IN THE HIGH COURT OF JUDICATURE AT MADRAS
Dated: 25/09/2002
Coram
THE HON'BLE MR.B.SUBHASHAN REDDY, CHIEF JUSTICE
and
THE HON'BLE MR.JUSTICE D.MURUGESAN
W.P. No.34090 of 2002
and
W.P.M.P. No.50671 of 2002 and batch
W.P.No.34090 of 2002
K. Ramanathan ... Petitioner
-Vs-
1. The State of Tamil Nadu,
rep. by its Secretary to Government,
Prohibition & Excise Department,
Fort St. George,
CHENNAI - 600 009.
2. The Commissioner (Excise),
Chepauk,
CHENNAI - 600 005.
3. The Asst. Commissioner of Excise,
Madurai. ... Respondents
Prayer : Petitions filed under Article 226 of Constitution of India
for the issuance of a Writ of Certiorarified Mandamus for the reasons as
stated therein.
For Petitioner in W.P.M.P. :Mr. R. Krishnamurthi, S.C. for
Nos.52582 to 52584/2002 Mr. V. Ayyathurai.
For Petitioner in W.P.M.P. :Mr. T.R. Rajagopalan, S.C. for
No.50671/2002 in WP 34090/ M/s. K. Selvaraj
2002
For Petitioner in W.P.No. :Mr. K.M. Vijayan, S.C. for
25184/2002 etc. Mr. J. Pothiraj
For Petitioner in W.P. No :Mr. P. Jayaraman, S.C. for
26261 of 2002 Mr. V. Chinnasamy
For Petitioner in W.P. No. :Mr. M. Venkatachalapathy,
35975 to 35980 of 2002 etc. SC., for Mr. K. Kumaresh
Babu
For Petitioner in W.P.M.P. :Mr. AR. L. Sundaresan
54378/2002 in W.P. No.
28678 of 2002
For Petitioner in W.P.M.P. No. :Mr. Venkatasubramaniam for
52319 of 2002 M/s.V. Sanjeevi
For Petitioner in W.P.No. :Mr. A. Sivaji
29676 etc. Batch
For Petitioner in W.P.M.P. :Mr. M.M. Sundaresh
No.52650 of 2002 etc.
For Petitioner in W.P.M.P. :Mr. D. Selvaraj
No.53098/2002 etc. batch
For Petitioner in W.P.M.P. :Mr. M. Muthappan
No.50801/2002
For Respondents in all the :Mr. N.R. Chandran,
W.P.M.Ps and W.Ps. Advocate General assisted by
Mr. K. Mahedran, Spl. G.P.
:O R D E R
THE HON’BLE THE CHIEF JUSTICE
This batch of writ petitions and miscellaneous petitions relate to
licensing of the retail vending of IMFL governed by the Tamil Nadu Prohibition
Act, 1937 and the Rules framed thereunder titled as Tamil Nadu Liquor (Retail
Vending) Rules, 1989, as amended from time to time. During the excise year of
2001 a policy was evolved by the Government of Tamil Nadu to grant licences to
vend IMFL in retail for a block period of 3 years with increase as determined
in the 2nd and 3rd years over the privilege amount fixed for the initial
period of one year. The said policy of block period was sought to be
discontinued by the Government by re-categorisation of the places of licence
for the purpose of levy of privilege fee and also increase in shops from 6000
to 7000 by issuance of G.O.Ms.Nos.128, 129 and 130 dated 8th July 2002. This
led to filing of a batch of writ petitions of more than 4000 and they were all
heard and disposed by a common Judgment dated 24.07.2 002 to the following
effect:
“Para-22 : We dispose of all the writ petitions as mentioned infra:
(i) The Government is at liberty to go ahead with the grant of privilege of
retail vending of Indian Made Foreign Liquor to the extent of 7,000 as
decided.
(ii) But the Government shall adhere to the places of retail vending which
have been licenced for the excise year 2001-2002 and held by the petitioners
and renew the licence of the petitioners for the excise year 2002 -2003 on the
petitioners’ remittance of the privilege amount on the basis of the amount
fixed in G.O.Ms.No.129, dated 8.7.2002 and also taking into account the
re-categorisation of the shops for the purpose of levy of the privilege
amount.
(iii) The above facility of renewal to the petitioners shall be made available
if the petitioners remit the requisite amounts on or before 31st of July 2002.
(iv) For any reason, there is a delay in renewal, the petitioners shall be
entitled to vend the Indian Made Foreign Liquor in retail on payment of the
proportionate privilege amount till the grant of licence.
