The Appellants are before us in the second round. They, except the State of Chhattisgarh, were granted excise licences. Grant of such licences indisputably is governed by the Chhattisgarh Excise Act, 1915 ...
No Acts & Articles mentioned in this case
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CASE NO.:
Appeal (civil) 2152 of 2006
PETITIONER:
Ashok Lenka
RESPONDENT:
Rishi Dikshit & Ors
DATE OF JUDGMENT: 21/04/2006
BENCH:
S.B. Sinha & P.K. Balasubramanyan
JUDGMENT:
J U D G M E N T
[@SLP (C) No. 5141 of 2006]
CIVIL APPEAL NO.2161 OF 2006
[@SLP (C) 5168 of 2006]
CIVIL APPEAL NO.2160 OF 2006
[@SLP (C) 5169 of 2006]
CIVIL APPEAL NO.2159 OF 2006
[@SLP (C) 5186 of 2006]
CIVIL APPEAL NO.2158 OF 2006
[@SLP (C) 5202 of 2006]
CIVIL APPEAL NO.2156 OF 2006
[@SLP (C) 5288 of 2006]
CIVIL APPEAL NO.2155 OF 2006
[@SLP (C) 5291 of 2006]
CIVIL APPEAL NO.2157 OF 2006
[@SLP (C) 5296 of 2006]
CIVIL APPEAL NO.2154 OF 2006
[@SLP (C) 5571 of 2006]
S.B. SINHA, J:
Leave granted.
INTRODUCTION
The Appellants are before us in the second round. They, except the
State of Chhattisgarh, were granted excise licences. Grant of such licences
indisputably is governed by the Chhattisgarh Excise Act, 1915 (for short
"the Act"). On or about 15.3.2002, the State Government under 'the Act'
made rules known as Chhattisgarh Excise Settlement of Licences for Retail
Sale of Country/ Foreign Liquor Rules, 2002 (for short "the Rules").
The State issued notices inviting tenders for grant of licences under
the Rules. Pursuant to or in furtherance of the said notices inviting tenders
about 2,64,703 applications were filed. The grant of licences in favour of
the Appellants in some of the appeals came to be questioned before the
Chhattisgarh High Court. By reason of a judgment dated 31.3.2005, a
Division Bench of the said Court allowed the writ petition and directed
cancellation of the licences. Appeals thereagainst were filed before this
Court. Interim orders were passed therein as a result whereof licensees
continued to carry on their business. This Court, however, while refraining
itself from setting aside the entire selection process thought it fit to ask the
respective District Level Committees to consider the matter relating to grant
of such licences afresh. Having regard to the actions of the statutory
functionaries, the exercises as regard scrutiny so as to arrive at a satisfaction
that the requirement of the Rules vis-a-vis selection process were required to
be undertaken by the Selection Committees. They were directed to do so
afresh.
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We would advert to the said directions a little later. However, we at
this juncture, may notice that, according to the State, in terms of the
directions of this Court, the District Level Committee under the strict
supervision of the Chief Secretary as also the Commissioner of Excise went
into the said exercise over again and found that the licensees were not only
eligible therefor but also fulfilled other conditions laid down in the Rules. It
is not in dispute that the writ petitioners \026 Respondents, filed objections
before the District Level Committee. The said objections were rejected.
Aggrieved by and dissatisfied therewith, the writ petitioners \026 Respondents
filed a writ petition before the Chhattisgarh High Court. The State in the
meanwhile issued a notification effecting an amendment in Rule 9 of the
Rules in terms of a notification dated 22.3.2005.
PROCEEDINGS BEFORE THE HIGH COURT
In the writ petition, the following reliefs were prayed for:
"7.1 That, this Hon'ble Court may be pleased to
send for the entire records from the respondents
and district committees in regard to the compliance
of the directions of the Hon'ble Supreme Court
and observance of the statutory rules and all such
other relevant and complete record as are in their
possession leading to the affirmation of the
selection of the select candidates.
7.2 The respondents 1 to 12 be directed to satisfy
this Hon'ble Court regarding the compliance of the
mandatory directions as given by the Hon'ble
Apex Court in the case of Ashok Lanka Vs. Rishi
Dikshit.
7.3 That the Hon'ble Court may be pleased to
issue a writ in the nature of mandamus quashing
and annulling the entire selection of respondents
13 to 89 and also quashing the temporary licences
by issuing a writ in the nature of certiorari.
That, the Hon'ble Court may be pleased to
issue a writ in the nature of mandamus
commanding the respondents 1 to 12 to make
selection strictly in accordance with law, rules and
the directions of the Hon'ble Supreme Court,
afresh.
7.4 That the contempt' proceedings be initiated
against the respondents 2 to 12 for the non-
compliance of the order of the Hon'ble Apex
Court."
Before the High Court, the questions raised by the parties inter alia
were:
(i) The permanent addresses of the persons in whose favour licences
were granted were not property verified.
(ii) The temporary addresses given by them were wrong and in that
view of the matter scrutiny of their applications could not be
carried out.
(iii) Provisions of Rule 9(d)(iii) in terms whereof criminal antecedents
not only of the applicants but also of their family members were
required to be verified, had not been complied with. According
to the State, however, there was no necessity to verify the criminal
background of the family members of the licensees as a mere error
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had crept in in the English version of the notification which stood
clarified by issuing another notification dated 5.7.2005.
Before the High Court, the parties produced a large number of
documents. It is not in dispute that 191 persons had been granted licences.
Before the High Court, however, 65 licensees were made parties and 126
were not. The private respondents also filed their counter affidavits
contending that the allegations made in the writ petition were incorrect.
Several instances of alleged irregularities on the part of the District Level
Committee in the matter of proper scrutiny of the contents of the
applications filed by the licensees had been brought on record. The State
appears to have filed documents containing approximately 3000 pages in
order to show that the directions of this Court had been complied with, in
letter and spirit. In reply to the said counter affidavit, the writ petitioners
filed a rejoinder to which we shall refer to hereinafter. We may, however,
notice that the State in purported response to the said rejoinder affidavit filed
by the writ petitioners filed an additional affidavit dealing with the
contentions raised therein.
The High Court in its impugned judgment has noticed some of the
purported irregularities committed by the District Level Committees.
Several instances were brought to the notice of the High Court to show as to
how and in what manner the purported irregularities in the matter of
selection of the licensees had been effected, allegedly as a result whereof the
directions contained in this court's decision in Ashok Lanka and Another v.
Rishi Dixit and Others [(2005) 5 SCC 598] (Ashok Lanka - I) were flouted.
