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2020 DIGILAW 365 (AP)

P. Vasanth Reddy v. State of Andhra Pradesh

2020-05-20

NINALA JAYASURYA

body2020
ORDER : (Heard and pronounced through Blue Jeans App(virtual) mode, since this mode is adopted on account of prevalence of COVID-19 Pandemic). 1. The Writ Petition is filed seeking to declare the order of the 3rd respondent issued in R.C.No.391/2019/C1 dated 27.04.2020 as illegal, arbitrary, violative of principles of natural justice, without jurisdiction and consequently direct the 3rd respondent to permit the petitioner to conduct the business and pass such other orders as deemed fit. 2. Heard the learned counsel for the petitioner and learned Government Pleader for Prohibition and Excise appearing for the respondents and with their consent, the present Writ Petition is disposed off, keeping in view the legal issues raised in the present Writ Petition and the relevant precedents governing the same. 3. This is a second round of litigation. The petitioner is a Form 2B license holder to run a Bar and Restaurant as per the provisions of the A.P. Excise (Grant of License of Selling by Bar and Conditions of License) Rules, 2017 and he is conducting the business in the name and style of P.V.R.Restaurant and Bar at Kadiri. 4. As seen from the affidavit filed in support of the Writ Petition, earlier the petitioner was visited with a show cause notice dated 21.12.2019. The basis for the show cause notice is a report of respondent No.4 submitted with reference to report of the respondent No.5 to the effect that during the surprise inspection of bar premises conducted on 25.10.2019, no certified measures were used and that six loose liquor bottles were found on the bar counter and strength of the liquor was found to be 24.9, 24.6, 26.0, 26.0, 24.6 and 24.3 of UP respectively and in the chemical examination of samples drawn, the report revealed that the strength of the liquor in respect of one bottle is 26.0 UP and the same was diluted Indian Made Liquor and other samples are Indian Made Liquor. The petitioner was granted seven(7) days time for submission of explanation and thereafter an order dated 27.01.2020 was passed, suspending the license granted, pending enquiry. The petitioner was granted seven(7) days time for submission of explanation and thereafter an order dated 27.01.2020 was passed, suspending the license granted, pending enquiry. On the premise that the said order was illegal, contrary to the provisions of A.P. Excise Act, the petitioner filed Writ Petition No.2259 of 2020 before this Court inter-alia contending that the order impugned therein is contrary to law, violative of principles of natural justice etc., A Learned Single Judge by an order dated 11.03.2020 allowed the said Writ Petition and set aside the order of suspension dated 27.01.2020 with an observation that the respondents are at liberty to take appropriate action by issuing a show cause notice afresh granting 15 days time. The license of the bar was under suspension from 27.01.2020 to 11.03.2020 till passing of order in Writ Petition No.2259 of 2020. 5. After disposal of Writ Petition No.2259 of 2020, a fresh show cause notice dated 13.03.2020 was issued to petitioner to show cause as to why the license shall not be suspended and 15 days time was granted for submission of explanation. The petitioner submitted his explanation dated 22.04.2020 and thereafter respondent No.3 passed an order of suspension in R.C.No.391/2019/C1, dated 27.04.2020. The said order is impugned in the present Writ Petition. 6. The learned counsel for the petitioner inter alia, contends that the respondent No.3 passed the order under challenge without exercising the discretion vested in him. The learned counsel submits that while disposing off the earlier Writ Petition, this Court granted mere liberty to the respondent No.3 to issue show cause notice afresh, but the respondent No.3 instead of exercising his discretion issued the fresh notice in a mechanical manner without application of mind, as if, this Court had directed to issue show cause notice. The learned counsel while contending that the discretion has to be exercised by taking into consideration the seriousness of the allegations submits that the variation in the strength of liquor is minimal which could be due to evaporation of alcoholic content and the respondent No.3 failed to consider the same and passed the order of suspension mechanically. The learned counsel while contending that the discretion has to be exercised by taking into consideration the seriousness of the allegations submits that the variation in the strength of liquor is minimal which could be due to evaporation of alcoholic content and the respondent No.3 failed to consider the same and passed the order of suspension mechanically. The learned counsel further contends that the