{"id":34303,"date":"2009-11-24T00:00:00","date_gmt":"2009-11-23T18:30:00","guid":{"rendered":"https:\/\/www.legalindia.com\/judgments\/sheo-narayan-singh-vs-state-of-jharkhand-ors-on-24-november-2009"},"modified":"2016-11-15T22:56:59","modified_gmt":"2016-11-15T17:26:59","slug":"sheo-narayan-singh-vs-state-of-jharkhand-ors-on-24-november-2009","status":"publish","type":"post","link":"https:\/\/www.legalindia.com\/judgments\/sheo-narayan-singh-vs-state-of-jharkhand-ors-on-24-november-2009","title":{"rendered":"Sheo Narayan Singh vs State Of Jharkhand & Ors on 24 November, 2009"},"content":{"rendered":"
Jharkhand High Court<\/div>\n
Sheo Narayan Singh vs State Of Jharkhand & Ors on 24 November, 2009<\/div>\n
                IN THE HIGH COURT OF JHARKHAND AT RANCHI\n                              W.P. (C) No. 1124 of 2009\n                                    With\n                              W.P.(C) No. 1661 of 2008\n\n                                   With\n                             W.P.(C) No.1518 of 2005\n                                   With\n                             W.P.(C) No. 2341 of 2006\n                Sheo Narayan Singh...       ...... Petitioner [in W.P(C) 1124\/09]\n                Bishwanath Shaw & Company............Petitioner [in W.P(C) 1661\/08]\n                R.S.K. Credit & Security Pvt. Ltd...... Petitioner [in W.P(C) 1518\/05]\n                Sanju Singh                  ............. Petitioner [in W.P.(C) 2341\/06]\n                                                      Versus\n                The State of Jharkhand & Ors. ...       ...        ...   Respondents\n                                         ------\n                CORAM:          HON'BLE MR. JUSTICE SUSHIL HARKAULI\n                                         ------\n                For the Petitioner:      Mr. Prabir Chatterjee, Mr. AbhishekKumar,\n                                         Mr. Indrajit Sinha, Mr.Sumir Prasad\n                For the Respondents:     Mr. R. Krishna\n                For the Intervener:      Mr. D. V. Pathy, Mr. Abhishek Kumar\n\n                                             ------\n20\/24.11.2009<\/pre>\n
          These four writ petitions raise a common question, and have
\n                accordingly been heard together and are being disposed of by this
\n                common order.\n<\/p>\n
                       W.P.(C) No. 1124 of 2009 and W.P.(C) No. 1661 of 2008 are
\n                by licensees of wholesale foreign liquor, who are seeking renewal
\n                of their licenses after having completed the five year period for
\n                which the license was granted.\n<\/p>\n
                       W.P.(C) No. 1518 of 2009 and W.P.(C) No. 2341 of 2006 are
\n                seeking a decision to the effect that after the maximum period {not
\n                exceeding 5 years prescribed by Rule 44 (5)} for which the license
\n                was granted, no wholesale license can be renewed and a fresh
\n                settlement must be made in which the existing licensees (who have
\n                completed their five year period) may also participate.\n<\/p>\n
                       The refusal on part of the Excise Department of Jharkhand
\n                Government to renew the licenses after the expiry of the 5 year
\n                period is sought to be justified on the basis of Rule 44 (5) of the
\n                Rules under Bihar & Orissa Excise Act, 1915 and clause (xiii) of
\n                the Excise Policy of the State for the year 2008.\n<\/p>\n
                       Thus the issue involved turns on Rule 44 (5) and clause (xiii)
\n                of the Excise Policy 2008.\n<\/p>\n
                       Rule 44 (5) reads as follows:\n<\/p>\n
                               2<\/span><\/p>\n
         “44.Licences for the wholesale or retail vend of excisable
\narticles may be granted for one year, from the 1st April, to the 31st
\nMarch, subject to the following provisions:-\n<\/p>\n
[(1)……………………………..\n<\/p>\n
 (2)……………………………..\n<\/p>\n
(3)……………………………..\n<\/p>\n
(4)……………………………….
