Research › Search › Judgment

Kerala High Court · body

2020 DIGILAW 183 (KER)

Saju Thuruthikunnel, S/o. Thankappan v. State Of Kerala

2020-02-12

C.T.RAVIKUMAR, N.NAGARESH

body2020
JUDGMENT : Ravikumar, J. This appeal carries challenge against judgment dated 24.10.2019 in W.P.(C).No.39032 of 2018. The appellant herein was the second petitioner and respondents 1 to 6 herein were the respondents, therein. The appellant, along with the 7th respondent herein, filed the said writ petition seeking the following reliefs:- (i) Issue a Writ of Certiorari or any other appropriate writ order or direction quashing Exhibit P5. (ii) Issue a Writ of Mandamus or any other appropriate writ order or direction directing the respondents 1 to 4 to renew/extend the licenses to conduct Toddy Shop Nos.26, 27, 28, 29 and 39 of Group VIII of Mamala Range of Ernakulam District to the petitioners. (iii) Issue a Writ of Mandamus or any other appropriate writ order or direction directing the respondents 1 to 4 to re-auction the Toddy Shops of Group VIII of Mamala Range of Ernakulam District pursuant to Ext.P5. (iv) Issue appropriate writ order or direction holding that the petitioners are entitled to get preference in giving licence/privilege to conduct Toddy Shop Nos.26, 27, 28, 29 and 39 of Group No.VIII of Mamala Excise Range of Ernakulam District. (v) Issue a Writ of Mandamus or any other appropriate writ order or direction directing the respondents 14 to give licence/privilege to the petitioners to conduct Toddy Shop Nos.26, 27, 28, 29 and 39 of Group No.VIII of Mamala Excise Range of Ernakulam District. (vi) Issue a Writ of Mandamus or any other appropriate writ order or direction directing 3rd respondent to consider and dispose of Exhibit P7 and P8. 2. The party respondents as also the official respondents in the writ petition filed separate counter affidavits in the writ petition. The writ petitioners including the appellant herein, jointly filed a reply affidavit to the counter affidavit filed by the official respondents. The learned Single Judge, after considering the rival contentions, passed the impugned order dismissing the writ petition. 3. Heard the learned counsel for the appellant, the learned Government Pleader, the learned counsel for the fifth respondent and also the learned counsel for the sixth respondent. 4. In view of the manner in which we propose to dispose of this appeal, we do not think it necessary to issue notice to the 7th respondent. 3. Heard the learned counsel for the appellant, the learned Government Pleader, the learned counsel for the fifth respondent and also the learned counsel for the sixth respondent. 4. In view of the manner in which we propose to dispose of this appeal, we do not think it necessary to issue notice to the 7th respondent. Hereafter, in this judgment, the appellant and the 7th respondent are together referred to as 'the writ petitioners' and the other respondents are referred to in accordance with their status in the writ petition. 5. A succinct narration of facts is required for a proper disposal of this appeal. Writ petitioners and the 5th respondent were the joint licensees of T.S.Nos.26 to 29 and 39 of Group VIII of Mamala Excise Range in Ernakulam District. A licence was issued to them in the year 2012 and thereafter, it was renewed periodically. Thereafter, owing to disputes, the said shops were closed and the Department Management took over and conducted them from 16.8.2017 to 4.12.2017. Later, based on a compromise, this Court ordered to allow them to conduct those shops from 31.3.2018 to 30.6.2018. As per G.O.(P)No.48/18/TD dated 27.6.2018, Government ordered to grant renewal of licence for the remaining period during the year 2018-19 viz., from 1.7.2018 to 31.3.2019 to the existing licensees. For getting renewal of licence from 1.7.2018, the appellant herein submitted an individual application in a white paper sans the requisite documents. Licence was not renewed owing to the failure to submit applications jointly by the licensees and owing to non-production of requisite documents. Thus, the fact is that the writ petitioners as also the 5th respondent did not renew the licence thereafter. As a result, from 1.7.2018, the said shops remained closed for a period of more than 30 days. In such circumstances, the second respondent passed Ext.P5 order dated 8.11.2018 in the light of the provisions under Sections 26(a) and 26(b) of the Abkari Act (for brevity, 'the Act') and Rules 7(15), 7(26), 7(29) and 7(31) of the Kerala Abkari Shops Disposal Rules (for short, 'the Rules'), cancelling the licence issued to the writ petitioners and the 5th respondent. Sections 26(a) and (b) of the Abkari Act read thus:- 26. Sections 26(a) and (b) of the Abkari Act read thus:- 26. Power to recall licenses, etc.