HIGH COURT OF JUDICATURE, CHHATTISGARH AT BILASPUR
Writ Petition No. 45 of 2004
Panchu Ram Deshmukh, aged about 30 years,
S/o Late Shri Som Nath Deshmukh,
Occupation - Business, R/o village-
Titurdih, Tehsiland District - Durg (C.G.).
...Petitioners
Versus
1. State of Chhattisgarh,
Through Secretary Department of
Excise, Mantralaya, D.K.S.
Building, Raipur (C.G.)
2. The District Excise Officer, Durg, Tehsil and District-Durg
(C.G.).
3. The Commissioner (Excise) Raipur, Tehsil and District-
Raipur (C.G.).
4. The Additional District Excise Officer, Durg, Tehsil and
District-Durg (C.G.).
5. Ajit Singh, Contractor, FL 1, Dandi Lohara, District -
Durg.
6. Gulbir Singh Bhatia, Contractor FL 3, Hotel G.S. Dalli
Rajharra, District - Durg.
7. Shri Faghu Ram Jarri, Contractor FL 3, Hotel Mid Town,
Dalli Rajharra, District - Durg.
...Respondents
! Petitioner by Shri Ravindra Shrivastava, Senior Advocate
with Shri Awadh Tripathi, Advocate.
^ Respondents No. 1 to 4 by Dr. N. K. Shukla, Additional
Advocate General with Shri Ranbir Singh, Govt. Advocate.
Respondents No. 5 to 7 by Shri Anand Kumar Tiwari,
Advocate.
Hon'ble Shri L.C. Bhadoo, J.
Press any key to continue ...
Dated : 03/02/2004
: Order
O R D E R
(Passed on 3rd February, 2004)
1. The petitioner has preferred this writ petition under
Article 226/227 of the Constitution of India whereby the
petitioner has challenged the order dated 27.12.2003 passed by
the Deputy Excise Commissioner, Raipur whereby the Deputy Excise
Commissioner clarified and modified the order dated 17.7.2003
Annexure P/3 passed by the Collector (Excise) District- Durg
mentioning therein that in view of the clause (a) of sub-rule
(6) of the Rule- 8 of the Chhattisgarh Foreign Liquor Rules,
1996 (hereinafter referred as `Rules 1996′), the F.L. 3 licence
holders are entitled to take liquor from any of the three shops
of FL-1 mentioned at Item No. 20 and 21 of the Collector’s order
Annexure P/3.
2. The brief facts giving rise to filing of this petition are
that the petitioner herein is a licence holder of FL -1 at
Jharandalli of Dalli Rajhara Group for the year 2003-2004 up to
31st March, 2004, whereas the Respondent No.5 is also a holder
of FL-1 licence of Dodilohara shop District-Durg and Respondents
No. 6 and 7 are FL-3 licence holders of Dallirajhara. As per the
Excise Rules FL-1 licence holders are those licence holders in
which the licence in Form F.L. 1 shall be disposed of by
auction/tender or under the `Fee – per-bottle-system’ or a
combination of both the systems or in such other manner as the
State Government may from time to time, by general or special
order direct. The licensee, holding a licence in Form F.L. 1,
shall sell foreign liquor in sealed bottles to consumers and to
F.L. 2, F.L. 3 and F.L. 5 licensees. F.L. 3 licence holders are
entitled to sell foreign liquor for consumption on the licensed
premises to residents of such hotels for their own use or that
of their guests and other casual visitors, with meals and
snacks. This licence may be granted to hotels having both
lodging and boarding facilities of such scale and standard as
may be determined by the State Government. Therefore, the
Respondents No. 6 and 7 who are F.L. 3 licence holders are
hoteliers, as per the licence condition, they are supposed to
purchase the foreign liquor as per their requirement from the
F.L. 1 licence holders after obtaining permit from the Officers
of Excise Department Respondents No. 2 & 4. The petitioner and
Respondent No.5 who are F.L. 1 licence holders are entitled to
sell foreign liquor in sealed bottles to the consumers and F.L.
3 licence holders.
