JUDGMENT : Ashok Menon, J. W.P.(C) No.29524/2017 seeking a writ of mandamus directing the third respondent Circle Inspector of Excise, Irinjalakkuda, to issue preferential certificate provided in Rule 5(2) of the Kerala Abkari Shops Disposal Rules, 2002 (“Rules” for brevity) to the petitioner, and to further direct the other respondents to give preferential right to him during the auction concerning of toddy shop in Group No. IV in Chalakkudy Excise Range, was dismissed by a learned Single Judge vide the impugned judgment dated 29.01.2019. Aggrieved, the petitioner is before us in appeal. 2. The facts in brief:- Appellant was a licensee in Group No.IV/16-17 of Chalakkudy Excise Range from 18.08.2012, conducting shop Nos.22, 24, 25, 29, 31 and 33. 3. The Sub Inspector of Police conducted an inspection at toddy shop No.31 situated at Pariyaram on 17.03.2017, and seized about 8 litres of illicit arrack stored in the shop, obviously for spiking the toddy sold at the shop. A case was registered as C.R.No.416/2017 against the Manager of the shop for an offence punishable under S.8(1) and (2) of the Act. Consequentially, vide order dated 08.05.2017, the Excise Commissioner cancelled the licence issued to the appellant invoking his powers under S.26 of the Abkari Act (“Act” for brevity) for violation of Rules 5(19), 7(31) and 9(2). 4. The appellant would contend that his preference in the auction of toddy shops for the consequent year could not have been prevented in view of his preferences to run the toddy shops under Rule 5, merely for the reason that an abkari case has been registered against his manager. It is contended that such preference could be denied only in case where an abkari case has been registered against licensee. Rule 5 of the Rules which is relevant for consideration of this appeal is extracted below:- “5. The Grant of privilege of vending Toddy shall be subject to the following conditions, namely.— (1)(a) While giving privilege, preference shall be given to those licensees who had conducted toddy shops during the year 2013-2014, provided no Abkari case is registered against him other than under Section 56 of the Abkari Act. The Grant of privilege of vending Toddy shall be subject to the following conditions, namely.— (1)(a) While giving privilege, preference shall be given to those licensees who had conducted toddy shops during the year 2013-2014, provided no Abkari case is registered against him other than under Section 56 of the Abkari Act. The licensees who have conducted the shops during the year 2013-2014 and whose licences cancelled due to registration of Abkari cases and subsequently exonerated by the Court and those licensees who could not complete the year 2009-10 on account of the closure of shops shall also be given preference.” 5. The appellant claims to have an unblemished record in conducting toddy shops and that he has not been involved in any abkari case, and therefore, the act of the authorities denying him the preferential treatment envisaged in Rule 5, is improper. 6. The learned Single Judge did not accept the argument of the learned counsel appearing for the appellant, and held it to be misconceived and observed that the licensee whose licence was cancelled for violation of the Rules, cannot claim any preference under Rule 5 and that it was not necessary that an abkari case be registered against him. The learned Single Judge observed that the intention in giving preference to persons is to enable licensees having unblemished record to conduct toddy shops in a similar manner without violation of the Rules in future as well. Granting preference based on conduct of toddy shops in past is not intended to encourage a violator. 7. We heard Sri. M.G. Karithikeyan, learned counsel appearing for the appellant/petitioner and Sri. Renil Anto, learned Senior Government Pleader appearing for the respondents. 8. The learned Senior Government Pleader would submit that the abkari case registered against the Manager of the abkari shop is still under investigation and final report has not yet been filed and that at any moment the investigating authorities may implicate the appellant as well. 9. The learned counsel appearing for the appellant would submit that the appellant cannot be held responsible of arrack unauthorisedly stored in one of his shops by his Sales Manger and that the privilege granted under Rule 5(1)(a) of the Rules for vending toddy shops can be declined only if there is an abkari case registered against the licensee. 9. The learned counsel appearing for the appellant would submit that the appellant cannot be held responsible of arrack unauthorisedly stored in one of his shops by his Sales Manger and that the privilege granted under Rule 5(1)(a) of the Rules for vending toddy shops can be declined only if there is an abkari case registered against the licensee. Even those whose licences have been cancelled due to registration of abkari case and subsequently cancelled by the court, could be given such preference. If that be so, how could the respondents deny granting such preferential treatment to the appellant/petitioner against whom admittedly no abkari case has been registered so far. 10. A Division Bench decision of this Court in 2012 (4) KHC 176 ) Sudheesh v. Excise Commissioner, Trivandrum & Ors. considering a situation, where the licensee had filed a writ seeking preference for licence under Rule 5(1)(a), held as follows:- “2. On the merits, we do not find any case for the appellant because preference for licence for those who carried on business previously will not be available to those involved in abkari offence during the period they carried on business in the past. Appellant’s is not a unique case because cases being booked by Police & Excise and those pending in Courts reveal that under the label “toddy” spurious liquor is extensively sold in toddy shops.” 