Som Distilleries Pvt. Ltd. vs The State Of Madhya Pradesh on 20 March, 2026

Author: Vivek Agarwal

Bench: Vivek Agarwal

                                                                   1                                  WP-4915-2026
                                           IN THE HIGH COURT OF MADHYA PRADESH
                                                        AT JABALPUR
                                                           WP No. 4915 of 2026
                                (SOM DISTILLERIES PVT. LTD. AND OTHERS Vs THE STATE OF MADHYA PRADESH AND OTHERS )



                           Dated : 20-03-2026
                                    Shri Naman Nagrath - Senior Advocate assisted by Shri Rahul
                           Diwakar - Advocate for the petitioners.
                                    Shri Harpreet Singh Ruprah - Additional Advocate General for the
                           respondents-State.

Hearing of this matter started at 2:45 p.m. after finishing regular

Division Bench work, so also the work assigned to the Special Division Bench.

2. Shri Naman Nagrath, learned Senior counsel submits that the petitioners are calling in question the order dated 04.02.2026 (Annexure P-8) passed by the Excise Commissioner, Madhya Pradesh, Gwalior, whereby 8 licences held by two distinct entities, namely, petitioner No.1 Som Distilleries Pvt. Ltd. and petitioner No.2 Som Distilleries and Breweries Pvt. Ltd. have been placed under suspension on the strength of show notice notice dated 26.02.2024, contained in Annexure P-3. It is submitted that in fact when

show cause notice Annexure P-3 was issued, at that time the licences which were valid had their validity upto 31.03.2024. Therefore, it is submitted that since the period of licence came to an end on 31.03.2024, therefore, show cause notice should have come to an end automatically.

3. It is submitted that in criminal appeals suspension of sentence was granted by the High Court of Madhya Pradesh at Indore and since the

2 WP-4915-2026 suspension was granted, therefore, show cause notice lost its efficacy.

4. It is submitted that vide Annexure P-6, all the licences were granted afresh for the year 2024-25 and 2025-26, but since show cause notice relates to the period 2023-24, it could not have been extended for the licences which were granted for the year 2024-25 and thereafter, for the year 2025-26. Thus, it is submitted that the action taken vide Annexure P-8 placing these licences under suspension for the year 2025-26 being not relatable to the show cause notice dated 26.02.2024 (Annexure P-3), which was for the year 2023-24, no action could have been taken.

5. It is further submitted that the first reply to the show cause notice was furnished on 04.03.2024 and in continuation to the same, second reply was furnished on 18.07.2024 as is contained in Annexure P-5. It is also submitted

that since these 8 licences deal with distilling, brewing, filtration of distilled and brewed material, so also distilling of country liquor and their respective bottling, cancellation of all these 8 licences at one go, is contrary to the principles of natural justice and the law.

6. It is further submitted that combined show cause notice to different entities without referring to which of the entities were guilty of violation, is unheard of.

7. It is also submitted that show cause notices, with the efflux of time and with grant of fresh licences, resulted in the SCN coming to an end.

8. It is further submitted that show cause notice is based on conviction of certain employees. Reliance is placed on the judgment of the Hon'ble Supreme Court in N.S. Shethna and others Vs. Vinubhai Harilal

3 WP-4915-2026 Panchal, reference to which is uploaded from 1966 SCC OnLine SC 239 . Reading from paragraphs 2 and 3 of the said judgment, it is submitted that with the issuance of fresh licences, the matter had come to an end. Paragraph 2 and 3 of the said judgment reads as under:-

"2. At all material times the respondent was carrying on and still carries on the business of exhibiting cinematographic pictures at Lakshmi Talkies in Ahmedabad and had obtained for that purpose a licence for sale of tickets which was valid upto December 31, 1960. On an allegation that through his manager and other employees he was indulging in sale of tickets contrary to the Bombay Cinema Rules, 1954, framed under the Bombay Cinema (Regulation) Act, 11 of 1953 a notice dated June 14, 1960 was served upon him to show cause why the said licence should not be suspended. On an inquiry having been held by the first appellant, that officer passed the impeached order suspending the said licence for a period of two months from the date of service of the order. But before the inquiry was completed and the said order passed, the period for which the licence was issued expired and an order renewing it for the next year, that is 1961, was passed on December 31, 1960. The impugned order was served on the respondent on March 5, 1961.

