Orissa High Court
Padmabati Jena vs State Of Odisha & Ors. ..... Opp. Parties on 11 January, 2024
Author: B.R.Sarangi
Bench: B.R.Sarangi
ORISSA HIGH COURT: CUTTACK
AFR W.P(C) NO. 9478 OF 2022
In the matter of an application under Articles 226 and
227 of the Constitution of India.
---------------
Padmabati Jena ..... Petitioner
-Versus-
State of Odisha & Ors. ..... Opp. Parties
For petitioner : M/s. D. Panda, S. Panda, A.
Mehta & D.K. Panda,
Advocates
For opp. parties : Mr. S. Nayak,
Addl. Standing Counsel
P R E S E N T:
THE HONOURABLE ACTING CHIEF JUSTICE DR. B.R.SARANGI
AND
THE HONOURABLE MR JUSTICE MURAHARI SRI RAMAN
Date of hearing: 08.01.2024 :: Date of Judgment: 11.01.2024
DR. B.R. SARANGI, ACJ. The petitioner, by means of this writ
petition, seeks to quash the letter dated 16.12.2021
under Annexure-6 issued by opposite party no.1-
Secretary to Govt. of Odisha, Excise Department,
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Bhubaneswar in cancelling the license of South City
IMFL Hotel 'ON' Shop at Bhagabanpur Industrial Area,
Tamando in the district of Khurda for the year 2021-22;
and further to issue direction to the opposite parties to
consider renewal of the license of South City IMFL Hotel
'ON' shop for the current excise year.
2. The brief facts, which led to filing of this writ
petition, are that the petitioner was issued with IMFL
'ON' shop license in respect of Hotel South City (with
Lodging) on 07.04.2021 by opposite party no.4-
Superintendent of Excise, Bhubaneswar with validity
from 01.04.2021 to 30.04.2021 on payment of license fee
of Rs.2,00,000/- through challans dated 06.04.2021 and
the currency of the said license was extended up to
30.09.2021. Apart from that, the petitioner has also
deposited license fee of Rs.3,00,000/ through chalans
dated 09.09.2021 after adjustment of relaxation amount
of Rs.2,25,000/-, which was deposited in the excise year
2020-21 towards license fee for the year 2021-22.
// 3 //
2.1. On 11.10.2021, opposite party no.5-IIC,
Tamando P.S, Bhubaneswar wrote to opposite party
no.4, by way of requisition, to take action against the
petitioner alleging that the Bar used to remain open till
late night, i.e., 3 AM to 4 AM or more, and that the
Dance Bar Room is too small but the licensee is allowing
huge congregation, which violated the terms and
conditions of the license and the COVID guidelines.
Basing on the alleged requisition, without making any
enquiry to the said allegations by the concerned
Inspector of Excise as well as opposite party no.4, a
show cause notice was issued to the petitioner on
16.10.2021 by opposite party no.4, by order of opposite
party no.3-Collector, Khurda, to submit an explanation
within 7 days as to why her license shall not be
cancelled for violation of license conditions and COVID
Pandemic guidelines, failing which action shall be taken
for cancellation of license, as per the provisions of law.
2.2. On 22.10.2021, S.I., Tamando P.S lodged an
FIR alleging that he got an information that one
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employee of South City Hotel was illegally selling foreign
liquor bottles to customers at the reception counter of
the said Hotel. It was further alleged that owner of the
Hotel, namely, Pradyumna Jena and his partners,
including the petitioner, were running the Hotel till late
hours of night violating guidelines and restrictions. The
said FIR was registered for alleged commission of
offences under Sections 269 /270 /168 /385 /506/
120-B of the IPC read with Section 52(a) of Odisha
Excise Act, 2008, Section 96 of the Odisha Urban Police
Act, 2003, Section 3 of Epidemic Diseases Act, 1897 and
Section 5 of the Odisha Fire Works and Loud Speaker
(Regulation) Act, 1958. As a consequence thereof, the
husband of the petitioner, namely, Pradyumna Kumar
Jena was arrested on 23.10.2021 and was released on
bail, vide order dated 05.11.2021 passed by the learned
Addl. Sessions Judge-cum-Spl. Judge, CBI II,
Bhubaneswar.
2.3. Though the petitioner received show-cause
notice on 18.10.2021, she could not file any reply within
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7 days, as her only son was under treatment at Chennai
because his liver was not functioning and her husband
was arrested in connection with Tamando P.S Case
No.221 of 2021 arising out of C.T. Case No.5865/2021
pending on the file of learned S.D.J.M., Bhubaneswar.
