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Rajasthan High Court · body

2006 DIGILAW 2131 (RAJ)

State v. Versus Manoj Ali

2006-07-06

R.P.VYAS, RAJESH BALIA

body2006
Judgment 1. These four appeals are against the common Judgment of the learned Single Judge dated 29.07.2005 passed in four S.B. Civil Writ Petitions No. 3993, 3994, 4038 and 4044/2005 particulars of which we shall refer to a little later. 2. The controversy in these matters is about cancellation of wholesale licence of IMFL/beer and country liquor licence issued in favour of the respondent Manoj Ali and party (hereinafter referred to as the Contractor) for finance year 2005-2006. Particulars about Petitions and Special Appeal Relating to Cancellation of Wholesale IMFL/beer Licence 3. Vide order passed by the Commissioner of Excise Rajasthan dated 30.05.2005 by finding that since from the approved godown under the wholesale licence to vend IMFL and beer, a large quantity of IMFL was recovered in respect of which a case under Section 19/54 read with Section 58(c) of the Rajasthan Excise Act, 1950 has been registered as FIR No.8/2005 and that storage of IMFL and beer in the godown in question was unauthorized and in breach of conditions of licence. The licence issued on 27.04.2005 and provisional sanction issued on 01.04.2005 for wholesale trade in IMFL and beer was cancelled and as a consequence the licence fee was forfeited. The Distt. Excise Officer, Bikaner was directed to take in his possession the stock lying in the approved godown for wholesale trade and dispose off it in accordance with law. 4. The said order dated 30.05.2005 cancelling IMFL licence and sanction issued in favour of the Contractor and forfeiting the amount of licence fee was set aside by the Board of Revenue vide its order dated 06.07.2005 and the matter was remanded back to the Commissioner of Excise, Rajasthan for deciding the case a fresh. 5. Both the Excise Department as well as Contractor were not happy with the order of remand. While the department wanted that the Board ought to have sustained the order of the Commissioner dated 30.05.2005, the Contractor demanded that the order of the Commissioner has rightly been set aside, but there was no case for remanding it back to the Commissioner. 6. This led to filing of two cross writ petitions by the Excise Department as well as by the Contractor. 7. 6. This led to filing of two cross writ petitions by the Excise Department as well as by the Contractor. 7. The Contractor has preferred S.B. Civil Writ Petition No.4038/2004 challenging the order of Board of Revenue and the order of Excise Commissioner relating to cancellation of wholesale licence of IMFL and beer. D.B. Civil Special Appeal No.352/2006 arises out of Judgment referable to writ petition No.4038/2005. 8. Correspondingly the Commissioner, Excise and the Distt. Excise Officer preferred S.B. Civil Writ Petition No. 3993/2005 challenging the order of Board of Revenue dated 06.07.2005 related to cancellation of contractor’s licence for wholesale trade in IMFL and beer. D.B. Civil Writ Petition No.355/2005 arises out of aforesaid writ petition No.3993/2005. Particulars About Petitions And Special Appeals Relating To Cancellation Of Country Liquor Licence 9. As a result of cancellation of licence for wholesale vend of IMFL and beer granted to the respondent - Contractor and also for the reason of registration of case under Section 19/54 read with Section 58(c) of the Rajasthan Excise Act, the licence for retail vend of country liquor issued in favour of the respondent - Contractor was also cancelled by the Commissioner vide his order dated 28.06.2005 as per Section 34(2) of the Act. 10. In this order reference was made to condition No.9.2 of the country liquor which provides that if the licensee is found guilty of evading excise duty payable to the State directly or indirectly, his licence can be cancelled or suspended. It also referred to condition No. 9.3 which corresponded to Clause 17 of wholesale licence for IMFL/beer, that apart from empowering Commissioner to cancel or suspend licence in terms of Section 34(1)(d) on being convicted of any offence stated therein, the Commissioner could also cancel or suspend the licence on mere registration of a case under said provisions. However, in these appeals, principal reliance was placed on Section 34(2) of the Act of 1950 which enables cancelling authority to cancel other licence if one of the licence issued under the Act is cancelled for any reason. It has also been the reason for cancelling the country liquor licence that Contractors licence for wholesale vend of IMFL/beer was cancelled on 30.05.2005. 