-The Commissioner may cancel or suspend any license or permit granted under this Act:- (a) if any fee, duty, tax or rental payable by the holder thereof be not duly paid; or (b) in the event of any breach by the holder of such license 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 and conditions of such license or permit; Rules 7(15), 7(26), 7(29) and 7(31) of the Rules read thus:- Rule 7(15): Subject to the above provisions every shop shall be kept open as prescribed in sub-rule (10) unless it's temporary or permanent closure is authorized or ordered by the commissioner of Excise. In every shop such supply of toddy or foreign liquor, as the Commissioner of Excise or the Joint Commissioner of Excise or Deputy Commissioner of Excise may consider sufficient to meet the local requirement, shall be maintained. Shops not opened within one month from the date of receipt of the confirmation of sale of shop of privilege and shops once opened but in which the sales have been discontinued for more than 30 days consecutively, shall be liable to be resold or disposed otherwise at the risk and loss of the licensees. Rule 7(26): The annual rental for which the privilege has been granted in the case of Toddy Shops shall be remitted by the licensee in full at the beginning of the contract as stipulated in rule 5(12) of these rules. The licensee of the group/range of toddy shops who have purchased the privilege for more than one year, shall remit the annual rental for succeeding Abkari year before 31st March of the current Abkari year and should get the privilege for vending toddy extended for the succeeding year by duly furnishing required eligibility certificates before the Deputy Commissioner of Excise concerned, failing which the licence shall be cancelled and toddy shops shall be resold for the remaining period. In the case of Foreign Liquor-1 Shops, the deposit of 50% of rental made as per Rule 6(2) shall be adjusted towards the rental due for the period from 1st April of the year to 31st March of the following year and the balance due for the year shall be payable by the licensee in eight equal monthly instalments on or before the 10th day of each English Calender month beginning from 1st July of the year. In case of failure of payment of any instalment, interest at the rate of 18% per annum or at such other rate of interest as may be fixed by the Government from time to time shall be charged from 11th. The amount remitted by a defaulter towards arrears shall be adjusted towards interest due and the balance if any, shall be adjusted towards the principal amount. In calculating interest for periods of less than a month, 15 days and more shall be taken as one month and periods of less than 15 days shall be ignored and if the arrears contain fractions of a rupee, 50 paise and above shall be treated as one rupee and any amount less than 50 paise shall be ignored. But no cancellation of the licence or resale of the shop shall be ordered until after the 25th day of the month. Rule 7(29):Whenever the licensee fails to pay the Kist, tree tax, fee, duty etc., due from him for any month together with the interest due thereon, on or before the 25th day of the month, the Commissioner of Excise may cancel the license and order a resale or direct the management of the business of the shop by departmental agency or otherwise dispose of the same at the risk and cost of licensee. All losses on account of such cancellation and resale or Departmental management or disposal otherwise of the privilege shall be borne by the defaulting licensee, but he shall no right to put forth any claim on the gain, if any, which accrues. Disposal otherwise than by resale includes closure. The whole of the deposit made at the commencement of the contract shall be liable to forfeiture. The Departmental Management fee collected from a shop while it was under departmental management due to default of payment of any sum towards Government shall be liable to forfeiture. Disposal otherwise than by resale includes closure. The whole of the deposit made at the commencement of the contract shall be liable to forfeiture. The Departmental Management fee collected from a shop while it was under departmental management due to default of payment of any sum towards Government shall be liable to forfeiture. The Deputy Commissioner of Excise may however allow sales to continue or make such other arrangements, as he deems fit, pending disposal otherwise, of the privilege. Any sum due from a licensee may be recovered under the Revenue Recovery Act for the time being in force. Interest on account of loss by resale or by disposal otherwise shall be calculated from the date of confirmation of such resale or re-disposal of the shop; Provided that the Commissioner of Excise may before issuing orders for resale restore the license cancelled if the defaulter pays the amount defaulted by him with interest thereon. Rule 7(31) : Infraction of any of the 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 rental and cancellation of licence. 6. Subsequent to Ext.P5 passed under the afore-extracted provisions, re-sale of the shops was conducted and privilege to vend toddy through the said shops was issued to one K.T.Anil Kumar. It is relevant to note that said Sri.K.T.Anil Kumar was not made a party to the writ petition as also in this appeal. It is also a fact that no challenge has been made by the writ petitioners and the fifth respondent against the issuance of licence to said K.T.Anil Kumar after cancelling the licence issued in their favour. 7. The reliefs sought for in this writ petition, as extracted above, would reveal that the writ petitioners sought for quashment of Ext.P5 dated 8.11.2018 only in March 2019. Feigning ignorance about the re-sale effected on 5.12.2018, they also prayed for issuance of a writ of mandamus commanding respondents 1 to 4 to renew/extend the licence to conduct toddy shops. Though the petitioners seek quashment of Ext.P5 and a mandamus to renew/extend the licence to conduct the toddy shops in question, the indisputable fact obtained is that after cancelling the joint licence issued to the writ petitioners and the 5th respondent, a re-sale was conducted on 5.12.2018 and licence was given to the aforesaid Sri.K.T. Anil Kumar. Though the petitioners seek quashment of Ext.P5 and a mandamus to renew/extend the licence to conduct the toddy shops in question, the indisputable fact obtained is that after cancelling the joint