JUDGMENT : 1. Heard learned Counsel for the petitioner and learned Additional Chief Standing Counsel. 2. The present writ petition has been filed challenging the order dated 24.02.2016 whereby 06 country liquor and 02 Indian Made Foreign Liquor (IMFL) licenses of the petitioner were cancelled and the security as well as the licence fee was forfeited in exercise of powers under Section 34 of The United Provinces Excise Act, 1910 as well as the appellate order dated 22.03.2016 whereby the appeal preferred by the appellant was dismissed and the order dated 17.02.2017 whereby the revision preferred by the petitioner before the State Government was rejected. 3. The facts in brief leading to the filing of the present writ petition are that the petitioner was granted six licences of country liquor shop in District Amethi in exercise of the powers conferred under the Uttar Pradesh Excise (Settlement of Licenses for Retail Sale of Country Liquor) Rules, 2002 (in short 'the Rules 2002') and was also granted two licences for selling foreign liquor in District Amethi in terms of the provisions of Uttar Pradesh Excise [Settlement of Licenses for Retail Sale of Foreign Liquor (Excluding Beer and Wine Rules)] Rules, 2001 (in short 'the Rules 2001'). On 28.01.2016, an FIR came to be lodged in Case Crime No.103 of 2016, under Section 60 of the Excise Act read with Sections 419 and 420 IPC at Police Station Musafirkhana, District Amethi against one Guddu Singh and Babblu Singh. The said two accused took the name of the petitioner and in pursuant to the said statement, the petitioner was arrested under the said FIR. The allegations as contained in the FIR referred to violation of Section 60 of the Excise Act read with Sections 419 and 420 IPC and it was also stated that unauthorized liquor was found in a rice mill owned by the petitioner. 4. Subsequently, the proceedings were initiated for suspending the licences (six in number) in exercise of the powers conferred under the Rules 2002 and the Rules, 2001. A notice was served to the petitioner on 04.02.2016 referring to the FIR and alleging therein that there appeared to be a violation of Section 34 of the Excise Act and the Rules of 2002. A notice was served to the petitioner on 04.02.2016 referring to the FIR and alleging therein that there appeared to be a violation of Section 34 of the Excise Act and the Rules of 2002. The petitioner put in appearance and denied the allegations levelled against him, however, orders were passed suspending the six licences granted to the petitioner in respect of the six shops vide order dated 21.02.2016. Thereafter on 22.02.2016, the petitioner was called upon for personal hearing in terms of Rule 21(2) of the 2002 Rules. The petitioner filed a reply denying his involvement with the offence in question, he also filed his written submissions, however, an order dated 24.02.2016 was passed cancelling the six licences and through the same order, the basic license fee, the license fee and the security deposit were forfeited in favour of the State Government. Aggrieved against the said order cancelling the license, the petitioner preferred an appeal before the Excise Commissioner, which came to be dismissed on 22.03.2016. 5. Subsequent to the dismissal of the appeal, a final report was filed in favour of the petitioner in the Case Crime No.103 of 2016 wherein nothing incriminating was found against the petitioner and only the other two accused were charge-sheeted. It is also relevant that challenging the appellate order, the petitioner has preferred a revision before the State Government and during the pendency of the revision, the petitioner by means of an affidavit brought the subsequent development as took place in Case Crime No.103 of 2016 before the Revisional Authority and pleaded that as the sole ground for cancellation of the licenses and the action of forfeiture of security and licence fee was based upon the lodging of the FIR, in which ultimately a final report was filed in favour of the petitioner, the revision deserves to be allowed. The Revisional Authority, by the impugned order proceeded to dismiss the revision. On perusal of the said order, there appears to be no discussion with regard to the subsequent development that happened in Case Crime No.103 of 2016. 6. The Revisional Authority, by the impugned order proceeded to dismiss the revision. On perusal of the said order, there appears to be no discussion with regard to the subsequent development that happened in Case Crime No.103 of 2016. 6. In the above referred three orders, which are under challenge, the main submission of the Counsel for the petitioner is that the entire action initiated and concluded by means of the above three orders, which are impugned herein, there is a serious error committed by the authority concerned in not following the mandate of law. He draws my attention to the Rules 2002 as well as the Rules 2001 which governs the grant of licenses in respect of country liquor and foreign liquor respectively. He also argues that even the time limit prescribed under the rules for filing replies was not adhered to. 7. Rule 21 of the Rules 2002 provides for the manner in which steps can be taken for suspension and cancellation of the license as well as provides for penalty. Rule 21 reads as under : "21. Suspension and cancellation of the licence and penalties - (1) Licensing Authority may suspend or cancel the license - (a) if any bottle or container of country liquor is found in the licensed premises on which duty has not been paid and which does not