The High Court held:
"Thus, it is quite clear that respondents 1 to 12
have failed to carry out the directions issued by the
Supreme Court in the manner expected of them
and in conformity with the mandatory Rules 9 and
11 of the Rules\005"
The High Court noticed the contents of the additional return filed by
the State on 23.02.2006 but apparently the contents thereof had not been
taken into consideration on the ground that the same was by way of sur-
rejoinder to the rejoinder filed by the writ petitioners and, as such, such
pleadings are impermissible without permission of the court. It was
furthermore held that in the said additional return, untenable defences were
set up covering up serious lapses committed by Respondent Nos. 1 to 12.
The High Court thereafter proceeded to cite examples in support of its
findings. It was noticed that the official respondents wrongly placed the
burden of proof on the objectors like the writ petitioners to prove that the
applicants for grant of licences did not possess the prescribed eligibility, as
the writ petitioners objectors were not supposed to prove the negative facts
by producing evidence. The responsibility cast on the statutory authorities
has, thus, been sought to be placed on the objectors which constituted a
serious flaw in the enquiry vitiating the selection process.
Before the High Court, a chart was produced by the writ petitioners
showing common addresses of a number of licensees. The High Court in
detail noticed the findings of this Court and opined that the State and its
officers failed to comply therewith and, furthermore, flouted the mandatory
provisions of Rules 9 and 11.
As regards the purported clarification made by the State in respect of
the variation in the Hindi version of Rule 3 and the English version thereof,
it was held:
(i) The State and its officers were bound by the decisions of this
Court.
(ii) The English version shall prevail over the Hindi version, and
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(iii) In any event, there is no conflict between the English version and
the Hindi version.
On the aforementioned premise, holding that licences were illegally
granted to the Respondent Nos. 13 to 89 of the writ petition, it was directed:
"\005The respondents 13 to 89 who has the
beneficiaries of the illegal acts of respondent No. 1
to 12 cannot be allowed to have the continued
benefits of wrong-doing of respondents 1 to 12 till
the term of the licences comes to an end."
On the aforementioned premise, the writ petitions filed by the
contesting respondents herein were allowed.
SUBMISSIONS
We have heard a large number of counsel in support of these appeals.
Mr. Ashok Desai, Mr. Sunderam, Mr. Dushyant Dave, Mr. Mukul Rohtagi,
Mr. C.S. Vaidyanathan and Mr. Ranjit Kumar appearing on behalf of
successful licensees submitted:
(i) The High Court committed a manifest error insofar as it failed to
take into consideration that the compliance of this Court's order
was not carried out with utmost diligence.
(ii) Rule 8 does not envisage that a resident of a State other than the
State of Chhattisgarh was not eligible for filing application for
grant of licence and only in some cases temporary addresses had
been given only for the purpose of postal communications.
(iii) As regards compliance of Rules 9 and 11, the age of the candidates
was verified from documents such as driving licence, election ID
Card, PAN Card, telephone bills, electricity bills, ration cards,
residence certificates issued by competent authorities, birth
certificates, school certificate, etc.
(iv) In cases where more than one document had been submitted, the
Selection Committee satisfied itself as regards the correctness
thereof from any of the said documents. As, for example, when a
certificate in proof of residence had not been issued by an authority
competent therefor, other documents such as driving licence, PAN
Card, Election ID Card were taken into consideration.
(v) The High Court, in arriving at the conclusion as regards purported
non-compliance of the rules, failed to notice various documents
and drew inferences which were contrary to the records.
(vi) So far as the alleged non-compliance of Rule 9(c) of the Rules is
concerned, a consolidated list of defaulters along with their
complete addresses was available with all the licensing authorities
and the same had been relied upon while scrutinizing the various
applications.
(vii) As regards, alleged compliance of Rule 9(d) of the Rules, it was
submitted that the Superintendent of Police of the respective
districts where the applicant was a resident of more than one
district and one State had issued character certificates.
(viii) In terms of Rule 12, in the case where there had been multiplicity
of applications, a lottery was held which was completely above
board being a computer generated programme operated by a
Central Government organization, viz. National Informatics
Centre.
(ix) The High Court had wrongly held that certificates were to be
granted only by the Revenue Authorities of Chhattisgarh
inasmuch as nothing in the excise rules or the decision of this
Court precluded a person who is resident of another State from
applying for and obtaining a liquor licence.
(x) The requirements of the Rules being that the applicant should be a
citizen of India and above the age of 21, the certificates granted, as
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also character certificates, issued by the Superintendents of Police
of their respective Districts met the requirements of the Rules.
(xi) Licences of some of the licensees could not have been directed to
be cancelled on the basis of purported irregularities committed by
the District Level Committee in respect of those who were not
parties to the writ petition.
(xii) Since many of the applicants were not permanent residents of the
State they had merely given a temporary address along with the
permanent address and only for that reason there had been
overlapping of addresses.
(xiii) The High Court having not held the whole selection process to be
bad in law, no situation arose requiring cancellation of the entire
set of licenses. The High Court was required to identify the cases
whose requirements of law had not been complied with and only in
such cases, the licensees could have been directed to be revoked.
(xiv) In view of the directions contained in Para 40 of this Court's
judgment in Ashok Lanka - I (supra), the onus of proof, being on
the writ petitioners, the High Court committed a mistake in holding
that the burden of proof had been wrongly thrown on the objectors.
(xv) The findings of the High Court as regards purported non-
compliance of the directions of this Court by the State is based on
a wrong premise as for example, in the case of Abhay Singh,
although the High Court proceeded on the basis that he is a fake
person, no objection in this behalf was taken by the writ petitioners
before the District Level Committees.
Mr. Srivastava, learned counsel appearing on behalf of the writ
petitioners, however, has drawn our attention to several instances showing
how the age of some of the applicants for grant of licences had been verified
only on the basis of the certificate issued by a doctor or a dental surgeon
which could not be held to be valid proof therefor. In some cases, only
dwelling certificates had been produced by way of proof of residence which
again could not have been considered to be valid proof having not been
certified by any statutory or public authority. In view of the admitted fact
that several persons have shown the same addresses, fictitious persons might
have been granted licences.
STATUTORY PROVISIONS
The Act was enacted to consolidate and amend the Excise Law in the
State of Chhattisgarh. Section 7(e) of the Act provides that the State
Government may, by notification, for the whole or for any specified part of
the State, delegate to the Chief Revenue Authority or the Excise
Commissioner all or any of its powers under the said Act except the power
conferred by Section 62 to make rules.
Rule 4 provides for formation of groups of liquor shops; clause (iii)
whereof prohibits an applicant/firm/company from obtaining licences for
more than two groups of shops. Rule 5 provides for the period of licence
which would be for an excise year or part thereof.