3. Aggrieved by the said order the licensee took out a writ petition in the High Court for setting aside the said order. The plea

urged in the petition was that the show cause notice related to the

4 WP-4915-2026 licence for the year 1960 which expired on December 31, 1960 and therefore did not affect the renewed licence for 1961 sought to be suspended by the impugned order. The High Court took the view that the renewed licence was a separate licence and not in continuation of the licence for the year 1960 and a fresh show cause notice ought to have been served for suspending the renewed licence and that not having been done the inquiry was not in consonance with the rules and quashed the order."

9. It is submitted that in paragraph 9 of the said judgment of N.S. Shethna (supra), it is held that current licences could not have been suspended as new licences cannot be suspended in the light of old show cause notice.

10. It is also submitted that in terms of the Section 28 of the Excise Act, since licence during currency of which SCN was issued, was only upto 31.03.2024, therefore, there was no justification in continuing the show cause notice, which ultimately culminated in the order of suspension contained in Annexure P-8.

11. Reading from the provisions contained in Section 31(1-A) of the Madhya Pradesh Excise Act, 1915, it is submitted that "Before making an order cancelling or suspending a licence permit or pass under sub-section (1), the authority aforesaid shall record in writing the reasons for the proposed action, furnish to the holder thereof a brief statement of the same and afford him a reasonable opportunity of being heard." Thus, it is submitted that in fact the requirements which are ingrained in sub-section (1-A) of Section 31

5 WP-4915-2026 of the Excise Act are that the authorities should record in writing the reasons for the proposed action.

12. Reading the second clause of this sub-section, it is submitted that in fact a draft order should have been provided by the Commissioner to the licencee. Thirdly, that reasonable opportunity of being heard should have been provided.

13. It is submitted that common show cause notice for two different legal entities, will give rise to a question as to which of the entities convicted persons belong to i.e. whether they belong to one entity or both. Though it is submitted that there is no mention of this fact in the SCN, however, at this stage, Shri Harpreet Singh Ruprah, learned Additional Advocate General, interrupts and submits that even in the reply to the show cause notice, the petitioners have not come clean as to which of the entities i.e. the petitioners, the convicted employees belong to.

14. It is also submitted that judgment of conviction was passed by the concerned Additional Sessions Judge, vide judgment dated 23.12.2023 in S.T. No.21/2021. Reading from paragraph 111, it is submitted that persons mentioned therein at S.No.1, 2 and 3, namely, Umashankar, Dinkar and Mohansingh, were convicted under Sections 420, 467, 468, 471, 120-B of of the Indian Penal Code, 1860, along with persons mentioned at S.No.8, 9, 10 and 11, namely, Deenanath Singh, Shailendra Singh, Gurudarshan and Surjeet Lal.

15. It is admitted that persons namely, Umashankar, Dinkar and Mohansingh were working as Supervisors in the petitioners company,

6 WP-4915-2026 whereas Deenanath Singh, Shailendra Singh, Gurudarshan and Surjeet Lal were working as Directors. It is submitted that the show cause notice makes a mention of only names of the aforesaid persons and admitted they were not convicted under any of the provisions contained in the Excise Act.

16. It is submitted that those who are convicted under the provisions of the Section 34(2) of the Excise Act are Santosh and Omprakash, whose names are not mentioned in the show cause notice. Thus, it is submitted that since they have been convicted under Sections 420, 467, 468, 471, 120-B of of the Indian Penal Code, 1860, therefore, they will be outside the purview of the provisions contained in Sections 31(1)(b) and 31(1)(c) of he Excise Act because none of the persons mentioned in the show cause notice, namely, Umashankar, Dinkar, Mohansingh, Deenanath Singh, Shailendra Singh, Gurudarshan and Surjeet Lal, have been convicted either under the provisions of the Excise Act or under the provisions of the Dangerous Drugs Act, 1930 or under the provisions of the Indian Merchandise Marks Act, 1889, or under any Section which have been introduced into the Indian Penal Code (XLV of 1860) in Section 3 of that Act; and, therefore, it is submitted that since names of Santosh and Omprakash, who were convicted under Section 34(2) of the Excise Act, do not find mention in the show cause notice and even their identification with the two entities is not shown, therefore, action under Sections 44 / 31(1)(b)(c), is wholly vitiated.

