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Rajasthan High Court · body

2005 DIGILAW 2567 (RAJ)

Suresh Kumar v. State

2005-09-23

DINESH MAHESHWARI

body2005
Judgment Dinesh Maheswari, J.-The petitioners, Suresh Kumar, Brij Mohan and Kistu Devi have submitted this writ petition with the prayers that the order dated 23.06.1989 (Annexure-5) passed by the Excise Commissioner, Rajasthan, Udaipur and the order dated 212.1992 (Annexure-6) passed by the Divisional Commissioner, Jodhpur in Excise Appeal No. 2/1989 may be set aside and the Excise Department may be directed to refund the security amount deposited by the petitioners. 2. Barring a few, all the facts of the present case are more or less admitted and it shall be appropriate to refer to the facts in their chronology. The petitioners were the licensees for the sale of Indian Made Foreign Liquor (IMFL) at Sumerpur, District Pali for the year 1985-1986. In relation to the said license, the petitioners deposited an amount of Rs. 1,06,380/-as security amount with the respondent Excise Department. Upon the expiry of the period of their license, the said security amount was to be refunded in accordance with the terms of the contract after the petitioners have fulfilled their contract obligations. The term of their license came to an end on 31.03.1986. However, the petitioners submitted an application on 19.04.1986 (Annexure R/1) through the Excise Inspector, Pali to the District Excise Officer, Jalore stating that they had fulfilled all their contract obligations and nothing was due against them nor any litigation was pending and yet if any dues would be found, they would remain liable for the same. It was prayed in the application that the security amount of Rs. 1,06,380/-may be adjusted towards the security amount of M/s Mohanlal Sidhawat, Satya Narain and Party, the licensees of IMFL and country liquor for the year 1986-1987 for Pali Group. This application was forwarded by the Excise Inspector, Pali to the District Excise Officer, Jalore, who in turn, forwarded the same to the Excise Commissioner, Rajasthan, Udaipur. 3. The Excise Commissioner accepted the said proposal of adjustment of the security amount of the petitioners towards the security payable by the licensees of the said Pali Group for the year 1986-1987 by the order dated 05.05.1986. This order dated 05.05.1986 was not earlier produced on record, however, learned Counsel for the respondent has produced a photostat copy of the same during the course of arguments and being undisputed, is taken on record. This order dated 05.05.1986 was not earlier produced on record, however, learned Counsel for the respondent has produced a photostat copy of the same during the course of arguments and being undisputed, is taken on record. By the order dated 05.05.1986, the said proposal was accepted, but with the condition that an undertaking in writing be taken from the earlier licensees (petitioners) that if there be any dues against them of Excise, then they would remain liable to deposit the same and on their failure, the dues could be recovered by auction of their movable and immovable property, and the property would not be alienated for three years without obtaining consent of the Excise Commissioner, and there should not be any prosecution pending against them. 4. It is not in dispute that the petitioners did not comply with the requirements of the order dated 05.05.1986. By way of a letter dated 210.1986 (Annexure-1) the Department informed the petitioners of having not submitted the requisite bond and for want of the same, adjustment of the security amount could not be completed and that the bond was required to be submitted at the earliest. 5. The petitioners submitted an application dated 011.1986 (Annexure Rule-2) to the Excise Commissioner stating that their aforesaid security amount be not adjusted for M/s Mohanlal Sidhawat, Satya Narain and Party and the amount be refunded in cash to them. The petitioners have placed on record a copy of the letter dated 012.1986 (Annexure-2) addressed by the Excise Commissioner to the District Excise Officer, Jalore informing about the application made by the petitioners for refund and asking for a factual report and staying the proceedings for adjustment till then. 6. The petitioners have also placed on record an order dated 212.1986 as Annexure-3, issued by the Assistant Accountant of the office of Excise Commissioner, Rajasthan, Udaipur addressed to the District Excise Officer, Jalore stating that the licensees were not in favour of the adjustment and, therefore, the previous sanction issued by the office be treated as cancelled and for the security amount liable to be refunded of Rs. 1,06,380/-, new proposals in the prescribed form be forwarded. 