Then, opposite party no.3, vide letter dated 17.01.2021,
recommended to opposite party no.1 for cancellation of
license of the petitioner, as per Section 47 (c) of 2008 Act
on the ground of illegal opening of 'ON' shop till late
night, illegal operation of dance bar and allowing huge
congregation. Opposite party no.1, vide letter
No.6033/Ex, dated 16.12.2021, cancelled South City
IMFL Hotel 'ON' shop license for the year 2021-22, as per
Section 47 of the Odisha Excise Act, 2008. Hence, this
writ petition.
3. Mr. D. Panda, learned counsel appearing for
the petitioner vehemently contended that cancellation of
the South City IMFL 'ON' shop license of the petitioner
for the year 2021-22 under Section 47 of the Odisha
Excise Act, 2008, vide order/letter dated 16.12.2021
// 6 //
under Annexure-6, cannot be sustained in the eye of
law, as the same was issued/passed without assigning
any reason and without any notice in writing and
without offering an opportunity of hearing to her, as
required under Section 47 (4) of the Odisha Excise Act,
2008 and without following the principle of natural
justice. It is further contended that on the requisition of
Tamando Police dated 11.10.2021 under Annexure-3
that the Bar was used to open till late night and dance
bar room is too small and the licensee was allowing huge
congregation violating the terms and conditions of
license and COVID guidelines are totally incorrect and
baseless. As such, no enquiry has been conducted by the
Excise Officials as well as opposite party no.4 to know
about the correctness of the allegations, but, basing on
the false allegations of Tamando Police, opposite party
no.4 issued show cause notice dated 16.10.2021 under
Annexure-4, and the opposite party no.1, without giving
any opportunity of hearing to the petitioner, passed the
order impugned cancelling the license of South City
IMFL Hotel 'ON' shop, which cannot be sustained in the
// 7 //
eye of law. It is further contended that opposite party
no.1 could have compounded the alleged offences, as
provided under Section 75 of Odisha Excise Act, 2008,
as first offence, by imposing fine under Section 64 (c) of
the Odisha Excise Act, 2008 for breach of any
regulatory/license conditions and operation of 'ON' shop
against COVID guidelines, as in similar circumstances
the Excise Commissioner, Odisha, Cuttack, vide order
dated 12.08.2020 in Excise Appeal Case Nos.2, 3, 4, 5, 6
and 7 of 2020 allowed revival of licenses. It is further
contended that as per the excise law in vogue, the State
Government in Excise Department is the competent
authority and has jurisdiction to issue show cause notice
and decide cancellation of license, as per Section 47 of
the Odisha Excise Act, 2008. But, in the present case,
opposite party no.4, by order of opposite party no.3-
Collector, Khurda, being not the competent authority
and without any jurisdiction, issued show cause notice
dated l6.10.2021 under Annexure-4, whereby opposite
party no.1 has taken decision illegally for cancellation of
license of the petitioner without issuing show cause
// 8 //
notice, as per Section 47 (4) of 2008 Act. Therefore, it is
contended that the order/letter dated 16.12.2021 under
Annexure-6 issued by opposite party no.1 cancelling the
license of the petitioner cannot be sustained in the eye of
law and consequentially seeks for quashing of the same.
4. Mr. S. Nayak, learned Additional Standing
Counsel appearing for the State-opposite parties
vehemently contended that the action taken against the
petitioner is well within the jurisdiction of the authority
concerned and, as such, although the petitioner was
continuing South City IMFL Hotel 'ON' shop, being a
license holder, but, in view of the allegations made, the
license of the petitioner was cancelled vide letter/order
dated 16.12.2021 of the State Government for the Excise
Year 2021-22. It is further contended that the petitioner
has not approached this Court with clean hands and has
suppressed the true state of affairs. Therefore, she is not
entitled to get any relief, as prayed in the writ petition. It
is further contended that since the petitioner violated the
terms and conditions of the license, which virtually
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caused harm to the peaceful citizens of the locality and
destroyed the sanctity of the locality, which is violative of
the provisions contained in Section 47 (c) of the Odisha
Excise Act, 2008, the license of the petitioner was
cancelled. It is further contended that while cancelling
the license, sufficient opportunity of hearing to the
petitioner was given to disprove the allegations and,
therefore, the question of violation of Section 47(4) of the
Odisha Excise Act, 2008 does not arise. It is further
contended that as per the provisions contained under
Section 47(4) of the Odisha Excise Act, 2008, the
petitioner was issued with notice to show cause vide
letter dated 16.10.2021, as per the order of the Collector,
Khurda. It is further contended that the Officer-in-
Charge of Bhubaneswar-III Excise Station also issued a
show cause notice, vide letter dated 14.10.2021. Both
the notices were received by the licensee on 18.10.2021.
