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2011 DIGILAW 1063 (KER)

M/s Aramana Bar & Restaurant v. State of Kerala

2011-10-21

C.N.RAMACHANDRAN NAIR, P.S.GOPINATHAN

body2011
Judgment : P.S. Gopinathan, J. The writ appeal is preferred by respondents 5 and 6 in the writ petition against an order extending the interim order granted in favour of the first respondent, who is the petitioner in the writ petition, after declining the request of the appellants to hear the writ petition and to vacate the interim order. (Hereinafter, the parties are referred to as arrayed in the writ petition. The documents are also referred to as produced in the writ petition). 2. The brief facts leading to the writ petition is as follows: Ext.P1 FL-3 licence was granted in favour of one P.J. Paul on 21.2.1984 for the following financial year. It was renewed from year to year. For the year 1994-95 it was transferred in favour of one P.J. Ajay Ghosh, managing partner of a hotel. Thereafter, it was transferred to the petitioner firm in the name of V.K. Ashokan, the then managing partner. While so, Sri. E. Satheeshkumar, the husband of the 5th respondent and father of the 6th respondent was inducted as a partner of the firm. Satheeshkumar met with an accident on 25.6.2004 and succumbed to the injuries. The remaining partners, on the death of Satheeshkumar, re-constituted the firm after obtaining sanction under rule 19 of the Foreign Liquor Rules. In support of the application for sanction to re-constitute the firm, a declaration said to have been signed by the 5th respondent was produced by the petitioner and the authorities accepted it. According to the 5th and 6th respondents, no such declaration was given and that the document produced is a forged one. A copy of the said declaration is produced by respondents 5 and 6 as Ext.R5 (a) along with the petition seeking impleading them as additional 5th and 6th respondents. However, the Deputy Commissioner accepted Ext.R5(a) and based on it sanction was accorded to reconstitute the firm. Consequently, Ext.P1 licence was further renewed. While so, respondents 5 and 6 preferred a writ petition as W.P.(C) 8577 of 2007 seeking a declaration that Ext.R5(a) is a fraudulent document and that re-constitution of the firm as well as renewal of licence basing upon Ext.R5(a) is bad and not sustainable. Consequently, Ext.P1 licence was further renewed. While so, respondents 5 and 6 preferred a writ petition as W.P.(C) 8577 of 2007 seeking a declaration that Ext.R5(a) is a fraudulent document and that re-constitution of the firm as well as renewal of licence basing upon Ext.R5(a) is bad and not sustainable. That writ petition was dismissed by a learned Single Judge of this Court by Ext.P7 judgment dated 29.3.2007 with the reasoning that there was delay and the dispute is an issue of fact and requires to be decided on the basis of evidence. Though they preferred appeal as W.A.1067/2007 they were not successful. Ext.P8 is the judgment in appeal. Their review petition as R.P. 1031/2009 was also dismissed by Ext.P9 order. The third respondent had been renewing the F.L-3 licence annually treating Ext.R5(a) as a genuine document. It appears that respondent No.5 alleged criminal misconduct and other offences under the Indian Penal Code against the then Circle Inspector of Excise as well as against the other partners and a complaint was lodged before the Vigilance and Anti Corruption Bureau (VACB). The VACB made a preliminary enquiry wherein it was revealed that Ext.R5(a) declaration was forged by the surviving partners with the connivance of the then Excise Circle Inspector. The document was seized and sent to the Forensic Science Laboratory. On forensic examination, it was scientifically revealed that it is a forged document. Consequently, a case was registered as Crime No. VC 20/2009 of the VACB, Thrissur, alleging offences under Sections 465, 468, 471 and 120 (B) IPC and Section 13(1)(c) r/w 12 of the Prevention of Corruption Act against the two partners, the mother-in-law of the 5th respondent and one T.V. Raphel, the then Excise Circle Inspector. The copy of the First Information report is produced as Ext.R5(c). When, the petitioner sought for renewal of Ext.P1 licence for the year 2010-11, the third respondent having received the report from the forensic laboratory, by Ext.P6 order dated 20.3.2010, declined to renew the licence. Following the case registered, Circle Inspector Raphel was suspended from service in contemplation of the disciplinary proceedings. Assailing Ext.P6 order the writ petition on hand was filed against respondents 1 to 4. Following the case registered, Circle