2010(2) ALL MR 718
IN THE HIGH COURT OF JUDICATURE AT BOMBAY(NAGPUR BENCH)
B.P. DHARMADHIKARI, J.
Ramkishor S/O. Nathulal Jaiswal Vs. State Of Maharashtra & Ors.
Writ Petition No.2796 of 2005
11th December, 2009
Petitioner Counsel: Mr. S. G. JAGTAP
(A) Bombay Prohibition Act (1949), S.54(1)(c) - Power to cancel or suspend licence and permits - If earlier a holder of licence was having some other licence and its conditions are breached, action under S.54(1)(c) may be possible. (Para 7)
(B) Bombay Foreign Liquor Rules (1953), R.45 - Renewal of licence - Renewal appears to be as a matter of course - No requirement of placing the renewal application before the committee as is required under sub-rule (1) at the time of initial grant of licence. (Para 8)
JUDGMENT :- By this petition under Articles 226 and 227 of the Constitution of India, the petitioner a person holding FL-III licence has challenged the order dated 16.03.2005 passed by respondent no.3 Collector, canceling that licence under Section 54[c] of Bombay Prohibition Act, 1949 (hereinafter referred to as "the Prohibition Act" and an order in Appeal preferred under Section 137 thereof, delivered by respondent no.2 Commissioner, maintaining it on 18.05.2005.
2. Shri. S. G. Jagtap, learned Counsel appearing for petitioner licensee has not disputed the facts and has restricted his challenge only to legal grounds. The ground pressed into service by him is after renewal of license with knowledge to the competent Authority of alleged lapses/irregularities, no action in relation to such past lapses or irregularities is possible and the punishment of cancellation of licence for such pre-renewal period is not legal. He has relied upon the judgment of this Court reported at 2000 Cri.L.J. 2038 : [2000(2) ALL MR 283] (K. V. Acharya Vs. State of Maharashtra), in support of his contentions.
3. He has pointed out that as per the provisions of Bombay Foreign Liquor Rules, 1953 the duration of licence is from 1st April till 31st March of next year and in this case, the alleged lapses or irregularities were noted in inspection dated 09.04.2002. Thereafter FL-III licence of petitioner was renewed for period from 01.04.2003 to 31.03.2004 and then for subsequent period from 01.04.2004 to 31.03.2005. He points out that first order of cancellation is passed by respondent no.3 Collector on 16.03.2005 and the Appellate Order is passed thereafter i.e. on 18.03.2005. He points out that, the cancellation therefore, is after two renewals and hence, legally unsustainable. He has relied upon the provisions of Rule 45 of the Foreign Liquor Rules to show that the authority has been empowered to grant licence and also to renew it. According to him the power to grant, includes power to cancel also and hence when alleged lapses were within the knowledge of competent renewing authority and despite that knowledge, the renewals were granted regularly from year to year, the action, the cancellation of that licence by the impugned order on 16.03.2005 is uncalled for and arbitrary. He has invited attention to the provisions of Section 54 of the Prohibition Act, in this respect.
4. Learned Assistant Government Pleader points out that petitioner has relied on the above judgment to show that, there for similar lapses between 1992-95, action of suspension of licence was taken in the year 1997, and this Court held that having granted renewal after those action, the Authority was estopped from taking any such action. He contends that there, this Court was dealing with the provisions of Section 33 of the Bombay Police Act and Rules 13[A] of the Rules framed thereunder. He states that the provisions of Bombay Police Act and Bombay Prohibition Act are pari materia. He has invited attention to the provisions of Section 54[c] to urge that even for past lapses or irregularities, action of cancellation is contemplated by the said provision and according to him because of this power the Authorities have decided to cancel FL-III licence for present petitioner in the matter. He has also invited attention to reply affidavit filed on record, particularly paragraph no.10 thereof to show how the developments have taken place in the meanwhile and how after giving petitioner an opportunity in accordance with the principles of natural justice, impugned action has been taken. He argues that, considering the gravity of lapses noticed, the Authorities have taken correct action and no interference is warranted in writ jurisdiction.
5. The earlier judgment of this Court in the case of K. V. Acharya, [2000(2) ALL MR 283] (supra), needs to be considered first to find out what it exactly says. It considers the provisions of Section 33 as appearing in Chapter IV, which deals with the Police Regulation and heading of Section 33 is "Power to make Rules for regulation of traffic and for preservation of order in public place etc.". Sub-rule , states that, it is always lawful for the competent authority to refuse a licence or to prohibit keeping of any place of public amusement or entertainment by a person of notoriously bad character. This sub-section begins with non-obstante clause and prevails over earlier sub-section and that section and also other rules made thereunder. Rule 13-A has been reproduced in the text of the reported judgment and it's sub-section  states that, Commissioner of Police may refuse to renew the licence, if he is satisfied after such enquiry as he thinks fit, that the licensee is not a suitable person for continuing to hold licence. The facts there show that, the petitioner was having a licence to keep the place of public entertainment. He was served with the impugned show cause notice dated 15.11.1995 and then an order was passed thereafter on 02.04.1996, which was maintained in appeal on 17.06.1996, whereby his licence was suspended for 15 days.