Even though such notices were issued, the petitioner did
not give any reply within the stipulated period, i.e., by
09.11.2021. It is further contended that though the
petitioner is obliged under law to abide by the terms and
// 10 //
conditions of the license, she failed to discharge her
duty, as during late hours of the night, she was selling
liquor in the licensed premises as well as in other
premises. Thereby, there is violation of the licence
conditions as well as the provisions contained in the
Odisha Excise Act, 2008, for which the Inspector in-
Charge, Tamando Police Station registered a case vide
Tamando P.S Case No.221 dated 27.10.2021 for the
offences punishable under Sections 269, 270, 168, 385,
386, 506, 120(B) of the IPC, Section 52(A) of the Odisha
Excise Act, 2008, Section 96 of the Odisha Urban Police
Act, Section 3 of the Epidemic Disease Act, 1897 and
Section 5 of Odisha Fireworks Loud Speaker Act. Since
the petitioner violated the terms and conditions of the
license, action has been taken as per the provisions
contained under Section 47(C) of the Act, 2008.
5. This Court heard Mr. D. Panda, learned
counsel appearing for the petitioner and Mr. S. Nayak,
learned Additional Standing Counsel appearing for the
State-opposite parties in hybrid mode. Pleadings have
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been exchanged between the parties and with the consent
of learned counsel for the parties, the writ petition is
being disposed of finally at the stage of admission.
6. For just and proper adjudication of the case,
the provisions of Sections-20, 47 and 48 of the Odisha
Excise Act, 2008, being relevant, are extracted
hereunder:-
"20. Grant of exclusive privilege of manufacture
and sale of foreign liquor, India made foreign
liquor and country liquor or other intoxicants
etc.:-(1) The State Government may grant to any
person on such conditions and for such period as it
may think fit, the exclusive privilege-
(i) of manufacturing, or of supplying by
wholesale, or of both;or
(ii) of selling by wholesale or by retail;
or
(iii) of manufacturing or of supplying by
wholesale, or of both, and of selling by
retail,
any liquor or other intoxicant within any
specified local area :
Provided that public notice shall be given of the
intention to grant any such exclusive privilege under
the preceding sub-section and that any objections
made by any person residing within that area shall be
considered before an exclusive privilege is granted.
(2) The State Government may, by notification, confer
on any officer the power mentioned in Sub-section (1).
(3) No grantee of any privilege under Sub-section (1)
shall exercise the same unless or until he has received
a licence in that behalf from the Collector or the Excise
Commissioner.
// 12 //
xxx xxx xxx
47. Power to cancel or suspend licence, permit or
pass :- (1) Subject to such restrictions as may
prescribed, the authority granting any exclusive
privilege, licence, permit or pass under this Act may
cancel or suspend it irrespective of the period to which
the same relates -
(a) if it is transferred or sublet by the holder
thereof without the permission of the said
authority; or
(b) if any duty or fee payable by the holder
thereof has not been paid; or
(c) in the event of any breach by the holder
thereof or by any of his servants, or by any
one acting on his behalf, with his express or
implied permission, of any of the terms or
conditions thereof; or
(d) if the holder thereof is convicted of any
offence punishable under this Act or any
other law for the time being in force relating
to revenue or of any cognizable and non-
bailable offence: or
(e) Where a licence, permit or pass has been
granted on the application of the holder of
an exclusive privilege granted under Section
20 on the requisition in writing of such
holder; or
(f) if the conditions of the exclusive
privilege, licence, permit or pass provide for
such cancellation or suspension at will.
(2) When an exclusive privilege, licence, permit or pass
held by any person is cancelled under clause (a), (b),
(c) or (d) of Sub-section (1), the authority aforesaid may
cancel any other exclusive privilege, licence, permit or
pass granted to such person under this Act, or under
any other law for the time being in force relating to
Excise.
(3) The holder of an exclusive privilege, licence, permit
or pass shall not be 1. Substituted vide Odisha
Gazatte Ext. No. 2008, Dt. 07.11.2016 18 THE
ODISHA EXCISE ACT, 2008 entitled to any
compensation for its cancellation or suspension under
this Section, or to the refund of any fee or
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consideration money paid or deposit made, in respect
thereof.