Inspector Raphel was suspended from service in contemplation of the disciplinary proceedings. Assailing Ext.P6 order the writ petition on hand was filed against respondents 1 to 4. The following are the main reliefs sought in the writ petition: i) call for the records leading to Ext.P6 and quash the same by issuing a writ of certiorari or other appropriate writ, order or direction; ii) declare that the petitioner firm is entitled to get the renewal of Ext.P1 F.L.3 licence No.TSR-42 conducting by the firm for the Abkari Year 2010-2011 as per Ext.P5 application; iii) issue a writ of mandamus or other appropriate writ, order or direction commanding the respondents to pass an order renewing the FL-3 license No.TSR-42 conducting by the petitioner firm for the year 2010-2011 as per the application Ext.P5.” The interim relief sought was to “pass an order directing the respondents to renew the FL-3 licence No.TSR-42, Ext.P1, conducting by the petitioner firm for the year 20102011 as per the application Ext.P5, pending disposal of the above writ petition.” 3. On 30.3.2010, the learned Single Judge granted an interim order whereby respondents 1 to 4 were directed to renew the license provisionally, subject to the result of the writ petition. In essence, the interim relief granted is the third main relief which is incidental to relief Nos.1 and 2. The result is that by the interim order, the petitioner got a relief that would have been got on final disposal of the writ petition in case the petition is allowed. On the basis of the interim order, the petitioner has been running the bar. Respondents 5 and 6 who were not originally on the party array, having got aggrieved, file a petition as I.A. 5241/2010, seeking an order to get them impleaded as respondents 5 and 6. By order dated 28.6.2010, that petition was allowed and they got impleaded. They filed counter affidavit along with documents. On 15.12.2010, respondents 5 and 6 sought for hearing the matter. But it was not heard for the reason that respondents 1 to 4 had not filed any counter affidavit and adjourned to 12.1.2011. Thereafter, it was adjourned on various dates. By order dated 28.6.2010, that petition was allowed and they got impleaded. They filed counter affidavit along with documents. On 15.12.2010, respondents 5 and 6 sought for hearing the matter. But it was not heard for the reason that respondents 1 to 4 had not filed any counter affidavit and adjourned to 12.1.2011. Thereafter, it was adjourned on various dates. While so, on 25.2.2011, 5th respondent filed a petition-I.A. 3512/2011 styling under Article 226 (3) of the Constitution of India, seeking an order to vacate the interim order dated 30.3.2010 with a plea that the application for renewal of the licence was based upon a forged document and it was rightly declined by the third respondent and that the interim order would allow the guilty to enjoy the fruits of their own misdeeds which is against the dictum laid down by the Apex Court in Commissioner of Customs vs. Essar Oil Ltd. (JT 2004 (9) 12). It was also alleged that the interim order would tantamount to perpetuating the fraud and forgery. In the meanwhile, the mother-in-law of the 5th respondent filed a petition as I.A. 1733/2010 seeking an order to get her impleaded as 7th respondent. On 15.3.2011 that petition was allowed. While allowing that petition, the interim order issued on 30.3.2010, though not for a particular period, was extended till 25.3.2011 and the petition was posted to 24.3.2011 on which day the interim order was extended till 31.3.2011. On 30.3.2011, the interim order was extended by another two months. Aggrieved by that order extending the interim order, after declining the prayer to hear the writ petition, the writ appeal was preferred. 4. At the request of the appellant and having noticed that the order appealed is in effect amounted to allowing the writ petition and the decision of the appeal in one way or other would amount to disposal of the writ petition and thereby the writ petition would become infructuous and also taking note that in a writ petition where the opposite party aggrieved by the interim order makes an application, Article 226(3) of the Constitution mandates a time bound disposal of the applications, the writ petition was also ordered to be posted along with the writ appeal. Accordingly, the writ petition was also posted along with the appeal. 5. We have heard either side. Accordingly, the writ petition was also posted along with the appeal. 