6. The show cause notice gave particulars of incidents, offences, breaches and omissions which were to be used for pressing that suspension. Those instances are total 19 in number and from 17.04.1992 onwards till 24.03.1995. It is thus obvious that after 1992 till the issuance of the show cause notice on 15.11.1995, there were renewals and those breaches or incidents were available when those renewals were considered. Section 33 mentioned above, give a blanket and overriding power to the competent authority to refuse a licence or to prohibit keeping of any place of public entertainment to a person of notoriously bad character. Rule 13-A, enabled the Commissioner of Police to refuse to renew licence to a person found not suitable for continuing to hold it. In view of this express provision, this Court has found that, when licence was being renewed from time to time, suspension for a period of 15 days for repeatedly committing breaches of law and creating law and order problem was not legal. It was found that, when the offences or incidents or breaches were not found sufficient by the competent authority to deny licence or to deny its renewal, the same cannot furnish a ground for cancellation or suspension of licence which was renewed after said licence. It is thus obvious that, this Court has considered the powers available and the co-relation thereof with purpose. The licence was sought to be suspended and was infact suspended only for 15 days and the observations have been made in this background.
7. The provision of Section 54 of the Prohibition Act deals with power to cancel or suspend licence and permits. The provision of Sub-section  permits authority granting any licence under Prohibition Act to suspend it or cancel it for reasons to be recorded. Clauses [a], [b] and [c] of this sub-section speak of contingencies in which such suspension or cancellation can be ordered. Clause [c] shows that, if there is any breach by holder of any licence, the action for suspension or cancellation can be taken. The said clause [c] reads as under:
"[c] in the event of any breach by the holder of such licence, permit, pass or authorization or by his servant or by any one acting with his express or implied permission on his behalf of any of the terms or conditions of such licence, permit, pass or authorization or of any licence, permit, pass or authorization previously by the holder."
It is to be noted that, it also takes within its hold, breach of any licence, permit, pass or authorization previously held by the holder. Thus, if, earlier a holder of licence was having some other licence and its conditions are breached, action under Section 54[c] may be possible. However, as this is not the issue before this Court, it is not necessary for me to go into more details in this respect.
8. Provisions of Rule 45 of Bombay Foreign Liquor Rules, 1953 deal with grant of licence and its duration. Under sub-rules  and [a] licence can be granted after application therefor is considered by the committee. Its sub-rule  provides for renewal and any person desiring to renew such licence has to apply 30 days before the date of expiry of that licence for its renewal. Sub-rule  states that, any licence granted under sub-rule  can be renewed by the Collector for a period of not exceeding one year at a time. Thus there is no requirement of placing the renewal application before the Committee, as is required under sub-rule  at that time of initial grant of licence, and renewal therefor appears to be as a matter of course. The provision like Section 33 of Bombay Police Act or then Rule 13-A of Rules framed thereunder, does not figure in Prohibition Act or Foreign Liquor Rules, framed thereunder.
9. In the reported judgment of this Court considered supra, total 19 incidents have been mentioned and looking to the nature of challenge therein, the facts of each such incident or event were not relevant. In present circumstances, it can be seen that on 09.04.2002, during inspection spurious liquor was found in the licensed premises. Because of this discovery, the respondents have then made inquiries with the manufacturer and the concerned manufacturer namely Jamner Taluq Cooperative Distillery, District Jalgaon has on 30.01.2003 informed the respondents that though labels and cocks [seals] of seized bottles of European Rum, looked similar to their labels and cocks, they were not belonging to them. Similarly Rum as contained in the seized bottles and one manufactured by them was also different and seized Rum was also not manufactured by them. The manufacturer's letter dated 22.06.2003 was received on 15.10.2003 by the respondent. The respondent had also sought report from Chemical Analyzer and that report dated 22.12.2003 was received on 23.12.2003. After collecting this material, show cause notice was issued to the petitioner on 30.01.2004 and petitioner submitted his explanation on 22.02.2004. He had requested for hearing and accordingly, he was heard on 28.05.2004 and 08.06.2004. It is thereafter that the impugned orders came to be passed. On affidavit, respondents have stated that at the time of personal hearing petitioner was unable to put evidence regarding legality or genuineness of 35 boxes of seized liquor. The Chemical Analyzer's report and manufacturer's report confirms that the liquor contained in those 35 boxes were duplicate, spurious and duty evaded.
10. It is therefore, clear that the respondents were proceeding further with investigation after 09.04.2002 and after they secured proper reports and materials, they issued show cause notice and have taken action in accordance with the law. This process of collecting reports and, thereafter proceeding further in accordance with in principles of natural justice, has taken its time. During that period, the renewal for the year 2003-04 and 2004-05 had became due and was granted. It cannot be viewed as waiver of its rights by respondents. It is to be noted that, such renewal before the impugned order is in March/April, 2004 for period from 01.04.2004 to 31.03.2005. At that time, the petitioner had submitted his explanation to show cause notice on 21.02.2004 and he was aware of pending action against him. The impugned order has been passed by the Collector on 16.03.2005 after noticing all these facts and after noticing the prohibited contents of Ethyl Alcohol in the seized bottle. The said order also mentions that, earlier i.e. on 16.08.2000 also licence of petitioner was cancelled for similar mal-practice.
11. In these circumstances, the judgment on which petitioner has placed strong reliance is not at all relevant here. Here the action is of permanent cancellation and in terms of Rules. The Rules contemplate cancellation only for reasons to be recorded in writing and that has been appropriately done by the Competent Authority, after complying with the principles of natural justice.
13. At this stage, Shri. Jagtap, learned counsel states that, petitioner is carrying on his business by using the licence because of interim orders operating in this matter. He states that the interim order should be continued further for 8 weeks more, so as to enable the petitioner to take further appropriate measures. Learned A.G.P. is opposing the request. Shri. Jagtap, learned counsel further states that during the period after impugned order, there is not a single violation or breach of any condition noticed in so far as the business of petitioner is concerned. He also states that this statement can be recorded by the Court. In the circumstances, in view of the statement made, the operation and effect of todays judgment is suspended till 31.01.2010. Interim protection given to petitioner shall cease to operate automatically thereafter.