\n(5) Wholesale licenses for the supply and sale of excisable articles
\nmay be granted for any numbers of years not exceeding five, as
\nthe Board may decide in each case.]”\n<\/p>\n
         In W.P.(C) No. 2341 of 2006, a counter affidavit has been
\nfiled on behalf of the respondent nos. 1, 2, 3 & 5 who respectively
\nare :\n<\/p>\n
(i)      State of Jharkhand\n(ii)     The Secretary-cum-Commissioner, Excise Department, State\n         of Jharkhand, Ranchi.\n(iii)    The Excise Commissioner, Jharkhand, Ranchi.\n(iv)     The Deputy Commissioner, Palamau at Daltonganj.\n\n\n<\/pre>\n
         The said counter affidavit has been sworn by A. Kujur,
\nExcise    Superintendent,     Palamau-cum-Latehar-cum-Garhwa         i.e.
\ncovering three districts.\n<\/p>\n
         For ready reference, the contents of para-8 to 11 of the said
\ncounter affidavit are relevant and are produced below:-\n<\/p>\n
         “8. That it is stated that before giving parawise reply of the
\nwrit application at this stage, it is just and proper to give the
\nmanner of settlement of licences in Form-I i.e. wholesale licence of
\nIMFL as per direction of this Hon’ble Court dated………\n<\/p>\n
         9. That it is stated that for settlement of wholesale licence of
\nany district, if vacancy arises advertisement is being published for
\ninvitation of applications in prescribed Form. On receipt of the
\napplication from the interest persons\/parties, scrutiny is being
\nmade as to which of the party\/person is fulfilling all the terms and
\nconditions of the notice. Upon scrutiny if only one person is found
\neligible, then settlement is being made with him for one year with a
\ncondition that his licence will be renewed for the subsequent years
\nif his performance\/conduct is found satisfactory during the last
\nfinancial year and was not a defaulter. But in case more than one
\napplicant after scrutiny are found eligible, then in presence of all
\nthe applicants lottery is being made on the date fixed in the
\n                            3<\/span><\/p>\n
presence of applicant and in this way one person is selected for
\nsettlement of the wholesale licence.\n<\/p>\n
       10. That advertisement is made for settlement of licenses in
\nForm-I as and when any vacancy is created due to non-
\nrenewal\/cancellation of licence of any licencee by the Deputy
\nCommissioner. It is not necessary that in every year fresh
\nadvertisement will be made for settlement.\n<\/p>\n
       11. That it is stated that once settlement for wholesale
\nlicences is made with a person, his licences can be renewed for any
\nnumber of years on year-to year basis subject to the condition that
\nhe applies for renewal and his performance is found satisfactory
\nand he does not violate any terms and conditions.”\n<\/p>\n
       No contrary practice has been shown on the record of any of
\nthis bunch of cases. It is therefore established, and not even
\nattempted to be controverted, that the Rule 44(5) was interpreted
\nconsistently and always understood by all concerned as not
\nexcluding the renewal of a wholesale license after the 5 year
\nperiod. Therefore it will need to be examined whether the Excise
\nPolicy or more specifically clause (xiii) thereof has made any such
\ndifference, as to call for the departure suggested by the State
\nGovernment from the earlier settled interpretation and practice.\n<\/p>\n
       On 26.8.2009, an order was passed which can be found on
\nthe record of W.P.(C) No. 1124 of 2009 which purports to be in
\nrespect of all these four writ petitions. The relevant part of the
\norder reads as follows:\n<\/p>\n
       “Before taking any decision, I consider it desirable, having
\nregard to that facts that the text book of Bihar Excise Act & Rules
\nshown to me appears to be out of date, to have an affidavit of the
\nExcise Commissioner of the State enclosing therewith the latest
\nrules with up-to-date amendments, the latest instructions, if any,
\nissued by any authority empowered to issue such instructions, the
\nlatest excise policy, if any, including the policy immediately prior to
\nthe existing policy with regard to the grant and\/or renewal of
\nwholesale licences.”\n<\/p>\n
       In response, an affidavit of Prawin Kr. Toppo, Excise
\nCommissioner, Government of Jharkhand has been filed. The said
\naffidavit which has been described as supplementary counter
\naffidavit encloses as Annexure-A, the Rules under Bihar & Orissa
\nExcise Act, 1915 of which Rule 44(5) is a part. Annexure-B to the
\n                                       4<\/span><\/p>\n
     supplementary counter affidavit is a copy of the Rules framed by
\n     the Board of Revenue under Section 90 of the Bihar Excise Act,
\n     1915 as adopted in the State of Jharkhand. These Rules under
\n     Section 90 do not have any bearing upon the issue involved.
