IN THE HIGH COURT OF JUDICATURE AT MADRAS DATED:26.03.2010 CORAM THE HONOURABLE MR. JUSTICE K.VENKATARAMAN Writ Petition Nos.11239 and 11240 of 2009 and M.P.Nos.1 and 2 of 2009 Imperial Spirits and Wine Private ... Petitioner in Limited, rep. by its Director. both the writ petitions. vs. 1.The State of Tamil Nadu, rep. by the Secretary to Govt., Prohibition and Excise Department, Secretariat, Fort St. George, Chennai-9. 2.The Commissioner and Commissioner of Prohibition and Excise, Ezhilagam, Chennai-5. 3.Tmt.M.R.Ganga Bai, Public Information Officer / Assistant Commissioner-II, Prohibition and Excise, ... Respondents in
Chepauk, Chennai-5. both the writ petitions.
Writ petition No.11239 of 2009 has been filed under Article 226 of the Constitution of India to issue a writ of mandamus directing the third respondent to provide information to the petitioner as sought for in its application dated 12.05.2009 under the Right to Information Act.
Writ petition No.11240 of 2009 has been filed under Article 226 of the Constitution of India to issue a writ of certiorarified mandamus to call for the records of the second respondent comprised in its order dated 12.06.2009 under Ref.No. Ma (Ma) A 5(2) / 11982/2006, rejecting the petitioner’s application and the consequential order dated 17.06.2009 under Ref.No. Ma(Ma)A 5(2)/11982/2006 issued purporting to return the petitioner’s application for grant of privilege and licence under the Indian Made Foreign Spirit (Manufacture) Rules, and quash the same and consequently directing the second respondent to consider the petitioner’s application dated 4.5.2006 and grant privilege and licence to manufacture Indian Made Foreign Spirit.
For petitioner : Mr.AL.Somayaji, SC, for Mr.Madhan Babu, in both the writ petitions. For respondents : Mr.P.S.Raman, A.G., asst. by Mrs.Pushpa Menon & Mrs.Lita Srinivasan, G.A. COMMON ORDER The petitioner has come up with the writ petition in W.P.No.11239 of 2009 for a mandamus directing the third respondent to provide information as sought for in its application dated 12.05.2009 under the Right to Information Act.
2. Challenging the order of the second respondent dated 12.06.2009 rejecting its application and the consequential order dated 17.06.2009 returning its application for grant of privilege and licence under the Indian Made Foreign Spirit (Manufacture) Rules and consequently directing the second respondent to consider its application dated 04.05.2006 and grant licence to manufacture Indian Made Foreign Spirit, the petitioner has come up with W.P.No.11240 of 2009.
3. The case of the petitioner in both the writ petitions, in nutshell, is set out here under:-
(a) The petitioner is a part of the Imperial Group of Companies which was incorporated in the year 2002 under the Companies Act, 1956 and it has vast experience in the field of manufacture of Indian Made Foreign Spirit for almost a decade.
(b) In the year 2006, the petitioner decided to establish an Indian Made Foreign Spirit manufacturing unit in the State of Tamil Nadu and accordingly, submitted its application under Rule 4 of the Tamil Nadu Indian Made Foreign Spirit (Manufacture) Rules, 1981 (herein after referred to as “IMFS Rules”) for grant of privilege and licence to manufacture Indian Made Foreign Spirit in Pollachi Taluk, Coimbatore District, Tamil Nadu. After submitting the said application, the petitioner has also complied with all the requirements indicated by the respondents from time to time. The petitioner has already identified the land in Marchanickenpalayam Village, Pollachi Taluk, Coimbatore District for establishing its factory. Pursuant to the identification of the land, the petitioner has also obtained “No Objection Certificate” from the Tahsildar, Pollachi for construction of factory in the said land. Notwithstanding the compliance with all legal requirements by the petitioner, its application has been languishing now for over three years for extraneous reasons.
(c) The grievance of the petitioner is that due to the non-grant of privilege and licence to manufacture Indian Made Foreign Spirit, despite its scrupulous compliance with all rules and regulations, was further aggravated by the fact that the respondents had granted privilege and licence in favour of three other entities within a matter of few days after their applications, even without waiting for any of the compliances as insisted in the case of the petitioner. Further, the petitioner is the senior most applicant having made its application as early as 4.5.2006 and having complied with all requisites contemplated under law.
(d) In view of the deliberate non-consideration of its application, the petitioner approached this Court by filing a writ petition in W.P.No.22742 of 2008 for a mandamus directing respondents 1 and 2 herein to forthwith consider its application dated 4.5.2006 and grant privilege and licence to manufacture Indian Made Foreign Spirit under the IMFS Rules. This Court, by an order dated 30.03.2001, allowed the said writ petition along with connected writ petitions and directed the respondents to forthwith issue requisite licences applied for under the Tamilnadu Prohibition Act and all the rules framed thereunder within an out limit of six weeks from the date of communication of that order.
(e) Even after receiving the said order, respondents 1 and 2 were busying themselves with granting further largesse to their favoured ones. Despite its best efforts including issuance of notice dated 12.5.2009 to the third respondent under the Right to Information Act, the petitioner is unable to elicit information from the respondents and the crucial information, which will bring to the public regime the facts relating to the manner of grant of licence and orders granting enhancement of the existing production capacity from time to time to a selective few, had remained guarded secret in the hands of the respondents. A reply dated 4.6.2009 received from the third respondent acting in her capacity as the Public Information Officer is a shocking dereliction of duties cast upon her under the Tamil nadu Prohibition Act as well as the Right to Information Act. Since the mala fide is writ large in the third respondent’s reply dated 4.6.2009, the petitioner has impleaded her as a party respondent.
(f) The third respondent, after receiving the petitioner’s application dated 12.05.2009, seeking particulars relating to grant of privilege and licence to third parties as well as the particulars of the licences, has now informed the petitioner to approach the respective licensees and distillery units directly to secure the particulars without stating her difficulties in furnishing the said information. As regard the particulars relating to TASMAC, the petitioner has been directed to obtain the particulars from TASMAC. The said letter of the third respondent is ex-facie illegal and ultra vires under the provisions of the Right to Information Act and is solely aimed at maintaining the secrecy of matters which clearly deserve public scrutiny and to perpetuate the mala fide and gross abuse of licensing powers.