3. The petitioner and Respondent No.5 got the F.L. 1 licence
for the period 2003 – 2004 i.e. up to 31st March, 2004. The
petitioner’s shop is at Jharandalli whereas the Respondent
No.5’s shop is at Dallirajhara. As per the case of the
petitioner the Respondents No. 2 and 4 used to issue transport
permit in favour of the petitioner’s shop for lifting the liquor
by Respondents No. 6 and 7 for consumption and use in their
hotel. As per the order Annexure P/3 the Respondents no. 2 and 4
are required to issue permit to the Respondents No. 6 and 7 to
lift the foreign liquor from his shop in the first instance and
in case a particular variety of liquor is not available with the
petitioner then the Respondent No. 2 and 4 are required to issue
a permit to the Respondents No. 6 and 7 to lift that particular
liquor from Balod shop which is at serial No.2 in Annexure P/3
and further if that particular liquor is also not available at
the shop situated at Balod then the Respondents No. 2 and 4 are
required to issue permit to the Respondents No. 6 and 7 to lift
the liquor from Dodilohara shop i.e. the shop of the Respondent
No.5. It has been specifically mentioned in the order Annexure
P/3 passed by the Collector and this practice was continued in
the year 2002-2003 and thereafter till 12.12.2003. However, the
Respondents No. 6 and 7 are interested to lift the liquor from
the shop of the Respondent No.5 because the owner of the shop of
Respondent No.5 is close relative of the Respondent No. 7
therefore from December, 2003 the Respondents No. 2 and 4
started issuing permit in favour of Respondent No.5 which is
evident from Annexure P/5. The shop of the Respondent No.5 is
situated in other group i.e. Balod and not in Dallirajhara group
and as per the grouping scheme the Respondents No. 6 and 7 are
required to lift the liquor from the petitioner’s shop which
falls in Dallirajhara group and this act of the respondents has
started affecting the business of the petitioner as the
petitioner is paying monthly fee to the tune of Rs. 6,34,789/-.
In order to achieve their object the Respondent No. 7 filed a
civil suit before the Additional District Judge, Balod seeking
order that the Excise Department be directed to allow him to
lift the liquor from the shop of Respondent No.5. When the
Respondent No.7 could not succeed in that civil suit he made a
representation to the Excise Commissioner and the Excise
Commissioner without giving any opportunity of hearing and
giving notice to the petitioner allowed the representation of
the Respondent No.7 and modified the order passed by the
Collector Annexure P/3 vide impugned order dt. 27th December,
2003. Therefore, the order impugned dt. 27.12.2003 (Annexure
P/5) be quashed and the Respondents No. 2 and 4 be directed to
issue permit in favour of the petitioner as per Annexure P/3.
4. Return has been filed on behalf of the respondents and all
the respondents have mentioned that as per clause (a) of sub-
rule (6) of Rule 8 of the Rules 1996 the Respondents No. 6 and 7
are entitled to lift the foreign liquor as per their requirement
from any one of the three shops i.e. the shop of the petitioner
situated at Jharandalli, shop at Balod or shop at Dodilohara;
that being the sprit of the above provision of clause (a) of sub-
rule (6) of Rule 8, the Deputy Excise Commissioner issued the
impugned order Annexure P/5 dt. 27.12.2003 and even prior to
that on 13/15-5-2002 the Additional Excise Commissioner issued a
similar order and the Collector was under an obligation as per
clasue (a) of sub-rule (6) of Rule 8 to issue directions for
issuance of permit under the order passed by the Excise
Commissioner for lifting of the foreign liquor from anyone of
the three shops mentioned above and the petitioner’s petition is
devoid of any merit and the same be dismissed.
5. I have heard Shri Ravindra Shrivastava, learned Senior
counsel for the petitioner, Dr. N. K. Shukla, learned Additional
Advocate General for the Respondents No. 1 to 4 and Shri Anand
Kumar Tiwari, learned counsel for the Respondents No. 5 to 7.