licence issued to the writ petitioners and the 5th respondent, a re-sale was conducted on 5.12.2018 and licence was given to the aforesaid Sri.K.T. Anil Kumar. We have already taken note of the fact that despite the cancellation of the licence and subsequent grant of licence to Sri.K.T.Anil Kumar, neither the writ petitioners nor the 5th respondent had chosen to challenge grant of licence in favour of Sri.K.T.Anil Kumar. When the shops conducted by them reached the hands of another upon re-sale and that licensee started running them, the writ petitioners cannot pretend no-knowledge on that aspect. Therefore, the present position is that pursuant to the re-sale conducted on 5.12.2018, Sri.K.T. Anil Kumar has been conducting the said shops. In such circumstances and in view of the afore-extracted provisions, we are of the considered view that the learned Single Judge was perfectly correct and justified in not interfering with Ext.P5. 8. Now, we will consider whether the appellant herein can have any grievance, legally, against rejection of the prayer for issuance of writ of mandamus seeking a direction to respondents 1 to 4 to renew/extend the licence to conduct the aforesaid shops. Renewal or extension of licence at the instance of the appellant would be possible only if the appellant was the existing licensee as relates the shops in question. As noted earlier, on 5.12.2018, re-sale/re-disposal was effected in respect of those shops and licence was issued to the aforesaid K.T.Anil Kumar and the writ petitioners did not challenge the grant of licence to the said person. Hence, we are of the view that being the existing licensee, Sri.K.T.Anil Kumar alone could claim for renewal/extension of licence to conduct the said shops and the appellant cannot legally stake a claim for renewal of licence in respect of the shops in question. 9. As regards prayer Nos. (iii) to (v), certain other aspects have to be considered. There cannot be any doubt with respect to the position that Government got power to formulate as also to change abkari policy. In other words, the question whether in respect of toddy shops, sale or renewal is to be conducted, is a matter of policy to be taken by the Government. There cannot be any doubt with respect to the position that Government got power to formulate as also to change abkari policy. In other words, the question whether in respect of toddy shops, sale or renewal is to be conducted, is a matter of policy to be taken by the Government. Needless to say that in case the policy of the Government is to conduct sale or whenever sale is conducted, necessarily, provisions under chapter IV Rule 5 of the Rules have to be followed. Chapter IV of the Rules deals with general conditions applicable for sale of toddy shops. The fact is that the policy of the Government from 2013-14 onwards is to grant renewal of licence to the existing licensees. At the same time, if in a given circumstance, licence could not be renewed due to various reasons like cancellation of the licence of the existing licensee or inability on the part of the licensee to continue with the conduct of the shops owing to registration of cases other than under section 56 of the Abkari Act etc., conduct of sale may become inevitable. A careful scrutiny of the provisions under Rule 5 of the Rules would reveal that the question of grant of preference to a person would arise only when sale of toddy shop is effected. In other words, there is no question of grant of preference in respect of any shop, if renewal is to be effected going by the Abkari policy. In that view of the matter and taking note of the relevant provisions under Rule 5 and in the light of the finding of the learned Single Judge in the impugned judgment, another question also calls up for consideration. Paragraph 5 of the impugned judgment would reveal that after referring to Rule 5 of the Rules, the learned Single Judge held that to get preference in terms of the provisions under Rule 5, continuity of conduct of toddy shop till resale takes place, is required. 10. The question is whether in terms of the provisions under Rule 5 of Chapter IV of the Rules, continuity of conduct of toddy shops till re-sale takes place is required to get preference as contemplated thereunder. The learned Single Judge also held that there is no vested right conferred upon previous licensee to claim preference. 10. The question is whether in terms of the provisions under Rule 5 of Chapter IV of the Rules, continuity of conduct of toddy shops till re-sale takes place is required to get preference as contemplated thereunder. The learned Single Judge also held that there is no vested right conferred upon previous licensee to claim preference. Furthermore, it was held that the law envisages such preference only to provide continuity of conduct of toddy shops to those persons who were running toddy shops in the previous year. On going through the provisions under Rule 5 of Chapter IV, we are of the view that whenever intention is to provide continuity of conduct of toddy shops to those persons who were running toddy shops in the previous year or to give renewal of licence to the existing licensee, there is absolutely no question of conducting sale. In such circumstances, it can only be case of renewal of licence. The fact is that from 2013-14 onwards, the policy being followed by the Government is 'renewal of license'. We may hasten to add that even though the same is the policy, at times, sale of toddy shops would become inevitable and in such eventualities, sale is to be effected by strictly following the general conditions for the sale of toddy shops provided under Chapter IV, more particularly, under Rule 5. 