Research › Search › Judgment

Kerala High Court · body

2018 DIGILAW 854 (KER)

Rajan v. State of Kerala

2018-10-25

ANU SIVARAMAN

body2018
JUDGMENT : 1. The issue raised for consideration in these Writ Petitions is with regard to compounding of an offence of mixing of starch with toddy. The parties and documents are being referred to in this judgment as arrayed in W.P. (C) No. 3969 of 2018 which is taken as the leading case. 2. The petitioner was a licencee of toddy shop Nos. 11, 14, 15, 16, 17 and 26 of Group No. 111 in Vadakara range for the period upto 31.3.2018. It is submitted that a crime and occurrence report dated 15.8.2017 had been registered against the petitioner. It is stated that a sample of toddy taken from the petitioner’s shop on 15.4.2017 revealed the presence of starch mixed with toddy. It is stated that Exhibits P16 and P17 applications preferred by an employee in the shop of the petitioner had been rejected and Exhibit P14 order of cancellation of licence in respect of the toddy shops had been issued on 1.1.2018 on the allegation that the toddy had been found to be adulterated with foreign material. Exhibit P15 order directing resale of the shops was also issued which is under challenge in the Writ Petition. 3. The contention of the learned Senior Counsel for the petitioner is that the mixing of starch with toddy is a minor offence and cannot entail cancellation of licence in terms of S.26 of the Abkari Act (for short, the Act). It is stated that by the amendment brought about in Sections 57(a) and 67A of the Act, the mixing of starch with toddy, even if such mixing is admitted, has been made a minor offence by taking it out of the ambit of the more serious offences. Compounding is also enabled in such cases after the amendment. It is therefore contended that even though the offence in these cases was committed before the amendment to S.57(a) and S.67A of the Act, the application preferred for compounding is liable to be considered and the cancellation of licence is completely unjustified and illegal. 4. A detailed counter affidavit has been filed on behalf of the 2nd respondent. It is stated therein that the offence of mixing of starch with toddy had been detected in all these cases before the amendment was effected in the Act with effect from 21.12.2017. 4. A detailed counter affidavit has been filed on behalf of the 2nd respondent. It is stated therein that the offence of mixing of starch with toddy had been detected in all these cases before the amendment was effected in the Act with effect from 21.12.2017. It is stated that the offence of mixing foreign materials with toddy was an offence punishable under S.57(a) of the Act at the time when the offence was committed and detected. It is stated that the provision for compounding of the offence has come into effect only with effect from 21.12.2017. It is stated that therefore the application for compounding under S.67A could not be considered, since the offence was committed before the date on which the offence was made compoundable. 5. Relying on S.320 Cr.P.C. the learned Government Pleader would contend that compounding of an offence is not a right available to any person and that what is contemplated is only an application by the petitioner. It is stated that in these cases, final reports have been filed before court and that in the said circumstances, compounding is possible only with the permission of the court. It is stated that the State cannot be directed to compound any offence and the appropriate consideration has to result in each case on the merits thereof. Relying on the decision of a Division Bench of this Court in Sanjayan v. Tahsildar, 2007 (4) KLT 597 , the learned Government Pleader submits that the effect of compounding an offence is that the accused admits his liability and seeks to avoid the penal consequences of the same. It is submitted that the compounding of an offence under S.57(aa) as provided in S.67A would only absolve the petitioners of the liability for facing prosecution for the said offence. It is therefore contended that the cancellation of licences and the decision to re-auction the shops would remain unaffected by any compounding of the offence, even if it were to be accepted. The learned Government Pleader therefore contends that the compounding of the offence would be of no consequence whatsoever for the purpose of consideration of the issue of cancellation or suspension of. licence. Relying on the decision of the Apex Court in Union of India & Anr. The learned Government Pleader therefore contends that the compounding of the offence would be of no consequence whatsoever for the purpose of consideration of the issue of cancellation or suspension of. licence. Relying on the decision of the Apex Court in Union of India & Anr. v. Banwari Lal Agarwal, (1998) 7 SCC 652 , it is contended that an enabling provision for compounding cannot give a right to a party to insist that the authority should make an offer for compounding before prosecution is launched. 6. The learned Senior Counsel appearing for the petitioner would, on the other hand, rely on the decisions of the Apex Court in Rayala Corporation (P) Ltd. v. Director of Enforcement, New Delhi, 1970 KHC 664, T. Barai v. Henry Ah Hoe & Anr. 1983 KHC 415, Kolhapur Canesugar Works Ltd v. Union of India, 2000 KHC 995, General Finance Co. & Anr. v. Assistant Commissioner of Income Tax, Punjab, (2002) 7 SCC 1 , Basheer v. State of Kerala, 2004 KHC 540 and State of Kerala v. Unni, 2007 (1) KLT 151 (SC). 