is without any basis. 6. This court during course of hearing asked the counsel for the State to produce the file dealing with the amendment and accordingly, the file has been produced and we have perused and its reference will be made at proper time. 7. Before proceeding further, it will be apt to mention the relevant condition of the advertisement and Rule 17(1) of the Rules. 8. Clause 3(e) of the advertisement provides that in case of tender of any of the applicants being accepted, then the contractor has to supply the countrymade liquor in the bottles of 600 ML, 300ML and 150 ML and the types of the bottles should be in terms of the provisions contained in the Rules. 9. The Rules were published on 10th February, 2004 and the Rule 17(1) and the Appendix l as mentioned in Rule 17(1) run as follows; "Rule 17(1): The size of bottle shall be such as is specified in Appendix-l. Cent percent new transparent white glass bottles having round bottom and long neck, manufactured by automatic plant and in accord with appendix-l, will have to be used. Use of old bottles shall be prohibited. All bottles shall be washed first in a solution of potassium permanoppete or hydrochloric acid and again thereafter in pure water. After being. finally dried up, liquor shall be filled in the bottle. Use of old bottles shall be prohibited. All bottles shall be washed first in a solution of potassium permanoppete or hydrochloric acid and again thereafter in pure water. After being. finally dried up, liquor shall be filled in the bottle. The account of all bottles shall be kept in the Prescribed Bottle Form appended to these Rules or in a format, as directed by the Excise Commissioner, Bihar, from time to time." APPENDIX - I "The bottles to be used shall be made from automated machine, being cent percent new, white and transparent made of glass having round bottom and long neck and measuring 600 ml, 300 ml and 150 ml on which the words "Bihar Excise" shall be embossed, and shall be leak-proof i.e., of the roll-on- threads pilfer-proof standard. The lid of the bottle will be made of aluminium and leak proof on which the words "Bihar Excise" shall be embossed. Any other transparent material, in additjon to glass bottle, may be used, as prescribed by the Board of Revenue." 10. Thus, according to the Rules, the bottles to be used shall be made by automatic plant and the use of the old bottles shall be prohibited. 11. The Board has power to frame a rule and if the Board has framed the rule providing for the said condition, the same cannot be said to be invalid only on the ground that the condition has been made for supply of countrymade liquor in bottles made by automatic plants. The Board may take such decision with a view to make bottle more transparent and preventing reuse; may for the purpose of checking illegal trade, but after perusal of the file, it appears that the procedure for framing the rule is contrary to Section 90 of the Act and even the Board has amended the rules and proposed draft of amendment has been made to delete words in rule 17(1) and that matter has not been finally decided. 12. Under Section 90 of the Act the Board may make Rules and Sections 90(1)(b) says that the Board has power to make rules for regulating the bottling of liquor for the purposes of sale. However, in this case, the Board appears to have been given no discretion at all to decide or frame the rules. 12. Under Section 90 of the Act the Board may make Rules and Sections 90(1)(b) says that the Board has power to make rules for regulating the bottling of liquor for the purposes of sale. However, in this case, the Board appears to have been given no discretion at all to decide or frame the rules. The file has been processed by the Department, approved by the Minister and thereafter for a formal approval it was sent to the Board of Revenue and the Board of Revenue approved the same. Thereafter a notification was made on 10.2.2004. Even if we accept that once the Board has approved the Rule and thereafter published, it will be treated that the Board has applied its mind and as such it cannot be struck down on the ground of mere technicality. That does not solve the problem for the simple reason it appears that subsequently the Board found that Rule 17(1) is to be amended and accordingly prepared a draft providing that the group of words Cent-percent new manufactured by automatic plant" appearing in second line and the "use of old bottles shall be prohibited" appearing in the 3rd line of Rule 17(1) of the Rules shall be deleted. Similarly, the word "made from automatic machine being cent-percent new" in Appendix- of the Rules shall be deleted. Once the Board prepared a draft amendment, then there was no legal impediment for getting the same published in amending the rule, but it appears that thereafter file has adopted a unique procedure that it was sent to the Secretary, then to the Minister and now it is pending with the Chief Minister to give approval to the said proposed amendment. In our view, this procedure has no sanction in the eye of law, The settled law is that when a rule vests power in a particular authority, then that authority alone has to exercise its discretion and the superior authority cannot thrust its own discretion and issue direction to the authority to act in a particular manner. The Board of Revenue being the final authority to make rule in terms of Section 90 of the Act, the Secretary of the Department and the Minister have no jurisdiction to interfere in the matter. The Board of Revenue being the final authority to make rule in terms of Section 90 of the Act, the Secretary of the Department and the Minister have no jurisdiction to interfere in the matter. The records clearly show that the proposed amendment by the Board of Revenue is pending as no decision has been taken because of the aforesaid reasons. 13. Accordingly, we are of the view that hybrid procedure has been adopted in this case while making the rule and taking steps to amend the rule which is not permissible in law. Let the Board of Revenue being the final authority consider the matter finally and decide as to whether Rule 17(1) of the Rules, as it stands or as proposed by him which has to be amended, will stand and thereafter step for grant of privilege is to be taken. The decision is to be taken by it within six weeks from the date of the order and till that time, the matter of grant of exclusive privilege should be stayed so far as the countrymade liquor is concerned. 14. So far supply of spiced country liquor is concerned it is being supplied through bottles as per the Bihar Spiced Country Spirit (manufacture and sale) Rules, 1976 as amended in 1999 and we do not find any infirmity in the said Rules. 15. In the result, all the three writ applications are allowed to the extent indicated above. S.N.Hussain, J. 16 I agree.