6. Learned Senior counsel for the petitioner argued two folds,
that as per the sprit of clause (a) of sub-rule (6) of Rule 8 of
Rules 1996 the order of the Collector Annexure P/3 is correct
and it is in consonance of the sprit of the rule, whereas the
order of the Deputy Excise Commissioner Annexure R-7/5 dated
27.12.2003 and the Additional Excise Commissioner dt. 13/15-
5.2002 are not in consonance with the sprit of the rule. The
second argument of learned counsel for the petitioner is that
the Deputy Excise Commissioner passed the order dt. 27.12.2003
on the representation made by the Respondent No.7 without giving
any opportunity of hearing and issuance of show cause notice to
the petitioner which is violative of the principles of the
natural justice.
7. On the other hand learned counsel for the respondents
argued that the impugned order of the Deputy Excise Commissioner
dt. 27.12.2003 and 13/15-5-2002 of Additional Commissioner are
in consonance with the above Rule and the order Annexure P/3
passed by the Collector is not in consonance with the sprit of
the Rule.
8. In order to appreciate the arguments advanced by learned
counsel for the parties, it is useful to reproduce the Relevant
Rules. Clause (a) and (b) of sub-rule (6) of Rule-8 which are
as follows:-
(6) Attachment of certain licences with the nearest F.L. 1,
F.L. 1A, F.L.1AA, F.L.1AAA, F.L. 10 or F.L.10A licences –
(a) F.L. 2, L.L.3, F.L.4, F.L.4A or F.L. 5 licensee shall
purchase foreign liquor from such F.L. 1, F.L. 1A, L.F. 1AA
or F.L. 1AAA licensee of the district as may be specified
by the Collector in accordance with the general directions
of the Excise Commissioner or State Government. Purchase of
such brands or labels, that are not available with any F.L.
1, F.L. 1A, F.L. 1AA or F.L. 1AAA licensee of the district,
from any similar licensee of any other neighbouring
district of the State, may be authorized by the Excise
Commissioner in special circumstances.
(b) Similarly, Every F.L. 1, L.L. 1A, F.L. 1AA or F.L. 1AAA
licensee shall, after paying duty and bottle fee in his
district, procure his supplies of liquor from any F.L.10,
F.L.10-A licensee functioning in the division in which the
district is situated. In case a brand or label of foreign
liquor is not available with any F.L. 10, F.L. 10A licensee
of the division, or if certain special circumstances
warrant so, such F.L. 1, F.L. 1A, F.L. 1AA or F.L. 1AAA
licensee may be permitted by the Excise Commissioner to
purchase such brand or label from any F.L. 10, F.L. 10A
licensee operating in any other neighbouring division.
9. The heading of the clause (a) of sub-rule (6) of Rule 8
starts with the wordings `attachment of certain licences with
the nearest F.L. 1,’ and it has been mentioned in this Rule
that the licensee shall purchase foreign liquor from such F.L.1
licensee as may be specified by the Collector of the district in
accordance with the general directions of the Excise
Commissioner or the State Govt. So this Rule lays down that the
F.L.-3 licensee is required to lift the liquor from the nearest
F.L.1 shop attached with the F.L.3 shop and the language of the
Rule is in singular form not in plural form and it is not
disputed that the nearest shop F.L. 1 is of the petitioner’s
shop which is said to be existing between the premises of the
Respondents No. 6 and 7, whereas the shop of Balod and
Dodilohara are situated at a distance of more than 5 to 6 k.m.
