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2019 DIGILAW 192 (UTT)

Rai Bahadur Narain Singh Sugar Mills Ltd. v. Kalpana Singh Nautiyal

2019-03-13

N.S.DHANIK, RAMESH RANGANATHAN

body2019
JUDGMENT : RAMESH RANGANATHAN, J. 1. The application, seeking condonation of the delay, is not opposed by the learned counsel for the respondents, and the delay is, therefore, condoned. 2. These appeals are preferred by the appellant-Sugar Mill aggrieved by the common order passed by the learned Single Judge in Writ Petition (M/S) No.2809 of 2018 and batch dated 24.10.2018. 3. Facts, to the limited extent necessary, are that the appellant herein was granted license for manufacture and supply of country made liquor. Four industries, including the appellant, were given licenses, by the State of Uttarakhand, to manufacture and supply country made liquor. The State Government allotted different areas of supply for each of these four manufacturers, in terms of which each of them was permitted to supply 50% of the prescribed quantity exclusively only to retail outlets established within the stipulated area. In so far as the appellant is concerned, since their unit is located in Haridwar district, the impugned order dated 28.08.2018 enabled them to supply upto 50%, of the quota prescribed for Haridwar district, to retailers within the said district. In the State of Uttarakhand, the Excise year commences from the1st of April each year and ends by the 31st of March of the succeeding year. The respondents-writ petitioners are all retail outlets in whose favour retail licenses were issued for sale of country made liquor, from their respective outlets, to consumers during the license period of twelve months. When such licenses were granted to them on 01st of April, 2018, no restrictions were placed that they should procure 50% of the prescribed quota, which they were required to lift from manufacturers of country made liquor in the State, only from the appellant herein. 4. The respondents-writ petitioners invoked the jurisdiction of this Court questioning the order dated 28.08.2018, and the consequential order dated 04.09.2018 whereby they were called upon to procure 50% of their offtake only from the appellant 5. 4. The respondents-writ petitioners invoked the jurisdiction of this Court questioning the order dated 28.08.2018, and the consequential order dated 04.09.2018 whereby they were called upon to procure 50% of their offtake only from the appellant 5. In the order under appeal dated 24.10.2018, the learned Single Judge held that the Government of Uttarakhand had framed a policy on 19.03.2018, Clause 41 of which provided that country liquor shall not be allowed to be imported from other States, and to ensure smooth supply of country liquor, the manufacturers of country liquor could be allotted areas in the State of Uttarakhand; in the exercise of the power conferred by the said Clause, the impugned order dated 28.08.2018 was passed, whereby a particular quota of country liquor was reserved in different districts i.e., Dehradun, Haridwar, Udham Singh Nagar and Nainital; consequently, a quantity of 2.16 lakh bulk litres of country liquor was reserved in favour of the appellant for Haridwar district; the fall out, of the order dated 28.08.2018, was that, in district Haridwar, each retailer had to compulsorily lift 50% of country liquor from the appellant; by the impugned order, the Government was forcing retailers to sell 50%, of their total sales, of a particular brand of country liquor; and the respondents-writ petitioners had contended that the impugned order, forcing them to lift 50% of the quota from a particular distillery, restricted their choice of procurement and placed unreasonable restrictions on them besides violating Article 14 of the Constitution of India. 6. While holding that nobody has a fundamental right to trade in liquor, the learned Single Judge observed that, that did not mean that the retailers, who were given licenses, could be compelled to sell a particular brand of a particular distillery; the Government had to be fair and just in its dealings; and the impugned order, on the face of it, was unfair and against the retailers. While taking note of the submission, urged on behalf of the appellant, that the said order dated 28.08.2018 had been passed in view of the policy of the Government as contained in Rule 41, where such reservation and allotment could be made, and the impugned order was passed to ensure that the money received from the appellant, on selling country liquor, was given to sugarcane growers, the learned Single Judge opined that Rule 41 did not contemplate a contingency as had been directed in the order dated 28.08.2018; Rule 41 only visualized that the areas could be reserved in order to ensure easy supply of country liquor; in the present case the ground, on which the impugned order was passed, was only that it would save extra cost of transport for the distilleries; this could never be a reason for passing such an order; and the said order dated 28.08.2018 was patently illegal. 7. Before us Mr. Navneet Kaushik, learned counsel for the appellant, would submit that the learned Single Judge had erred in setting aside the impugned order, even in the absence of a challenge to the validity of Clause 41 of the policy; Clause 41 confers wide powers on the Government, including the power to prescribe a particular area exclusively in favour of a manufacturer; in terms of the said provision, it was open to the State Government to permit the appellant to sell its entire quota of 2.16 lakh bulk litres only within the district of Haridwar; the State Government had, in fact, restricted the quantum only to 50% of the allotted quantity of 2.16 lakh bulk litres for the district of Haridwar; and, since the said order ensured easy supply of country liquor from the appellant’s unit located in District Haridwar to the retail outlets established in the same district, the order under appeal necessitated being set-aside. 