11. It has also been the reason for cancelling the country liquor licence that Contractors licence for wholesale vend of IMFL/beer was cancelled on 30.05.2005. 11. The order dated 28.06.2005 was also set aside along with the order dated 30.05.2005 by the Board by common order dated 16.07.2005 and the Board remanded the case back to the Commissioner for deciding the case of cancellation of country licence also afresh. 12. Aggrieved with the aforesaid order relating to cancellation of country liquor licence, the Contractor preferred S.B. Civil Writ Petition No.4044/2005 and the Excise Commissioner and the Distt. Excise Officer preferred S.B. Civil Writ Petition No.3994/2005 respectively. The special appeal No.353/2005 arises out of the decision rendered in writ petition No.3994/2005 and special appeal No.354/2005 arises out of S.B. Civil writ petition No.4044/2005. In the writ petitions filed by the Commissioner, Excise, State has not been arrayed as party, though State was impleaded as party in the to petitions filed by the Contractor. 13. Before the learned Single Judge both the learned Counsel submitted that none of them wanted the matter to be remanded and the matter is required to be decided one way or other on the basis of material on record. 14. With this request in mind, the learned Single Judge decided all the four writ petitions by common order. The writ petition filed by the Commissioner, Central Excise and the Distt. Excise Officer, Bikaner were dismissed by sustaining the preliminary objection raised by the Contractor that in view of the decision rendered by the Hon’ble Supreme Court in the case of Chief Conservator of Forests, Govt. of A.P. vs. Collector & Ors. reported in 2003 (3) SCC 472 , the writ petition is not maintainable as the lis arising out of the contract entered between the State and the respondent - Contractor could be pursued only by or against the State Government and Officers of the State Government could not maintain the writ petition of their own. 15. The other writ petitions filed by the Contractor was allowed and the order of remand by the Board as well as of the Commissioner cancelling licences were set aside. 16. 15. The other writ petitions filed by the Contractor was allowed and the order of remand by the Board as well as of the Commissioner cancelling licences were set aside. 16. Aggrieved with the aforesaid Judgment of the learned Single Judge dated 29.07.2005, the aforesaid appeals are preferred by State as one of the appellants in all appeals along with Commissioner Excise and District Excise Officer before the learned Single Judge who were petitioners in the writ petitions filed by the Department. 9.17. In the first instance, the Division Bench of this Court vide its Judgment dated 17.01.2006 was of the view that the Board of Revenue has correctly exercised its discretion in remanding the case for enquiry and fresh decision. The order of the Board of Revenue should have been upheld in its entirety and the writ petition preferred by the Contractor as well as the Department should have been dismissed. With this conclusion, the appeals were disposed of with following orders:- “In the result the order of the learned Single Judge is modified to the extent that quashing of the orders of Excise Commissioner dated 30.05.2005 and 28.06.2005 would stand but subject to enquiry followed by a fresh order to be passed by the Excise Commissioner in accordane with law as directed by the Board of Revenue by its order dated 06.07.2005. The writ petitions preferred by the Department as well as the Contractor would stand dismissed. The appeals are dismissed in the above terms. Before we part, it may be clarified that any observation made in this order should not be understood as concluded opinion of this Court. The observations were meant only for disposal of these appeals. The Excise Commissioner will be at liberty to arrive at his own conclusion.” 18. The matter was taken before the Hon’ble Supreme Court both by the Contractor as well as by the State Government. After grant of special leave, the Hon’ble Supreme Court made following order:-“Leave granted in both the matters. Having heard the learned Counsel for the petitioner and Mr. The matter was taken before the Hon’ble Supreme Court both by the Contractor as well as by the State Government. After grant of special leave, the Hon’ble Supreme Court made following order:-“Leave granted in both the matters. Having heard the learned Counsel for the petitioner and Mr. Sorabjee, learned Senior Counsel appearing on behalf of the State, we are of the opinion that the Division Bench of the High Court was not correct in remitting the matter to the Board of Revenue as both the petitioner as also the Commissioner of Excise approached the High Court aggrieved by the orders passed by the Board of Revenue, remanding the matter back to the Commissioner. The impugned order passed by the High Court is therefore set aside. We would, however, request the Division Bench of the High Court to consider the matter afresh on merits as expeditiously as possible, preferably within three months from the date of communication of this order. The appeals are disposed of with the aforementioned direction.” 