and looking to the sprit of this Rule the Collector Excise while
issuing the licence to the Respondents No. 6 and 7 issued the
order Annexure P/3 in which the Respondent No.7 has been shown
at Sr. No. 21 who is F.L. 3 licence holder and against his name
three shops have been shown at No.1 Jharandalli, No.2 Balod, and
No.3 Dodilohara. In this order at Sr. No. 20 name of Respondent
No.6 is shown who is also F.L. 3 licence holder and against his
name also three shops are shown i.e. at No.1 Jharandalli, No.2
Balod, and No.3 Dodilohara. The petitioner’s shop being nearest
shop of the Respondents No. 6 and 7, the Collector issued this
order that in the first instance the F.L. 3 licensee will lift
the liquor from shop No.1 and in case the required liquor is not
available at that shop then they will lift the liquor from the
No.2 shop and in case if with him also that liquor is not
available then they are entitled to lift the wine from the shop
No.3 after obtaining permit from the Respondents No. 2 and 4 and
this order is not only in respect of the petitioner and
Respondents No. 6 and 7; this order is in respect of 32 licence
holders and against each F.L. 3 and F.L. 4 licence holders three
shops have been shown from where those licensee are to lift the
liquor in order of serial No. 1 to 3, as mentioned above. In
clause (a) of sub-rule (6) of Rule 8 the words has been used
that `licensee shall purchase foreign liquor from such F.L. 1′;
it has not been mentioned in this sub-clause that the F.L. 3
licensee is entitled to lift the liquor from anyone F.L. 1
licensee, and in second part of clause (a) it has further been
made clear that in case that particular liquor is not available
in that attached shop then F.L. 3 licensee can take liquor from
any other F.L. 1 licensee of other district and that is what has
been done by the Collector in his order Annexure P/3. In this
connection if we look into clause (b) it makes more clear in
which it has been specifically mentioned that `F.L. 1 licensee
shall, after paying duty and bottle fee in his district, procure
his supplies of liquor from any F.L. 10. F.L. 10 licensee
functioning in the division in which the district is situated. `
Therefore, in clause (a) the word `such licensee’ has been used
which specifies that F.L. 3 licensee has to lift the liquor from
the attached F.L. 1 shop whereas in clause (b) the word `any
such shop in the division’ has been used, which shows that from
any shop of F.L. 10 the F.L. 1 licensee can lift the liquor.
Therefore, the legislature with specific purpose and has
deliberately used the word `such’ and `any’ in clause (a) and
(b) that is why as per the petitioner’s case in the year 2002-
2003 the practice which has been ordered in Annexure P/3 was
being followed and same practice was adopted for 2003-2004 as
per Annexure P/3 and even till December, 2003 from April 2003
this practice was going on but all of a sudden abruptly the
Deputy Excise Commissioner on the representation of the
Respondents No. 6 & 7 changed the scheme without hearing and
without giving notice to the petitioner and that too ignoring a
stand taken by the department before the Additional District
Judge in civil Court where the Respondent No.7 had filed a civil
suit challenging the order of the Collector (Excise) Annexure
P/3. In the circumstances merely on the representation of the
Respondent No.7 during the pendency of the civil litigation
regarding same issue and that to contrary to the stand taken by
the department in the written statement, learned Deputy Excise
Commissioner ought to have refrain himself from passing such an
order that too without giving opportunity to the petitioner and
particularly when the order of the Collector (Excise) Annexure
P/3 was in consonance with the existing practice and that was in
consonance with the sprit of the sub-rule also.
10. A perusal of the written statement filed by the
respondent/State before the Additional District Judge shows that
the Department had taken the stand in para-9 of the written
statement that the plaintiff i.e. Respondent No.7 herein, is not
entitled for the relief sought that he may be allowed to lift
the liquor from any of the three shops and in this written
statement it has also been mentioned that Jharandalli shop is
nearest shop to the Respondents No. 6 and 7 and thereafter the
shop of Balod and then the shop of Dodilohara are situated, and
it has come on record that the Respondent No.5 is relative of
Respondent No.7 that is why he wants to lift the liquor from his
shop even though it is at some distance.
11. In view of the above, the order/clarification issued by the
Deputy Excise Commissioner Annexure R-7/5 dated 27th December,
2003 and the circular dt. 13/15-5-2003 issued by the Additional
Commissioner (Excise) are contrary to the provisions of clause
(a) of sub-rule (6) of Rule-8. Therefore, the impugned order of
the Deputy Excise Commissioner is liable to be set-aside on this
ground.