8. On the other hand Mr. 8. On the other hand Mr. Shobhit Saharia, learned counsel for the respondents-writ petitioner, would submit that, since the retailers were granted licenses nearly five months before the impugned order was passed, and their licenses enabled them to procure the prescribed quantity of country liquor from any of the four manufacturers in the State, the impugned order placed unreasonable restrictions on their right to carry on business; as the quantum of off-take from the manufacturers, by each retailer, is fixed, the respondents-writ petitioners were obligated to lift the prescribed quantity from any of the four distilleries; and the learned Single Judge was justified in setting-aside the impugned order dated 28.08.2018. 9. Section 24 of the United Provinces Excise Act, 1910 (hereinafter referred to as the “1910 Act”) relates to grant of exclusive privilege of manufacture and, thereunder, subject to the provisions of Section 31, the Excise Commissioner may grant to any person a license for the exclusive privilege (1) of manufacturing or supplying by wholesale, or of both, or (2) of selling by wholesale or by retail, or (3) of manufacturing or of supplying by wholesale, or of both, and of selling by retail, any country liquor or intoxicating drug within any local area. Section 40 of the 1910 Act confers power on the State Government to make rules and, under sub-Section (1) thereof, the State Government may make rules for the purpose of carrying out the provisions of the Act, or any other law for the time being in force relating to the excise revenue. 10. The State Excise Policy, 2018 are, in fact, the Rules made by the State Government in the exercise of the powers conferred on them under Section 40 of the 1910 Act. Rule 41 of the said Rules relates to licensing provision for the bulk sale of the country liquor in the State, and reads as under:- “41. Licensing provision for the bulk sale of the country liquor in the State-Permission for importing the country liquor from outside the State shall not be given and the decision on the supply area to the manufacturers of the country liquor for the easy supply of the country liquor and as per the requirement shall be taken after the approval of the higher authorities on the recommendations of the committee constituted under the Chairmanship of Secretary, Excise.” 11. It is in exercise of this power, under Rule 41, that the order impugned in the Writ Petition dated 28.08.2018 was issued whereby the Excise Commissioner was informed that in terms of Rule 41, and in furtherance of the recommendations of the Committee constituted for the allotment of the supply area to the manufacturers of country liquor as per the requirement and for the easy supply of country liquor, while reserving the monthly quota of minimum sale guarantee quota of 2.16 lakh bulk litres of country liquor, among others, to the appellant upto 50% of the said districts and 50% in other districts shall remain unreserved which shall depend on the market forces and self efforts. The impugned order further records that, while reserving a quota of 2.16 lakh bulk litres per month, for each of the distilleries in the four districts, 50% in the aforesaid districts and 50% for other districts shall remain unreserved, and shall be sold on their own efforts; and districts had been allotted to the distilleries keeping in view the savings in transportation costs. 12. As noted hereinabove, wide powers are conferred by Rule 41 of the Rules on the State Government to decide the supply area to be given, to manufacturers of country liquor, for the easy supply of country liquor. The validity of this Rule has not been subjected to challenge in the Writ Petition. As the impugned order dated 28.08.2018 falls within the ambit of Rule 41, the question whether the impugned order should have been set at naught, even in the absence of a challenge to Rule 41, necessitated examination. 13. While this aspect has not been examined in the order under appeal, we also see no reason to examine this issue as we are satisfied that the order of the learned Single Judge must be upheld, albeit on another ground. 14. As noted hereinabove, the respondents-writ petitioners were all granted retail licenses on 01.04.2018. While it is, no doubt, true that the Rules were framed prior thereto on 19.03.2018, the licenses granted in favour of the respondents-writ petitioners did not place any such restrictions as has been prescribed in the proceedings dated 28.08.2018. 14. As noted hereinabove, the respondents-writ petitioners were all granted retail licenses on 01.04.2018. While it is, no doubt, true that the Rules were framed prior thereto on 19.03.2018, the licenses granted in favour of the respondents-writ petitioners did not place any such restrictions as has been prescribed in the proceedings dated 28.08.2018. If the respondents-writ petitioners had been aware, that any such restrictions would be imposed on them later, they may or may not have applied for grant of a retail license, as the impugned order places fetters on their choice of a supplier, and they are now obligated to procure 50% of the quota, earmarked in their favour, only from a particular manufacturer (the appellant herein). As such a restriction was imposed, long after the licenses were issued to the respondents-writ petitioners, the impugned order would be inapplicable to them, as no such restriction was imposed on them when they were granted retail licenses. Instead of setting-aside the impugned order dated 28.08.2018, we modifying the order of the learned Single Judge and, instead, hold that the conditions stipulated in the impugned order dated 28.08.2018 are inapplicable to the respondents-writ petitioners who were all granted retail licenses long prior thereto. 15. The question of law, as to whether the impugned order dated 28.08.2018 falls foul of Article 14 of the Constitution of India, is left open, if need be, to be examined later in appropriate legal proceedings. 16. All the appeals are, accordingly, disposed of. No costs.