Rules 6 and 7 of the Rules read as under:
"6. Application fee with application \026
The application fee with the application for
licence of groups of liquor shops shall be as shown
in the table below \026
S.No.
Reserve Price of the group
Prescribed
application fee
1.
For group of shops of Rs. 5
lakh to 1 crore
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Rs. 1,000/-
2.
For group of shops of Rs. 1
crore to 2 crore
Rs. 3,000/-
3.
For group of shops of Rs. 2
crore to 8 crore
Rs. 5,000/-
The amount of application fee will neither
be adjustable in licence fee nor the amount will be
refundable in case of not granting the licence.
7. Issue of licence for liquor shops -
The licences for liquor shops shall be issued
by the licensing authority on deposit of the security
amount and licence fee for the month of advance
by the licensee."
Rule 8 provides for procedure for grant of licence, which reads as
under:
"8. Procedure for grant of licence\027
(a) Whenever a new licence is proposed to be
granted in an area or locality, the licensing
authority shall invite the applications for this
purpose after giving wide publicity through
daily newspapers having circulation in that
area.
(b) A list of shops of country/foreign liquor for
which the licensing authority proposes to grant
licence shall be exhibited along with shopwise
licence fee minimum monthwise guaranteed
quantity, security amount, and annual quantity
in office of Collector, Tehsil, District Excise
Officer/Assistant Commissioner, Excise and
Deputy Commissioner, Excise (Flying Squad).
(c) Application for grant of licence with
application fee shall be submitted in the
prescribed form as appended to these Rules as
Annexure 4.
(d) The last date to be fixed for the receipt of
application shall not be earlier than ten days
with effect from the date of publication of the
advertisement in the newspapers."
Rule 9 provides that the applicant shall affirm an affidavit as regards
the matters specified therein. It reads as under:
"9. Eligibility conditions for applicant \026 The
applicant has to fulfill the following conditions for
obtaining the licence for shop/ group of shops of
Country / foreign liquor.
(a) Should be a citizen of India or a
partnership firm whose partners are
citizen of India. No change in
partnership shall be allowed after
settlement of shop (s) groups of shops
except with the permission of the Excise
Commissioner.
(b) Should be above 21 years of age.
(c) Should not be defaulter/ blacklisted or
debarred from holding an excise licence
under the provisions of any rules made
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under the Act.
(d) Has to submit an affidavit duly verified
by public notary as proof of the
following, namely \026
(1) That he possessed or has an
arrangement for taking on rent
suitable premises in that
locality for opening the shops
in accordance with the rules.
(2) That he possess good moral
character and have no criminal
background and have not been
convicted of any offence
punishable under the Act or
Narcotic Drugs and
Psychotropic Substances Act,
1985 or any other law for the
time being in force or any other
cognizable and non-bailable
offence.
(3) That in case he is selected as
licensee, he will furnish a
certificate issued by
Superintendent of Police of the
district of which he is the
resident, showing that he as
well as his family members
possess good moral character
and have no criminal
background or criminal record,
within thirty days of grant of
licence.
(4) That he shall not employ any
salesmen or representative who
has criminal background as
mentioned in clause (iii) or who
suffer from any infectious or
contagious disease or is below
21 years of age or a woman.
(5) That no government dues are
outstanding against him."
Rule 10 envisages formation of a district-level committee; whereas
Rule 11 provides for selection of licensees, clauses (b) and (c) whereof read
thus:
"(b) The said Committee shall select licensees
from the list of applicants. In case more than one
applicants are found suitable for any particular
group of shops the Committee shall select the
licensee for such group of shops by lottery. In case
the selected applicant does not deposit the required
amount according to Rule 13 and does not fulfil
the prescribed formalities or is unable to arrange
suitable premises for the shops within stipulated
period, the licensing authority shall cancel the
allotment and take steps for resettlement of the
shops/group of shops.
(c) In case there is no application for a particular
group of shops or no applicant is found suitable for
a group of shops the licensing authority shall take
immediate steps for resettlement as per procedure
laid down in Rule 8."
Rule 12 reads as under:
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"12. Statement of settled shops \026 A statement of
the settled shops alongwith names and address of
the licensees, shop wise annual quantity, details of
security amount and licence fee deposited shall be
sent by the District Excise Officer/ Assistant
Commissioner Excise to the Excise Commissioner
within 15 days of the settlement."
Rule 13 provides for payment of licence fee and security amount,
which reads as under:
"13. Payment of licence fee and security
amount.\027In case an applicant is selected as
licensee, he shall deposit one month's amount of
licence fee and the security amount within three
days of being informed of his selection. If he fails
to deposit the amount of one-month licence fee and
security amount within prescribed period, his
selection shall stand cancelled and the said
licensee shall be debarred from holding any excise
licence in future, anywhere in the State and his
application fee shall also stand forfeited. A
consolidated list of such defaulters under this rule,
along with their complete addresses shall be
forwarded by the District Excise Officer/Assistant
Commissioner to the Excise Commissioner, who
will circulate the consolidated list of the State to
all the licensing authorities of the State."
CONSTITUTIONAL SCHEME
When a law is made, having regard to the phraseology used in Part IV
of the Constitution of India, it is expected that law made or actions taken
would be in furtherance thereof. In terms of the Directive Principles of State
Policy, the State is bound to make endeavours to promote public health
which is one of its primary duties of the State. One important component of
the said directions was regulation and control over the trade in intoxicating
drinks so as to enable the State to curb or minimize, as far as possible, the
consumption thereof. The State may or may not prohibit manufacture, sale
or consumption of liquor but it is vital that while parting with its exclusive
privilege to deal with intoxicating liquor, the provisions of the Act and the
Rules for which the same had been enacted must be strictly complied with.
The Act and the Rules deal only with control and regulations. There
was no provision which gives any discretion to the authorities concerned to
relax the provisions of the Rules. The Rules in this behalf again must be
framed upon taking into consideration of all relevant factors. The State in
making the rules and formulating the policy decisions must be guided by
public interest. In such matters, the State has a positive obligation to ensure
that any activity contemplated, strictly conforms to the requirements of
public good and is not otherwise derogative of public health. The State parts
with its exclusive privilege on certain statutory conditions such as payment
of excise fee. When it lays down criteria for selection of persons who would
become qualified for grant of licence under the Act, not only the eligibility
criteria therefor should be laid down, but having regard to its past experience
as to how and in what manner, the licensees find means and methods to
circumvent the said provisions, all endeavours should be made to plug all
loopholes. The State has an extremely solemn obligation to fulfil in that
behalf. All information supplied by the applicants for licences, thus, must
undergo and satisfy the 'strict scrutiny test'. The State should not treat its
right of parting with its privilege only as a means of earning more and more
revenue. It may certainly earn revenue but only upon fulfillment of its
constitutional and statutory obligations. There exists a strong underlying
notion of public health and welfare when the matter comes to retention of
the exclusive privilege and/ or parting therewith either in whole or in part.