license of bar was under suspension from 27.01.2020 till passing of earlier order of suspension dated 11.03.2020 i.e., for 46 days and that itself is a substantive punishment and without looking to the said aspect, the respondent No.3 again passed an order of suspension and the same is unjust and arbitrary. The learned counsel while contending that the respondent No.3 being a quasi judicial authority is obligated to give reasons for passing the order of suspension, submits that the said order is violative of principles of natural justice as the respondent No.3 merely held that the explanation is not satisfactory without giving any findings/assigning reasons to any of the issues that were raised by the petitioner in the explanation. The learned counsel while submitting that the drawl of samples is not in accordance with A.P.Excise (Grant of License to Sell Toddy, Conditions of License and Tapping of Excise Trees) Rules, 2017, contends that the petitioner was deprived of the opportunity to seek reference of the second sample for chemical examination as the authorities have taken only one sample instead of three samples as required under the said Rules. The learned counsel submits that as there is gross violation of principles of natural justice and Rule 27 of the said Rules, the order is liable to be set aside. 7. The learned Government Pleader for Prohibition and Excise, while strenuously refuting the submissions made on behalf of the petitioner contends that the order of suspension was in operation pending consideration of the earlier Writ Petition filed by the petitioner for which the petitioner is responsible and that the said period cannot be treated or termed as punishment. The learned Government Pleader submits that the respondent No.3 is justified in passing order of suspension since the liquor sold is diluted as per analysis of samples, which is detrimental to consumers. The learned Government Pleader further pleads for dismissal of the Writ Petition. 8. The learned Government Pleader submits that the respondent No.3 is justified in passing order of suspension since the liquor sold is diluted as per analysis of samples, which is detrimental to consumers. The learned Government Pleader further pleads for dismissal of the Writ Petition. 8. In reply there to, the learned counsel for the petitioner submits that nothing prevented the authorities to complete the enquiry as there is no order restraining the authorities from completing the enquiry and ultimately seeks for setting aside the order of suspension since the bar license was under suspension for 46 days which amounts to substantive punishment. 9. Before dealing with the various contentions raised in the Writ Petition, it would be appropriate to mention here that as seen from the material available on record, the petitioner submitted a detailed explanation and this Court, for the sake of brevity, deems it appropriate to refer to some of the contentions which inter alia reads as follows: “It is submitted that in so far as the strength of the liquor is concerned, the same is specified under Rule 14 of the A.P.Distillery (Manufacture of Indian Made Foreign Liquor other than Beer and wine) Rules, 2006. Rule 14(5) of the Rules deals with regard to a tolerance of +0.5 PS is allowed in the manufacture of Indian Made Foreign Liquor and Rule 14(6) reads that sample from each bottle shall be sent to the Chemical Examiner and it shall be passed by the Chemical Examiner if the strength is within the tolerance limit of 24.5 UP to 25.5 UP. A conjoint reading of the above provisions of the Rules, it is clear that if the strength of the liquor is upto 26.0 UP, the same is permissible. In the present case, the allegation that is made against me is that the strength of liquor in one bottle is 26.0 UP and on that basis, the present show cause notice is issued. As stated supra, the strength of the liquor is permissible upto 26.0 UP. In the present case, the allegation that is made against me is that the strength of liquor in one bottle is 26.0 UP and on that basis, the present show cause notice is issued. As stated supra, the strength of the liquor is permissible upto 26.0 UP. Once it is permissible, there is no violation of any rule and hence the issuance of the show cause notice under Section 31(1) (b) itself is illegal and the same is one without jurisdiction.” “It is submitted that the bottles are supplied by the Beverages Corporation and at the time of issuance of the bottles, the strength of the liquor is not measured by the corporation and the authorities are under an assumption that the strength of the liquor is as per the rules. I submit that we are not shown the strength of the liquor at the time of purchase and we are not aware of the same and the liquor is sold as supplied by the corporation. In the present case, out of the six samples taken, five samples strength is in between 24.5 to 24.9 and only in one bottle, the strength is 26. It is submitted that the decrease in strength of the liquor cannot be attributed to the license and the same may be the defect of the manufacturer and in the absence of any proof, the show cause notice cannot be issued to me on the ground of alleged violation. I submit that if the counter boy fails to close the cap of the liquor bottle, the chances of the strength of the liquor getting diluted due to coldness in the atmosphere also cannot be ruled out. The sample in the bottle was taken in the month of October, 2019 and it was a cold season and even for this, the strength of the liquor can be reduced.” 