7. The contentions raised by the learned Senior Counsel appearing for the petitioners are (1) amendment which is clarificatory in nature has necessarily be retroactive in operation; (2) once the rigour of the penal provision is relaxed by a later amendment, the said relaxation has to be taken into consideration for the purpose of determining whether it would be an adequate ground for cancellation of a licence already granted and (3) the filing of final reports before court at a time when the rejection of the applications for compounding are already under challenge before this Court, would have no effect and cannot be relied upon to deny the benefit of S.67A of the Act to the petitioners herein. 8. The decisions of this Court in Balu v. State of Kerala, 2007 (1) KLT 401 , Mathew N.J. v. State of Kerala & Ors. 2011 (2) KHC 835 , Muraleedharan v. State of Kerala, 2011 (1) KLT 886 , Sivapalan v. R.T.O, Kollam, 1996 KHC 374 and Santhosh & Anr. v. State of Kerala & Ors. 2015 (5) KHC 198 (D.B.) are also relied on by the learned Senior Counsel appearing for the petitioners in these cases to contend that adding of starch to toddy is not so serious offence as to entail cancellation of licences on that ground. v. State of Kerala & Ors. 2015 (5) KHC 198 (D.B.) are also relied on by the learned Senior Counsel appearing for the petitioners in these cases to contend that adding of starch to toddy is not so serious offence as to entail cancellation of licences on that ground. The effect of compounding of an offence has been discussed in Sivapalan’s and Mathew N.J.’s cases (supra) and it has been found that the effect of compounding is that it operates as a complete bar to any further proceedings as if the offender had been acquitted. It is held in Mathew N.J’.s case (supra) that there is nothing in S.68 of the Forest Act, 1961, which takes away the power of an officer to compound an offence even when the case is pending before a court. 9. I have considered the contentions advanced at considerable length. It is clear that the issue has to be considered taking note of the specific language employed in the Statute in question. S.57(a) and 57(aa) of the Abkari Act reads as follows: “57. For adulteration, etc. by licensed vendor or manufacturer.- Whoever being the holder of a license for the sale or manufacture of liquor or of any intoxicating drug under this Act, (a) mixes or permits to be mixed with the liquor or intoxicating drug, sold or manufactured by him, any drug, other than a noxious drug or any ingredient, other than starch likely to add to its actual or apparent intoxicating quality or strength, or any article prohibited other than an article which the Government shall deem to be noxious by any rule made under Section 29, clause (k), when such admixture shall not amount to the offence of adulteration under Section 272 of the Indian Penal Code. (aa) mixes or permits to be mixed with starch in the liquor sold or manufactured by him. (b).... (c).... (d).... Shall, on conviction before a competent court, be punished:- (i) for the offences, other than an offence falling under clause (aa), with imprisonment for a term which may extend to five years or with fine which may extend to fifty thousand rupees or with both; (ii) for an offence falling under clause (aa), with imprisonment for a term which may extend to six months or with fine which shall not be less than twenty five thousand rupees.” 10. By amendment in 2017, S.57(a) was amended by substituting the words “any ingredient” with the words “any ingredient, other than starch”. S.57(aa) was inserted in the Act which reads, “mixes or permits to be mixed with starch in the liquor sold or manufactured by him” and the penalty in respect of the offence falling under S.57(aa) was reduced as imprisonment which may extend to six months or with fine which shall not be less than Rs. 25,000/. S.67A was also amended by adding an entry “mixing starch with liquor” in the table and fixing Rs. 25,000/- as the compounding fee for the same. 11. The contention of the petitioners is that with the reduction of the penalty and the taking away of the offence from the scope of the serious offences of mixing other noxious and dangerous materials with toddy and making it an independently less serious offence, the prosecution launched against the petitioners has been rendered unnecessary. It is stated that though the offence in these cases was detected on dates prior to the amendment, since the amendment made the offence compoundable, their applications for compounding were liable to be considered in accordance with law as it stood at the time when the applications were submitted. It is further contended that the cancellation of licences on the ground that starch had been found to be mixed with toddy is completely unwarranted in view of the amendment brought about in S.57 of the Act. 12. The contra contention of the learned Government Pleader is that the compounding of an offence is not the right of any party and all that can be directed, at best, is the consideration of an application for compounding by the competent authority in cases where final reports have not been laid and the consideration of such requests with the permission of the court in cases where final reports have been filed before court. It is contended that even if the compounding is allowed in favour of the petitioners, that can make no difference to the cancellation of the licences on the basis of the detection of offence, since compounding amounts to admission of guilt and forecloses only prosecution of the offence and cannot absolve the offender from the other consequences for such commission or omission. 13. 13. The decisions of this Court as well as the Apex Court, which have been placed before me, would show that what is to be looked into is the language of the compounding provision. S.67A of the Act is an enabling provision, which reads as follows: “67A. Power to compound offences.