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Inception of Article 47
Article 47 of the Constitution of India reads as under:
"The State shall regard the raising of the level of
nutrition and the standard of living of its people
and the improvement of public health as among its
primary duties and, in particular, the State shall
endeavour to bring about prohibition of the
consumption except for medicinal purposes of
intoxicating drinks and of drugs which are
injurious to health."
The importance of Article 47 of the Constitution of India may have to
be noticed tracing the history back from the date of constitutional debate.
With a view to find out the intent and purport for which the said provision
was inserted, Shri H.M. Seervai in his treatise, Constitutional Law of India,
Vol.II, 4th Ed. p.2012 noticed that all sections of the society including the
Mohammadan community, whose social habits were reinforced by the
Koranic injunction in relation to intoxicating liquor, supported the insertion
of such a provision. The learned Author stated:
"The prohibition of intoxicating liquor had long
been a part of the policy of the Indian National
Congress; and its inclusion in Art. 47 received
support from the Mohammedan community whose
social habits were reinforced by the Koranic
injunction against intoxicating liquor. In
considering the directive in Art. 47, it may be
observed that alcohol (the intoxicating ingredient
of liquor) is a "narcotic", a word replaced by the
word "depressant" to describe the same effects
contrary to the popular belief that it is a stimulant.
It is not mere accident that intoxicating liquor and
dangerous drugs have been clubbed together in
entry 8, List II."
Article 47 has a unique feature in the sense that the first part refers to
public health, whereas the second part specifically refers to prohibition of
liquor. Similar provisions are found in the Constitution of U.S. and
Lithuania as well. It is of some significance to note that Section 70 was
inserted in the draft Constitution after the first part was suggested by Shri
B.N. Rau derived from the recommendations of the U.N. Conference on
Food and Agriculture, 1943 as several members, including Seth Govind Das
and Shri Bishwanath Das specifically wanted that prohibition should find
specific mention at a suitable place in the Constitution. One of the members,
Kazi Sayed Karimuddin expressed his desire that such a provision should be
included in a separate Article having regard to the preachings of Mahatma
Gandhi and also having regard to the fact that the same has been approved
by all communities. In Article 47, however, only liquor was specifically
mentioned at the instance of Shri Bishwanath Das who opined that if
prohibition of liquor is to be included in a separate Article, other harmful
articles like opium, tabacco and like products should also find mention in
Article 47. (See CAD Vol. VII No.9, pp. 496 to 498.)
Regulation of liquor vis-`-vis Public Health
Having noticed the parliamentary debate, we may also notice the
importance of regulation of liquor vis-`-vis public health.
In common parlance, public health tends to refer only to aspects of
medical care and prevention of disease. However, a true interpretation of
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the term 'public health' will include not only this traditional notion but
several other aspects that promote healthy living.
Public health refers to both a goal for the health of a population and to
professional practices aimed at its attainment. In both senses, the term tends
to be broadly defined. The Constitution of the WHO defines the goal as a
state of complete physical, mental and social well-being and not merely the
absence of disease or infirmity. The Institute of Medicine defines it as the
fulfillment of society's interest in assuring the conditions in which people
can be healthy. Public health, as the practice that pursues the goal of a
healthy population, also has a broad definition, including the development of
the social machinery, which will ensure to every individual in the
community a standard of living adequate for the maintenance of health. [See
Lawrence O. Gosten, Scott Burris and Zita Lazzarini, The Law and the
Public's Health: A Study of Infectious Disease Law in the United States,
Columbia Law Review, Vol 99 No. 1, January 1999, pp. 61 and 69]
The relationships among medicine, public health, ethics and human
rights are now evolving rapidly, in response to a series of events,
experiences and struggles. In general people equate medical care with
health, but the vast majority of research into the health of populations
identifies so called 'societal factors' as the major determinants of health
status. Public health, although starting as a social movement, has at least in
recent years, responded relatively little to this profound knowledge about the
dominant impact of society on health, such as behaviour like excess alcohol.
Given that the major determinants are societal in nature, it seems evident
that only a framework that expresses fundamental values in societal terms,
and a vocabulary of values that links directly with societal structure and
function, can be useful to the work of public health. [See Jonathan M. Mann,
Public Health and Human Rights, American Bar Association Journal on
Human Rights, Fall 1998, Vol. 25 No.1, pp. 2,3 and 4.]
Grant of licence as a measure of control of intoxicating liquor is an
age-old phenomenon. Even in England several statutes have been enacted
therefor including the current one which was enacted in 2003. (See
Halsbury's Laws of England, 4th Ed. Volume 26 p.5.)
Regulation of liquor under the Act
The Chhattisgarh Act provides for a unified regulation of sale and
supply of alcohol. It seeks to promote fundamental licencing objectives. It
enjoins several duties upon the licensing authorities, namely, (i) prevention
of crime and disorder, (ii) public safety; (iii) prevention of public nuisance;
and (iv) the protection of children from harm.
In view of Article 47 of the Constitution, indisputably, public health
in society plays a vital role. By the said expression, the makers of the
Constitution refer both to the goal of health of the public and the attending
promotion of healthy practices.
Prohibition of liquor was, thus, inserted as part of public health. Strict
control was contemplated and it was made necessary. This in turn would
require that while granting licence the statutory committees and other
authorities must resort to strict scrutiny of the applications. For the purpose
of grant of licence, the law as contained in the rules, do not contain any
provision for relaxing any condition. The legislative policy, therefore, was
not to grant any relaxation therein. Relaxation, it is trite, can be granted by
the authorities provided there exists a specific provision therefor. Relaxation
cannot be granted by exclusion, when there does not exist any provision.
This aspect of the matter has recently been considered by this Court wherein
it was held that if an exemption notification is to be issued, the same must
be done within the four-corners of the legislative policy. (See Consumer
Action Group and Another v. State of T.N. and Others, Tata Iron & Steel
Co. Ltd. v. State of Jharkhand and Others, (2005) 4 SCC 272, Government
of India and Ors. v. Indian Tobacco Association, (2005) 7 SCC 396 and
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Commnr. Of Central Excise, Raipur v. Hira Cement, JT 2006 (2) SC 369]
The provisions of the Act therefore deserve strict construction. We
may in passing notice that whereas in cases of suspect legislation or where
the statute ex facie is arbitrary requiring the burden of proof of the State to
be shifted, the strict scrutiny test would apply whereas in a case where the
provision is not so arbitrary, intermediate construction, the doctrine of
proportionality would apply. [See R. v. Hughes 2002 UKPC 12 : 12 BHRC
243 (P.C.)]