\n     Annexure-C is a Resolution of the Government dated 21.2.2004
\n     which also is not material, being in respect of retail vend and not
\n     wholesale. Annexure- D is another Resolution dated 07.5.2008
\n     which fixes the license fee and which contains the crucial clause\n<\/p>\n
     (xiii). Annexure -E is another Resolution of 2009 of the Government
\n     refixing the license fee.\n<\/p>\n
             The respondent State is relying upon the Resolution dated
\n     7.5.2008 which is the Excise Policy of the State of Jharkhand and
\n     which has been published in the Gazette of the same date. It fixes
\n     the license fee for wholesale vend of foreign liquor and says in its
\n     clause (xiii) that the wholesale license will be settled with the
\n     proper person\/firm for a maximum period of five years.\n<\/p>\n
             The above clause (xiii) is in the same terms as Rule 44(5),
\n     and is quoted below:\n<\/p>\n
    “(XIII) fons’kh ‘kjkc Fkksd fcdzh dk okf”kZd vuqKk’kqYd dh nj fuEu izdkj gksxk :<\/p>\n
\n\n\ndzzekad                   ftyk dk uke                o\u00d9kZeku eas ykxw okf\"kZd ;Fkk fuf.kZr la'kksf\/kr\n                                                     vuqKk'kqYd '              okf\"kZd vuqKk'kqYd\n1                         jkaph]      iwohZflagHkwe] 5 yk[k #0                 12 yk[k #0\n                          cksdkjks]        \/kuckn]\n                          gtkjhckx\n2                         If'peh       flgHkwe] 5 yk[k #0                      6 yk[k #0\n                          fxfjfMg] iykew\n3                         >kj[kaM jkT; ds vU; 5 yk[k #0                        dksbZ ifjo\u00d9kZu ugha\n                          lHkh ftysa\n\n\n<\/pre>\n
             fons’kh ‘kjkc dh Fkksd vuqKfIr;ksa dks ;ksX; O;fDr@ QeZ ds lkFk
\n     vf\/kdre ikWap fo\u00d9kh; o”kZ rd ds fy;s gh cUnksoLr dh tk,xh A Hkkjr fufeZr
\n     fons’kh ”kjkc ds forjdrk vuqKk\/kkjh ( izi= 19 lh \/kkjd vuqKk\/kkjh) @ ;ksX;
\n     O;fDr @ fofuekZ.kd\u00d9kkZ dEiuh tks vgZrk iwjk djrs gSa dks Hkh fons’kh ‘kjkc dh
\n     Fkksd fcdzh dh vuqKfIr mudks ns; ‘kqYd ij vf\/kdre ikWap o”kZ ds fy,<\/p>\n
     cUnksoLr fd;k tk,xkA”\n<\/p>\n
             It will be noticed from the above that the relevant words
\n     used in clause (xiii) of the Excise Policy are only a reproduction of
\n     the words of Rule 44(5). It is difficult to see how this repetition of
\n                             5<\/span><\/p>\n
the words of Rule 44(5) in the Excise Policy could make any
\ndifference to the settled position.\n<\/p>\n
       Seen from another angle, it has to be considered that if the
\ninterpretation of the State is accepted and wholesale licenses are
\nnot be renewed after the maximum 5 year period, what is to be
\ndone after the expiry of that maximum period of five years
\nmentioned in the Rule 44(5) and Clause (xiii) aforesaid. Except for
\nthe counter affidavit of the Excise Superintendent extracted above,
\nthe Rules, the Excise Policy, the other affidavits and counter
\naffidavits all not very explicit. Thus we have to go by the procedure
\nmentioned in the counter affidavit.\n<\/p>\n
       It is important to keep in mind that as per the said counter
\naffidavit of the Excise Superintendent, if the license is not renewed
\nbut is issued by way of a fresh settlement, the same is not by
\ninviting tenders or auction, so as to procure higher revenue. In
\nfact, the license fee or the revenue to be earned by the State is
\nfixed by the Government as has been done in the aforesaid
\nAnnexures -D & E of the supplementary counter affidavit. If a fresh
\nsettlement is to be made, applications would be invited from
\neligible persons and if there are more than one eligible applicants
\nfor any particular license, the person with whom the license is to be
\nsettled will be picked out by a lottery.\n<\/p>\n