carry security hologram duly approved by the Excise Commissioner as a proof of payment of duty; (b) if any bottle or container of any other kind of liquor or intoxicating drug (for which licence is not granted) is found in the licensed premises; (c) if any liquor or intoxicating drug is found in the possession of the licensee against the provisions of the Act or rules; (d) if the affidavit submitted by the licensee at the time of application is found incorrect and assertions made therein are found to be false; (e) if it is found that the licence has been obtained in a false name or the licensee is holding the licence on behalf of some other person. (f) if the licensee fails to deposit monthly instalment of licence fee or replenish the deficit in security amount within prescribed period; (g) if the licensee is convicted of an offence punishable under the Act or of any cognizable and non-bailable offence, or any offence punishable under Narcotics Drugs and Psychotropic Substances Act, 1985 or of any offence punishable under Sections 482 to 489 of the Indian Penal Code. (2) The Licensing Authority shall immediately suspend the licence and issue a show cause notice for cancellation of licence and forfeiture of security. The licensee shall submit his explanation within 7 days of the receipt of notice. There after the Licensing Authority shall pass suitable orders after giving due opportunity of hearing to the licensee. (3) In case the licence is cancelled the basic licence fee, licence fee deposited by him shall stand forfeited in favour of the Government and licensee shall not be entitled to claim any compensation or refund. Such licensee may also be blacklisted and debarred from holding any other exercise licence." 8. Similarly Rule 18 of the Rules 2001 provides for the manner of suspension and cancellation of the licence in respect of Foreign Liquor Shops, which is quoted hereinbelow : "18. (1) Licensing authority may suspend or cancel the licence. - (a) If any bottle is found in licensed premises on which duty has not been paid and which does not carry security hologram duly approved by the Excise Commissioner as a proof of payment of duty. (b) if any other kind of liquor or intoxicating drug (for which licence is not granted) is found in the licensed premises. (c) if any liquor or intoxicating drug is found in the possession of the licensee against the provisions of the Act or rules; (d) if the affidavit submitted by the licensee at the time of application is found incorrect and assertions made therein are found to be false. (c) if any liquor or intoxicating drug is found in the possession of the licensee against the provisions of the Act or rules; (d) if the affidavit submitted by the licensee at the time of application is found incorrect and assertions made therein are found to be false. (e) if the licensee is convicted of any offence punishable under the Act or of any cognizable and non-bailable offence, or any offence punishable under Narcotics Drugs And Psychotropic Substances Act, 1985 or of any offence punishable under sections 482 to 489 of the Indian Penal Code, (f) if any bottle/container is found in the licensed premises on which maximum retail price is not printed and (g) if it is found that the licence has been obtained in a false name and the licensee is holding the licence on behalf of some other person. (2) The licensing authority shall immediately suspend the licence and also serve a show cause notice for cancellation of licence and for forfeiture of security deposit, the licensee shall submit his explanation within 7 days of the receipt of notice. Thereafter the licensing authority shall pass suitable orders after giving due opportunity of hearing to the licensee, if he so desires. (3) The licensee shall not be entitled to claim any compensation or refund for suspension or cancellation of licence under this rule. (4) In case the licence is cancelled the licensee may also be blacklisted and debarred from holding any excise licence." 9. In the light of the mandate of said Rules, the Counsel for the petitioner argues that the steps for suspending and cancelling of the licence can take place only in the event of 'any other kind of liquor or intoxicating drugs are found in the "licensed premises"'. He argues that similar provisions exist in the Rules 2002 also, thus to exercise the power under the said Rules, it is incumbent that there should be an allegation and conclusion to the effect that any liquor or intoxicating drugs is found in the "licensed premises" or in "possession of the licensee". He argues that similar provisions exist in the Rules 2002 also, thus to exercise the power under the said Rules, it is incumbent that there should be an allegation and conclusion to the effect that any liquor or intoxicating drugs is found in the "licensed premises" or in "possession of the licensee". He submits that in the allegations contained in the FIR as well as in the notices issued to the petitioner, there is no averment to the effect that any liquor or intoxicating drugs was found in the "licensed premises" or in the "possession of the licensee" and without there being any finding to that effect, the powers could not have been exercised for suspension and cancellation of the license as has been done in the present case. 10. The Counsel for the petitioner further argues that in a similar case, where no liquor was found in the licensed premises and subsequently a final report had been filed in favour of the licensee, the appellate authority in exercise of appellate powers had quashed the cancellation order passed in respect of the said licensee vide order dated 22.03.2016 which is contained in Annexure-20 to the writ petition. 