We may also notice that the English Courts while departing from the
Wednesbury principle developed the 'anxious scrutiny' test which was later
modified by the Court of Appeal into the strict scrutiny test. (See
Bugdaycay v. Secy of State for Home Department (1987) 1 All ER 940 at
952, R. v. Secy of State for Home Department, ex. p. Brind (1991) 1 AA ER
720, R. v. Ministry of Defence, ex p Smith (1996) 1 All ER 257 and B.
Archana Reddy v. State of AP, (2005) 6 ALT 6).
NECESSARY PARTIES
The licensees whose licences were directed to be cancelled were
necessary parties to the writ petition. In the absence of any opportunity of
hearing given to them, their right to continue their businesses has been
violated. It is not a case where the State, for one reason or the other, did not
intend to part with its exclusive privilege to deal in liquor. It is also not a
case where the State has acted in such an arbitrary manner which would
attract the wrath of Article 14 of the Constitution of India. All the licensees
in relation to whom allegations had been made, thus, were necessary parties
in the writ petition and in their absence the same could not have been
decided.
Furthermore, it would be a travesty of justice if the parties against
whom serious allegations were made and are said to have been found had
not been made the parties to the writ petition as by reason thereof they in
terms of the High Court judgment were not allowed to carry on their
businesses in terms of the licences granted in their favour.
All such persons whose licences had been cancelled were, thus,
necessary parties.
EN-MASSE CANCELLATION \026 PRINCIPLES OF
In law it is permissible to cancel the entire selection process if it is
held that the same is tainted to such an extent that it may not be possible to
separate the innocent from the tainted ones. As, for example, in a case of
mass cheating adopted by the students in a Board Examination, it may be
permissible to cancel the entire examination. When selections, however, are
carried out not by one agency but by several ones, the principle of en masse
cancellation may not apply. In this case, admittedly, several District Level
Committees have carried out the selection process and in that view of the
matter it was obligatory on the part of the High Court to consider the mode
of manner of selection made by each one of them individually. It was not a
case of mass cheating in an examination or an illegality or gross irregularity
in the selection process which would lead to cancellation of the entire
selection process.
In the writ petition, the writ petitioners have not disclosed as to how
each one of the licensees who had appeared as respondents therein were
ineligible or otherwise disqualified and/ or did not fulfil the conditions
therefor. Had such opportunities been given, the State as also the said
respondents could have met the said allegations. Such allegations were
made only in the rejoinder. No new plea ordinarily could have been
permitted in the rejoinder without the leave of the court. We would not have
commented upon this as the High Court does not appear to have placed
reliance upon the additional affidavit filed by the State inter alia on the
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ground that the same being a sur-rejoinder could not have been filed. The
High Court's attention was evidently not drawn to the fact that writ
petitioners brought on record new facts for the first time in the rejoinder and,
thus, the State was entitled to file a sur-rejoinder controverting the
allegations made therein.
In Benny T.D. and Others v. Registrar of Cooperative Societies and
Another [(1998) 5 SCC 269], this Court repelled a contention raised therein
that in view of the findings of the Public Inquiry Commission that there has
been tampering of marks in respect of several candidates and as such there
has been no fair and objective selection, public interest demanded annulment
of the entire selection. This Court held that the same could not be done as
the same would tantamount to gross violation of principles of natural justice
which cannot be brushed aside on the ground that public interest demands
annulment of the selection.
Yet again in Onkar Lal Bajaj and Others v. Union of India and
Another[(2003) 2 SCC 673], this Court while dealing with a case of en
masse cancellation of the licences granted to the LPG Distributors as a result
whereof unequals were said to have been clubbed by reason of arbitrary
exercise of executive power, the same was held to be impermissible stating:
"The solution by resorting to cancellation of all
was worse than the problem. Cure was worse than
the disease. Equal treatment to unequals is nothing
but inequality. To put both the categories \027
tainted and the rest \027 on a par is wholly
unjustified, arbitrary, unconstitutional being
violative of Article 14 of the Constitution\005"
It was further held:
"The aforesaid observations would apply with
equal if not more force to DSBs if media exposure
that the allotments were made either to the high
political functionaries themselves or their near and
dear ones is correct, the authorities would not only
be justified in examining such cases but it would
be their duty to do so. Instead of fulfilling that duty
and obligation, the executive cannot unjustly resort
to cancellation of all the allotments en masse by
treating unequals as equals without even prima
facie examining any cases exposed by the
media\005"
It was also not a case where the writ petitioners had impleaded the
private respondents in their representative capacity. In the writ proceedings,
no leave in terms of Order 1, Rule 8 of the Code of Civil Procedure or the
principles analogous thereto had been obtained. No public notice had also
been given as regard pendency of the said writ petition.
In Union of India and Others v. Rajesh P.U., Puthuvalnikathu and
Another [(2003) 7 SCC 285], this Court observed:
"\005Applying a unilaterally rigid and arbitrary
standard to cancel the entirety of the selections
despite the firm and positive information that
except 31 of such selected candidates, no infirmity
could be found with reference to others, is nothing
but total disregard of relevancies and allowing to
be carried away by irrelevancies, giving a
complete go-by to contextual considerations
throwing to the winds the principle of
proportionality in going farther than what was
http://JUDIS.NIC.IN SUPREME COURT OF INDIA Page 13 of 29
strictly and reasonably to meet the situation. In
short, the competent authority completely
misdirected itself in taking such an extreme and
unreasonable decision of cancelling the entire
selections, wholly unwarranted and unnecessary
even on the factual situation found too, and totally
in excess of the nature and gravity of what was at
stake, thereby virtually rendering such decision to
be irrational."
We are, therefore, of the opinion that the High Court committed an
error in directing cancellation of licences of all the private respondents of the
writ petition without arriving at a finding as to how and in what manner
licence granted to each one of them was either in violation of the provisions
of the statute or the directions of this Court.
To put it shortly, the inadequacies or otherwise of fulfillment of
eligibility criteria or the violation of the statute should have been decided by
taking up individual matters and upon proper scrutiny of the case. To the
aforementioned extent, the judgment of the High Court cannot be sustained.