5. We have heard either side. The persistent argument that was advanced by the learned counsel for the appellant is that in the light of Ext.R5(c), the first information report, there is ample material before the third respondent to conclude that the re-constitution of the firm was sought on the basis of a forged document and it is for that reason Ext.P6 order declining renewal was issued. We find that a reading of Para 2 of Ext.P6 would be appropriate for easy appraisal of the dispute. Para 2 of Ext.P6 reads as follows: “The application has been perused by me in detail. It is seen that the Vigilance and Anti Corruption Bureau, Thrisur unit had registered a case as VC-20/09 alleging that certain forged documents have been created for the reconstitution of the partnership deed of the hotel in the year 2005, consequent to the death of a partner Sri. E. Sathish Kumar. The erstwhile partners and licensee of the Hotel are also accused in the case. Also the Excise Commissioner, Thiruvananthapuram vide letter referred 3rd cited above has directed not to renew the licence for the year 2010-2011, since a report of the Forensic Science Laboratory, Thiruvananthapuram is received regarding the above allegations.” According to the learned counsel for the appellant, in the light of Ext.R5(c), reasons given in Ext.P6 are valid and good to decline the request for renewal of the licence, which was rightly done by the 3rd respondent and this Court, while exercising discretionary jurisdiction shall not interfere with that order, either by interim order or otherwise, so as to enable the parties to perpetuate fraud and forgery; and to enjoy any privilege under the forged document. On the other hand, the learned senior counsel appearing for the writ petitioner would submit that Ext.P7 writ petition was filed by respondents 5 and 6 on the very same pleadings and this Court rightly rejected the same and it has become final by Ext.P8 judgment in appeal. The review petition was also dismissed by Ext.P9 order. On the other hand, the learned senior counsel appearing for the writ petitioner would submit that Ext.P7 writ petition was filed by respondents 5 and 6 on the very same pleadings and this Court rightly rejected the same and it has become final by Ext.P8 judgment in appeal. The review petition was also dismissed by Ext.P9 order. Therefore, according to the learned senior counsel, the third respondent ought to have renewed the licence and that the mere fact that a case was registered against some of the then partners or the Excise Inspector is not at all a sufficient reason to decline the request for renewal of the licence and thereby Ext.P6 is erroneous and unsustainable and the third respondent ought to have renewed the licence. 6. We notice that Ext.P7 judgment is dated 29.3.2007 and Ext.P8 judgment in appeal is dated 8.9.2009. Ext.P9 order in review petition is dated 2.11.2009. Neither Ext.P7 nor Ext.P8 nor Ext.P9 is on merit, but on reasons stated earlier. Ext.R5(c) FIR is dated 7.12.2009. Evidently, Ext.R5(c) is subsequent to Exts.P7 to P9. So, the argument of the learned senior counsel appearing for the petitioner basing on Exts.P7 to P9 is not at all sustainable because Ext.R5(c) was not on board while Exts.P7 to P9 were delivered. Therefore, the Single Judge, while delivering Ext.P7 or the Division Bench while delivering Exts.P8 and P9 had no occasion to consider Ext.R5(c). In that circumstance, Exts.P7 to P9, would not operate against the defence of respondents 5 and 6. Irrespective of Exts.P7 to P9, respondents 5 and 6 are entitled to defend the writ petition. So also, Exts.P7 to P9, which are not on merits, would not enure any right on the petitioner. The very same reasons which nonsuited respondents 5 and 6 are applicable to the petitioner also. Petitioner is also not entitled to get an interim relief or final relief in writ proceeding basing upon a disputed or tainted document. 7. During the preliminary enquiry conducted by the VACB, the original of Ext.R5(a) was seized and sent for forensic examination wherein it was revealed that the signature of the 5th respondent in the document was forged. True that materials disclosed in the preliminary enquiry or the registration of the case may not amount to proof in support of the plea that Ext.R5(a) is a forged document or that the petitioner forged it. True that materials disclosed in the preliminary enquiry or the registration of the case may not amount to proof in support of the plea that Ext.R5(a) is a forged document or that the petitioner forged it. But such report can no way be ignored while issuing interim mandatory order, that too exactly the main relief which can be granted only on final disposal of the writ petition. Going by Ext.R5(c), we find that it is basing upon the report of the Forensic Science Laboratory, the VACB had arrived at a prima facie conclusion that Ext.R5(a) was forged in connivance with the 4th accused, the then Excise Circle Inspector. It is not a report on surmises, but based on scientific examination. The Excise Circle Inspector was suspended from service following the registration of the crime. Though he approached this Court by filing W.P.