11. In the light of the aforesaid, the counsel for the petitioner argues that although the term of the licences have come to an end and the same cannot be renewed/ granted to the petitioner, the forfeiting of the basic licence fee, licence fee and the security, which was against the law, should be directed to be refunded to the petitioner. 12. Learned Standing Counsel, on the other hand, argues that the orders have been passed in exercise of powers under Section 60 read with Section 34 and Section 7 of The United Provinces Excise Act, as such, no fault can be found with the orders. He further argues that the offending liquor was found in the premises owned by the petitioner and thus no fault can be found in exercise of powers as has been done by means of the impugned order. He lastly prays that the writ petition is liable to be dismissed. 13. He further argues that the offending liquor was found in the premises owned by the petitioner and thus no fault can be found in exercise of powers as has been done by means of the impugned order. He lastly prays that the writ petition is liable to be dismissed. 13. Considering the submissions made at the bar, the first question to be determined is whether the condition existed for suspension and cancellation of the licence in terms of the powers conferred under the statutory enactment being The United Provinces Excise Act and the 2002 or the 2001 Rules. 14. It is common ground in between the parties that the Rules 2002 and 2001 as extracted above would be applicable to the grant of licence in respect of country liquor shop as well as the foreign liquor shop respectively. 15. The action as taken against the petitioner under the orders impugned herein was clearly an 'expropriatory action' and the provision in the Rules are also 'expropriatory'. It is well settled that expropriatory powers conferred on State through statutes are required to be interpreted strictly and the orders passed have to pass the 'strict scrutiny test'. On a plain reading of the provisions of the Rules 18 and 21 in the 2001 and 2002 Rules respectively, it is clear that the steps for suspension and cancellation of the licence can be taken only in the event that (i) any liquor is found in the licensed premises or (ii) it is found in the possession of the licensee. The other conditions specified in Rule 21 and Rule 18 need not detain this Court as the same do not arise in the present case. The words "licensed premises" has not been defined under the Act and the Rules referred above, however while granting of licence, the premises for which the licence has been granted is clearly delineated and specified in the licence itself and thus for the purposes of interpreting the word "licensed premises", reference has to be drawn to the premises referred to in the licence. Any infraction or possession of liquor or intoxicating drugs other than authorized in the 'licensed premises' would certainly empower the authority concerned to take action under Rules 18 or Rule 21 of the aforesaid Rules as the case may be. Any infraction or possession of liquor or intoxicating drugs other than authorized in the 'licensed premises' would certainly empower the authority concerned to take action under Rules 18 or Rule 21 of the aforesaid Rules as the case may be. Similarly the possession of any liquor or intoxicating drugs other than the authorized in the possession of the licensee would also trigger the powers to be exercised under Rules 18 and 21 of the aforesaid Rules. In the absence of any allegation of any recovery from any place in the 'licensed premises' or in the 'possession of the licensee', the powers to suspend and cancel cannot be resorted to under the Act or the Rules referred above. 17. In the present case even the time limit of 07 days provided under Rule 18 and Rule 21 of the Rules was not adhered to for the reasons best known to the State. 18. The orders passed and impugned herein, thus were against the substantive provisions and also violated the procedural provisions. 19. In the present case, the allegations in the FIR were that the unauthorized liquor was found in a rice mill owned by the petitioner. Clearly the rice mill not being covered within the definition of "licensed premise" would not attract the rigor of Rules 18 and 21 of the aforesaid Rules. In any event subsequently even the said allegations of recovery of goods from the rice mill could not be substantiated and the police authority proceeded to file a final report in favour of the petitioner and which facts even demolishes the allegation in the FIR that any unauthorized liquor was found in possession of the licensee. 20. Thus for all the reasoning recorded above, the order passed against the petitioner are clearly unsustainable and are liable to be set aside. 21. Accordingly, the order dated 24.02.2016, the order dated 22.03.2016 and the order dated 17.02.2017 are set aside. 22. As no direction for renewal of the licences can be issued in view of the change in the policy of the State Government, the writ petition is disposed off with a direction to refund the proportionate basic license fee, the proportionate license fee and the security deposit as forfeited by means of the order dated 24.02.2016 within a period of two months from the date of the petitioner moving an appropriate application before the District Magistrate, District Amethi. 23. 23. There shall be no order as to costs.