It was also not a case wherein en masse cancellation was warranted as
enunciated in Bihar School Examination Board v. S.C. Sinha [AIR 1970 SC
1269], Union of India v. Anand Kumar Pandey [(1994) 5 SCC 663],
Hanuman Prasad and Others v. Union of India and Another [(1996) 10 SCC
742] and Union of India and Others v. O. Chakradhar [(2002) 3 SCC 146]
ASHOK LENKA - I
Analysing the provisions of the Act and the Rules, this Court opined
that the Rules contemplated strict compliance of the Rules as also the terms
and conditions of the licences. Eligibility clause contained in the
advertisement was, therefore, required to be considered applying a rigorous
standard. Emphasising the necessity to verify the requisite documents by the
District Level Committees and the mode and manner in which the selection
processes were to be adverted to in terms of Rule 11 of the Rules, it was
held that the Scrutiny Committee was entrusted with the duties to oversee
as to whether the conditions have been complied with or not. The
expression "has to submit an affidavit" contained in Rule 9 ex facie was
found to be mandatory in nature. It was opined:
"Furthermore, filing of an affidavit in the
prescribed format is a statutory requirement under
the Rules. Filing of such an affidavit is necessary
as in the event the same on verification is found to
be incorrect, not only the deponent can be
proceeded against but his licence would also be
liable to be cancelled. Filing of an affidavit under
the Rules is, therefore, mandatory in character."
This Court noticed from the chart filed on behalf of the writ
petitioners that different persons belonging to different communities had
filed different applications showing the same addresses and even the persons
with same names have filed more than one application. It was held:
"\005The authorities of the State cannot raise a plea
that they would not even notice the inherent
defects contained in the application. They could
not proceed on a presupposition, for which there is
no legal sanction, that contents of the affidavit
would be correct. No summary report required to
be prepared by the Member-Secretary for its
placement before the Committee appears to have
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not been prepared. The Rules postulate that each
and every application must be examined carefully.
Mere fact that a large number of applications have
been filed, as a result whereof the State had been
able to obtain crores and crores of rupees by itself
did not entitle the State to dispense with the
statutory requirements. The application fees were
not meant to be utilised for the purpose of earning
revenue but to meet the administrative charges
required therefor. Application fee cannot be
equated with tax."
In the aforementioned situation, it was directed:
"Keeping in view the peculiar facts and
circumstances of this case, we intend to issue the
following directions:
(i) The Member-Secretary shall scrutinise all the
applications of the successful candidates afresh
and prepare a summary report within one week
from date.
(ii) Irrespective of the format prescribed by the
Commissioner of Excise, each of the selected
candidates must file an appropriate affidavit,
which would be in strict compliance with the
requirement of Rule 9.
(iii) Such affidavits must be filed before the
respective Committees within one week from date,
the contents whereof would be verified in terms of
Order 6 Rule 15 of the Civil Procedure Code. The
said affidavits shall be scrutinised by the
Committee so as to enable them to arrive at a
finding as to whether the applicants fulfil the
eligibility criteria and are otherwise suitable for
grant of licence under the Act and the Rules.
(iv) The writ petitioners or any other person in the
locality may file appropriate applications before
the said Committee with a view to show that the
selected candidates do not fulfil the eligibility
criteria or are debarred or are otherwise unsuitable
for obtaining a licence under the Act.
(v) Such objections may also be filed within two
weeks from date. The Committee may consider the
said objections and, if necessary, may call for
further or better particulars from the selected
candidates so as to satisfy themselves about their
eligibility, etc.
(vi) The respective district-level committees shall
strictly verify and scrutinise the affidavits as also
other documents furnished by the said applicants
so as to arrive at a decision that the statutory
requirements have been complied with upon
application of their mind.
(vii) The members of the Committee are made
personally liable to see that all statutory
requirements are complied with. They would
strictly apply the statutory provisions as regards
eligibility and suitability of the candidates.
(viii) The aforementioned exercise by the
Committee should be completed within one month.
In the event, any affidavit filed by a selected
candidate either pursuant to this order or filed
earlier in the format prescribed by the
Commissioner of Excise is found to be incorrect,
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strict action in accordance with law shall be taken
against him.
(ix) The Superintendent of Police of each district
within whose jurisdiction the selected candidates
ordinarily reside shall verify the antecedents and
other relevant particulars of the selected candidates
vis-`-vis their eligibility/suitability to obtain a
licence and submit a report to the Committee by
12-6-2005 which would be strictly in terms of sub-
rule (3) of Rule 9. While issuing such a certificate
in favour of the selected candidates by 12-6-2005,
he shall also file a copy of the report before the
Committee.
(x) We direct the Chief Secretary of the State and
the Commissioner of Excise to act strictly in
accordance with law and oversee the functioning
of the Scrutiny Committees.
(xi) If the State and the Commissioner of Excise
come across misconduct on the part of any of the
officers including the members of the Committee,
strict action must be taken against the officer
concerned.
(xii) The selected candidates in the meanwhile
may carry on the trade in liquor pursuant to the
licence granted in their favour but the same shall
be subject to this order as also the decision of the
Scrutiny Committee."
WERE THE DIRECTIONS COMPLIED WITH ?
We may notice in the following chart some of the cases, by way of
sample as to the mode and manner in which the Committees dealt with the
applications in respect of the private respondents both who were parties and
who were not parties:
Private Respondents who were parties
S.
No.
No. and name of
respondent
Direction No. 6
Direction No.
9
Direction No.
10
Details of records
received in regard to
examination of the
affidavit and page No.
Photocopy of
the report
submitted by
the Supdt. Of
Police
regarding
character
verification
Details of the
supervision
conducted by
the Chief
Secretary and
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Excise
Commissioner
1
2
8
11
12
1.
Shri Amit Singhal,
Ganjpara,
Respondent No. 3
1. Domicile Certificate,
2. Higher Sec.
Certificate, 3.Telephone
Bill
32-34
Enclosed
35-36
Directions
issued for time
bound
proceedings on
14.05.2005,
meeting held
by the Excise
Commissioner
on 16.05.2005.
Video
Conferencing
held by the
Chief Secretary
on 26.05.2005,
letter issued to
the Suptd. Of
Police by Chief
Secretary,
Chhattisgarh
on 26.05.2005,
letter issued to
the General
Director,
Police,
Chhattisgarh
by Chief
Secretary on
07.06.2005
Page No. 37 to
130
45.
Shri Vikram
Vishwal, Sarsiva,
respondents No.
61 and 80
1. Dwelling Certificate,
2. Age Certificate by
Doctor
1391-1392
Enclosed
1393
As above
47.
Shri Manish
Upadhyaya,
Bhanwarpur
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Respondent No. 66
1. Dwelling Certificate,
2. Voter List, 3. Rent
Deed, 4. PAN Card, Age
Certificate, 1433-1441
Enclosed
1442-1445
As above
65.
Shri Pawan Singh,
Fingeshwar,
Respondent No. 88
1. Dwelling Certificate,
2. Age Certificate by
Doctor
1990-1991
Enclosed
1992
As above
Private Respondents who were not parties
S.
No.
No. and name of
respondent
Direction No. 6
Direction No.