(C) 36968/2009 to assail the suspension order, he was not successful and he continues to be under suspension till date. The crime alleged is very grave and no way condonable, if committed. Not only fraud and forgery was committed, forged document in connivance with Excise officials was produced before the Government as if genuine document to secure bar licence to run liquor business under the shade of forged document. On an anxious consideration of the available materials, we find no reason to reject Ext.R5(c) First Information Report based upon the report of Forensic Science Laboratory, Thiruvananthapuram. 8. We have carefully gone through Ext.R5(a) as well as the counter affidavit filed by respondents 5 and 6. Prima facie, we notice that the signatures as that of the 5th respondent contained in Ext.R5(a) materially vary with the signature of the 5th respondent in the counter affidavit. Therefore, we are not in a position to rule out the report of the Forensic Science Laboratory that Ext.R5(a) is a forged document. In the above circumstances, we find that the third respondent was justified in issuing Ext.P6 after declining the request for renewal of Ext.P1 licence. There is no material to come to a conclusion that Ext.P6 order is anyway vitiated or that there is any error or illegality. Neither is there any arbitrary or excessive exercise of the powers vested on the third respondent under Rule 13(3) of the Foreign Liquor rules. There is no material to come to a conclusion that Ext.P6 order is anyway vitiated or that there is any error or illegality. Neither is there any arbitrary or excessive exercise of the powers vested on the third respondent under Rule 13(3) of the Foreign Liquor rules. The title relied upon by the petitioner being of shady nature and Ext.P6 being no way erroneous, the petitioner is not entitled to any relief including interim relief under writ jurisdiction. 9. In Ext.R5(a) there is a statement that respondents 5 and 6 had decided to opt out of the partnership firm and they had settled their accounts in full satisfaction of their claims. It is not in dispute that the firm was running business in crores. The license fee itself would come to more than a score lakh. It was also revealed out that the major single investor in the firm was the husband of the 5th respondent who had 45% share over the partnership. The building in which the Bar is run also worth crores of rupees. Though it is stated in Ext.R5(a) that the parties thereto settled the accounts in full satisfaction of the claims of respondents 5 and 6, it is not at all mentioned as to what was the amount paid or that respondents 5 and 6 had abandoned their claim over the partnership business. Not a piece of document is produced before us to show that a single rupee was paid to respondents 5 and 6. Mode of settlement remains a mystery. Learned counsel for respondents 5 and 6 would submit that there was not any settlement. Neither is there any payment of any amount either as a solace to the 5th or 6th respondent or otherwise. It was also submitted that the 7th respondent, the mother-in-law of the 5th respondent had colluded with the other partners and she having received some amount, had joined hands to oust respondents 5 and 6 without paying their due share. Though the learned senior counsel appearing for the petitioner submitted that respondents 5 and 6 were paid their due share, he is not in a position to say as to what was paid, when and how? We are sure that in the event there was any payment, the other partners would have been cautious to get document for the amount paid. We are sure that in the event there was any payment, the other partners would have been cautious to get document for the amount paid. It is also pertinent to note that the 6th respondent is a kid aged three years as on the date of Ext.R5(a). Whether the other partners got discharged the share of the kid by Ext.R5(a) is also not revealed out. If discharged, how? If there was settlement of accounts of the firm as claimed by the petitioners on the death of the major share holder of the firm we do not know why the alleged payments to the widow and the minor child were not made through cheques or demand drafts. Mystery stares at the petitioner. So there is element of financial fraud also in forging Ext.R5(a). 