Rajeev Kumar vs State Of U.P. & Others
2013 Latest Caselaw 5458 ALL

HIGH COURT OF JUDICATURE AT ALLAHABAD
 
 

A.F.R.
 
Court No. 10
 
Civil Misc. Writ Petition No. 1226 of 2007
 
Rajeev Kumar 						....... Petitioner
 
Vs.
 
State of U.P. & others					....... Respondents
 

 
Hon. Arun Tandon, J.

Heard Sri Mukesh Prasad, Advocate on behalf of the petitioner and Standing Counsel on before of the State respondents.

Petitioner before this Court, in response to the advertisement published by the Collector, Meerut, made an application for grant of a licence for retail sale of country liquor in respect of the locality of Siwaal Khas, district-Meerut in accordance with the provisions of U.P. Excise (Settlement of Licenses for Retail Sale of Country Liquor) Rules, 2002 (hereinafter referred to as the Rules, 2002). The application of the petitioner was processed and after draw of lots in accordance with Rule 10(b) the petitioner was selected for grant of licence for retail sale of country liquor in respect of the said locality.

However, in between large number of writ petitions were filed before this Court, leading writ petition being Writ Petition No. 5050 of 2002 wherein initially an interim order was passed restraining the settlement of licences under the Rules of 2002. However, the interim order was modified on 20.04.2002 permitting the settlement of the shop on daily wage basis only either with the previous licensee or with the newly selected candidate. This arrangement under the order of the High Court remained in operation till 07.07.2002 when the writ petitions were finally decided and dismissed. Thereafter petitioner was granted temporary licence, which was extended up to 21.07.2002.

With the dismissal of the writ petitions notice was issued to the petitioner on 17.07.2002 by the Excise Authorities calling upon the petitioner to deposit the basic licence fee, earnest money and security money so that he may be granted regular licence for retail sale of country liquor for the locality.

The petitioner vide his letter showed his inability to comply with the said deposit and referred his earlier letter dated 15.07.2002 pointing out that as per his request the daily wage licence itself may not be extended beyond 22.07.2002.

From the record it is established that for the period 01.04.2002 to 19.04.2002 the shop in question was settled with the previous year licensee on daily wage basis.

The Excise Authority at district Meerut taking into account the inability of the petitioner to deposit the licence fee, security money and earnest money, treated the same to be a surrender of the licence under Section 36 of the U.P. Excise Act, and accordingly issued a notice to the petitioner to deposit the balance amount of the licence fee due for the entire year.

Accordingly, a demand notice dated 28.08.2002 was issued calling upon the petitioner to deposit the balance amount of the basic licence fee as well as of the licence fee due for the remaining part of the excise year.

It appears that the petitioner submitted a reply and requested for withdrawal of the notice. The matter remained pending for nearly four years. However, a citation for recovery of a sum of Rs. 12,81,000/- was served upon the petitioner on 27.11.2006. He, filed Excise Appeal No. 71 of 2006 under Section 11(1) of the U.P. Excise Act challenging the said demand before the Excise Commissioner. The appeal was dismissed vide order dated 19.02.2007. He, therefore, filed revision under Section 11(2), being Revision No. 20(R) of 2007, before the State Government. The revision has also been dismissed vide order dated 19.07.2007. Hence this petition.

In order to keep the record straight it may be noticed that this writ petition was allowed by means of judgement and order dated 17.04.2008 in light of the judgement of this Court in the case of Rajendra Singh Chauhan vs. State of U.P. and others and Anil Kumar and others vs. State of U.P. and others.

This order of the High Court was subjected to challenge by the State Government before the Apex Court by means of Civil Appeal No. 7133 of 2009. The appeal was connected with other similar matters and allowed vide judgment and order dated 21.10.2009. The matter has been remanded for fresh hearing before the High Court.

On behalf of the petitioner it is contended that the State Government is not justified in recording that once the petitioner has been selected, he becomes liable for payment of the basic licence fee as well as licence fee for the entire excise year in respect of the shop in question. It is his case that in case the selected applicant does not deposit the security money, basic licence fee and the earnest money as fixed for the shop, then the consequences under Rule 10(c) and Rule 22 of Rules, 2002 follow, which aspect of the matter has completely been ignored. The State Government has wrongly held that the application of the petitioner refusing to deposit the basic licence fee, earnest money and the security money would amount to surrender of the licence contemplated by Section 36 of the U.P. Excise Act. He submits that no regular licence was ever granted in his favour, therefore, the question of surrender of the same does not arise.

Standing Counsel on behalf of the respondent however points out that a Division Bench of this Court in the case of Brij Kishore Jaiswal and another vs. State of U.P. Thru' Princ. Secry., (Excise) and others, reported in 2011 (4) ADJ 558 has held that the judgment in the case of Rajendra Singh Chauhan does not lay down correct law. The judgment in the case of Anil Kumar and others was delivered following the law as laid down in the case of Rajendra Singh Chauhan. He further points out that the Division Bench of this Court in the case of Brij Kishore Jaiswal has held that once lottery is drawn, an applicant is selected and the slip of selection is countersigned by the excise authority, the contract between the parties is concluded and in that circumstances the person concerned become liable for payment of the entire licence fee which is in two parts (a) basic licence fee and (b) the licence fee for the entire year being the consideration for parting with exclusive privilege for trade in country liquor. Therefore, the order of demand of balance licence fee is justified and the Court may not interfere.