1,06,380/-, new proposals in the prescribed form be forwarded. It appears that before an order was passed by the Excise Commissioner on the proposal for refund of the amount to the petitioners, an application dated 21.01.1987 (Annexure R/3) was submitted by Bhanwarlal on behalf of M/s. Mohanlal Sidhawat, Satya Narian and Party, the licensees of the Pali Group for the year 1986-1987, stating therein that the aforesaid security amount of the petitioners was permitted to be adjusted towards the security of M/s. Mohanlal Sidhawat, Satya Narian and Party and after receiving of the sanction they had made a payment of Rs. 1,06,380/-to Suresh Kumar and Party and now when a little time was left before the expiry of period of their license, the said adjustment was sought to be cancelled and the amount was sought to be recovered from them which was illegal and, therefore, the previous decision be maintained and the security amount be adjusted in their account and else they would approach the Courts. 7. It seems that a proposal was made by the District Excise Officer, Jalore for refund of the amount to the petitioners and acting upon the same, the Excise Commissioner passed the order dated 25.03.1987 (Annexure-4) wherein the Commissioner observed that the earlier order dated 05.05.1986 had not been implemented still and revised proposals have been made, therefore, the previous order was revoked and the amount of Rs. 1,06,380/-was permitted to be refunded in cash. However, this order was subject to the condition that the security amount of the Pali Group for the year 1986-1987 has been got filled-up and further with the condition that this amount was not earlier refunded or adjusted. 8. It appears that immediately after passing of this order dated 25.03.1987, the licensees of the Pali Group for the year 1986-1987 M/s. Mohanlal Sidhawat, Satya Narian and Party appeared before the Excise Commissioner on 10.04.1987 and submitted an application which has been produced as Annexure R/4 by the respondents with their additional affidavit. The said licensees stated in the application that the previous licensee had taken an amount of Rs. 1,06,380/-from them and the same party was not taking the refund from the Department which was resulting in injustice and, therefore, the amount be refunded only when agreed in writing by the applicant. The said licensees stated in the application that the previous licensee had taken an amount of Rs. 1,06,380/-from them and the same party was not taking the refund from the Department which was resulting in injustice and, therefore, the amount be refunded only when agreed in writing by the applicant. In this application, it was specifically stated on behalf of the licenses of the Pali Group for the year 1986-1987 that the Excise Department has already recovered from them the amount for Pali thus,- ^^- - - - - - - - - - - -,DlkbZt foHkkx us ikyh dh olwyh esjs ls dj yh gS-** 9. This application dated 10.04.1987 was forwarded by the Excise Commissioner to the District Excise Officer, Jalore, this time directing not to take any proceedings for refund/adjustment without prior permission. .10. It is also the case of the Department that the Excise Commissioner directed the District Excise Officer, Jalore to obtain necessary affidavit from M/s. Mohanlal, Satya Narian and Party by the letter dated 09.06.1987 (Annexure R/6) and thereupon the necessary affidavit was forwarded by the District Excise Officer, Jalore with his letter dated 02.07.1987 (Annexure R/7). It appears that nothing happened in the matter thereafter for a long time but then an application was made by the petitioners on 03.04.1989 (Annexure R/5) to the Excise Commissioner in which they again prayed for refund of the said security amount of Rs. 1,06,380/-. With reference to the objection raised by M/s. Mohanlal, Satya Narian and Party, the petitioners stated thus,- ."On enquiry, it has further been revealed that though no further order for stopping payment has been made, but even then, payment has not been made to the licensees. Firstly, no such objection petition is maintainable. No payment has been made by Shri Mohanlal to the licensees of 1985-1986 and it at all without admitting for the sake of arguments it is presumed that certain amount was paid by Mohan Lal to the licensees of 1985-1986, even then, the security amount which was deposited by the licensees of 1985-1986 cannot be withheld." 11. Thereafter, the Excise Commissioner passed the impugned order which has been referred to be dated 23.06.1989 by the petitioners and its true copy has been produced as Annexure-5 but this order seems of be dated 28.06.1989 whose photostat copy has been produced as Annexure-R/8 by the respondents. Thereafter, the Excise Commissioner passed the impugned order which has been referred to be dated 23.06.1989 by the petitioners and its true copy has been produced as Annexure-5 but this order seems of be dated 28.06.1989 whose photostat copy has been produced as Annexure-R/8 by the respondents. In this order dated 28.06.1989, the Commissioner ordered regarding the security amount of the petitioners that the amount was available for refund but the licensees of the Sumerpur Group (petitioners) have got the amount adjusted towards the security of the Pali Group for the year 1986-1987 and that an amount of Rs. 1,01,586/-was due against the licensees of the Pali Group for the year 1986-1987 towards interest. Therefore, it was ordered