(v) The Government, the Commissioner and all the District Collectors shall be
entitled to re-locate the shops out of 7,000, at the places they feel
expedient, but only after safeguarding the shops which are being run by the
petitioners.”
2. The State Government had assailed this Judgment before the Supreme
Court and S.L.Ps. were finally disposed of on 26.08.2002 upholding the above
Judgment of this Court regarding the right of renewal of licences treating
2001 – 2004 as a block period. There had been no stay of operation of the
Judgment of this Court pending disposal of the 5 S.L.Ps., which were filed
against 5 of the existing licensees, who were parties to the above Judgment
rendered by this Court.
3. This fresh litigation has cropped up because of the stand of the
Government that among the writ petitioners only 286 have complied the
condition of deposit of the privilege amount by 31.7.2002 and that the rest of
the shops are liable to be given to fresh applicants by drawal of lots. The
petitioners would maintain that they were ready and willing to perform their
part of the obligation and in fact were permitted to perform their obligations
only partially, as the State Government was waiting for the verdict of the
Supreme Court with a strategy to discontinue the temporary licence in case
they win the matter in the Supreme Court or to comply with the Judgment of
this Court, in the event of their losing S.L.Ps. The State Government refutes
this obligation stating that there was default on the part of the petitioners
in compliance of the Judgment of this Court and that only 286 are entitled for
renewal of licences and not the rest.
4. When the matters came up first before us, the Government took a
stand that as the Supreme Court disposed of the S.L.Ps., this Court was not
having jurisdiction to adjudicate on the issue. But, on behalf of the
petitioners it was submitted that the matter was moved before the Supreme
Court and on the adjourned date the order dated 9.9.2002 passed by the Supreme
Court was produced befo re us and the same reads as follows:
” The High Court, in the Judgment under challenge before us, made it crystal
clear that the facility of renewal to the petitioners shall be made available,
if the petitioners remit the requisite amounts on or before 31st July, 2002
and the said direction has been repeated by us in our Judgment. It is not
possible for us to examine the assertions made by these applicants that they
have submitted the fees for the whole year though only part of the fees was
accepted. This matter, which if proved, before the High Court, can be gone
into by the High Court and appropriate directions can be issued. Thus, we see
no justification for this Court to extend the time or modify our order.”
5. Among the petitioners, there are two types of claims relating to
mode of compliance of the conditions of deposit of the privilege amount by
31.07.2002. Some say that they were ready to pay the money but the
appropriate authorities did not issue the challan on the ground that there was
no such instructions from the Government to receive the full privilege, some
have shown the Demand Drafts on the ground that they were ready with the
Demand Drafts but their plea was not entertained by the authorities for the
same reason mentioned above. But, the common ground taken by all the
petitioners is that the Government itself was unwilling to receive the amounts
in full awaiting the Judgment of the Supreme Court and to proceed further
basing upon the verdict of the Apex Court. From reading the order of the Apex
Court, it is clear that we are enjoined to decide as to whether the
petitioners were ready to pay the privilege amount by 31.7.2002, but the
Government was not prepared to receive the same in full. The renewal of
licence or otherwise depends upon the said decision. As the matter relates to
more than 4,000 cases, it is practically impossible to make casewise enquiry
to decide on the different contentions raised by the petitioners. But we made
enquiry to the extent possible and even getting information by posing
interrogatories, upon which affidavits have been filed answering
interrogatories and also material papers. We scanned through the same. Out
of 6,000 shops notified for the excise year 2001 – 2002, only 5,512 shops
could be sold out by drawal of lots. Out of the same, 1,830 persons have
availed of the order dated 16th July 2002 of the learned single Judge by
remitting three months rental for the excise year 2002 – 2003. Pursuant to
the instructions of the Commissioner dated 25.7.2002, 286 applications were
made. 4,632 applications were made pursuant to G.O. Ms.No.176, dated
30.7.2002 and consequent instructions of the Commissioner on 30.7.2002. It is
pertinent to mention that this number of 4,632 includes 1,830 who had remitted
three months rental as mentioned above.
6. The argument on behalf of the petitioners was led by Mr.R.
Krishnamurthi, learned senior counsel. M/s.T.R. Rajagopalan and K.M.
Vijayan, learned senior counsel appearing for some of the petitioners, as also
other learned counsel made their submissions. Mr. N.R. Chandran, learned
Advocate General, appeared for the State. M/s. P. Jayaraman and M.
Venkatachalapathy, the learned senior counsel appeared for some of the drawees
of the lots on 2nd and 9th September 2002 and supported the arguments of the
learned Advocate General.