(g) After the directions of this Court in W.P.No.22742 of 2008, the first respondent has passed two Government Orders in G.O.Ms.No.97 dated 19.11.2008 and G.O.Ms.No.98 dated 24.11.2008. In terms of G.O.Ms.No.97, the respondents, in purported exercise of their powers conferred under Rule 35 of the Tamil Nadu Indian Made Foreign Spirit (Manufacture) Rues, 1981, have increased the production capacity of M/s.Mohan Breweries and Distilleries Limited from 42,63,660 cases per annum to 78,73,600 cases per annum with effect from 1.12.2008. In G.O.Ms.No.98, the first respondent has increased the production capacity of M/s.Southern Agrifurane Industries Limited from 30 lakh cases per annum to 49,57,200 cases per annum with effect from 1.12.2008.
(h) The petitioner reliably understands that similar orders were hastily passed by the respondents soon after the disposal of W.P.No.22742 of 2008 in favour of other units. However, the application of the petitioner is concerned, respondents 1 and 2 refused to take up the application for consideration and they remained unmoved not only by the numerous letters and reminders issued by the petitioner after the order but also by the contempt petition filed by the petitioner before this Court in Contempt Petition No.284 of 2009. Long after filing of the contempt petition, respondents 1 and 2 filed an application in M.P.No.1 of 2009 in W.P.No.22742 of 2008 seeking extension of time by six months from 1.4.2009 for consideration of the petitioner’s application and the same was dismissed by this Court by an order dated 28.04.2009. The appeal preferred against the said order was also dismissed by a Division Bench of this Court, however, extension was granted to the respondents until 30.06.2009 to pass orders on its application.
Hence, as stated already, W.P.No.11239 of 2009 was filed for a mandamus directing the third respondent to provide information as sought for in its application dated 12.05.2009 under the Right to Information Act and W.P.No.11240 of 2009 was filed challenging the order of the second respondent dated 12.06.2009 rejecting its application and the consequential order dated 17.06.2009 returning its application for grant of privilege and licence under the Indian Made Foreign Spirit (Manufacture) Rules and consequently directing the second respondent to consider its application dated 04.05.2006 and grant licence to manufacture Indian Made Foreign Spirit.
4. Common counter affidavit was filed on behalf of the second respondent, wherein the following facts have been set out:-
(a) In view of the appeal remedy available under the Statute, W.P.No.11240 of 2009 is not maintainable.
(b) The petitioner applied in Form I of the Tamil Nadu Indian Made Foreign Spirits (Manufacture) Rules, 1981 for grant of privilege for the manufacture of Indian Made Foreign Spirits in the factory to be located in Marchanaickenpalayam Village, Pollachi Taluk, Coimbatore District. As per Rule 7 of the said Rules, the Commissioner, after having regard to the matters specified in the said Rule 5 and the conditions set out in Rule 6 may, with the prior approval of the Government, grant them privilege for manufacture of Indian Made Foreign Spirits and approve with or without modification of the plan of the building and the statements or reject any application. In cases upon the grant of the privilege, the Commissioner shall issue a licence in Form No.2.
(c) To ascertain the details as per the said Rules, the Collector, Coimbatore was requested by the second respondent to send a detailed and specific report. The District Collector furnished his report on 6.11.2007. As the report was short of some details, the Collector, Coimbatore was again requested to furnish the details by the second respondent dated 19.11.2007. The Deputy Commissioner (Excise), Coimbatore was also requested by letter dated 19.11.2007 to cause enquiry through proper authority and ascertain the genuineness of the address and send a report to that effect.
(d) The Collector, Coimbatore has sent his report in his letter dated 11.12.2007. The further report was perused and certain clarifications were required as it was reported that there was an Odai as per records and the specific recommendations of the Collector was not furnished. The NOC from Fire and Rescue Department was also called for. The report received from the Collector was perused and it was found that the lay out was not duly authenticated by him.
(e) The Collector was also requested to send his further report as to whether distillery is located within ten kilometers of the proposed manufactory site. In the meantime, while the application is in progress, the petitioner has filed W.P.No.22742 of 2009 and this Court, by an order dated 03.11.2008, directed the respondents to process the application of the petitioner and pass necessary orders on merits and in accordance with the Rules within three months from the
date of receipt of a copy of that order. Since the orders could not be passed within the stipulated time, miscellaneous petition was filed before this Court seeking extension of time. However, in the meanwhile, the petitioner has filed Contempt Petition No.284 of 2009. This Court has dismissed the application made by the respondents for extension of time. Aggrieved over the same, respondents 1 and 2 filed a writ appeal in W.A.No.675 of 2009 before the Division Bench. The Division Bench directed the appellant therein to give effect to the order of this Court dated 3.11.2008 on or before 30.06.2009 and made it clear that no further extension will be granted. Subsequently, the second respondent issued orders rejecting the request of the petitioner for setting up an Indian Made Foreign Spirit Manufacturing Unit at Marchanaickenpalayam Village, Pollachi Talu, Coimbatore District.
(f) The application of the petitioner for grant of privilege was not rejected on the ground of non-compliance of Rule 5 of the said Rules but rejected only based on the present policy of the Government even though its application was processed. Only on compliance of Rule 5 of the said Rules in entirety alone privilege will be issued with the prior approval of the Government and the issuance of licence will be considered only after the completion of the building and erection of machinery etc.
(g) The contention of the petitioner that the issuance of licence favouring particular persons for ulterior objects and as political favours even without verifying their solvency, bona fide and other requisite and it is violative of Article 14 of the Constitution of India is not true and untenable. The application of the petitioner as well as the other three companies were processed as per the provisions of the said Rule. The Government arrived at a new policy decision that there will be no new grant of IMFL privilege by a letter dated 10.06.2009. In view of the new policy, not only the application of the petitioner but also all the pending applications were rejected and hence, there is no discrimination or colourable exercise as contended by the petitioner.