(4) Before cancellation of the exclusive privilege,
licence, permit or pass the authority cancelling it shall
give to the grantee at least seven days' notice in
writing of his intention to cancel it and offer an
opportunity to him to show cause within the said
period as to why his exclusive privilege, licence, permit
or pass should not be cancelled.
xxx xxx xxx
48. Power to withdraw licences :- (1) Whenever
the authority granting any licence or exclusive
privilege under this Act considers that the licence
or exclusive privilege should be withdrawn for any
cause other than those specified in Section 47, it
shall remit a sum equal to the amount of the fees
or consideration money payable in respect thereof
for fifteen days, and may withdraw the licence
either -
(a) on the expiration of fifteen days'
notice in writing of its intension to do so,
or
(b) forthwith, without notice.
(2) If any licence or grant of an exclusive privilege is
withdrawn under clause (a) of Sub-section (1), the
Excise Commissioner may, in special circumstances,
direct the payment of such compensation as he may
consider fit, in addition to the remission of the fee to
the licensee or grantee of an exclusive privilege as
aforesaid.
(3) When a licence or grant of an exclusive privilege is
withdrawn under Subsection (1),any fee paid in
advance, or deposit made, by the licensee or grantee
of an exclusive privilege in respect thereof shall be
refunded to him, after deducting the amount, if any,
due to the State Government.
(4) For the purpose of calculating the amount due to
the State Government mentioned in Sub-section (2), the
amount of fee or consideration money payable on
account of the licence or exclusive privilege, as the
case may be, for the period during which it was in
// 14 //
force shall be taken to be the sum bearing the same
proportion to the total fee or consideration money, for
the whole period for which the licence or exclusive
privilege was settled, as the period during which the
licence or exclusive privilege was in force bears to the
full period for which the licence or exclusive privilege
was settled or granted."
7. On perusal of the aforementioned provisions of
the 2008 Act, it is made clear that for grant of exclusive
privilege of manufacture and sale of foreign liquor, India
made foreign liquor and country liquor or other
intoxicants, etc., the State Government may grant to any
person on such conditions and for such period as it may
think fit, the exclusive privilege in respect of
manufacturing, or of supplying by wholesale, or of both;
or of selling by wholesale or by retail; or of manufacturing
or of supplying by wholesale, or of both, and of selling by
retail, any liquor or other intoxicant within any specified
local area. Section 47 of the Act deals with power to
cancel or suspend licence, permit or pass subject to sub-
section (4) of Section 47 of the Act which contains that
before cancellation of the exclusive privilege, licence,
permit or pass the authority cancelling it shall give to the
grantee at least seven days' notice in writing of his
// 15 //
intention to cancel it and offer an opportunity to him to
show cause within the said period as to why his exclusive
privilege, licence, permit or pass should not be cancelled.
Therefore, it is a mandate that the authority can cancel
the license and for that the authority shall have to give
the grantee at least seven days' notice in writing of his
intention to cancel it and offer an opportunity to him to
show cause within the said period. But nothing has been
placed on record showing that observing the provisions
contained in Section 47(4) of the Odisha Excise Act, due
opportunity of hearing to the petitioner was given while
cancelling the license granted in her favour.
8. The letter/order dated 16.12.2021 shows that
it was the proposal for cancellation of license issued in
favour of the petitioner for the year 2021-22, which reads
as follows:
"Sir,
I am directed to invite a reference to your letter
No.10437 dated 02.12.2021 on subject cited above
and to say that Government, after careful
consideration, have been pleased to accord approval
for cancellation of licence of South City IMFL Hotel
'ON' Shop issued in favour of Smt. Padmabati Jena
situated at Bhagwanpur Industrial Area, P.S-
Tamandao, Dist-Khordha for the year 2021-22 under
section 47 of Odisha Excise Act, 2008."
// 16 //
On perusal of the aforesaid letter/order, it appears that
no reason has been assigned in cancelling the license.
Since no reason has been assigned, the order/letter so
issued on 16.12.2021 under Annexure-6 cannot be
sustained in the eye of law.
9. Reasons being a necessary concomitant to
passing an order, the authority can thus discharge its
duty in a meaningful manner either by furnishing the
same expressly or by necessary reference to those given
by the original authority.