that from the aforesaid amount of Rs. 1,06,380/-, the interest dues of Rs. 1,01,586/-may be adjusted. .12. The aforesaid order dated 28.06.1989 was subjected to appeal before the Divisional Commissioner, Jodhpur under Section 9 of the Rajasthan Excise Act, 1950 by the petitioners arraying the Excise Commissioner, Udaipur, the District Excise Officer, Jalore and the licensees of the Pali Group as respondents. This appeal was held to be maintainable by the learned Divisional Commissioner and thereafter the matter was considered on merits. The learned Divisional Commissioner was of .opinion that the appellants (petitioners) were entitled to refund of the security amount after completion of the term of their license but they voluntarily moved an application requesting for adjustment of the amount towards the security for the year 1986-1987 for the Pali Group and this proposal was not subject to any condition. This proposal was accepted by the Excise Commissioner on 05.05.1986 and the acceptance was never subject to the condition that for any dispute between the appellants and respondents, the amount would not be adjusted. The Excise Commissioner only ordered that a bond from the appellants (petitioners) be obtained in accordance with the Rules and else so far as the adjustment of the amount was concerned, by the order dated 05.05.1986 the same was absolute and final for the appellants (petitioners) and the respondents. Thereafter, the learned Divisional Commissioner observed that, in other words, the appellants obtained the amount of Rs. 1,06,380/-from the respondents and in lieu thereof agreed for adjustment without any condition and that if they were aggrieved of the order of the Excise Commissioner, that ought to have been taken in appeal which they did not. 13. Thereafter, the learned Divisional Commissioner observed that, in other words, the appellants obtained the amount of Rs. 1,06,380/-from the respondents and in lieu thereof agreed for adjustment without any condition and that if they were aggrieved of the order of the Excise Commissioner, that ought to have been taken in appeal which they did not. 13. A contention was raised before the Divisional Commissioner on behalf of the appellants (petitioners) that the order dated 23.06.1989 was passed without hearing the petitioners and it ought to be annulled being an ex parte order. This contention was rejected as not proper by the learned Divisional Commissioner for the reasons and considerations that earlier when the Excise Department passed the order dated 10.04.1987 cancelling the adjustment order dated 05.05.1986 and to make payment of Rs. 1,06,380/-to the appellants (petitioners), that was also an ex parte order in which the respondents No. 3 to 6 were not given an opportunity of hearing. If the order dated 23.06.1989 was liable to be set aside being ex parte then the earlier order dated 10.04.1987 was also liable to be set aside on this ground itself as the same was also ex parte in which the respondents No. 3 to 6 were not heard. The conclusion was drawn to the effect that both the order dated 10.04.1987 and 23.06.1989 were liable to be cancelled and, if they be treated so, the result was that the order of the Excise Commissioner dated 05.05.1986 would remain intact. 14. The learned Divisional Commissioner also observed that the appellants (petitioners) have nowhere stated in this appeal that against this adjustment of Rs. 1,06,380/-, the respondents No. 3 to 6 have not made payment of the amount to them and, therefore, it would be assumed that as between both the parties the transaction was completed in accordance with the previous contract dated 05.05.1986 and, therefore, the appellants (petitioners) were not entitled now to raise the objection that the order dated 05.05.1986 be altered and the amount of Rs,. 1,06,380/-be paid to them. The learned Divisional Commissioner also referred to the affidavit of M/s. Mohanlal Sidhawat, Satya Narian and Party stating that the amount of Rs. 1,06,380/-has been paid cash to the appellant Suresh Kumar. 1,06,380/-be paid to them. The learned Divisional Commissioner also referred to the affidavit of M/s. Mohanlal Sidhawat, Satya Narian and Party stating that the amount of Rs. 1,06,380/-has been paid cash to the appellant Suresh Kumar. On these considerations, the learned Divisional Commissioner formed the opinion that the orders dated 05.05.1986 and 23.06.1989 were not liable to be interfered with and the appeal was accordingly dismissed. It may be reiterated that in the order passed by the Divisional Commissioner, the impugned order of the Excise Commissioner has been referred as dated 23.06.1989 but the same appears to be dated 28.06.1989 as noticed supra. 