(By Shri.' Arum iiK'u-i:)ar,'iAdlV'oeiate for Crest Law Partners) i\/I'S*I.L Building, No.36, Cunningham Road, B ~-Managing Director. 3 32. Company Secretary and IN THE HIGH COURT OF KARNATAKA AT BANG..aLoRgE,i,, DATED THIS THE Gap"? DAY OF NOVEMBER', may " BEFORE: it B it C THE HON' BLE MR. JUSTICE ANAND._BYRgA'i2,I§;DDi't--,i'II " WRIT' PETITION No. 13665 2008' (EXC-IS]i;) BETWEEN: it i B C R ii SKOL Breweries Limited, A company incorpora_te~d un,der,th'e C' Provisions of the C0I§IpaaIIies«Act_, 1955:-, B V And having itsioftiiéeat Jalahaolglig C Road, Yeshw,ant'h,pur;:.Bang_alor'e --' 5..6_(V)WO322 And herein repres.e»nted3";by hishead legal And authorized 1"epresj'e-11tati\'fe__ --- ' Mr. Gobind"Chandi1"a,_man~i, "* -. ' " v . . PETITIONER 1," Mysore"Sa_le_s International Limited A' c_ompanyi'.i--nCorporated under the V Provisions ofthe Companies Act,'E956 And h.i2l'4/,_ii'1g their registered office at Bangalore -- 560 052 And herein represented by its Deputy General Manager, Mysore Saies lnternationai Limited, MSIL Building, No.36, Cunningham Road, Bangalore -- 560 052. ...RESPONDENTS
?’>
(By Shri. Padmanabha Mahale, Senior Advocate for
Angadi, Advocate for Respondent No.l and 2)
This Writ Petition is filed under A_rticle.sz th-ye.’
Constitution of India, praying to declare’ that the ‘vd.etermin–ati.Qn”._VV
made by the Respondents vide ‘the impugned orderyyy dated , *
25.07.2008, vide Annexure–D, is niii.l_ and void..and’not;estab1ish
in the eye of law and that it is—-not.in~.,comp’1’iance.’jwith the
directions of the Hon’b1e’SLipre1t-he Cour_tnvi’de its order in SLP
N().4728–4732 of 1989 (Civ1i1_e_Ap’peii1?;, datevd._l’.’3..2.2003 and the
further direction of this Honfble E7oi1prt’ivide~~.’r;<)'urt order dated
15.6.2005 in W.P,No.,_47I2£i. of:.20.05r.._ 9
This peri'r'ieii.'iieei2iirg.beee..yhe.aryd er 84.08.2010 and reserved
and comingon for'pi:onou.ncen'ie'1it_.of orders this day, the Court
deliveredthe foi'1ofwuingii;:' _ _
Heard the leariiediiicounisiijrl for the parties.
facts 'b~rie_fi_y.stated are as foliowsz
' all''M[s';.,Mysvore—-Breweries Limited (Hereinafter referred to as
'Mfiiifiiiifior is a company engaged in the manufacture of
-4 u._be,er. It i’s,V1’_n-erged with the petitioner herein. The present dispute
relates to the affairs of MBL. The Karnataka Excise
of Indian and Foreign Liquors) Rules, 1.968 (hereinafter
‘referred to as the ‘Excise Rules’ for brevity) provides for licensing
and sale of Indian and foreign l’%xor. Rule 3(l l.) of the Excise
the amended Rule had come into effect. It was only ingflie:”*year
1994, that MSIL placed orders on the petitioner for
and it is the contention of the petitionerihthat the ent_ire._stoc-ks
beer manufactured by it. was to be taken’lde.livery,Qf».by
which lacked the infrastructure to act» entire
stock of liquor and beer It was in
that background that__though,.a..inonoploly to be created
by the issued licences to
various Section 3(ll) of the
Excise Ru.lesr and l’lz’1~.lft’i.,.f1pl’1i'<t1£is'»ll'3t.-if'was'driven to withdraw its order
nominating iithelsole distributor with effect from
ttttt
i" one other manufacturer, M/s Khoday
Distilleriesp. (hereinafter referred to as the 'KDL' for
l""<«.__brevity) also challenged the amendment to the Rules and
A iultirnatleily failed before the Supreme Court, which dismissed the
ilfappeal and that petitioner was directed to pay compensation to
if MSIL. This may have prompted MSIL to seek a review of the
order permitting this petitioner to withdraw the Special Leave
Petition, that it had fiied nine years after its disposal. The review
customers was less than the rate at which products were
to MSEL. The officials of MSIL however, remained-'.sl{epticaelii arid'
on several occasions had inspected the" docu«me.nts,«pertaining to;
sales effected by the petitioner had even"obtaineid;copiesiall a
sale invoices for the period l994–li9'SlE[';»duri.ng
had placed orders for supplyfof peridorreriend MSIL
by an order dated to pay 5%
on all sales effected by
the petitioner, that the petitioner
had on its customers that was to
be paid over-..toaccordingly, the petitioner had
deriiandof MSIL before this court, on the ground
"th_at' therelwpas, lnoidetermination, which was essential, in order to
raise such a as permitted by the Supreme Court.