In Union of India v. Mohan Lal Capoor, AIR
1974 SC 87, it has been held that reasons are the links
between the materials on which certain conclusions are
based and the actual conclusions. They disclose how the
mind is applied to the subject-matter for a decision
whether it is purely administrative or quasi-judicial and
reveal a rational nexus between the facts considered and
conclusions reached. The reasons assure an inbuilt
support to the conclusion and decision reached.
Recording of reasons is also an assurance that the
// 17 //
authority concerned applied its mind to the facts on
record. It is vital for the purpose of showing a person that
he is receiving justice.
Similar view has also been taken in Uma
Charan v. State of Madhya Pradesh, AIR 1981 SC
1915, Patitapaban Pala v. Orissa Forest Development
Corporation Ltd. & another, 2017 (I) OLR 5 and in
Banambar Parida v. Orissa Forest Development
Corporation Limited, 2017 (I) OLR 625.
10. Learned counsel appearing for the petitioner
emphatically stated that while cancelling the license of
the petitioner, no opportunity of hearing was given to
her, though Section 47(4) of the Odisha Excise Act
categorically mandates that before cancellation of license
opportunity of being heard has to be given to the grantee.
11. In view of such position, since no opportunity
of hearing was given to the petitioner while order/letter
dated 16.12.2021 under Annexure-6 was issued
cancelling her license, as required under Section 47 (4) of
// 18 //
the Act, it amounts to violations of the principles of
natural justice.
12. The essential of compliance of natural justice
is nothing but a duty to act fairly. Natural justice is an
antithesis of arbitrariness. It, therefore, follows that audi
alteram partem, which is facet of natural justice is a
requirement of Art.14.
12.1. The word 'nature' literally means the innate
tendency or quality of things or objects and the word
'just' means upright, fair or proper. The expression
'natural justice' would, therefore, mean the innate
quality of being fair.
12.2. Natural justice, another name of which is
common sense of justice, is the name of those principles
which constitute the minimum requirement of justice
and without adherence to which justice would be a
travesty. Natural justice accordingly stands for that
fundamental quality of fairness which being adopted,
// 19 //
justice must not only be done but also appears to be
done.
12.3. The soul of natural justice is "fair play in
action".
13. In HK (An Infant) in re, 1967 1 All ER 226
(DC), Lord Parker, CJ, preferred to describe natural
justice as 'a duty to act fairly'.
13.1. In Fairmount Investments Ltd. v. Secy. of
State for Environment, 1976 2 All ER 865 (HL), Lord
Russel of Killowen somewhat picturesquely described
natural justice as 'a fair crack of the whip'.
13.2. In R. v. Secy. Of State for Home Affairs, ex
p. Hosenball, Geoffrey Lane, LJ, 1977 3 All ER 452 (DC &
CA), preferred the homely phrase 'common fairness' in
defining natural justice.
13.3. In Ridge v. Baldwin, (1963) 2 SLL RT 66 at
102, Lord Morris of Borth-y-Gest observed that "it is well
established that the essential requirements of natural
// 20 //
justice at least include that before someone is
condemned he is to have an opportunity of defending
himself, and in order that he may do so that he is to be
made aware of the charges or allegations or suggestions
which he has to meet ... My Lords, here is something
which is basic to our system: the importance of
upholding it far transcends the significance of any
particular case".
13.4. In Byrne v. Kinematograph Renters Society
Ltd, (1958) All ER 579, while considering the
requirements of natural justice, Justice Narman, J
said. "........First, I think that the person accused should
know the nature of the accusation made; secondly, that
he should be given an opportunity to state his case; and
thereby, of course, that the tribunal should act in good
faith. I do not think that there really is anything more".
13.5. In Russel v. Duke of Norfolk, (1949) 1 All ER
109, Tucker, LJ, observed that one essential is that the
person concerned should have a reasonable opportunity
of presenting his case. The view of Tucker, LJ, in
// 21 //
Russell's case (supra) has been approved by the
Supreme Court of India in Rattan Lal Sharma v
Managing Committee, (1993) 4 SCC 10 : AIR 1993 SC
2115.
13.6. In General Medical Council v. Spackman,
(1943) AC 627, Lord Wright pointed out that it should
give a full and fair opportunity to every party being
heard.
13.7. In A.K. Kraipak and others v. Union of
India, AIR 1970 SC 150: (1969) 2 SCC 262, is a
landmark in the growth of this doctrine. Speaking for the
Constitution Bench, Hegde, J. observed thus:
"If the purpose of the rules of natural justice is
to prevent miscarriage of justice one fails to see
why those rules should be made inapplicable to
administrative enquiries. Often times it is not
easy to draw the line that
demarcates administrative enquiries from
quasi-judicial enquiries. Enquiries which were
considered administrative at one time are now
being considered as quasi-judicial in character.