10. Having prima facie noticed that nothing was paid to respondents 5 and 6 after the death of Satheeshkumar, by order dated 26.5.2011, almost on a consensus, we directed the petitioner to pay a sum of Rs.10 lakhs to respondents 5 and 6 and try a negotiated settlement. We record with appreciation that the learned senior counsel was fair enough to advise the party to make the payment. Though payment was made, petitioner could not reach a settlement. Therefore, we direct that the payment so made shall be adjusted towards the dues to respondents 5 and 6 on settlement of accounts. 11. We notice that under the interim order the petitioner continued the foreign liquor bar during the previous year and the term for which renewal was requested for had already expired. The learned senior counsel appearing for the petitioner submitted that the writ petition has become infructuous. On the other hand, the learned counsel for the appellant sought for disposal of the appeal on merits. We do not find any justification for us to allow the interim order to become final. Therefore, the appeal is disposed on merits. 12. A party seeking discretionary relief vested on this Court under Article 226 of the Constitution of India shall come with clean hands. In the event it is revealed that the document basing upon which the right asserted/sought is a forged document, that alone is a sufficient reason to decline the interim relief especially when the interim relief is nothing but the final relief. In the event it is revealed that the document basing upon which the right asserted/sought is a forged document, that alone is a sufficient reason to decline the interim relief especially when the interim relief is nothing but the final relief. In the nature of the pleadings, the learned Single Judge ought to have considered the merits of the plea and the nature of the relief even before granting the interim order or at least while extending the exparte interim order which is opposed by the opposite party. Such duty is more on the court when the interim relief is nothing but main relief and in the nature of a mandamus which can be granted on final disposal. We would like to add that such duty is not a discretionary duty but a mandate of Article 226 (3) of the Constitution of India which reads as follows: Article 226-Xxx xxx xx xxx (3) “Where any party against whom an interim order, whether by way of injunction or stay or in any other manner, is made on, or in any proceedings relating to, a petition under clause (1), without— (a) furnishing to such party copies of such petition and all documents in support of the plea for such interim order; and (b) giving such party an opportunity of being heard, makes an application to the High Court for the vacation of such order and furnishes a copy of such application to the party in whose favour such order has been made or the counsel of such party, the High Court shall dispose of the application within a period of two weeks from the date on which it is received or from the date on which the copy of such application is so furnished, whichever is later, or where the High Court is closed on the last day of that period, before the expiry of the next day afterwards on which the High Court is open; and if the application is not so disposed of, the interim order shall, on the expiry of that period, or, as the case may be, the expiry of the said next day, stand vacated.” In view of the above provision, the interim order would stand vacated on expiry of two weeks from the date of the petition. That being the mandate of the Constitution, no question of extension would arise. 13. That being the mandate of the Constitution, no question of extension would arise. 13. The learned single Judge grossly erred in extending the interim order without considering the contentions of respondents 5 and 6 as well as the mandate of Article 226(3) of the Constitution of India. It is liable to be vacated. In the result, the appeal succeeds. While allowing the writ appeal, the interim order of the learned Single Judge would stand set aside. The writ petition would stand dismissed with liberty to the petitioner to establish the title through civil suit, if so advised. We would make it clear that our observation about Ext.R5(a) is for the purpose of this appeal and would not be binding upon the parties in a civil suit touching the validity of Ext.R5(a). The civil court shall dispose of the suit untrammelled by our observation in this judgment. There will be no order as to costs. This judgment would be maintained in the writ appeal and a copy would be maintained in the writ petition.