11. Now, we will consider whether requirement of continuity of conduct of toddy shops till re-sale takes place is contemplated under Rule 5 of the Rules. For a proper consideration of the same, it is only worthy to extract Rule 5(1)(a) of the Rules. Rule 5(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 licenses 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. Provided that shops which functioned till 2006-07 and which are sought to be relocated within 50 metres radius of the previous site, for carrying out repair to the building etc. shall be deemed as functional during 2013-14. (underline supplied) 12. Provided that shops which functioned till 2006-07 and which are sought to be relocated within 50 metres radius of the previous site, for carrying out repair to the building etc. shall be deemed as functional during 2013-14. (underline supplied) 12. On a careful scanning of Rule 5 of the Rules, we could not find any specific mandate or condition therein that in order to get preference by virtue of the provisions under Rule 5, there should be continuity of conduct of toddy shops till re-sale takes place. The fact is that till 2013-14, the policy of the Government was to conduct sale of toddy shops and thereafter, 'renewal of licence' has been the policy. As stated earlier, for one or other reasons, if renewal cannot be granted or was not granted after 2013-14, the requirement to effect sale of a toddy shop may become/became inevitable. Depending upon the condition that necessitated the sale, a situation may arise where more than one previous licensee may raise claim for preference. The learned Government Pleader would submit that in such situations, it was by lot that the persons entitled to preference would be identified. 13. Now, coming to question as to who are all entitled to get preference in terms of Rule 5(1) (a) of the Rules, it is evident that conditions revealed therefrom should be satisfied to earn eligibility for preference. Firstly, the person/persons concerned must have conducted the toddy shop during the year 2013-14 and secondly, he should not be a person against whom abkari case other than under section 56 of the Abkari Act is registered. We may hasten to add that on going by the provisions thereunder, even in the case of a licensee who had conducted the shops till 2013-14 and whose licence was cancelled due to registration of an abkari case, he would also become eligible to claim preference, provided he is exonerated by the court subsequently. The other condition in which a licensee could claim preference under Rule 5 is that those licensees could not complete the year 2009-10 on account of closure of shops. These provisions would again reveal the position that continuity of conduct of toddy shops is not enjoined as a condition to get preference as provided under Rule 5 of Chapter IV of the Rules. These provisions would again reveal the position that continuity of conduct of toddy shops is not enjoined as a condition to get preference as provided under Rule 5 of Chapter IV of the Rules. When continuity of conduct of toddy shops till re-sale is not explicitly or by necessary implication indicated under Rule 5, how such a condition be read into as a condition for getting preference under Rule 5 of Chapter IV of the Rules. When it pertains to a right viz., 'right for preference', it has to be decided with reference to the position as it is and nothing can be read into the said provision. In short, we are of the firm view that the condition of continuity of conduct of toddy shops till auction takes place cannot be said to be a condition required for earning eligibility to claim preference under Rule 5 of Chapter IV of the Rules. Shortly stated, continuity of conduct of toddy shops till auction takes place is not contemplated under Rule 5. For the forgoing reasons, we vacate the finding/observation that preference as conferred under Rule 5 is based on continuity of conduct of toddy shops till re-auction takes place, in paragraph 5 of the impugned judgment. The learned Government Pleader submitted that the Abkari policy of the Government has not so far been changed. In such circumstances, if the policy of renewal continues to be the policy of the Government for this abkari year, then the question of grant of preference to the 5th respondent or the writ petitioners would not arise. In such circumstances, the question would only be whether the licence issued in the name of Sri.K.T.Anil Kumar need to be renewed or not, provided that person applies for renewal. The learned Government Pleader submitted that in case renewal is not granted owing to the change in policy and if sale is to be effected for that reason, the writ petitioners and the 5th respondent can jointly or individually claim preference subject to the policy to be evolved by the Government for the abkari year 2020-21. The learned Government Pleader submitted that in case renewal is not granted owing to the change in policy and if sale is to be effected for that reason, the writ petitioners and the 5th respondent can jointly or individually claim preference subject to the policy to be evolved by the Government for the abkari year 2020-21. Since the aforesaid K.T.Anil Kumar has not been made a party to this writ petition as also in the appeal, we make it clear that we have not decided the right, if any, of the said person to claim preference even in case renewal is not continuing to be the Abkari policy of the Government. Subject to the modification and observations, as above, this appeal stands disposed of.