Arriving at a just decision is the aim of both
quasi-judicial enquiries as well as
administrative enquiries. An unjust decision in
an administrative enquiry may have far
reaching effect than a decision in a quasi-
judicial enquiry".
// 22 //
In Maneka Gandhi v. Union of India, AIR
1978 SC 597 : (1978) 1 SCC 248, law has done further
blooming of this concept. This decision has established
beyond doubt that even in an administrative proceeding
involving civil consequences doctrine of natural justice
must be held to be applicable.
13.8. In Swadeshi Cotton Mills v. Union of India,
AIR 1981 SC 818, the meaning of 'natural justice' came
for consideration before the apex Court and the apex
Court observed as follows:-
"The phrase is not capable of a static and
precise definition. It cannot be imprisoned in the
straight-jacket of a cast-iron formula.
Historically, "natural justice" has been used in a
way "which implies the existence of moral
principles of self evident and urarguable truth".
"Natural justice" by Paul Jackson, 2nd Ed.,
page-1. In course of time, judges nurtured in the
traditions of British jurispruduence, often
invoked it in conjuction with a reference to
"equity and good conscience". Legal experts of
earlier generations did not draw any distinction
between "natural justice" and "natural law".
"Natural justice" was considered as "that part of
natural law which relates to the administration
of justice."
13.9. In Basudeo Tiwary v Sido Kanhu University
and others (1998) 8 SCC 194, the apex Court held that
// 23 //
natural justice is an antithesis of arbitrariness. It,
therefore, follows that audi alteram partem, which is facet
of natural justice is a requirement of Art.14.
13.10. In Nagarjuna Construction Company
Limited v. Government of Andhra Pradesh, (2008) 16
SCC 276, the apex Court held as follows:
"The rule of law demands that the power to
determine questions affecting rights of citizens
would impose the limitation that the power
should be exercised in conformity with the
principles of natural justice. Thus, whenever a
man's rights are affected by decisions taken
under statutory powers, the court would
presume the existence of a duty to observe the
rules of natural justice. It is important to note in
this context the normal rule that whenever it is
necessary to ensure against the failure of
justice, the principles of natural justice must
be read into a provision. Such a course is not
permissible where the rule excludes expressly
or by necessary intendment, the application of
the principles of natural justice, but in that
event, the validity of that rule may fall for
consideration."
13.11. The apex Court in Uma Nath Panday and
others v State of U.P. and others, AIR 2009 SC 2375,
held that natural justice is the essence of fair
adjudication, deeply rooted in tradition and conscience,
to be ranked as fundamental. The purpose of following
// 24 //
the principles of natural justice is the prevention of
miscarriage of justice.
13.12. In Mohinder Singh Gill v. The Chief
Election Commissioner, AIR1978 SC 851 : (1978) 1
SCC 405, the apex Court held that natural justice is
treated as a pervasive facet of secular law where a
spiritual touch enlivens legislation, administration and
adjudication, to make fairness a creed of life. It has
many colours and shades, many forms and shapes and,
save where valid law excludes, it applies when people are
affected by acts of Authority. It is the bone of healthy
government, recognised from earliest times and not a
mystic testament of judge-made law. Indeed, from the
legendary days of Adam-and of Kautilya's Arthasastra-
the rule of law has had this stamp of natural justice
which makes it social justice.
13.13. In Bhagwan v. Ramchand, AIR 1965 SC
1767: (1965) 3 SCR 218, the apex Court held that the
rule of law demands that the power to determine
questions affecting rights of citizens would impose the
// 25 //
limitation that the power should be exercised in
conformity with the principles of natural justice.
13.14. In Sukdev Singh v Bhagatram, AIR
1975 SC 1331: (1975)1 SCC 421, the apex Court held
that whenever a man's rights are affected by decisions
taken under statutory powers, the court would presume
the existence of a duty to observe the rules of natural
justice.
14. A contention was raised by learned
counsel for the petitioner that the authority, who
has passed the order impugned, has no
jurisdiction to cancel the license of the petitioner.