10. Though such a plea in respect of strength of liquor was taken, as seen from the impugned order, there was no mention about it, let alone consideration of the same by the respondent No.3 while passing the order of suspension. This itself is sufficient to hold that the order under challenge is violative of principles of natural justice and unsustainable in Law. 11. This itself is sufficient to hold that the order under challenge is violative of principles of natural justice and unsustainable in Law. 11. Further this Court time and again held that the quasi judicial authorities are duty bound to consider the explanation and assign reasons before passing an order of suspension/cancellation. In this regard, it would be apposite to refer to the recent judgment of a Learned Single Judge passed in V.Nageswara Rao v. State of Andhra Pradesh, Writ Petition No.5833 of 2020 dated 06.03.2020 relied on by the learned counsel for the petitioner. The learned Judge while referring to the judgments of the Hon’ble Supreme Court interaliaheld as follows: “The Court while exercising power of judicial review under Article 226 of Constitution of India, cannot sit over the order of 3rd respondent dated 28.02.2020, but can examine the quasi judicial or administrative order to find out whether the Quasi Judicial or Administrative Authority followed the procedure in the process of passing such an order, if the Court concludes that the procedure followed by Administrative Authority is contrary to principles of natural justice and not considered the real controversy and explanation thereto, the Court can interfere with such quasi judicial order in view of law declared by the Apex Court in West Bengal Central School Service Commission v. Abdul Halim, [ 2019(9) SCALE 573 ] Therefore, the procedure adopted by 3rd respondent in the process of passing order is contrary to law. 10. Recording of reasons in administrative or quasi judicial order which attracts penal consequences is imperative. Non-consideration of explanation by Administrative or Quasi Judicial Authority is nothing but disowning the obligation as public officer. The Apex Court time and again in catena of perspective pronouncements candidly held that consideration of explanation and recording of reasons is to afford guide to Appellate Authority. In exercise of power of judicial review, the Apex Court in Assistant Commissioner, Commercial Tax Department, works contract and Leasing, Kota v. Shukla and brothers [ (2010) 4 SCC 785 ] had an occasion to deal with an unreasoned order and made certain observations. In exercise of power of judicial review, the concept of reasoned orders/actions has been enforced equally by foreign courts as by the courts in India. The administrative authority and tribunals are obliged to give reasons, absence whereof could render the order liable to judicial chastise. In exercise of power of judicial review, the concept of reasoned orders/actions has been enforced equally by foreign courts as by the courts in India. The administrative authority and tribunals are obliged to give reasons, absence whereof could render the order liable to judicial chastise. Thus, it will not be far from absolute principle of law that the Courts should record reasons for its conclusions to enable the appellate or higher courts to exercise their jurisdiction appropriately and in accordance with law. It is the reasoning alone, that can enable a higher or an appellate court to appreciate the controversy in issue in its correct perspective and to hold whether the reasoning recorded by the Court whose order is impugned, is sustainable in law and whether it has adopted the correct legal approach. To sub-serve the purpose of justice delivery system, therefore, it is essential that the Courts should record reasons for its conclusions, whether disposing of the case at admission stage or after regular hearing. The Apex Court also referred various judgments in Siemens Engineering and Manufacturing Co., of India Ltd. v. Union of India and another [ AIR 1976 SC 1785 ], Gurdial Singh Fijji v. State of Punjab [(1797) 2 SCC 368 and other judgments in Jawahar Lal Singh v. Naresh Singh and others [ (1987) 2 SCC 222 ], Chabungbambohal Singh v. Union of India [1995 (Suppl.) 