19. This is the course through which these appeals are before us for decision. Before we embark on the detailed facts and merits of the case, we may notice that in all the four appeals, the Contractor has moved a separate Misc. Application. The Misc. Applications are primarily for claiming consequential reliefs as a result of setting aside the order of Commissioner dated 30.05.2005 cancelling the wholesale licence to vend IMFL and beer and the order dated 28.06.2005 cancelling the licence for retail vend of country liquor by seeking refund of security deposit and licence fee forfeited by the order of Commissioner with interest and also laid claim to the estimated loss of profit which according to the Contractor, he would have earned had his licence been not cancelled. However, realizing that claim to loss of profit falls in the realm of damages for breach of contract and is not subject matter of writ petitions and requires probe into questions of facts about the party who is liable for breach of contract, the extent of responsibility of State in such matters relating to action of its officers which are ultimately found to be erroneous and as to the actual loss of profit that have been caused, the Counsel for the Contractor candidly stated that the Misc. Applications be confined to the grant of consequential benefits of refund of forfeited amount with interest payable thereon in accordance with law. In respect to the claim of loss of profit, the Contractor be set at liberty to pursue his remedy under the ordinary law as may be available to him. To this prayer, the learned Counsel for the appellants has no objection to the extent it related to direct consequence of ultimate result of appeals, as restoration of licence and permission to trade in potable liquor is not possible as the permit of licence has expired during pendency of these proceedings. 20. It may also be noticed here that during pendency of this litigation, the period of contract both for wholesale vend of IMFL and beer and retail vend of country liquor have expired and therefore, question of allowing the Contractor to carry on trade as a result of setting aside of order of cancellation in both the cases will not arise. To that extent, the relief has also become infructuous so far as the present appeals are concerned. 21. Since we propose to dispose of all the appeals by common order, the facts are common, though marking of annexure in different writ petitions are different, we refer to chronology of facts as are relevant for the present purposes. Since we are to determine the issue raised in these appeals on merits by taking into consideration entire facts and material, chronology of events is on the basis of material placed on record and the original records that have been placed before us by the appellant during the course of hearing so far as considered necessary and relevant for appreciating material on record as well as certain submissions made by the learned Counsel during the course of hearing. Brief Facts: A. Thecontract for IMFL and beer wholesale vend and retail country liquor for the Bikaner Group of Shops for the year 2005-2006 was to commence w.e.f. 01.04.2005. B.On 12.02.2005 the Excise Section of Finance Department of State of Rajasthan issued temperance policy for the year 2005-2006. Apart from details of general policy matters to be followed, the two aspects of the policy relevant for the present purpose may be noticed. B.On 12.02.2005 the Excise Section of Finance Department of State of Rajasthan issued temperance policy for the year 2005-2006. Apart from details of general policy matters to be followed, the two aspects of the policy relevant for the present purpose may be noticed. Firstly in order to regulate the quality of IMFL and beer vended in the State, it was proposed that on IMFL and beer to be vended in the State of Rajasthan, the hologram/ slip containing batch number be fixed on the IMFL and beer containers. Secondly, it was also envisaged that only such IMFL and beer be permitted to be vended in the State which is manufactured out of extra neutral alcohol (ENA) and the IMFL manufactured from rectified spirit need not be permitted to be sold within the State of Rajasthan. C. ManojAli and party, the respondent was granted licence for retail trade in country liquor for the year 2005-2006 for Bikaner district group, on the basis of his highest tender and on that basis, he was also sanctioned licence for wholesale trade of IMFL and beer for Bikaner district group for the year 2005-2006 vide order dt.30.03.2005 in pursuance of an application made on 29.03.2005. D. With the sanction letter dated 30.03.2005, the Contractor was required to submit a map in four copies of wholesale godown from where the Contractor intends to trade and the locality where he wants to store the IMFL and beer on 30.03.2005 itself . E.The Contractor submitted blue print of premises which he intended to use as godown. The premises were owned by one Sh. Daljeet Singh and Gurmeet Singh and consisted of five rooms/halls of different sizes annexed herewith as Schedule -A. F. The map as it appears from the record was exact replica of the original map submitted for approval as wholesale godown of IMFL/beer and as such approved by the Distt. Excise Officer in the case of previous Contractor M/s Ram Pal Rajkishan and Party situated at Tulsi Circle. The map of approved premises for wholesale godown of IMFL/beer for financial year 2004-2005 in favour of Rampal Rajkishan is annexed as Schedule-B. G. Thismap shows that on the west of constructed premises was one room followed with open space abutting on the public way. The room was shown to be having an opening towards public way on the open space. The room was shown to be having an opening towards public way on the open space. On the eastern side, there was Deshi wine godown and was abutting Vishnoi Dharmshala. While at the close of western side, there was only one hall attached to IMFL wholesale godown of four rooms. H. On first of April, under the letter of sanction, the Contractor commenced his business, before the licence in the prescribed proforma was issued or the proposed premise for wholesale storage of IMFL and beer was approved. In fact the first supply commenced only on 4th April. I. While the matter was pending for issuance of licence and approval of the premises proposed as wholesale godown for IMFL/beer on 11.04.2005, it is stated that on receiving a complaint, the Dy. Superintendent of Police surveyed the aforesaid premises. The inspection was said to have commenced on 11.04.2005 at 12.30 p.m. after requiring the Excise Inspector, Bikaner Circle Sh. Hajja Raj to be present. As a consequence of aforesaid inspection or survey, a search report was prepared on 12.04.2005 at 11 p.m. i.e. to say almost 35 hours from the time of commencement of inspection. J. As per that inspection report, the compound wall gate was closed from inside. Seeing the persons in uniform, somebody who was present inside the premises ran away by jumping the wall towards Vishnoi Dharmshala. On entering into the gate, it was found that wholesale godown was open. No body was inside. No independent witness was found and therefore, Sh. Prithvi Pal Singh, Sub-Inspector and Hajja Ram, Excise Inspector, Bikaner Circle were nominated as motbirs. In the front room of the godown, IMFL and beer were found for which separate list was prepared. Then the party went to the room situated at the back of the godown which was closed with shutter. Since the said room according to Hajja Ram was part of approved wholesale godown, he suggested that its search is also essential and one man has already run away, suspicion about illicit liquor is strong. It was not possible to procure key of the lock, therefore, locks were broken open and it was found that the room is filled with IMFL and it was also found that it did not contain hologram of the Excise Department nor did it contain MRP which according to new excise policy were essential. It was not possible to procure key of the lock, therefore, locks were broken open and it was found that the room is filled with IMFL and it was also found that it did not contain hologram of the Excise Department nor did it contain MRP which according to new excise policy were essential. Therefore, it was considered to be unauthorized liquor. Since godown is in the name of Manoj Ali, therefore, primarily case against Sh. Manoj Ali is made out for offence under Section 16/54 of the Excise Act. With this premises unauthorized liquor was seized. In all 11204 nips, 1634 pints and 6820 bottles of IMFL and 370 bottles of beer were found in the said room. The seizure memo was prepared and prosecution report was filed under Section 16/54 of the Excise Act