(h) If the petitioner is aggrieved over the reply of the Public Information Officer, it may work out its remedy as provided under Right to Information Act, 2005 (Central Act 22 of 2005). The contention of the petitioner that it has made huge investment for the purpose of establishing the Indian Made Foreign Spirit Unit is not relevant as the respondents are not responsible for any investment made by the petitioner at its own risk and in the course of the business activities.
Thus the counter affidavit of the second respondent seeks for the dismissal of the writ petitions.
5. Additional counter affidavit was filed on behalf of the respondents, wherein the following facts have been set out:-
(a) Under the Tamil Nadu Prohibition Act and Rules framed thereunder, an application shall be made to the Commissioner of Prohibition and Excise for grant of privilege and licence by an individual or a company, and the Commissioner, after due consideration, calls upon the Collector of the District wherein the unit is sought to be established for verification of the various criteria / conditions set out under the said Act and the Rules. After ascertaining all the details, the Collector submits a report to the Commissioner of Prohibition and Excise. Thereafter, the Commissioner forwards the Collector’s report with his own recommendation to the Government. It is only at this point of time, the State Government which is the authority to approve the grant of privilege gets seized of the matter.
(b) The petitioner filed its application on 04.05.2006. Few months earlier, the Government by letter dated 1.3.2006 had already rejected the application of one Sri Murugan Distilleries Ltd, for setting up of their unit at Erode since there was no need to encourage another new manufacturing unit.
(c) In July, 2006, the Government formed a Technical Committee at the request of the Commissioner of Prohibition and Excise, who after examination of each individual application for enhancement of production capacity, recommended enhancement of capacity and to take up application of individual units as well. Based on the recommendation of the said Committee, the Government by order dated 4.9.2006 temporarily enhanced the production capacity of the existing units and the temporary period came to be extended from time to time owing to the continued need of TASMAC. It was in these circumstances the said enhancement was granted by the Government and not in any manner motivated by any other reasons.
(d) In the month of June, 2007, TASMAC addressed a letter to the Commissioner of Prohibition and Excise bringing to his notice that inspite of an increase in the production capacity of the existing units, they were unable to secure enough supply since the monthly sale in TASMAC has gone up considerably. Therefore, the TASMAC requested the Commissioner to take action for increasing the availability of IMFS.
(e) Pursuant to the same, the Commissioner started processing of applications for establishment of new units and wrote a letter to the Collector to investigate and submit a report regarding the petitioner’s claim. The final report of the Collector came to be submitted only on 26.12.2008 as the Collector could complete his inspection and secure all the documents from the petitioner only at that time. Along with the petitioner’s application, five other distilleries pending consideration were rejected on 24.06.2009 on the same ground.
(f) The allegation of political mala fide by the petitioner is without any basis. The decision of the Government in not considering any other individual application beyond the enhanced demand of TASMAC, is only because of the consistent practice of this Government of not allowing local IMFS Unit to export their products, but have their production fully consumed domestically.
Thus, the additional counter affidavit sought for the dismissal of the writ petition.
6. Common reply affidavit was filed on behalf of the petitioner to the additional counter affidavit filed by the second respondent, wherein the following facts have been set out:-
(a) The present writ petition seeking grant of IMFS privilege and licence to the petitioner is not merely on account of delay caused by the respondents in considering the application of the petitioner. It is coupled with the fact that during such time when the application of the petitioner was kept pending by the respondents through the Coimbatore Collector, the respondents were granting licences and expansions to their favourites. The conduct of the respondents in granting three new licenses while holding back the application of the petitioner and further granting expansions to existing units in excess of 18 lakh cases per month even after the order of this Court dated 3.11.2008 was clearly tantamount to a fraud on power.
(b) Since the order of this Court dated 3.11.2008 and 28.4.2009 having become final, the respondents are estopped from contending anything contrary and ought to have considered the application of the petitioner without taking into consideration the change in policy. The averment of the respondents in their additional counter affidavit that the Government had taken a policy decision in 2006 not to grant fresh IMFS licenses and rejected the application of Sri Murugan Distilleries Ltd., on the ground that the State’s demand for liquor was met by the existing units is wrong. The petitioner reliably learnt that the application of the said company dated 2002 was in fact entertained and processed by the respondents for over three year and thereafter rejected on technical grounds. The very announcement of the policy relating to liquor has been converted into a device for conferring political favours as a weapon against persons who are handicapped solely on that account.
6.1. I have heard Mr.A.L.Somayaji, learned Senior Counsel appearing for the petitioner in both the writ petitions and Mr.P.S.Raman, learned Advocate General appearing for the respondents.
7. From the pleadings as well as the contentions raised by the learned Senior Counsel appearing for the petitioner and the learned Advocate General appearing for the respondents, the following facts emerge:-
On:
04.05.2006 : The petitioner made an application for grant of
privilege and licence under Rule 4 of IMFS Rules.
19.11.2007 : The second respondent sought for clarification from
the Collector concerned with regard to suitability of
applicant and details of business, etc. carried on by
the applicant.