7. While the learned Advocate General submits that there had been
compliance of the Condition No.3 by only 286 of the writ petitioners, the
argument of the learned counsel for the petitioners is otherwise. The learned
Advocate General heavily relies upon the instructions of the Commissioner of
Prohibition and Excise contained in Roc. P&E IX(1 )/16131/2002-15, dated
25.7.2002 so as to project the point that the Government had never intended to
stall the attempt of the petitioners to pay the privilege amount seeking
renewal in accordance with the judgment of this Court. The said executive
instructions were issued by the Commissioner of Prohibition and Excise to all
the District Collectors with a further direction to give necessary
instructions to the concerned Deputy/Assistant Commissioners of Excise. We
feel it apt to extract the same.
“Office of the Commissioner of Prohibition and Excise,
Chepauk, Chennai – 5.
To
ALL COLLECTORS
Roc.No.P&E.IX(1)16131/2002-15 Date: 25.7.2002
In continuation of the instructions issued in regard to grant of
privilege for retail vending of IMFL for the year 2002-2003, it is informed
that in its order in Writ Appeal No.2209/2002, dated 24.7.2002, the High
Court, Madras, has issued certain orders/directions:
2. In view of the above orders/directions of the High Court,
Madras, the applications for renewal of IMFL retail vending licences for the
year 2002-2003 have to be accepted from the Writ Petitioners with the revised
privilege amount fixed in G.O.Ms.No.129, P&E(VI), dated 8.7 .2002, taking into
account the re-categorisation of shops for purpose of revised privilege
amount.
3. Therefore, renewal applications from the Writ Petitioners with
the copy of the High Court’s order along with the Demand Draft for the revised
privilege amount for one year as fixed in G.O.No.129, P&E(VI), dt.8.7.2002 may
be accepted till 5.45 p.m. on 31.7.2002.
4. The list of Writ Petitioners, whose licences are entitled for
renewal, is sent to you through E-Mail. It contains names of 3,505 licensees.
Entertain renewal applications from those petitioners relevant for your
District from the list.
5. As regards receipt of applications for lot, there is no change
in the instructions issued earlier in this office Fax Message Dated 17.7.2002.
6. Instructions regarding scrutiny of applications, drawal of lot
etc. will be issued separately.
7. The Deputy / Assistant Commissioners (Excise) may be
instructed to await further instructions from this office for proceeding
further after receipt of applications both for renewal and for fresh
allotment.
COMMISSIONER (P & E)”
According to the learned Advocate General, only 286 petitioners responded to
the said instructions and only such persons are entitled for renewal of
licence and not others.
8. The learned counsel for the petitioners mainly rely upon G.O.
Ms.No.176 P & E (VI) Department, dated 30.7.2002 issued by the Government and
the consequential instructions issued by the Commissioner of Prohibition and
Excise in Roc. P&E IX (1)/16131/2002-18, dated 30.7.200 2. These two
proceedings also need extraction and they are as below.
"PROHIBITION AND EXCISE (VI) DEPARTMENT G.O. (Ms.) No.176 Dated: 30.7.2002. Read:
1. G.O. (Ms.) No.115, Prohibition and Excise Department, dated 22.6.2001.
2. G.O. (Ms.) No.128, Prohibition and Excise Department, dated 8.7.20 02
3. G.O. (Ms.)No.129, Prohibition and Excise Department, dated 8.7.200 2.
4. G.O. (Ms.).No.130, Prohibition and Excise Department, dated 8.7.20 02.
ORDER:
In the Government Order second read above, orders were issued
providing for the grant of licences for 7000 Indian Made Foreign Liquor retail
vending shops for the excise year 2002-2003 following the procedure prescribed
in Government Order first read above by lot system. Some of the existing
licensees filed batch of writ petitions before the High Court of Madras
questioning the deletion of the renewal clause. The High Court disposed of
the batch of writ petitions with directions to renew the licences of the writ
petitioners subject to their remitting the enhanced privilege amount on or
before 31.7.2002.
2. The State Government have filed Special Leave Petition before
the Supreme Court of India challenging the orders of the High Court. The said
petition is to be heard on 9.8.2002. Meanwhile, based on the statement made
on behalf of the State Government before the Supreme Court, the Government
have decided to extend the period of the existing licences for 15 days beyond
31.7.2002 in favour of licensees who desire such extension on their paying
proportionate privilege amount and other fees. The Government therefore,
direct that the licences of willing licensees be extended for a period of 15
days beyond 31.7.200 2.
3. In the circumstances, the Commissioner of Prohibition and
Excise is requested to issue directions to the various licensing authorities
to extend the licences of all licensees who desire such extension for 15 days
namely upto 15.8.2002 subject to payment of the proportionate privilege amount
and proportionate licence fee for 15 days besides the necessary application
fee.