According to him, as per the provisions contained
in Section 20 of the Odisha Excise Act, 2008, the State
Government may grant to any person on such conditions
and for such period as it may think fit, the exclusive
privilege in respect of manufacturing, or of supplying by
wholesale, or of both; or of selling by wholesale or by
retail; or of manufacturing or of supplying by wholesale,
// 26 //
or of both, and of selling by retail, any liquor or other
intoxicant within any specified local area. On perusal of
the letter/order dated 16.10.2021 under Annexure-4, it
would appear that show cause notice was issued by
order of the Collector, Khurda and under the signature of
the Superintendent of Excise, Bhubaneswar. The notice
of show cause was issued on the allegation of violation of
terms and conditions of the license and COVID
guidelines. Neither the Collector, Khurda, nor the
Superintendent of Excise, Bhubaneswar is the competent
authority to issue such show cause notice for
cancellation of license of the petitioner for violation of
terms and conditions of the license and COVID
guidelines. Therefore, an incompetent person, having no
jurisdiction, has issued notice of show cause dated
16.10.2021 under Annexure-4, which cannot be
sustained in the eye of law.
15. Butterworths' Words and Phrases Legally
Defined, Vol.3 at page-113, states succinctly "by
jurisdiction is meant the authority which a Court has to
// 27 //
decide matters that are litigated before it or to take
cognizance of matters presented in a formal way for its
decision".
15.1. In Black's Law Dictionary, 6th Ed., the word
'jurisdiction' is defined as 'a term of comprehensive
import embracing every kind of judicial action'.
15.2. In Halsbury's Laws of England, 4th Ed.
Vol.1(1) pp.113-122, it is stated as follows;
"The inferior Court or tribunal lacks
jurisdiction if it has no power to enter upon an
enquiry into a matter at all; and it exceeds
jurisdiction if it nevertheless enters upon such an
enquiry or, having jurisdiction in the first place, it
proceeds to arrogate an authority withheld from it
by perpetrating a major error of substance, form
or procedure, or by making an order or taking
action outside its limited area of competence. Not
every error committed by an inferior Court or
tribunal or other body, however, goes to
jurisdiction. Jurisdiction to decide a matter
imports a limited power to decide that matter
incorrectly.
A tribunal lacks jurisdiction if (1) it is
improperly constituted, or (2) the proceedings
have been improperly instituted, or (3) authority to
decide has been delegated to it unlawfully, or (4)
it is without competence to deal with a matter by
reason of the parties, the area in which the issue
arose, the nature of the subject-matter, the value
of that subject-matter, or the non-existence of any
other pre-requisite of a valid adjudication. Excess
of jurisdiction is not materially distinguishable
from lack of jurisdiction and the expressions may
be used interchangeably.
// 28 //
Where the jurisdiction of a tribunal is
dependent on the existence of a particular state of
affairs, that state of affairs may be described as
preliminary to, or collateral to the merits of, the
issue, or as jurisdictional.
There is a presumption in construing
statutes which confer jurisdiction or discretionary
powers on a body, that if that body makes an
error of law while purporting to act within that
jurisdiction or in exercising those powers, its
decision or action will exceed the jurisdiction
conferred and will be quashed. The error must be
one on which the decision or action depends. An
error of law going to jurisdiction may be
committed by a body which fails to follow the
proper procedure required by law, which takes
legally irrelevant considerations into account, or
which fails to take relevant considerations into
account, or which asks itself and answers the
wrong question.
The presumption that error of law goes to
jurisdiction may be rebutted on the construction of
a particular stature, so that the relevant body will
not exceed its jurisdiction by going wrong in law.
Previously, the courts were more likely to find that
errors of aw were within jurisdiction; but with the
modern approach errors of law will be held to fall
within a body's jurisdiction only in exceptional
cases. The Court will generally assume that their
expertise in determining the principles of law
applicable in any case has not been excluded by
Parliament.
Errors of law include misinterpretation of a
statute or any other legal document or a rule of
common law; asking oneself and answering the
wrong question, taking irrelevant considerations
into account or failing to take relevant
considerations into account when purporting to
apply the law to the facts; admitting inadmissible
evidence or rejecting admissible and relevant
evidence; exercising a discretion on the basis of
incorrect legal principles; giving reasons which
disclose faulty legal reasoning or which are
inadequate to fulfil an express duty to give
reasons, and misdirecting oneself as to the
burden of proof".
// 29 //
The same has been referred in Reliance Airport
Development Authorities v. Airport Authority, (2006)
10 SCC 1.
15.3. Wade's Administrative Law 7th Ed. (1994)
Chapter 9, states as follows:
"The Court will quash for any decisive error,
because all errors of law are now jurisdictional".