11.12.2007 : The Collector submitted a report to the Commissioner. 07.02.2008 : On further clarification from the Commissioner, further report was furnished by the Collector. 14.05.2008 : The report received from the Collector dt.7.2.2008 was perused by the Commissioner and found that the layout sketch was not authenticated by the Collector and the Collector was called upon to furnished the same. 25.06.2008 : The Commissioner sent a communication to the Collector seeking information as to whether there was any other distillery situated within a radius of 10 k.m. from the proposed unit of the petitioner. 15.04.2008 : The petitioner filed a writ petition in W.P.No.22742 2008 for mandamus directing the respondents to consider and pass orders on its application. 24.09.2008 : The Collector sent a report with regard to the request made by the Commissioner vide its letter dated 14.08.2008. 18.10.2008 : Counter affidavit was filed by the Commissioner in W.P.No.22742 of 2008. 03.11.2008 : Orders were passed by this Court in W.P.No.22742 of 2008 filed by the petitioner, granting three months time to the second respondent to consider and pass orders on the application of the petitioner. 07.11.2008 : The petitioner intimated the said order to the second respondent. 14.11.2008 : The Commissioner sent a reminder to the Collector seeking information with regard to the distance between the proposed unit of the petitioner and the existing units. 06.12.2008 : The petitioner writes to the Commissioner for complying with the orders made in W.P.No.22742 of 2008 dated 03.11.2008. 11.12.2008 : The Commissioner sent a reminder to the Collector, Chennai for information about the distance between the proposed unit of the petitioner and the existing unit. 24.12.2008 : The Collector sends a report about the distance issue. 07.01.2009 : The petitioner writes a letter to the Commissioner remaining him about the compliance to be made on the order dated 03.11.2008 referred to above. 23.01.2009 : A report was sent by the Commissioner to Secretary to Government for approval to issue privilege and licence to the petitioner. 19.02.2009 : The Commissioner sends a letter to the Secretary reminding about the pendency of the petitioner's request for I.M.F.S. Privilege. 16.03.2009 : The petitioner reminds the Commissioner to comply with the orders of this Court dated 03.11.2008 - the third reminder. 29.03.2009 : The petitioner filed a contempt petition against respondents 1 and 2 in Cont.P.No.284 of 2009. 03.04.2009 : An application was filed by the Respondents, in M.P.No.1 of 2009 in W.P.No.22742 of 2008 seeking extension of time. 28.04.2009 : M.P.No.1 of 2009 was dismissed. 18.05.2009 : Writ appeal was filed in W.A.No.675 of 2009 against the order dismissing the application for extension of time made in M.P.No.1 of 2009 dated 28.04.2009. 20.05.2009 : The said writ appeal was disposed of extending the time to consider and pass orders. 21.05.2009 : The first respondent, the Secretary to Government sends a communication to the Commissioner informing him about the orders passed in W.A.No. 675 of 2009 and requesting the Collector to furnish a report even though the said report was sent to the Secretary as early as 23.01.2009. 10.06.2009 : The Government of Tamil Nadu has taken a policy decision not to issue any IMFS licence. 12.06.2009 : The impugned order was passed rejecting the application of the petitioner. 17.06.2009 : Orders were passed intimating the petitioner about the refund of deposit made by it.
8. The above referred facts would reveal that though an application was made by the petitioner seeking grant of privilege and licence for manufacturing IMFS on 04.05.2006, after a prolonged correspondence, finally the petitioner’s request was rejected on 12.06.2009 stating that policy decision was taken on 10.06.2009, by the Government of Tamil Nadu not to issue any more privilege and licence for manufacturing IMFS, since the supply made by the existing units are sufficient to cater the needs of TASMAC.
9. The question that arises for consideration is, whether the delay that has occurred in considering the application of the petitioner for grant of privilege and license for manufacturing IMFS is justified or not.
A. According to the learned Senior Counsel appearing for the petitioner, the delay that has occurred is nothing but an attempt made by the respondents not to grant the privilege and licence for manufacturing IMFS to the petitioner. He has further submitted that at each stage of the matter, the delay has occurred with a view to deny the claim of the petitioner. He has pointed out the following facts in order to draw the attention of this Court about not only the attitude of the respondents but also the intentional delay caused by the respondents:-
(i) Though an application was made by the petitioner on 04.05.2006, only on 26.07.2007 i.e., after a lapse of one year and two months the second respondent sent a communication to the Collector requesting a report from him with regard to the application of the petitioner.
(ii) Though the Collector submitted a detailed report as early as 06.11.2007, again certain clarification was sought for by the Commissioner on 19.11.2007.
(iii) A detailed report was sent by the Collector to the second respondent on 11.12.2007. Final report was also furnished by the Collector to the Commissioner on 07.02.2008. However, the Commissioner found that the lay out sketch was not authenticated by the Collector and called upon him to furnish the same only on 14.05.2008.
(iv) On 25.06.2008, the second respondent sent a communication to the Collector seeking information as to whether there was any other distillery situated within a radius of 10 k.m. from the proposed unit of the petitioner. Though the Commissioner could have verified the same from his own file, nevertheless, he has sent a communication to the Collector seeking such information. The Collector sent a report only on 24.09.2008. On 14.11.2008, a reminder has been sent by the Commissioner to the Collector seeking information about the distance between the proposed unit of the petitioner and the existing unit. Again another communication was sent by the Commissioner to the Collector on 11.12.2008. Only on 24.12.2008, the Collector sends a report with regard to the distance issue.
(v) The petitioner in the meantime, was constrained to file a writ petition before this Court in W.P.No.22742 of 2008 on 15.09.2008 for mandamus directing the respondents to consider and pass orders on its application for grant of privilege and licence for manufacturing IMFS. This Court, by an order dated 03.11.2008, directed the second respondent to consider and pass orders on the application of the petitioner. The said order was communicated to the second respondent by the petitioner on 07.11.2008. On 06.12.2008, a reminder was sent. The third reminder was sent on 16.03.2009. Nevertheless, no action was taken.
(vi) Contempt Petition No.284 of 2009 was filed by the petitioner against respondents 1 and 2. Thereupon, an application was filed in M.P.No.1 of 2009 only on 03.04.2009 seeking extension of time. The said application was dismissed on 28.04.2009. Writ appeal was filed against the said order in W.A.No.675 of 2009 and the same was disposed of on 20.05.2009.
Thus, pointing out the said prolonged proceedings, it was strenuously urged on behalf of the learned Senior Counsel appearing for the petitioner that at each and every stage, the respondents were making all efforts to prolong the issue in not granting the privilege and licence for manufacturing IMFS.
10. On the other hand, it was contended on the side of the respondents, by the learned Advocate General, that the period from 4.5.2006 the date of an application of the petitioner to June 2009,the date of rejection of petitioner’s application has to be divided into three parts viz.,
(a) From 05.05.2006 till July, 2007;
(b) From August, 2007 to November, 2008; and
(c) From December, 2008 to June, 2009.