giving rise to FIR No.8. The offence was later on corrected as under Section 19/54 of the Excise Act. K. Though the Inspections report states that a “Fard” of IMFL/beer found in open part of godown was prepared and the same was found to be in order, but no such fard of properly stocked IMFL/beer is to be found with original report submitted along with complaint No.8 dated 13.04.2005 nor the same is to be found in any of the record produced before us. L. That no verification was made with stock register was also not found during the search as found by the Commissioner in his order dated 30.05.2005. M. It is pertinent here to notice that on 11.04.2005 itself , proposal to approve blue print submitted by the Contractor for the year 2005-2006 was sent for approval to the head office as per the Excise Department i.e. to say on the same date on which search was alleged to have started at 12.30 p.m. The FIR No.8 against the Contractor was registered on 13.04.2005. N. On 13.04.2005, the Contractor made an application before the Commissioner, Rajasthan Excise. After mentioning about the sanction of licence for wholesale trade in IMFL and beer, the Contractor submitted that the aforesaid premises, site plan of which was submitted for approval, were in possession of previous licensee for the year 2004-2005, who was the licensee until midnight of 31.03.2005. He had not delivered him possession of the room from which the IMFL/beer in question was recovered, under the lock and key of the previous Contractor. He had not delivered him possession of the room from which the IMFL/beer in question was recovered, under the lock and key of the previous Contractor. Since he is out of State, he has not been able to contact him. However, the Excise Department had knowledge about the IMFL stock stored by the previous Contractor in the disputed premises that has been recovered by effecting search of the said premises. The goods recovered from the said premises do not belong to him. O. After the case was registered on the basis of aforesaid search on 13.04.2005 and report dated 17.04.2005 about the same was sent to the Commissioner of Excise, on 27.04.2005, the Commissioner issued licence for IMFL wholesale trade in favour of the respondent - Contractor and also approved the blue print of IMFL godown submitted by the respondent - Contractor which was acknowledged by the Contractor with a rider that he accepts approval after excluding the disputed room in the map. P. Simultaneously with the issue of licence and approval of the entire premises as aforesaid on 27.04.2005, the Contractor was asked to show cause against the proposed cancellation of the licence of IMFL/beer. The reason given for proposed action was stated to be that on 11.04.2005, the Dy. Superintendent (Excise), Prevention Squad from the wholesale godown of IMFL at Tulsi Circle recovered IMFL and beer which did not have hologram of the Excise Department and MRP was also not printed thereon which was essential according to new Excise Policy. Therefore, IMFL and beer recovered from the aforesaid premises falls within the purview of illicit liquor, therefore, the case against the Contractor under Section 16/64 has been registered. No other ground was stated for the proposed cancellation of licence. Q.This was replied to by the Contractor on 30.04.2005 reiterating that until 11.04.2005 the premises from which the IMFL/beer without hologram and MRP was recovered was in the continued possession of previous Contractor M/s Rampal Rajkishan and party and one Naresh Kumar Arora as Chowkidar of the previous Contractor was left behind to take care of that room. The present contractor had no connection directly or indirectly with the aforesaid liquor. He also pointed out that seized IMFL/ beer stock being of the previous Contractor, ought to have been taken possession of by the Department on 31.03.2005. The present contractor had no connection directly or indirectly with the aforesaid liquor. He also pointed out that seized IMFL/ beer stock being of the previous Contractor, ought to have been taken possession of by the Department on 31.03.2005. Along with this reply, affidavit of Naresh Kumar dated 21.04.2005 stated to be the employee of the previous Contractor was submitted supporting the case of the Contractor. R. Thereafter on 13.05.2005, another notice was issued again referring to that seized bottles of IMFL/beer were not containing hologram and MRP as per excise policy of 2005-2006 which shows that the seized liquor has been illegally stored by the Contractor in the approved premises. In this letter, it was also stated that the case under Section 19/54 of the Excise Act has