In rejoinder Sri Mukesh Prasad points out that in the case of Brij Kishore Jaiswal the person concerned was held liable for payment of the licence fee for the entire year in view of the fact that he had run the shop for the entire excise year. It was in said factual background that the High Court held that even if no formal licence has been issued, the licensee was liable for payment of licence fee and the basic licence fee fixed for the entire licence year being the consideration for grant of privilege to trade in country liquor.

The Division Bench judgment in the case of Brij Kishor Jaiswal was not concerned with a case wherein the selectee had refused to deposit the basic licence fee, earnest money and the security money. In that respect the consequences which follow are provided under Rule 10(c) and Rule 22 of the Rules, 2002. He, therefore, submits that the judgment in the case of Brij Kishor Jaiswal is clearly distinguishable in the facts of this case.

I have heard learned counsel for the parties and have examined the records.

It is not in dispute that the petitioner did make an application for being considered for grant of licence for retail sale of country liquor in respect of the locality of Siwaal Khas, district-Meerut. After draw of lottery he was selected for grant of such licence by the excise authority at Meerut. However, because of the interim order dated 18.04.2002 passed by the High Court in Writ Petition No. 505 of 2002 and connected matters the excise authorities were restrained from settling the licence regularly and were permitted to run the shop only on daily wages basis either with the old licensee or with the newly selected candidates. This interim arrangement continued till 07.07.2002 when the writ petition was finally decided.

After the judgment was delivered, a notice was issued to the petitioner to deposit the licence fee, earnest money and the security money by the Excise Officer, Meerut and it was specifically stated in the notice that in case the petitioner does not deposit the said amount, his selection shall be cancelled. A copy of the notice is enclosed as Annexure-IV to the present writ petition.

The petitioner admittedly did not deposit the licence fee, earnest money and the security money and as a matter of fact vide his application dated 15.07.2002 requested that the term of his daily basis licence be not extended beyond 22nd July, 2002.

It is, therefore, clear that the petitioner, who was the selected candidate, did not comply with the requirement of Rule 12 of Rules, 2002 in the matter of deposit of the money as required. Accordingly, the consequences prescribed under Rule 10(c) and Rule 12 followed by operation of law. Rule 10(c) and Rule 12 of Rules, 2002 read as follows:

"10. Selection of Licensee-

(a) ............

(b) ...........

(c). In case the selected applicants does not deposit the required basic licence fee or security amount and does not fulfill the prescribed formalities or is unable to arrange suitable premises for the shop within stipulated period, the Licensing Authority shall cancel the allotment and take steps for resettlement of the shop."

12. Payment of basic licence fee and security amount- In case an applicant is selected as licensee, he shall deposit the entire amount of basic licence fee within 3 working days of being informed of his selection. He shall be required to deposit half the security amount within 10 working days of information of his selection and balance of security amount within 20 days of information of his selection. If he fails to deposit the amount of basic licence fee or security amount within prescribed period, his selection shall stand cancelled and his earnest money and the basic licence fee and security amount if deposited by him shall be forfeited in favour of the State Government and the said shop shall be resettled forthwith."

The State Government while passing the order impugned has completely lost sight of the aforesaid statutory rules while holding that non-deposit of the security money, earnest money and the licence fee by the selected candidate would amount to surrender of the licence covered by Section 36 of the U.P. Excise Act.

In the opinion of the Court since the selection of a candidate stands cancelled under Rule 10(c) read with Rule 12 for non-deposit of the licence fee and the security money, the question of grant of licence and surrender thereof does not arise. Surrender/cancellation of licence is a stage subsequent to the deposit of money as per Rule 12. It is worthwhile to notice that Rules 10(c) and 12 talk of cancellation of selection, while Rule 21 talks of cancellation of licence. Therefore, the Rules, 2002 themselves make a distinction between cancellation of selection for non-deposit of the requisite basic licence fee , security and the cancellation/surrender of licence of a person who has been granted licence after deposit of the said amount.

So far as the judgment in the case of Brij Kishore Jaiswal (supra) is concerned, suffice is to record that before the Division Bench there were no issue with regard to the violation of conditions pertaining to deposit as required under Rules and the consequences which follow under Rule 10(c) and Rule 12 in the matter of non-deposit of the security money and basic licence fee by the selected candidate within the period specified. Therefore, the said judgment is clearly distinguishable.

The Apex Court in the case of Bhavnagar University v. Pitiola Sugar Mills 2003 (2) SCC 111 followed in the case of Dr. Raghuvir Singh reported in AIR SCC Weekly 5817 has explained that a little difference in the facts of the case will make a lost of difference in the precedential value of the decision.

In view of the aforesaid, the order passed by the State Government dated 19.07.2007 cannot be legally sustained and is hereby set aside. Revision No. 20(R) of 2007 is restored to its original number.

Let the State Government take a fresh decision keeping in mind Rule 10(c) and Rule 12 of the Rules, 2002. State Government shall pass a reasoned order after affording opportunity of hearing to the petitioner within three months of the receipt of a copy of this order.

Writ petition is allowed subject to the observations made.

05.09.2013

Pkb/1226-07