(i) By elaborating the same, learned Advocate General submitted that though the application was made by the petitioner on 04.05.2006, one Sri Murugan Distilleries Limited few months prior has applied, before the Government, for setting up their unit at Erode and the same was rejected by the Government on 01.03.2006. The rejection was made since it was felt by the Government then, that the existing IMFS Manufacturing units are able to produce the required quantity to satisfy the Tamil Nadu State Marketing Corporation Limited (TASMAC) and hence, there is no need to encourage another IMFS Manufacturing unit. The Government could have rejected the request of the petitioner made on 04.05.2006, but, however, the same was kept pending which only to the advantage of the petitioner. In the month of June, 2007, the TASMAC addressed a letter to the Commissioner of Prohibition and Excise bringing to his notice that in spite of the increase in the production capacity in the existing unit, they are unable to secure enough supply. Therefore, TASMAC requested the second respondent to take action for increasing the availability of IMFS. The Commissioner, therefore started processing the application for establishment of new units and thereupon wrote a letter dated 26.07.2007 to the Collector calling upon him to investigate and submit a report regarding the petitioner’s claim. Pointing out the said facts and circumstances, the learned Advocate General submitted that the delay cannot be attributed against the respondents from 04.05.2006 till July, 2007.
(ii) As regards the delay said to have been caused by the respondents from August, 2007 till November, 2008, the same was explained by submitting that on 19.11.2007, the second respondent has sought for further report from the Collector and the Collector send a report on 11.12.2007. Additional particulars were sought for by the second respondent. In the meanwhile, the petitioner filed a writ petition in W.P.No.22742 of 2008 for mandamus directing the respondents 1 and 2 to consider its application, which was disposed of on 03.11.2008 granting three months time. Thus, according to the learned Advocate General, there is no unwanted delay during the said period.
(iii) The delay between December, 2008 and June, 2009 was sought to be explained by the learned Advocate General by submitting that on 19.11.2008, the second respondent sent a communication to the Collector seeking further information with regard to the distance between the proposed IMFS Unit of the petitioner and the existing units. It was followed by another communication dated 11.12.2008. On 24.12.2008, a report was received from the Collector with regard to the distance issue. Thereafter, the second respondent addressed a communication to TASMAC requesting demand for IMFS in the forthcoming years. Thereafter, on 23.01.2009, a report has been sent by the second respondent to the Government for approval to issue privilege to the petitioner. Further, a writ appeal was filed against the order made in W.P.No.22742 of 2008. In the meanwhile, a policy decision was taken by the Government on 10.06.2009 not to issue any IMFS licence since the supply made at that point of time was sufficient.
Thus, according to the learned Advocate General, the delay if at all any from December, 2008 to June, 2009 was well explained.
11. On the above contentions raised by the learned Senior Counsel appearing for the petitioner and the learned Advocate General appearing for the respondents, it has to be seen: whether there was really any delay on the part of respondents in perusing the application of the petitioner for grant of privilege and licence for manufacturing IMFS ? whether the delay, if at all, has been caused wantonly and wilfully ? and whether the delay has been explained properly ?
11.1. Admittedly, the petitioner made an application on 04.05.2006 seeking grant of privilege. On the said application, the second respondent had addressed a communication to the Collector concerned requesting a report with regard to the application made by the petitioner only on 26.07.2007.
11.2. The delay is sought to be explained on behalf of the respondents that on 01.03.2006, the Government had already rejected the request made by Sri Murugan Distilleries for setting up their Unit at Erode. The said rejection was made on the ground that the existing units are able to produce the required quantity to satisfy the TASMAC and at the relevant point of time, the Government of Tamil Nadu felt that there is no need to encourage any other new IMFS manufacturing unit. The petitioner’s application was made on 04.05.2006. The Government would have been well justified in rejecting the application of the petitioner as that of Sri Murugan Distilleries. However, the application of the petitioner was kept pending which would be only to the advantage of the petitioner. Further, the learned Advocate General sought to support the delay from May, 2006 till July, 2007 on the ground that without rejecting the request of the petitioner as that of the other applicant namely Sri Murugan Distilleries, the same was kept pending and only after a letter from the TASMAC addressed to the second respondent in the month of June, 2007 that it is unable to secure enough supply, the second respondent addressed a communication to the Collector requesting report with regard to the petitioner’s application.
11.3. However, I am unable to accept the said contention of the learned Advocate General appearing for the respondents. The petitioner made an application on 04.05.2006 and the second respondent either should have considered the request of the petitioner or should have rejected the same. Why the second respondent should keep the petitioner to wait for more than one year and two months. The second respondent would not have anticipated a letter from the TASMAC in the month of June 2007 about the inadequate supply of IMFS from the existing manufacturing units. The second respondent would not be anticipating such a communication by the TASMAC in the year 2007. The second respondent is trying his best to hush up the delay and he wants this Court to believe that TASMAC would be addressing him about the inadequate supply by the existing units in July 2007. In view of the above reasonings, I am unable to accept the contention of the learned Advocate General that there is no delay from May, 2006 till July, 2007 and even if there is a delay, the delay has been properly explained.
12. Then the next question arises is whether atleast from August, 2007 till November, 2008, there was some reasonable excuse on behalf of the second respondent to deny the request made by the petitioner.