(BY ORDER OF THE GOVERNOR)
R. BALAKRISHNAN
SECRETARY TO GOVERNMENT
To
The Commissioner of Prohibition and Excise, Chennai- 5.”
“OFFICE OF THE COMMISSIONER OF PROHIBITION AND EXCISE
CHEPAUK, CHENNAI – 5.
Roc.No.P &E IX (1) 16131/2002-18 dated 30-7-2002 TO ALL COLLECTORS
———————————————————————
The Government in G.O. Ms.No.176 P & E (VI) Dept. dated 30-7-2002 (
copy sent to you by E-mail separately) have decided to extend the existing
IMFL retail vending licences for fifteen days beyond 31.7.2002 in favour of
licensees who desire such extension on payment of proportionate privilege
amount and other fees and directed that the licences of willing licensees be
extended for a period of fifteen (15) days beyond 31.7.2002. Therefore, the
IMFL retail vending licences of the willing licensees may be extended for a
period of 15 days upto 15.8.2 002.
In this connection, the procedure laid down below should be followed:
1. Application in the Form appended to this fax message has to be accepted.
2. Application fee of Rs.500/- may be collected in full
3. Proportionate privilege amount for 15 days at the revised rate fixed in
G.O.Ms.No.129 P & E (VI) Department, dated 8.7.2002 shall be collected.
4. Proportionate licence fee for fifteen days (15 days) shall be collected.
As the period of licence for the year 2001 – 2002 expires on 31.7.200 2
expeditious action should be taken for the extension of time in respect of the
licences of the willing licensees. All those willing licensees who apply and
remit the proportionate privilege amount and licence fee should be granted
extension for 15 days without fail.
The Deputy / Assistant Commissioner (Excise) may be suitably
instructed.
COMMISSIONER ( P & E)”
9. The plea of the petitioners and the counter plea of the
Government rest on the analysis of the above three proceedings. While it is
clear from the proceedings dated 25.7.2002 that the judgment of this Court,
rendered a day earlier, was directed to be followed by accepting the
applications and also the remittance of the privilege amount but only on
accompaniment of the certified copy and the demand draft, the effect of the
same has to be read along with the later proceedings dated 30.7.2002, one
Governmental and the other, which is consequential, by the Commissioner of
Prohibition. The reason is obvious. By the time the proceedings dated
25.7.2002 was issued by the Commissioner, there was no definite decision taken
by the Government to file appeals before the Supreme Court. That is the
reason why the Commissioner had only authorized the concerned Licensing
Authorities to receive the applications with requisite amounts payable but not
to process the same or take a decision. That is ex facie clear from clauses 6
and 7 of the instructions of the Commissioner dated 25.7.2002. Then the
Government has taken a decision to move the Supreme Court and the matter was
mentioned before the Supreme Court on 30.7.2002 but no stay was granted and it
was posted to 9.8.2002. Then the Government, suo motu by G.O. Ms. No.176,
dated 30.7.2002, has directed the Commissioner of Prohibition and Excise to
instruct the Licensing Authorities to extend the existing licenses for a
period of 15 days i.e. upto 15.8 .2002, subject to licensees, desiring
extension, paying the proportionate privilege amount and proportionate licence
fee for 15 days besides the necessary application fee. In compliance of the
same, the Commissioner has issued the necessary instructions dated 30.7.2002
to all the District Collectors to in turn issue instructions to the Licensing
Authorities to take expeditious action for extension of time in respect of the
willing existing licensees, who apply and remit the proportionate privilege
amount and licence fee by 31.7.2002. Pursuant to the same, several existing
licensees have sought for the renewal of licenses with requisite applications
with fees, proportionate privilege fee and licence fee for the period of 15
days. On being satisfied about the compliance of the conditions, such a
number of existing licensees (4,632) were granted with extension of the
licence for a period of 15 days, then for a further period of 15 days from
16.8.2002 to 31.8.2002 by G.O. Ms.No.180, dated 12.8.2002 and again, as a
third extension of 15 days, from 1.9.2002 to 15.9.2002 by G.O. Ms.No.189,
dated 29.8.2002.
10. Among the applicants, there are two types, i.e. the fresh
one, who had applied pursuant to the impugned G.O. Ms. Nos.128, 129 and 130
, dated 8.7.2002, and the other is among the existing licensees. 1,8 30
applications which have been received pursuant to the order of the learned
single Judge dated 16.7.2002 have not been processed at all and they were just
kept pending obviously awaiting the outcome of judgment of the Division Bench.