_ T "flair; court, by its order dated 15.6.2005 held that MSIL
not made a proper determination of the amount demanded
the demand was quashed and the matter remitted to MSIL to
x afford an opportunity of hearing to the petitioner and to make a
determination in the manner contemplated in the order of the
Supreme Court which was as follows:
g
It is therefore the complaint of the petitioner that there is no
determination on the basis of material placed befQre_44i’tthe
respondents in holding that the petitioner i-‘t:_s___”i_
customers 5% towards margin money playable to ‘~
other hand, reliance is placed on to
which the petitioner proceed on the
assumption that the.petitioner.:.was.’iiliahleito of its entire
turnover to of the apex court
was to hmpidpparp petitioner had collected
money frorn paid to MSIL. The burden was on
MSIL to estaibl.ipshv.that.thepetitioner had indeed collected any such
on the”‘ac.count of MSIL. The onus could not be
“al_1il’te_d’on~.t:he4″petit.ioner to establish the negative and the entire
records of the petitioner having been placed at the disposal of the
r’espondei3.rs’, a summary direction as aforesaid, is therefore
_ w=ipth’outi any basis.
It is sought to be pointed out that in the course of cross-
examination of an erstwhile officer of the petitioner, four invoices
in which the value billed to certain third–pa1*ties was shown as
higher than the value at which it was sold to l\/ISlL . These were
§
11
would not show that an additional sum of 5% was cl.aimed__from
the said thirdwparty purchasers.
On the other hand, as was evident chartered”
acCountant’s report on behalf of thel’»._petitioi1eir;,that the::~-its/ra’te_e
charged to MSIL was in fact highe_r’t~hxan the av/erage:iratechargeld
by the petitioner on its other custo.naers._ but taken as a
proof of the petitioner having’ during the
relevant period. “present petition is
filed seeking to iiivdernand as not being in
accordanceiixvithtthe ofilsluprerne Court and being
without basis. ‘
3,:_ The learnedvcottnsellappcaiing for the petitioner would
nreiteratie above sequence of events and take this court through
the re’cor.d”to°de.n1o’nstrate the unjust demand made.
Theiespondents not having chosen to file any
é1até.n¥e,nt of objections, the learned Senior Advocate Shri
Mahale appearing for the counsel for the respondents
iihtvould submit that an application has been filed for dismissal of
the writ petition, which in effect, contains averments which
3
would be in the nature of statement of objections to
petition and he would contend that firstly, the presentifvxritpetitioii’: V’
is not maintainable as there is a conteraptiilpetitioln p.endi:1_g before;
the apex Court and secondly that the petitiion laclcsv_r’nieri’t
petitioner is bound by the orders pas’se:d»by the”apex:iCoLiivt. WMSIL
has been appointed as a so.l_e’~«distributo1*:. the Rules and the
amended Rules prescribe th.at:._the’ldistri’b’t1yto’rl?’s-.’licence shall be
issued only to such -r{o’mp.alti.ies;. vorlcuritrolled by the State
Governrrigntfppp adiripitted thegpetiitioner, the amended Rule
was challenged bvllllstevepralll”ti.an’u.f’ac’turers including the petitioner.
The petitioner .withdra$vn the special leave petition before
“*th_e Ec__our_t beifore..___r.h’e amended Rule was enforced, has
“ra_ischi’evo’t1sly.l’charged commission on the account of the MSIL
and has un_iustl–y”lenriched itself taking advantage of the order of
i””–__ltlt,x apex” coiurt, which indicated that no compensation would be
in view of the withdrawal of the special leave petition,
iihthough such direction was issued that the petitioner would be
i liable to pay compensation in the event that the appeal should fail
and the other manufacturers who had ultimately failed before the
apex court were required to pay compensation, which they had
%
15
court, an attempt was made by this court to ensure that there_”be”a
further determination of any excess amounts -eihargeid’-it V’
coilected by the petitioner on the accsattteor,r&tsIL,”ae;;i1sgsai,-,
having regard to the scanty material oriV..wil’rich
raise the demand while negatingiithiejivol1iniinoi1g:h’.=doetiinentary
evidence which was ‘estabiish that the
petitioner had indeed iivhich was made
over to MSil.,.. resisted. It is
there is no scope for
interference ‘of the express direction of the
Supreme Co1irt,_Vii » In that,_vvieiv of the matter, it is appropriate that
“*th_e approach.._.t.he Supreme Court itself in respect of its
on the face of it, in the epinien of this court, is
V apparently
regard to the order”-of this court dated 25.3.2010,
.___”tvherein it was observed that since there was no precipitative
.. factiott initiated by the respondents, there was not need to consider
the ra er for interim relief while reservin libert to the
I3 Y T 3 Y
petitioner to seek interim orders at an appropriate time, by Virtue
of the dismissal of this writ petition, coercive measures being
5
16
taken against the petitioner is imminent and therefore, jo1*t.ife«rV’t-oi
enable the petitioner to approach the apex ”
appropriate relief, the petitioner is entitileictto proteciteti ‘front
any such precipitative action for 21 ti.mited’per’iod of ei_ght’v/’eek4s’;’~.pi i’
Accordingly, the petition spta-nt1sv.d’i’sp_oseti”of._inyterms as
above. The respondents sha1l_e.’no’t..Vtia1§;e tiniyprecipitative action
against the petitio:ner:.ifor 3 F:!A€ri(:)f 6iightV.wee1:.’s from today.
Sd/-:
Tudge
[IV