15. Learned Counsel for the petitioners urged that the impugned order dated 28.06.1986 passed by the Excise Commissioner is wholly illegal, arbitrary and unauthorised. The amount in question is the property of the petitioners and they are entitled to get the amount refunded. The right to get such refund got crystalised by the order dated 25.03.1987 (Annexure-4) whereby the Excise Commissioner ordered such refund. This order could not have been reviewed or revoked by the Commissioner and the interest dues of the other licensee of Pali Group was never the liability of the petitioners. Learned Counsel submitted that the Divisional Commissioner has also proceeded on entirely irrelevant considerations and has acted wholly illegally in assuming that Pali Group licensee has made any payment to the petitioners and has not considered the legal effect of such allegation on the rights of the petitioners to obtain refund of their security deposit. Learned Counsel for the respondent has supported the impugned orders and submitted that in view of the rival assertions made by the parties and in view of the dues of Pali Group, the Excuse Commissioner has rightly passed the order Annexure R/8 which has rightly been affirmed by the appellate authority. Learned Counsel submitted that the department was made to believe that Pali Group licensee has made cash payment to the petitioners, hence the Commissioner has passed the impugned order taking into consideration all the facts and circumstances of this case. 16. Having given anxious consideration to the rival submissions and having scanned through the record, this Court is clearly of opinion that the impugned orders cannot be sustained. 17. From the narration of facts supra, the position which emerges it that so far the amount of Rs. 16. Having given anxious consideration to the rival submissions and having scanned through the record, this Court is clearly of opinion that the impugned orders cannot be sustained. 17. From the narration of facts supra, the position which emerges it that so far the amount of Rs. 1,06,380/-is concerned, the same was admittedly the property of the petitioners and was kept as a security deposit with the respondent Excise Department for operation of the license for the sale of IMFL at Sumerpur for the year 1985-1986. The respondents No. 4 to 7 were the licensees for Pali Group for the year 1986-1987 and they were required to submit a separate security for their license. However, the petitioners made a request that the aforesaid amount of Rs. 1,06,380/-of their security be adjusted towards the security of respondents No. 4 to 7. This proposal was accepted conditionally be the order dated 05.05.1986. However, the petitioners had not completed the requirements of the order dated 05.05.1986, for which, they were reminded also. The petitioners, thereafter moved the Department revoking their earlier proposal and asked for refund of the amount. This submission was ultimately acceded to and accepted by the Department. An order was passed on 25.03.1987 permitting refund subject to the condition that security of the Pali Group has otherwise been got filled-up. This very order sanctioning the refund was later on revoked particularly in view of the submission of licensees of the Pali Group that they had made cash payment of Rs. 1,06,380/-to the petitioners and, therefore, this amount be not refunded to the petitioners. This objection by the licensees of the Pali Group has resulted in staying of the refund to the petitioners. However, ultimately when the petitioners further pressed for refund, the Commissioner passed the order dated 28.06.1989. A perusal of the order dated 28.06.1989 shows that some amount of interest of Rs. 1,01,586/-was due against the Pali Group for the year 1986-1987 and for recovery of this amount, the security deposit of the petitioners has been directed to be adjusted. 18. However, ultimately when the petitioners further pressed for refund, the Commissioner passed the order dated 28.06.1989. A perusal of the order dated 28.06.1989 shows that some amount of interest of Rs. 1,01,586/-was due against the Pali Group for the year 1986-1987 and for recovery of this amount, the security deposit of the petitioners has been directed to be adjusted. 18. The Department in its additional affidavit has taken the stand that the Department was made to believe that the payment of the security amount for the year 1985-1986 was received by the petitioners from M/s Mohanlal Sidhawat, Satya Narian and Party and thereupon security amount of the petitioners was ordered to be adjusted against the interest to the tune of Rs. 1,01,586/-which was due form M/s. Mohanlal Sidhawat, Satya Narain and Party. The learned Divisional Commissioner has also observed in his impugned order dated 212.1992 that the appellants have not denied that the amount of Rs. 1,06,380/-was not received in cash from the respondents No. 3 to 6 and, therefore, an inference has been drawn that transaction between the parties was completed and, therefore, the petitioners were not entitled to get alteration of the order dated 05.05.1986 and to receive the amount of Rs. 1,06,380/-. 