       It may be repeated here that despite ample opportunity
\neven the Excise Commissioner does not say that any new scheme
\nof settlement other than the lottery system has been devised or is
\nproposed. The Excise Commissioner does not even say that it
\nwould be open to the Excise authorities to charge higher license fee
\nthan what has been fixed by the Government.\n<\/p>\n
       Thus, the stand of the State of Jharkhand before this Court
\nis that although the licensee, who worked for past five years has
\nworked properly, given no cause for complaint yet his license will
\nnot be renewed and he must apply afresh and his fate will be
\ndetermined by a lottery, meaning by a pure game of chance.\n<\/p>\n
       It is trite that all State action now, under the Constitution of
\nIndia, must be informed by reason and cannot be whimsical or arbitrary.
\nTherefore every policy, whether in original or by way of departure from
\nthe earlier policy, must logically serve some rational purpose. If it does
\nso, the Court may not go into the advisability of achieving that purpose
\nor the sufficiency of that purpose for warranting departure from the
\nearlier system.\n<\/p>\n
                             6<\/span><\/p>\n
       During the arguments, the learned counsel for the State as well
\nas the learned counsel for the petitioners in W.P.(C) No. 1518 of 2005 &
\nW.P.(C) No. 2341 of 2006 were therefore expressly required by the
\nCourt to logically demonstrate with reference to the record any rational
\npurpose to be served by refusing renewal of the existing licensee and
\nthrowing them at the mercy of the roll of dice.\n<\/p>\n
       The only argument raised in response was that this non-renewal
\nis intended to break the monopoly of the existing licensees, so that they
\nmay not have a license in perpetuity and to give other prospective
\ncandidates for license a chance to compete for trading in wholesale
\nforeign liquor.\n<\/p>\n
       So far as breaking of the monopoly or perpetuity of license is
\nconcerned the argument could have been accepted if the existing
\nlicensee after completing five years of business had been debarred from
\napplying afresh for that very license, thereby opening out the chance of
\nother fresh applicants. But that has not been done. In a system of
\nlottery the existing licensee would stand an equal chance of getting his
\nlicense back.\n<\/p>\n
       Firstly, it is difficult to accept that forcing the licensees into a pure
\ngamble is a rational act on the part of the State. Secondly and more
\nimportantly divorcing the renewal, extention or continuance from the
\npast performance of time bound holders of public offices or public
\ncontracts is generally so highly detrimental to public interest that it
\nshould be presumed to be irrational, unless the contrary is shown.\n<\/p>\n
       Reliance has been placed from the side of the petitioners
\nopposing the renewal upon a decision of the Patna High Court in the
\ncase of Most. Premlata Gupta Vrs. State of Bihar reported in
\n2005 (2) PLJR 670. The decision does support the view canvassed by
\nthe State but it is based upon a literal reading of the Rule 44(5) and
\ndoes not take into account the important aspects pointed out above as
\nalso below in this order. Therefore, with respect, I am unable to agree
\nwith the aforesaid view point of the Patna High Court. The purpose of
\nRule 44(5), in the back-drop of a fixed license fee is, that if a licensee is
\nto be settled today for a period of more than five years, the State of
\nJharkhand or the Board of Revenue would have to decide today and
\ninform the potential applicants as to what license fee would be payable
\nby them not only in the current year but also for the future years till the
\nexpiry of the license, to enable those applicants to decide whether to
\napply or not. Apparently, the rule makers were conscious of the fact that