12. It is an admitted position that the Deputy Excise
Commissioner without giving show cause notice to the petitioner
or opportunity of hearing, only on the the representation made
by the Respondent No.7, issued the impugned order modifying the
existing order Annexure P/3 which has resulted in affecting the
business of the petitioner and as has been held by the Apex
Court in the matter of Mahabir Auto Stores & others Vs. Indian
Oil Corporation & others, reported in A.I.R. 1990 S.C. 1031
that the `State acts in its executive power under Article 298 of
the Constitution in entering or not entering in contracts with
individual parties. Article 14 of the Constitution will be
applicable to those exercise of power. The exercise of powers
must be governed by the rule of law and must be informed by
reasons. So whatever be the activity of the public authority it
should meet the test of Article 14 of the Constitution. In that
case a firm was carrying on the business of sale and
distribution of all types of lubricants for a period of 18
years, supply of lubricants by the Indian Oil Corporation was
stopped without any notice or intimation given to the firm, the
action of the Corporation was held arbitrary.
13. Similarly the Hon’ble Apex Court in the matter of Canara
Bank and others Vs. Shri Debasis Das and others reported in JT
2003 (3) SC 183 has held that the adherence to the principles of
natural justice as recognized by all civilized States is of
supreme importance when a quasi judicial body embarks on
determining disputes between the parties or any administrative
action involving civil consequences is in issue. These
principles are well settled. The first and foremost principle is
what is commonly known as audi alteram partem rule. The
principle is that no one should be condemn unheard. Notice is
the first limb of this principle. It must be precise and
unambiguous. It should appraise the party determinatively the
case he has to meet. Time given for the purpose should be
adequate so as to enable him to make his representation. In the
absence of a notice of the kind and such reasonable opportunity,
the order passed becomes wholly vitiated. Thus, it is but
essential that a party should be put on notice of the case
before any adverse order is passed against him. This is one of
the most important principles of natural justice. It is after
all an approved rule of fair play.
14. It is an admitted position that as per the order Annexure
P/3 passed by the Collector, since April, 2003 the Respondents
No. 6 and 7 were continuously lifting the liquor in the first
instance from the shop of the petitioner and so was the case in
the previous year also but learned Deputy Excise Commissioner
abruptly on the representation made by the Respondents No. 6 and
7 changed the order Annexure P/3 without giving opportunity and
notice to the petitioner and which has affected the business of
the petitioner and has resulted into affecting the business of
the petitioner therefore the same being violative of Article 14
and 19 (1) (g) of the Constitution of India. Therefore, on this
ground the impugned order is liable to be quashed.
15. The Respondents No. 5 to 7 have raised the objection that
instead of filing this petition the petitioner ought to have
approached the appellate authority i.e. Excise Commissioner
which has not been done. This plea raised by the Respondents No.
5 to 7 is without any force for the reason that in the first
instance even though the order impugned dt. 27.12.2003 has been
issued by the Deputy Excise Commissioner but the same has been
passed on behalf of the Excise Commissioner therefore there was
no reason for the petitioner to file appeal before the Excise
Commissioner. Therefore, there was no reason for the petitioner
to file an appeal before the Excise Commissioner even otherwise
it is a rule of discretion and not a rule of law and where the
principle of natural justice is violated the petitioner is
entitled to file writ petition directly. In the matter of
Harbanslal Sahnia & another Vs. Indian Oil Corporation Ltd. &
others reported in (2003) 2 SCC 107 it has been held by the
Hon’ble Apex Court that the High Court may exercise it writ
jurisdiction in at least three contingencies; (i) where the writ
petition seeks enforcement of any of the fundamental rights;
(ii) where there is failure of principles of natural justice; or
(iii) where the orders or proceedings are wholly without
jurisdiction or the vires of an Act is challenged. In the
present case as has been held above, principles of natural
justice has been violated, therefore the plea raised by the
Respondents No. 5 to 7 is without force.
16. In the result the petition succeeds and the petition of the
petitioner is allowed, order Annexure R-7/5 dt. 27.12.2003
passed by the Deputy Excise Commissioner in supersession of
order passed by the Collector (Excise) Annexure P/3 is quashed
and set-aside.
Sd/-
L.C.Bhadoo
JUDGE
Thakur