9
Direction No.
10
Details of records
received in regard to
examination of the
affidavit and page No.
Photocopy of
the report
submitted by
the Supdt. Of
Police
regarding
character
verification
Details of the
supervision
conducted by
the Chief
Secretary and
Excise
Commissioner
1
2
8
11
12
1.
Rameshwar Prasad
Dhimar,
Tikarapara,
Graoup, Raipur
1. Age Certificate by
Doctor, 2. Family Card
6-8
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Enclosed
9
Directions
issued for time
bound
proceedings on
14.05.2005,
meeting held
by the Excise
Commissioner
on 16.05.2005.
Video
Conferencing
held by the
Chief Secretary
on 26.05.2005,
letter issued to
the Suptd. Of
Police by Chief
Secretary,
Chhattisgarh
on 26.05.2005,
letter issued to
the General
Director,
Police,
Chhattisgarh
by Chief
Secretary on
07.06.2005
Page No. 10 to
103
19.
Maheshbar Dass,
Basna Group,
Mahasamund
1. Domicile Certificate,
2. Rent Deed, 3. PAN
Card, 4. Age Certificate
278-283
Enclosed
284-287
As above
36.
Ajay Singh
Choteekoni group,
Bilaspur
1. Inquiry Report of the
Committee constituted by
Revenue Officials
2. Rent Deed
3. PAN Number
608-624
Enclosed
625-628
As above
125.
Pintu Singh,
Chanderpur group,
Janjgir
1. Bank Pass Book, 2
Medical Certificate, 3.
Domicile Certificate
2106-2110
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Enclosed
2111-2117
As above
A tabular statement has also been placed before us indicating how
each of the directions issued by this Court in para 90 are said to have been
complied with, which is as under:
"Srl
No.
DIRECTION
COMPLIANCE
i
The Member-Secretary shall
scrutinise all the applications
of the successful candidates
afresh and prepare a
summary report within one
week from date.
? On 16.05.2005 the Excise
Commissioner convened a
meeting of all the Assistant
Commissioner Excise and
District Excise Officers for
instructing them to comply with
the Order passed by the Hon'ble
Supreme Court within the
prescribed time. In this meeting
the officers were also appraised
as to how the scrutiny is to be
conducted, the affidavits are to
be obtained and the eligibility
criteria have to be checked and
further as to how the objections
are to be dealt with.
? The Member \026 Secretary, who is
the District Excise Officer
scrutinized all the applications
of the successful candidates
afresh and prepared a summary
report within one week.
ii
Irrespective of the format
prescribed by the
Commissioner of Excise,
each of the selected
candidates must file an
appropriate affidavit, which
would be in strict compliance
with the requirement of Rule
9.
? Each of the selected candidates
filed appropriate affidavits, in
strict compliance of the
requirement of Rule 9.
iii
Such affidavits must be filed
before the respective
Committees within one week
from date, the contents
whereof would be verified in
terms of Order 6 Rule 15 of
the Civil Procedure Code.
The said affidavits shall be
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scrutinised by the Committee
so as to enable them to arrive
at a finding as to whether the
applicants fulfill the
eligibility criteria and are
otherwise suitable for grant
of licence under the Act and
the Rules.
? It is submitted that the Scrutiny
Committees have scrutinized the
Affidavits submitted by the
successful candidates, the
contents of which were verified
in terms of Order 6 Rule 15. It
is submitted that the Scrutiny
Committee consisting of the
District Collector, Assistant
Commissioner, Excise and the
District Excise Officer have
personally interviewed each of
the successful Applicants before
the Licenses were confirmed.
iv
The writ petitioners or any
other person in the locality
may file appropriate
applications before the said
Committee with a view to
show that the selected
candidates do not fulfil the
eligibility criteria or are
debarred or are otherwise
unsuitable for obtaining a
licence under the Act.
? Respondents merely sought to
raise general and omnibus
objections that the addresses of
some of the other successful
candidates seem to be
incomplete or duplicated.
v
Such objections may also be
filed within two weeks from
date. The Committee may
consider the said objections
and, if necessary, may call
for further or better
particulars from the selected
candidates so as to satisfy
themselves about their
eligibility, etc.
? The objectors were given an
opportunity for making
representations before the
Committee.
? The Committee decided the
objections raised by the
objectors after considering the
objections with the documents
that had been submitted by the
successful Applicants.
? However, the objectors did not
point out a single instance
where Applicant was ineligible
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as not fulfilling the eligibility
criteria as prescribed in Rule 9
of the Excise Rules.
vi
The respective district-level
committees shall strictly
verify and scrutinise the
affidavits as also other
documents furnished by the
said applicants so as to arrive
at a decision that the
statutory requirements have
been complied with upon
application of their mind.
? The District Level Committees
strictly verified and scrutinized
the affidavits and supporting
documents furnished by the said
applicants so as to arrive at a
decision that the statutory
requirements have been
complied.
? The Committee also personally
interviewed each of the
successful Applicants before the
Licenses were confirmed.
vii
The members of the
Committee are made
personally liable to see that
all statutory requirements are
complied with. They would
strictly apply the statutory
provisions as regards
eligibility and suitability of
the candidates.
viii
The aforementioned exercise
by the Committee should be
completed within one month.
In the event, any affidavit
filed by a selected candidate
either pursuant to this order
or filed earlier in the format
prescribed by the
Commissioner of Excise is
found to be incorrect, strict
action in accordance with law
shall be taken against him.
? The Scrutiny Committees
completed the exercise within
one month.
ix
The Superintendent of Police
of each district within whose
jurisdiction the selected
candidates ordinarily reside
shall verify the antecedents
and other relevant particulars
of the selected candidates
vis-`-vis their
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eligibility/suitability to obtain
a licence and submit a report
to the Committee by 12-6-
2005 which would be strictly
in terms of sub-rule (3) of
Rule 9. While issuing such a
certificate in favour of the
selected candidates by 12-6-
2005, he shall also file a copy
of the report before the
Committee.
? That immediately after the
passing of the Order dated
11.05.2005, by letter dated
16.05.2005, the Excise
Commissioner requested
Director General of Police
Chhattisgarh to submit character
verification report of successful
applicants within the time
allowed by the Hon'ble
Supreme Court i.e. by 12th June,
2005.
? By letter dated 26.05.2005 the
Excise Commissioner requested
the Superintendent of Police of
the concerned District of other
States in such cases where the
successful applicants have
shown their permanent resident,
to verify the antecedents of such
candidates. It is submitted that
report from Superintendent of
Police of concerned districts of
other States were also received
in the concerned Excise Office
of the concerned district.