\nit would be very difficult to predict the situation which would obtain at a
\ntime beyond five years so as to quantify what license fee should be fixed
\n                                      7<\/span><\/p>\n
          for the years so far into the future. At the same time, renewal of
\n          wholesale license every year also had its own administrative and other
\n          problems. Therefore, a balance was struck and an outer limit of 5 year
\n          period was fixed for which settlement at any one point of time was
\n          permissible. The Board of Revenue has been given power to decide
\n          whether such wholesale license should be granted for one year or more
\n          but even the Board has not been empowered to extend such period
\n          beyond five years. Thus, the purpose of the rule is only to prevent the
\n          State from being tied down to a fix license fee for more than five years,
\n          as it may result in loss of revenue.\n<\/p>\n
                 To sum up, none of the rules provide for renewal or prohibit
\n          renewal. The system being followed for the past several years has been
\n          of renewals. There is no rational purpose to be achieved by the change
\n          suggested on the basis of repetition of the words of rule 44 (5) in the
\n          Resolution dated 7.5.2008 of the Government. At the cost of repetition
\n          neither Rule 44(5) nor its repetition in the Resolution dated 7.5.2008
\n          expressly rule out renewal after the period of five years. No reason has
\n          been shown to hold that such renewal is ruled out by necessary
\n          implication. There is no rational reason for holding that the renewal
\n          offends any public interest or the interest of the State revenue.\n<\/p>\n
                 It is, therefore, held that neither Rule 44(5) nor the Resolution of
\n          the Government repeating the words of Rule 44(5) either expressly or
\n          by necessary implication rule out renewal after (i) the maximum period
\n          of five years mentioned therein for wholesale license or (ii) after such
\n          lesser period as the Board may fix for grant of such licenses.\n<\/p>\n
                 The respondent State will therefore proceed with regard to the
\n          renewals in the matters of wholesale license in accordance with the
\n          interpretation given above.\n<\/p>\n
                 Accordingly, W.P.(C) No. 1124 of 2009 and W.P.(C) 1661 of 2008
\n          are allowed and W.P.(C) No. 1518 of 2005 and W.P.(C) No. 2341 of
\n          2006 are dismissed.\n<\/p>\n
                                                           (Sushil Harkauli, J.)
\nSudhir\/\n <\/p>\n","protected":false},"excerpt":{"rendered":"
Jharkhand High Court Sheo Narayan Singh vs State Of Jharkhand & Ors on 24 November, 2009 IN THE HIGH COURT OF JHARKHAND AT RANCHI W.P. (C) No. 1124 of 2009 With W.P.(C) No. 1661 of 2008 With W.P.(C) No.1518 of 2005 With W.P.(C) No. 2341 of 2006 Sheo Narayan Singh… …… Petitioner [in W.P(C) 1124\/09] […]<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_lmt_disableupdate":"","_lmt_disable":"","_jetpack_memberships_contains_paid_content":false,"footnotes":""},"categories":[8,18],"tags":[],"class_list":["post-34303","post","type-post","status-publish","format-standard","hentry","category-high-court","category-jharkhand-high-court"],"yoast_head":"\nSheo Narayan Singh vs State Of Jharkhand & Ors on 24 November, 2009 - Free Judgements of Supreme Court & High Court | Legal India<\/title>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/www.legalindia.com\/judgments\/sheo-narayan-singh-vs-state-of-jharkhand-ors-on-24-november-2009\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"Sheo Narayan Singh vs State Of Jharkhand & Ors on 24 November, 2009 - 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