been registered on 13.04.2005 (instead of 16/54 as stated in earlier notice). It was also stated that the aforesaid act amounts to violation of terms of licence and because case has been registered against the Contractor, it is also found to be in breach of condition No.17. Attention was invited to Clauses 9.2 and 9.3 of the licence relating to retail vend of country liquor. This letter also says that the Contractor has violated Clause 9.2 and 9.3 of the licence for country liquor also and since wholesale licence for IMFL and beer was issued on the premise because the Contractor was holding the licence for country liquor retail vend, the wholesale licence for IMFL and beer is required to be cancelled. The cause was required to be shown against the proposed cancellation of wholesale licence for IMFL and beer. This notice also did not contain any intimation that country liquor licence is required to be cancelled. S. TheContractor replied vide his submission dated 28.05.2005. The Contractor pointed out the discrepancy in the notice dated 13.05.2005 and 27.05.2005. He pointed out the variance in the provisions under which case against him was registered on 13.04.2005. While in the notice dated 27.04.2005, it was stated that the case has been registered under Section 16/54 of the Excise Act, in the notice dated 13.05.2005, the provision under which the case has been registered is stated to be 19/54 of the Excise Act. He reiterated that when the Dy. While in the notice dated 27.04.2005, it was stated that the case has been registered under Section 16/54 of the Excise Act, in the notice dated 13.05.2005, the provision under which the case has been registered is stated to be 19/54 of the Excise Act. He reiterated that when the Dy. Superintendent (Excise) had inspected the premises on 11.04.2005, one room which had separate outlet and was in possession of the previous licensee was not in his possession. It was also pointed out that and it was stated in seizure report that in the premises which were in possession of the Contractor duly authorized stock was lying and no further search and survey of the premises which were in possession of the Contractor was conducted. He has only seized the goods from the room which was not in his possession by breaking open the lock. Had it not been so, the entire godown would have been seized. It was also pointed out clearly in this letter that in the complaint lodged for prosecuting the Contractor, no batch number of any of the seized IMFL/beer has been shown and if the enquiry is made about batch numbers, it would be clear that the seized stock of liquor bottles belonged to previous licensee which was stored by the previous licensee in his approved retail godown for IMFL at Tulsi Circle. The contractor also pointed out that under the new policy, IMFL manufactured out of rectified spirit was required to be destroyed and it could not be transferred to subsequent licensee. It was also pointed out by the Contractor that amongst seized goods, majority of the stock consisted of red scotch whisky, rum and gin, which are manufactured from rectified spirit and could not have been transferred to anyone but were liable to be destroyed by the Department in terms of the new Policy, but the same were not destroyed and by collusion with the Excise Inspector, the previous licensee without delivering possession of said liquor and without destroying the same has left the place. It is said balance stock of the previous licensee which was recovered by the search party on 14.2005. In support of his aforesaid contention, he also referred to details about permit, invoice No. etc. It is said balance stock of the previous licensee which was recovered by the search party on 14.2005. In support of his aforesaid contention, he also referred to details about permit, invoice No. etc. from which it could be verified that goods seized during the search were shifted by the previous licensee from his wholesale godown on 24.03.2005 to retail godown at Tulsi Circle, entry about which is to be found in the wholesale register and goods have been recovered from the same place where it was transferred. According to the submission made by the Contractor, the aforesaid investigation would fortify the Contractor that the goods stored in the retail godown of previous licensee which was not inspected before the close of period of previous licensee and the disputed IMFL remained in the said godown. Since the previous licensee was required to pay excise duty on the balance of retail stock transferred from wholesale godown, he has left the place and the Department has also not acted by seizing the same before the expi