The same has been taken note by the apex Court in
Mafatlal Industries Ltd. v. Union of India, (1997) 5
SCC 536.
15.4. In Smt. Ujjam Bai v. State of U.P.
(Constitution Bench), AIR 1962 SC 1621, the apex Court
held that 'jurisdiction' is the power to hear and
determine, it does not depend upon the regularity of the
exercise of that power or upon correctness of the decision
pronounced, for the power to decide necessarily carries
with it the power to decide wrongly as well as rightly.
15.5. In Official Trustee West Bengal v.
Sachindranath Chatterji & Ors., AIR 1969 SC 823, the
// 30 //
apex Court, while considering Section-9 of the Code of
Civil Procedure, held that 'jurisdiction' means the legal
authority to administer justice according to the means
which the law has provided and subject to the limitations
imposed by that law upon the judicial authority.
15.6. In Raja Soap Factory v. S.P. Shantharaj,
AIR 1965 SC 1449, the apex Court held that by
"jurisdiction" is meant the extent of the power which is
conferred upon the Court by its Constitution to try a
proceeding.
15.7. In Hari Prasad Mulshankar Trivedi v. V.B.
Raju, AIR 1973 SC 2602, the apex Court held that the
word "jurisdiction" is an expression which is used in a
variety of senses and takes its colour from its context.
Whereas the 'pure' theory of jurisdiction would reduce
jurisdictional control, to a vanishing point, the adoption
of a narrower meaning might result in a more useful legal
concept even though the formal structure of law may lose
something of its logical symmetry.
// 31 //
15.8. In A.R. Antulay v. R.S. Nayak, AIR 1988 SC
1531, the apex Court held that jurisdiction is the
authority or power of the Court to deal with a matter and
make an order carrying binding force in the facts.
15.9. In Harpal Singh v. State of Punjab, (2007)
13 SCC 387, the apex Court held that 'jurisdiction'
means the authority or power to entertain, hear and
decide a case and to do justice in the case and determine
the controversy. In absence of jurisdiction the Court has
no power to hear and decide the matter and the order
passed by it would be a nullity.
15.10. In CIT v. Pearl Mech. Engg. & Foundry
Works (P.) Ltd., (2004) SCC 597, the apex Court held
that the word 'jurisdiction' implies the Court or tribunal
with juridical power to hear and determine a cause, and
such tribunal cannot exist except by authority of law.
15.11. In J.U. Mansukhani & Co. v. Presiding
Officer, AIR 2000 Del 103, the High Court Judicature at
Delhi held that the term "Jurisdiction" is normally
// 32 //
understood as the authority to decide a matter or
dispute.
16. Taking into consideration the meaning of
'jurisdiction', as prescribed in various dictionaries as well
as decisions of different Courts of the country including
the apex Court, it can be safely concluded that so far as
the question of 'jurisdiction' is concerned it would relate
to initiation of the proceeding by an authority. In the
instant case, basing upon the intimation received from
the IIC, Tamando Police Station, cancellation of the
license was made without following due procedure and
without complying with the principles of natural justice,
which cannot be sustained in the eye of law.
17. On the basis of the facts and law, as discussed
above, this Court is of the considered view that the
order/letter dated 16.12.2021 passed by the Under
Secretary to Government of Odisha, Excise Department
under Annexure-6 approving the cancellation of license
issued in favour of the petitioner in respect of South City
IMFL Hotel 'ON' Shop situated at Bhagwanpur Industrial
// 33 //
Area, P.S. Tamandao, District-Khurda for the year 2021-
22 cannot be sustained in the eye of law. Thereby, the
same is liable to be quashed and is hereby quashed. The
matter is remitted back to opposite party no.1 for being
adjudicated afresh by passing a reasoned and speaking
order in accordance with law in compliance of the
principles of natural justice by affording opportunity of
hearing to the petitioner.
18. In the result, therefore, the writ petition is
allowed. But, however, under the facts and
circumstances of the case, there shall be no order as to
costs.
(DR. B.R. SARANGI)
ACTING CHIEF JUSTICE
M.S. RAMAN, J. I agree.
(M.S. RAMAN)
JUDGE
Signed by: ALOK RANJAN SETHYOrissa High Court, Cuttack
Designation: A.R-cum-Sr. Secretary
Reason: Authentication The 11th January, 2024, Alok
Location: ORISSA HIGH COURT
Date: 11-Jan-2024 17:46:42