12.1. As stated already, the petitioner made an application on 04.05.2006 and only on 26.07.2007, the second respondent addressed a communication to the Collector requesting him to send a report with regard to the application made by the petitioner. Though it is stated that the Collector submitted the report as early as 06.11.2007, the second respondent sought for clarification with regard to the report on 19.11.2007. The report was sent by the Collector only on 07.02.2008 and it was perused only after a period of 97 days by the second respondent that is on 14.05.2008. After pursuing the report of the Collector, it was found by the second respondent that the lay out sketch was not authenticated by the Collector and the Collector was called upon to furnish the same. Thereupon, the second respondent sent a communication dated 25.06.2008 to the Collector seeking information as to whether there was any other distillery situated within the radius of 10 k.m. from the proposed unit of the petitioner. The report was submitted by the Collector only 24.09.2008. In the meantime, the petitioner moved this Court by filing a writ petition in W.P.No.22742 of 2008 for mandamus directing respondents 1 and 2 to consider and pass orders on its application for grant of privilege and licence for manufacturing IMFS unit. An order was passed on 03.11.2008 by this Court granting three months time to the Commissioner to consider and pass orders on the petitioner’s application. The same was communicated to the second respondent, by the petitioner, on 07.11.2008. Thereupon, the second respondent communicated a letter to the Collector on 14.11.2008 seeking information with regard to the distance between the proposed IMFS manufacturing unit of the petitioner and the existing unit.
12.2. The above facts would clearly indicate that there was a delay at each and every stage caused either by the second respondent or by the Collector concerned. On the above facts, I am of the considered opinion that–
(i) the second respondent ought to have sought for all clarifications from the Collector concerned in one stroke and that he should not have asked in a piece-meal manner at each point of time.
(ii) as far as the distance particulars sought for by the second respondent is concerned, it could be well within the knowledge of the second respondent about the same and there need be no necessity for the second respondent to seek clarification from the Collector in that regard. The ultimate report in this regard was sent by the Collector only on 24.12.2008. This would show the lethargic attitude on the part of the second respondent in seeking clarification and also the same attitude adopted by the Collector concerned in sending the report.
(iii) the petitioner filed a writ petition before this Court in W.P.No.22742 of 2008 for mandamus directing respondents 1 and 2 to consider its application for grant of privilege and licence for manufacturing IMFS. Though an order was passed on 03.11.2008 granting three months time to the second respondent to consider and pass orders on the application of the petitioner, the same was not carried out by the second respondent. In fact, after filing a contempt petition by the petitioner, an application in M.P.No.1 of 2009 was filed on 03.04.2009 seeking extension of time. When that was dismissed on 28.04.2009, a writ appeal was filed against the said order. This would show that in spite of the orders of this Court, there was a delay on the part of the respondents. Thus, I am of the considered opinion that the delay has not been explained properly and there appears to be a wilful delay on the part of the second respondent and also on the part of the Collector concerned.
13. Then, it has to be seen whether the delay that has occurred between December, 2008 and June, 2009 was properly explained.
13.1. As stated already, in spite of the orders of this court in the writ petition referred to above directing the second respondent to consider the application of the petitioner for grant of privilege and licence for manufacturing IMFS, the same was not carried out. As stated already, M.P.No.1 of 2009 was filed for extension of time granted by this Court in the writ petition and also a writ appeal was filed against the said order. Thereafter, citing the policy decision taken by the Government, an order was passed on 12.06.2009, rejecting the application of the petitioner. Thus, in my considered opinion, there was a delay in considering the application of the petitioner and that the delay has been caused not because of any reasonable reasons. The delay is unexplained.
13.2. That apart, while the application of the petitioner was not considered and that there existed an unexplained delay, the files of the other distillery companies were fast moving. One Elite Distillery company was incorporated on 21.06.2007. Government Order was issued granting privilege to the said company within 154 days from the date of incorporation of the said company viz., 22.11.2007. One KALS Distillery Company was incorporated on 12.11.2007, which made an application on 07.09.2007. Government Order was issued granting privilege to the said company on 08.01.2008 itself. Likewise, one SNJ Distillery Company was incorporated on 17.04.2008. It made an application on 11.4.2008. The Collector sent a report on 04.07.2008. A conditional Government Order was issued to the said company on 28.07.2008 itself. Thus, the above facts would indicate that actions were taken in a jet speed at every stage regarding the other distillery companies, whereas, in the case of the petitioner, it was moving very slow.
13.3. That apart, Government Orders were issued granting expansion to Mohan Breweries on 19.11.2008 and Southern Agrifurance on 24.11.2008. Government Orders were passed constituting a Technical Committee for considering expansion by 24 lakh cases P.A. for Balaji Distillery.
13.4. However, the grant of privilege and licence for manufacturing IMFS to the other distilleries referred to above and grant of expansion to certain units cannot be challenged or called in question in this writ petition since the petitioner —
(i) did not challenge the grant of privilege and licence for manufacturing IMFS to them or grant of expansion to the other units;
(ii) the petitioner has not made them as parties in this writ petition. Without impleading them as parties and without questioning the grant of privilege and expansion to them, the petitioner cannot be heard to say that the grant of privilege and expansion to them is bad.
13.5. No doubt, Mr.A.L.Somayagi, learned Senior Counsel appearing for the petitioner contended that the petitioner does not question the grant of privilege and licence for manufacturing IMFS to other distilleries. It was contended by him that those facts were brought to the notice of this Court only for the purpose of exhibiting before this Court that when an action was taken in a jet speed with regard to other distilleries, it was moving very slowly in the case of the petitioner. This contention of the learned Senior counsel appearing for the petitioner deserves to be considered. Though this court is not called upon to decide the grant of privilege and licence for manufacturing IMFS to other distilleries, this Court cannot shut its eyes on the action taken by the respondents especially the second and third in moving the files of other distilleries in a fast manner while the files of the petitioner was either kept in gold storage or an undue delay made at every stage. The failure to implead the other distillery companies may disentitle the petitioner to question the grant of privilege and licence for manufacturing IMFS to them, but, however, as rightly pointed out by the learned Senior Counsel appearing for the petitioner, they can be cited to substantiate the grievance of the petitioner that the inaction on the part of the respondents on the application of the petitioner and that undue delay has occurred in processing the application of the petitioner at each and every stage. This Court is therefore of the view that an unwanted and unexplained delay has occurred in the case of the petitioner. Especially when the Government was granting expansion to other units, the attitude of the second respondent in keeping the application of the petitioner without any rhyme or reason, cannot be appreciated at all.
13.6. The discussions made above would undoubtedly make this Court to draw a conclusion that the act of the respondents more so the second respondent and third respondent is unjust.