Therefore, it is submitted that the impugned order deserves to be set aside or at least stayed in terms of the directions of the Hon'ble Supreme Court.

17. It is also submitted that Section 3 of the Indian Merchandise Marks

7 WP-4915-2026 Act, 1889, has introduced/incorporated by way of amendment in the IPC Sections 478 to 489 and since conviction is not under any of these Sections, starting from Section 478 to Section 489 of the IPC, which have been introduced in the IPC through the Act of 1889, the act of the respondents cannot be justified. Therefore, a prayer is made that order dated 04.02.2026 (Annexure P-8) be set aside.

18. Shri Harpreet Singh Ruprah, learned Additional Advocate General, in his turn, submits that Annexure P-3 is the show cause notice. It is submitted that names of Santosh and Omprakash, who have been convicted by the learned Additional Sessions Judge, finds mention in the second paragraph of this show cause notice, wherein it is mentioned that Santosh and Omprakash have been convicted under Section 34(2) of the Madhya Pradesh Excise Act, whereas others have been convicted under Sections 420, 467, 468, 471, 120- B of of the Indian Penal Code. It is also submitted that allegation on Santosh and Omprakash is that they as an agent of a carrier, which was hired by the licencee or his agents were involved in using forged permit books for transportation of liquor from Raisen to Diu. Thus, it is submitted that submissions made by Shri Naman Nagrath, learned Senior counsel, that their names have not been mentioned in the show cause notice, is factually incorrect.

19. Shri Ruprah, reading from his reply, submits that three appeals have been filed, namely, Criminal Appeal No.1246/2024 (Annexure R-1), Criminal Appeal No.1146/2024 (Annexure R-2) and Criminal Appeal No.1249/2024 (Annexure R-3) by three different sets of persons, namely,

8 WP-4915-2026 Supervisors, Directors or former Directors and the driver and cleaner of the truck. It is submitted that the fact in regard to their status is an admitted fact, which can be read into paragraph 5.2 of their respective appeals.

20. Reading from paragraph 5.2 of Annexure R-3, it is pointed out that both Santosh and Omprakash admitted that they have been engaged by Chanchal Goods Carrier, an independent contractor dealing in the business of transportation. Similarly, in Annexures R-1 and R-2, convicted accused have admitted their status as Supervisors and Directors of the petitioners' company. Som Distilleries Breweries Pvt. Ltd., a company incorporated under the Companies Act, has taken the transport services of Chanchal Goods Carrier for transport of liquor from Madhya Pradesh to Diu and the appellants being the driver and helper were given the responsibility of the same along with the necessary documents/licences/permits required for the transportation of liquor. Thereafter, in paragraph 5.3, a vivid description is given as to how their truck was intercepted by the SHO of the Police Station Betma and then what followed.

21. Shri Harpreet Singh Ruprah, learned Additional Advocate General, also submits that there is an alternative remedy of revision provided under Section 62 of the Madhya Pradesh Excise Act, 1915 and the Rules made thereunder specifically in this regard.

22. At this stage, since it is already 4:45 p.m. and Shri Harpreet Singh Ruprah submits that it will not be possible for him to conclude his arguments

in 15-20 minutes, the matter is posted for 23rd March, 2026.

23. At this stage, Shri Naman Nagrath, learned Senior counsel submits that

9 WP-4915-2026 there is urgency in the matter and there are also directions of the Hon'ble Supreme Court.

24. With a view to honour the directions of the Hon'ble Supreme Court, so also taking this fact into consideration that the parties require more time to conclude their arguments, this case is posted for 23.03.2026 as first case on the top of the list.

25. Registry is requested that in view of the directions of the Hon'ble Supreme Court dated 16.03.2026, appropriate orders may be obtained, if deemed proper by the Hon'ble Chief Justice, to constitute Single Bench prior to assembling of the Division Bench, or as directed by the Hon'ble Chief Justice, which in usual course has been given roster to deal with criminal appeals pending in the High Court of Madhya Pradesh at Jabalpur from the year 2016 onwards.

26. Subject to the orders of the Hon'ble Chief Justice, list this case on 23.03.2026 as the first case before the Single Bench.

(VIVEK AGARWAL) JUDGE