Even with regard to 286 applicants, who are said to have remitted the entire
amount pursuant to the instructions of the Commissioner dated 25.7.2002, no
orders were passed on their applications until 2.9.2002. It is
ununderstandable as to why the Government did not pass orders on those 286
applicants by 31.7.2002 if really the Government was of the view that only 286
applicants deserved consideration in the light of the judgment of the Division
Bench of this Court dated 24.7.2002. Even while keeping the said 286
applications pending, the Licensing Authorities had received the applications
with fees payable thereon as also the proportionate privilege fee and licence
fee for 15 days upto the closing time of 31.7.2002 and granted extension to
4,632 applicants among the existing licensees. This shows the clear intention
of the Government that it did not want to renew the licences for the full
excise period 2002 – 2003 because of the pendency of the matter before the
Supreme Court and it wanted to act suitably only after hearing the verdict of
the Supreme Court. In fact, the same is quite evident from the recitals of
G.O. Ms. No.189, dated 29.8.2002.
"PROHIBITION AND EXCISE (VI) DEPARTMENT G.O. (Ms.) No.189 Dated: 29.8.2002. Read:
1. G.O. (Ms.) No.115, Prohibition and Excise Department, dated 22.6.2001.
2. G.O. (Ms.) No.128, Prohibition and Excise Department, dated 8.7.20 02
3. G.O. (Ms.) No.129, Prohibition and Excise Department, dated 8.7.20 02.
4. G.O. (Ms.) No.130, Prohibition and Excise Department, dated 8.7.20 02.
5. G.O. (Ms.) No.176, Prohibition and Excise Department, dated 30.7.2
002.
6. G.O. (Ms.) No.180, Prohibition and Excise Department, dated 12.8.2
002.
Read also:
7. From the Supreme Court of India final judgment dated 26.8.2002 in SLP
No.14735 of 2002.
ORDER:
The Supreme Court of India in its judgment dated 26.8.2002,
seventh read above has dismissed the Special Leave Petition. Pending
implementation of the judgment of the Supreme Court of India, the Government
have decided that the licences of willing licensees whose licences have
extended for two spells, namely, from 1.8.2002 to 15.8.2002 and from 16.8.2002
and 31.8.2002 may be extended for a further period from 1.9.2002 to 15.9.2002.
2. Accordingly the Government direct the Commissioner of Prohibition and
Excise to issue directions to the various licensing authorities to extend the
licences of all licensees who desire such extension for a further period of 15
days from 1.9.2002 to 15.9.2002, subject to the payment of the proportionate
privilege amount and proportionate licence fee for the period so extended.
BY ORDER OF THE GOVERNOR
R. BALAKRISHNAN
SECRETARY TO GOVERNMENT”
11. In view of the above discussion, the irresistible conclusion
is that the Government was not willing to renew the licences of the existing
licencees until the decision is given by the Supreme Court. By giving
extensions in three spells of 15 days each in G.O. Ms.Nos.176, 180 and 189,
dated 30.7.2002, 12.8.2002 and 29.8.2002 respectively, the Government made it
clear that it was re sorting to clause 4 of the judgment of the Division Bench
dated 24.7.2002. The Government cannot be permitted to say that it can resort
to have the relief in clause 4 mentioned above annulling the right of the
petitioners, in fact a substantive one, granted in clause 3 of the judgment of
this Court dated 24.7.2002. It is the Government which had prevented 4,632
applicants from remitting the whole of the licence fee and privilege amount
and as such is obliged to receive the balance of the privilege amount after
giving credit to the rental paid for 45 days as also the rentals from the
existing licensees which have been deposited for a period of 3 months pursuant
to the order of the learned single Judge dated 16.7.2002 because we are told
at the Bar that the Government had refunded the said three months rental only
to some of the applicants and not to all.
In result, we hold
1. that the 4,632 applicants, who had filed applications with fee thereon and
paid proportionate privilege amount and proportionate licence fee by the
closing date of 31.7.2002 shall be entitled to remit the balance amount after
making the adjustments as mentioned above by 30 .9.2002 (upto 5.45 p.m.);
2. in order to avoid controversy, we direct the above applicants to remit the
amount by demand draft;
3. on compliance of the above condition, the said applicants shall be
entitled for the renewal of licences;
4. on failure to do so, the Government shall be at liberty to deal with the
defaulting shops, as it deems fit; and
5. it is needless to mention that other shops not covered by the above
clauses shall be dealt with by the Government as it deems fit.
All the W.Ps. and W.P.M.Ps. are disposed of accordingly.
(B.S.R., CJ) (D.M., J)
sm/bh
25.09.2002
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