11. The learned counsel appearing for the appellant distinguishes the above cited decision from the facts in the present case by contending that in the instant case, no abkari case has been registered against the licensee, and therefore, he could not have been declined the preference available under Rule 5(1) of the Rules, as he was a person who had unblemished record and experience in running toddy shops for the last several years. 12. From the records, it is seen that the Police Inspector had on inspection in one of the shops belonging to the appellant seized 8 litres of arrack and hence a case was registered against the Manager for offence under S.8(1) punishable under S.8(2) of the Act. S.8(1) prohibits a person from manufacturing, importing or exporting without transit permit or from possessing, storing, distributing, bottling or selling arrack in any form. This would indicate that there is a total embargo in dealing with arrack. In the instant case, arrack was recovered from the shop of the appellant. S.8(1) prohibits a person from manufacturing, importing or exporting without transit permit or from possessing, storing, distributing, bottling or selling arrack in any form. This would indicate that there is a total embargo in dealing with arrack. In the instant case, arrack was recovered from the shop of the appellant. Any contraband article found from the shop is considered to be in the possession of the licensee of the shop. 13. Section 26 of the Act empowers the Commissioner to cancel or suspend any licence or permit granted under the Act, and sub-clause (b) thereof states that in the event of any breach by the holder of such licence or permit or by his servant, or by any one acting with his express or implied permission on his behalf, of any of the terms or conditions of such licence or permit, the licence may be cancelled by the Commissioner. So even if it was the manager of the appellant who was proceeded against in the criminal case, steps were taken to recall the licence, because even the breach of licence conditions by a servant of the licensee would entail recalling of the licence. 14. Rule 5(19) of the Rules also empowers the Commissioner of Excise to cancel any licence issued under the Rules at any time on valid grounds. 15. Rule 7(31) of the Rules states that infraction of any Rules or the conditions of the licence either by the licensee or by any person in his employment, shall entail on the licensee the forfeiture of deposit/annual rent and cancellation of licence. 16. Rule 9(2) of the Rules pertains to the special conditions applicable to licensees granted privilege of vending toddy in independent toddy shops and states that no toddy other than that drawn from Coconut, Palmyrah or Choondappana palms and on which tree-tax due under the Act has been paid shall be sold by the licensee. All toddy kept or offered for sale shall be natural and conforming to such specifications and complying to such restrictions as may be notified by Government under clause (n) of Rule 2. Nothing shall be added to it to increase its intoxicating quality or strength or to alter its natural composition or for any other purposes. All toddy kept or offered for sale shall be natural and conforming to such specifications and complying to such restrictions as may be notified by Government under clause (n) of Rule 2. Nothing shall be added to it to increase its intoxicating quality or strength or to alter its natural composition or for any other purposes. Storing of arrack, which is a prohibited item, in the toddy shop was undoubtedly meant to increase the intoxicating quality or strength of toddy or to alter its natural composition, and therefore, such act is an infraction of the Rules or conditions which entails cancellation of the licence as mentioned in Rule 7(31) as well as in Rule 5(19). It is acting under these provisions that the Commissioner was pleased to recall the licence issued to the appellant and that has now become final. It is true that strict interpretation of S.5(1) would indicate that a licensee could not be given a preferential treatment in subsequent conduct of shops, in cases where an abkari case is registered against the licensee. But it is also pertinent to note that the licence of the appellant was cancelled due to infraction of the Rules. The intention of giving preferential treatment in subsequent auction of shops is only intended to encourage licensees to abide by the Rules while conducting the toddy shop. An infringer of the Rules and conditions of licence should definitely not get a preferential treatment in subsequent auctions. The legislature definitely did not contemplate persons whose licence was cancelled due to infraction of Rules to be granted licence again. The exemption is granted under Rule 5(1)(a) only to those persons whose licence was cancelled but subsequently exonerated by the court. In the instant case also, in case the appellant or his sales manager if exonerated in trial by a court, the preferential treatment could be restored, but not before that. We are therefore, in agreement with the findings of the learned Single Judge in dismissing the Writ Petition. There is absolutely no reason for us to interfere. The Writ Appeal fails and the same is, accordingly, dismissed. No costs.