14. Then the next question that arises for consideration is, when the Government has taken a policy decision not to have any more units since the supply made by other companies satisfies the requirement of TASMAC, can this Court extend its arm in directing the Government to grant privilege and licence for manufacturing IMFS to the petitioner. In this connection, the learned Senior Counsel appearing for the petitioner would draw my attention to the judgment of this Court made in W.P.Nos.4717, 4721 and 5067 of 1999 and paragraph 86 of the said judgment is usefully extracted here under:-
86. Further it is also admitted that even the applications have been kept pending for years together and everytime the respondents have been calling upon the petitioner for some compliance and has been going on inspecting the petitioners’ installation from time to time through its officers to satisfy the compliance of the rules. Had the respondents rejected the application at the threshold, as further production in the State is not called for or in the interest of public, then the State Government would be well justified. On the other hand, the respondents have made the petitioners to believe that if the requirements are complied the licence applied for will be considered and granted. At no point of time such a stand was taken or disclosed. For the past few years, when the applications were kept pending at one stage or the other, the respondents have not indicated that the licence will not be granted, if it comes to the conclusion that production is more than sufficient to meet the local demands. That is not the case here.
15.1. Learned Advocate General appearing for the respondents however sought to distinguish the said judgment by submitting that even if this Court comes to a conclusion that there was an unexplained delay in processing the application of the petitioner, still the case of the petitioner cannot be considered for the reason that in the above referred to judgment, after rejecting the application of the petitioners thereon, the State has allowed substantial increase in the installed capacity of various distilleries, breweries in the State. However, in the present case on hand, the State Government has neither granted license to any other unit nor granted expansion to other units, after rejecting the application of the petitioner. He further added that in the case on hand, the Government has taken a policy decision not to issue any privilege and licence for manufacturing IMFS to any of the units. It is one thing according to the learned Advocate General that the policy of the Government cannot be interfered with by this court and secondly, unlike in the case referred to above, no license was granted and no expansion was made after rejecting the application of the petitioner. Hence, according to the learned Advocate General, there cannot be any direction to the Government to grant privilege and licence for manufacturing IMFS to the petitioner.
15.2. On the other hand, learned Senior Counsel appearing for the petitioner contended that when once this court comes to a conclusion that the petitioner’s request for grant of privilege and licence was kept pending without any rhyme or reason, the further direction has to be granted to the respondents to grant privilege and licence to the petitioner.
15.3. I have carefully considered the submissions made by the learned Senior Counsel appearing for the petitioner as well as learned Advocate General appearing for the respondents.
15.4. This Court already came to the conclusion that there was undue delay in processing the application of the petitioner and the delay caused was not explained properly by the respondents. Even when the application of the petitioner was kept pending for years together, license was granted to other units and even G.O’s were issued granting permission to two units on 19.11.2008 and 24.11.2008. This will clearly show that the respondents have made the petitioner to believe that license will be granted to it, if everything is alright.
15.5. That apart, even after this Court directed the respondents to consider and pass orders in the IMFS application of the petitioner on 03.11.2008, G.O’s were issued on 19.11.2008 and 24.11.2008, granting expansion of one Mohan Breweries and Southern Agrifurance. Thereafter, on 23.01.2009, the second respondent had sent a report to the first respondent to approve the issuance of privilege to the petitioner institution. A reminder was sent by the second respondent to the Secretary on 19.02.2009 about pending of the petitioner file for IMFS privilege. Contempt application was also filed against the respondents 1 and 2 for not complying with the orders of this Court in W.P.No.22742 of 2008. Thereafter, on 03.04.2009 M.P.No.1 of 2009 was filed in the writ petition for extension of time. Though, the said application was dismissed as early as 28.04.2009, Writ Appeal was filed against the said order and the same was also disposed of by this Court, extending time to consider and pass orders in the IMFS files of the petitioner till 30.06.2009, while confirming the order dated 28.04.2008. However, curiously the first respondent writes to the second respondent not only to intimate the order passed by the Division Bench in the Writ Appeal referred to above, but also requesting the second respondent to furnish the report on the application of the petitioner, forgetting that the second respondent has already furnished a detailed report to him as early as 23.01.2009 and the reminder made on 19.02.2009. While so, a policy decision was taken on 10.06.2009 for the first time, not to issue IMFS license and thereafter an order was passed on 12.06.2009, rejecting the application of the petitioner. This will clearly show that the respondents have bent upon rejecting the request of the petitioner. In this connection, Paragraphs 89, 97, 99, 101 of the judgement referred to above is usefully extracted here under:
89. The State Government expedited the recommendation and refixed the production capacity of the two IMFL units, namely, M/s. Balaji Distelleries and M/s. Mohan Breweries and Distilleries Ltd., etc. This is admitted by the contesting respondents. That being so, the rejection of application submitted by the petitioners on the sole ground that the licenced capacity of the existing IMFS units is sufficient to meet internal demand and supply and that there is no scope for setting up additional unit ignoring the earlier application which is pending consideration and despite issue of earlier directions by this Court cannot be sustained and requires interference.
97. That apart the reason that capacity of the existing unit in the State is sufficient to meet the internal demands is an extraneous consideration as seen from Rule 5 itself. Keeping the application pending for years together, while at the same time granting licence for increased installed capacity to other units in the State even though the respondents are aware that for all purpose the petitioners unit had already been established and ready to steam, it is rather a strange and abnormal approach, which cannot be sustained, as it is arbitrary. Thus on a consideration of the entire matter, on a perusal of files and law laid down by the Apex Court, it is clear that the respondents have taken into consideration of matters which are not relevant for the purpose of grant of licence and the rejection of the licence is not only arbitrary but also discriminatory and whimsical.