2 SCC 83 and Hindustan Times Limited v. Union of India [ (1998) 2 SCC 242 ], concluded that the absence of reasoning as to the mandatory requirement of provision which conferred jurisdiction on the quasi judicial authority or a Court or administrative authority is mandatory. In the absence of reasons, the Court while exercising power of judicial review under Article 226 of Constitution of India can set aside the order impugned in the writ petition.” 12. Further in another judgment in Ch.JayaSri v. State of Andhra Pradesh, Writ Petition No.7720 of 2020, dated 20.03.2020 a Learned Single Judge succinctly dealt with the procedure to be adhered to by quasi judicial authorities while dealing with matters and drafting of orders in the light of various judgments of the Hon’ble Supreme Court, and set aside the order of suspension. The relevant portion of the said judgment in the context of present case reads thus: “……Despite heavy quantum of cases it would neither be permissible nor possible to state as principle of law that while exercising power of judicial review on administrative action and more particularly order of Quasi Judicial Authority before the High Court, providing of reasons can never be dispensed with. The doctrine of ‘audit alteram partem’ has three basic essentials, firstly; a person against whom an order is required to be passed or whose rights are likely to be affected adversely must be granted an opportunity of being heard, secondly; the concerned authority should follow fair and transparent procedure and lastly; the authority concerned must apply its mind and dispose of the matters by reasoned order or speaking order. This has been uniformly applied by Courts in India and abroad [vide Assistant Commissioner, Commercial Tax v. M/s.Shukla (2010) 4 SCC 785 ]….” “…….Even otherwise, it is the duty of Quasi Judicial Authority to state its reasons on each issue by due application of mind, clarity of reasoning and focused consideration; a slipshod consideration or cryptic order without due reflection on issues raised in the matter may render such decree unsustainable and therefore, hasty adjudication must be avoided and each and every matter that comes to the Quasi Judicial Authority must be examined with seriousness it deserves as held by the Supreme Court in Board of Trustees of Martyr Memorial Trust and another v. Union of India and another [ 2012 (10) SCC 734 ].” 13. The above said judgment squarely applies to the present case and the order impugned is unsustainable in as much as the same is violative of principles of natural justice and not in tune with the Judicial precedents. 14. With regard to the other contentions of the learned counsel for the petitioner, it may be trite to mention here that the respondent No.3 being a quasi judicial authority while exercising discretion is bound to exercise it reasonably, bonafide and without negligence considering the circumstances of the case, when such interim suspension is necessary as held by a Division Bench in Kode Ravindra Babu v. State of Andhra Pradesh, Writ Appeal No.413 of 2020 and batch dated 20.11.2019. The Hon’ble Division Bench while referring to para 45 of the judgment of Full Bench in Tappers Cooperative Society, Maddur v. Superintendent of Excise, Mahaboobnagar, 1984(2) APLJ (1) held that “the licensing authority while exercising the discretion is bound to exercise it reasonably, bonafide and without negligence. Considering the circumstances of the case, when such interim suspension is necessary and in case the opportunity may be possibly given to the licensee prior to taking such drastic steps, the said authority is bound to afford an opportunity and further that the power of suspension pending enquiry should not be exercised as an invariable rule or made for making enquiry”. 15. In the light of the judgment referred to above, looking to the facts of the case, the explanation of the petitioner and the cryptic and slipshod manner in which the order impugned was passed, this Court is of the opinion that the respondent No.3 has not exercised his discretion by due consideration of the explanation, as per the expression of the Division Bench referred to supra. 16. In view of the foregoing discussion as also findings of this Court, the contentions of the learned counsel for the petitioner that the impugned order is violative of principles of natural justice and respondent No.3 failed to exercise his discretion are upheld and the contentions of learned Government Pleader are rejected as devoid of merits. 17. Accordingly, the impugned order of suspension is set aside and the Writ Petition is allowed as prayed for. 18. There shall be no order as to costs of the Writ Petition. 19. Consequently, Miscellaneous Petitions pending, if any, in the Writ Petition shall stand closed.