9.19. A fundamental fact to which this Court was concerned even at the time of admission of this writ petition is as to whether the security amount of Pali Group for the year 1986-1987 was otherwise filled up or not? The petitioners have submitted an additional affidavit categorically asserting that earlier there was a shortage in the security amount for the Pali Group and the petitioners made a request to the Excise Department to have it completed by adjustment from their security amount available with the Department but shortage of the security amount (of Pali Group) was made good by the respondents No. 4 to 7. The learned Counsel for the Department has also candidly admitted during the course of hearing that so far the security amount of the Pali Group was concerned, the same was definitely completed by the licensees of Pali Group themselves. The same fact has been stated in the application dated 10.04.1987 by the licensees of the Pali Group as quoted hereinabove. 10.20. The same fact has been stated in the application dated 10.04.1987 by the licensees of the Pali Group as quoted hereinabove. 10.20. It is, therefore, not at all in dispute that so far the security amount of the Pali Group is concerned, towards which this adjustment was agreed by the petitioners, the same has been filled-up and made good by the licensees of the Pali Group themselves and nothing was due in that respect. It is also not in dispute that amount which is now sought to be recovered is not the shortfall of security or the interest towards the delayed payment of security, but is specifically the amount of interest towards delayed deposit of the contractual amount (of installment for country liquor) by the licensees of Pali Group. The question is: as to how the petitioners are sought to be made liable for these interest dues against the respondents No. 4 to 7? 121. The licensees of Pali Group have alleged that they have made cash payment to the petitioners. Firstly, there is a serious dispute about this fact and the same has consistently been refuted by the petitioners. Secondly, as contended by the petitioners in the alternative, even if some amount was allegedly paid by the licensees of the Pali Group to the petitioners, how could that be taken cognisance of by the Department and how on that basis a liability of the petitioners to make good the interest deficiency of the licensees of the Pali Group could arise? 122. The Department has contended that it was made to believe that the payment has been made to the petitioners by the licensees of the Pali Group. The Divisional Commissioner has drawn an inference that such payment was made to the petitioners. The inference drawn by the appellate authority is nothing but a conjecture. So far the belief of the Department is concerned, how that was drawn without hearing the petitioners and how even such belief could lead to the conclusion of the liability of the petitioners is not established on record. How could the Excise Department take cognisance of alleged assertion of the licensees of Pali Group of having made the cash payment and to act upon such assertion has not been shown. How could the Excise Department take cognisance of alleged assertion of the licensees of Pali Group of having made the cash payment and to act upon such assertion has not been shown. Neither the parties have been shown to have been heard by the Excise Commissioner nor there respective contentions have been dealt with in the impugned order dated 28.06.1989 nor any finding has been recorded that the interest dues of the Pali Group is also the liability of the petitioners and if so, under which term of the contract? Moreover, when it is the admitted case of the Department that security of the Pali Group had otherwise been fully paid up, it has not been shown as to how still the amount of the petitioners could be retained or adjusted when the said amount was offered by the petitioners to be adjusted towards security only? 23. The impugned order dated 28.06.1989 (Annexure-4) passed by the Excise Commissioner remains a totally non-speaking order wherein the Commissioner has neither adverted to the questions involved in the case nor has taken note of the respective legal rights of the parties nor has spelt out the basis in law or under the contract on which such directions for adjustment of the security amount of the petitioners towards interest dues of the other licensee were issued. The Divisional Commissioner has also not adverted to the real questions in controversy and has rather proceeded only on conjectures. 24. In the circumstances aforesaid, the impugned orders cannot be sustained being absolutely arbitrary and bereft of any basis, logic or reason. The orders passed by the Excise Commissioner dated 28.06.1989 and by the Divisional Commissioner dated 212.1992 are, therefore, quashed and set aside and the matter is remanded to the Excise Commissioner for passing the order afresh on the petitioners application dated 03.04.1989 (Annexure R/5). 25. The petitioners in the first place shall appear before the Excise Commissioner on 110.2005 who shall fix a date for hearing, and after hearing all concerned in accordance with law, pass appropriate, clear and speaking order particularly adverting to the observations made and questions posed hereinabove. 26. The writ petition is allowed as indicated above. However, in the circumstances of the case, the parties are left to bear their own costs.