– (1) The Commissioner of Excise or the Deputy Commissioner of Excise of the District concerned or any Abkari Officer specially empowered by the Government in this behalf by notification in the Gazette, may accept, from any person reasonably suspected of having committed any of the offences specified in column (1), a sum of money as specified in column (3) of the Table below by way of composition for the offence which may have been committed and where any property has been seized, the same shall be confiscated to Government or disposed of in such manner as may be prescribed. (2) Where any case involving an offence specified under sub-section (1) is pending before a court of law, such offence may be compounded with the permission of such court and a report of the action taken thereon shall be filed before the court. (3) On payment of such sum of money or such value or both, as the case may be, to such officer empowered for the purpose under sub-section (1), the accused person, if in custody, shall be discharged.” 14. It is not in dispute before me that the power to compound under S.67A is a discretionary power. S.67A only enables the empowered officer to consider an application for compounding. In cases where cases are pending trial before a court of law, such application has to be considered with the permission of the court. At the time when the offence was committed, the offence of mixing starch with toddy was an offence under S.57(a) and was not compoundable in nature. However, by the amendment to the Abkari Act, 2017, the offence of mixing starch with toddy has been taken away by the ambit of S.57(a) and has been included S.57(aa) and has been made compoundable under S.67A. 15. The Government in its wisdom has found that the mixing of starch with toddy need not be included with the serious offences of mixing other foreign ingredients with toddy and has given offence a separate status which does not entail as serious punishment. 15. The Government in its wisdom has found that the mixing of starch with toddy need not be included with the serious offences of mixing other foreign ingredients with toddy and has given offence a separate status which does not entail as serious punishment. It is therefore clear that the request made by the petitioners for compounding of offence is liable to be considered even though the offences were committed at a time when they were not compoundable offences in terms of S.67A. The applications for compounding therefore will have to be considered by the appropriate authority in each case. The filing of a final report after the Writ Petitions in each of these cases has been admitted will not stand in the way of the consideration of the application for compounding in terms of S.67A(1). It is so directed. 16. With regard to the contention that the compounding would only entail the absolving of the petitioners from the liability of facing criminal prosecution and that such compounding will not have any effect on the action for cancellation of licences is, according to me, a highly misconceived argument. S.26 of the Act provides power for recall of licences. Breach by the holder of the licenses or permission is a ground on which a licence can be suspended or cancelled. It is clear from the orders of cancellation of licence issued in these cases that the commission of offence under S.57(a) is what has weighed with the respondents in coming to the conclusion that the licence is liable to be suspended. The necessity for suspension of a licence in case of detection of a lesser offence in terms of S.57(aa) would evidently not have been considered by the respondents in view of the fact that the amendment was later in point of time to the commission of offence. Since the amendment has reduced the rigour of penalty for the offence, I am of the opinion that, that is an issue which has to be independently considered by the authority while taking a decision on the necessity or otherwise or cancellation of licences. The impugned orders, which had not considered the legal effect of the amendment and the introduction of S.57(aa), are therefore not sustainable. 17. The impugned orders of suspension/cancellation of licence are therefore set aside. The impugned orders, which had not considered the legal effect of the amendment and the introduction of S.57(aa), are therefore not sustainable. 17. The impugned orders of suspension/cancellation of licence are therefore set aside. There will be a direction to the competent among the respondents to first consider the application for composition preferred by the petitioners in terms of S.67A(1) of the Abkari Act and to pass appropriate orders in accordance with law on the said applications. It is clear from the language of the provisions compounding under S.67A would amount to absolving the accused persons of all liabilities in respect of any penal provision in terms of the Abkari Act or the Rules made thereunder. In the above view of the matter, the reconsideration of the issue of necessity for cancellation of licences has to be made by the competent among the respondents after the application for compounding is duly considered and disposed of. In case the compounding applications preferred by the petitioners are allowed, the issue of cancellation of licences will be taken up and decided taking note of the fact that the petitioners stand absolved of all liabilities in respect of the offences alleged against them in terms of S.57(aa) of the Act. Needful shall be done by the respondents within a period of two months from the date of receipt of a copy of this judgment. 18. The Writ Petitions are ordered accordingly.