99. Mr.T.Rajagopalan, learned Additional Advocate General, contended that it is a policy decision of the State Government. Policy decision should be uniform and there cannot be a different policy for an existing unit and a unit which has already installed the machineries and waiting for grant of licence for years together. The policy suggested or sought to be highlighted cannot be taken as a policy adopted, as the State Government has neither laid down such a policy in this respect not this action could be held to be in consonance with such a policy which is sought to be suggested at the hearing of the present writ petitions. If a policy of the State Government that only existing units will be allowed to increase their production capacity and no new units will be granted licence, this also cannot be sustained at all. At the same time, if the policy is not to allow manufacture of more quantity of potable liquor, then on the one hand the respondents cannot decline the licence and on the other hand the respondents cannot increase the installed capacity of other existing breweries and distilleries.
101. It is equally true that this Court would be slow to interfere with such a policy, if there is a policy at all. There is nothing to show that the State Government had resolved or laid down such a policy muchless a consistent policy. It is only at the final level when the Honourable Chief Minister, the Chief Secretary and the concerned Secretary met for discussions, this aspect, namely, alleged excess production has been though of as a reason to reject the applications. Till that stage and at all levels the files would disclose that the privilege applied for by the petitioner is not only being considered favourably, but a decision is yet to be taken. Had the State Government rejected the applications at the earliest opportunity or intimated that the supply in the State is sufficient to meet the demand, probably the petitioners may not have ventured to proceed or invest a heavy sum and put up the factory. In fact, originally it is the State undertaking in whose favour the letter of intent was issued and with the approval of the State Government, the said letter of intent had been transferred in favour of the petitioner, at the first instance as a joint venture and thereafter with a modification. All these aspects would show that the State Government had not laid down any policy and only at the final stage of rejection such a reason had been invented and set out in the impugned order. Therefore it is farfetched on the part of the respondents to contend that it is a policy of the State not to allow more units or new units as the production capacity will be more than sufficient to meet the internal demand.
15.6. In the above referred judgement, finally, a direction was granted to issue license and privilege to the petitioners and the respondents were directed not to grant license or privilege or permission to increase the capacity of the existing units till the grant of privilege in favour of the petitioners thereon.
15.7. The said judgement is squarely applicable to the facts of the present case on hand. Further, the discussions made above will amply prove that the rejection made on the application of the petitioner is totally unjustified.
15.8. The policy decision which is set forth on the side of the respondents neither finds merits nor based on any justifiable reason. Such a policy, in my considered opinion was invented only with a view to reject the claim of the petitioner. The policy could be only discriminatory. No doubt, as held by the Hon’ble Apex Court in several decisions that in administrative matters, the scope of judicial review is very limited and that judiciary must exercise restraints in such matters. But undoubtedly, there can be interference under Article 226 of the Constitution of India, if there exists arbitrariness, unreasonableness, bias and mala fide. Though, the question of mala fide or bias cannot be gone into at depth in the present case, since the units for whom the privilege and license for manufacturing IMFS or expansion were granted are not made as parties, but the discussions made above amply establishes that there exist unreasonableness in denying grant of privilege and license for manufacturing IMFS to the petitioner.
15.9. This Court cannot shut its eyes towards new principles of judicial review which are being now developed. Further, the decision was not taken on public interest, which would have weighed the mind of this Court in exercising judicial restraint. Further, this Court is conscious of the fact that the decision making process of the respondents cannot be subject matter of judicial review since, this Court does not act as Court of Appeal or Review to such decisions. However, as discussed earlier there is ample scope in the present matter to come to a conclusion that there was undue delay and unjust denial of the privilege and license for manufacturing IMFS to the petitioner.
15.10. In view of the above discussions, I am of the considered view that the respondents shall be directed to issue IMFS license to the petitioners and till such consideration the respondents shall not grant any new license to any other units or increase the capacity of the existing units.
16. Thus, considering the overall circumstances, the discussions made above and the conclusion that has been arrived at, the following findings are arrived at viz.,
(i)The application of the petitioner was processed dead slow and each and every point of time, the delay has been caused which cannot be attributed against the petitioner.
(iii)There is an unexplained delay on the part of the second respondent at every stage of the proceedings.
(v)When the applications of the other distillery units were processed in a jet speed and a decision was taken at an high speed, the application of the petitioner has moved dead slow.
(vii)The delay occurred thereon was not explained properly though an attempt was made to explain the same.
(viii)The grant of privilege and license for manufacturing IMFS to other distilleries and grant of expansion to certain units cannot be called in question in this writ petition, since the same is not under challenge in this writ petition and more over, they have not been made as parties in this writ petition.
(ix)the question of mala fide or bias cannot be gone into at depth in the present case, since the units for whom the privilege and license for manufacturing IMFS or expansion were granted were not made as parties. However, the discussions made above amply establishes that there exists unreasonableness and undue delay in denying grant of privilege and license for manufacturing IMFS to the petitioner.
(xi)The proclaimed policy namely, that the supply made by the present units are sufficient to cater the needs of the TASMAC does not find any reason and that such policy is nothing but discriminatory.
17. In fine, the impugned order of the second respondent dated 12.06.2009, rejecting the petitioner’s application and the consequential order dated 17.06.2009 issued purporting to return the petitioner’s application for grant of privilege and licence under the
K.VENKATARAMAN,J
sbi/pgp
Indian Made Foreign Spirit (Manufacture) Rules is liable to be set aside and accordingly set aside and the writ petition No.11240 of 2009 stands allowed. The respondents are directed to forthwith issue requisite license to the petitioner at the earliest but, however not later than one month from the date of receipt of a copy of this order. In view of the same W.P.No.11239 of 2009 stands closed. Consequently, connected miscellaneous petitions are closed. However, no order as to costs. .03.2010
sbi/pgp
Index : Yes / No
Internet : Yes / No
Note to Office : Issue order copy on 31.03.2010
To
1.The Secretary to Govt.,
The State of Tamil Nadu,
Prohibition and Excise Department,
Secretariat, Fort St. George,
Chennai-9.
W.P.Nos.11239 and 11240 of 2009
2.The Commissioner and
Commissioner of Prohibition
and Excise,
Ezhilagam, Chennai-5.
3.Tmt.M.R.Ganga Bai,
Public Information Officer /
Assistant Commissioner-II,
Prohibition and Excise,
Chepauk, Chennai-5. Dated :26 .03.2010