? It is submitted that all the
character verification reports
were received in the office of
District Level Committee by
12th June, 2005.
x
We direct the Chief Secretary
of the State and the
Commissioner of Excise to
act strictly in accordance
with law and oversee the
functioning of the Scrutiny
Committees.
? The Chief Secretary,
Government of Chhattisgarh
convened several meeting with
Collectors/ Assistant
Commissioner Excise/ District
Excise Officers through Video
Conferencing and took stock of
stage of compliance of the
Order passed by the Hon'ble
Supreme Court."
Before we advert to the rival contentions of the parties, we may also
notice the following chart showing licence holders against whom findings
have been recorded in the impugned judgment and subsequently the licences
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were cancelled:
NAME OF
PARTIES
REASONS FOR
CANCELLATION
ADDRESS I
ADDRESS
II
AGE/CERTIFIED
BY
Satyendra
Singh
(i)Discrepancies in
certificates with
respect to
addresses;
(ii) Age certified by
private practitioner
In character
certificate by
police
authrority-
Vialleg
Karhara, Post
Jaipur, Police
Station Mali,
District
Aurangabad
In letter by
SP, Bilaspur-
Village Mali,
Police Station
Nabinagar,
Aurangabad.
47 years- certified
by private
practitioner Dr.
H.S. Hura
Abhay
Singh
(i) Certificate issues
by Tahsildar does
not bear revenue
case number or seal
of office of
Tahsildar;
(ii) Age certified by
private practitioner.
---
----
27 years- certified
by private
practitioner Dr.
H.S. Hura
Arvind
Singh
(i) Residential
certificate issued by
the Sarpanch does
not mention the
revenue case
number or the
authority of the
Sarpanch to issue
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the Certificate;
(ii) Age certified by
a dental surgeon;
(iii) Discrepancies
in addresses.
Certificate
suggesting
that he is a
resident of
Batha.
Certificate
suggesting
that he is
residing at
Baya Kasdol,
District
Raipur
Certified by Dr.
N.L. Upadhyay, a
dental surgeon.
Anil Pal
(i) Discrepancies in
addresses.
Certificate
indicating
him to be a
resident of
village
Jhapla, P.O.
Jhapla,
district
Palamou
(Jharkhand)
Police
verification
report
suggests that
he is a
resident of
village
Bankat,
Police Station
Husainabad,
district
Palamou
(Jharkhand)
----
Pradeep
Gupta
Anil Kumar
Gupta
(i) He is not an
independent person;
(ii) His financial
condition indicates
that he could not
undertake the
financial burden of
liquor trade.
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(i) Not residing
within the territorial
jurisdiction of the
police station
issuing the
certificate.
---
----
---
----
---
----
From the aforementioned chart, it would appear that although various
instances have been cited in respect of the persons against whom findings
have been recorded in the impugned judgment, their licences remained valid
whereas licences have been directed to be annulled in respect of Satyendra
Singh, Abhay Singh, Arvind Singh, Anil Pal, Pradeep Gupta and Anil
Kumar Gupta. We have hereinbefore dealt with the consequences of not
impleading some successful licensees in the writ petition.
SOME INDIVIDUAL CASES
Before us, various instances had been shown as to how the provisions
of the mandatory rules have been flouted in the selection process. The
eligibility of the candidates was also questioned.
Rule 9 provides for affirmation of an affidavit by the applicant
categorically stating that in the event he is selected, he shall furnish the
information specified therein within 30 days from the date of grant of
licence including a certificate issued by the Superintendent of Police of the
district of which he is the resident.
The learned counsel for the Appellant has placed before us a chart, as
noticed hereinbefore, showing the mode and manner in which the directions
of this Court had been purportedly complied with. From the said chart, it
would appear that there are several cases where only residence certificate of
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some incompetent person was produced in support of residence and
certificate by a doctor in support of age were produced as proof without
producing any other document to prove those two facts. Thus, there was no
proper proof of residence or age produced by these applicants. The record
of scrutiny produced by the State shows that, those applicants who had
submitted aforesaid improper documents were not even asked by the State at
the scrutiny, to submit proper documents such as residence certificate by
Revenue Authority, etc. or proper proof of age such as School Certificate or
Birth Certificate, etc.
We may in this connection notice some findings of the High Court.
Before the High Court, it had been conceded that the residential certificates
issued by the Councillors of Municipal Council or Sapranches or other
persons who had no legal authority and/ or otherwise incompetent to issue
the same, had been taken into consideration. It may be true that residence
certificates granted in favor of the applicants who are not ordinarily
inhabitants of the State of Chhattisgarh, cannot be procured from the
Revenue Department of the State. The applicants, however, could procure
such certificates from the competent authorities of the respective States
where the applicant was a resident and who hold similar status in their State,
particularly, when it is one of the eligible criteria. The High Court in
paragraph 21 of its judgment has noticed the example of residence certificate
of Abhay Singh, which does not even bear the revenue case number or seal
of the office of the Tehsildar which are mandatory requirements. The High
Court has also noticed that the certificates relating to age had been issued by
Dental Surgeons and Orthopaedic Surgeons. The High Court furthermore
noticed the report of the Station House Officer, Chirmiri to S.P. Koria
mentioning about one licensee Pradeep Gupta that he is an employee of
liquor contractor Amolak Singh Bhatia and financial condition of Pradeep
Gupta is not such that he could take the financial burden of liquor trade. In
spite of it, liquor licence was granted to him.
Furthermore, the High Court in paragraph 22 of its judgment found
that the Official Respondents have failed to carry out the directions issued
by this Court in the manner expected of them and in conformity with the
mandatory rule 9 and 11 of the Rules. The High Court in paragraph 23 also
found that the burden was wrongly shifted on objectors to prove the negative
facts by evidence which was a serious flaw in enquiry. In paragraph 24, it
also took notice of a chart and found that vague and incomplete address such
as 'resident of Raipur' and 'resident of Saja' which is an assembly
constituency, has been accepted by the authorities.
The aforesaid findings of the High Court establish that the licences
might have been issued in fake names and to the ineligible applicants. Our
attention has furthermore been drawn to the fact that some of the applicants
are facing criminal trials, veracity whereof is not established.
The contention of the learned counsel appearing on behalf of the
Appellant that this Court has placed burden of proof on the objector may not
be entirely correct. The initial burden was on the applicants themselves for
grant of licences to satisfy the members of the District Level Committees
that they fulfill the eligibility and other criteria. This Court merely opined
that even in such matters, the satisfaction was required to be arrived at by the
competent authority upon considering the objections raised by the writ
petitioners. This Court, thereby, did not mean that whenever an objection
was raised, the burden thereof would be upon the objector to prove the same.
Sub para (iv) of Paragraph 90 of the judgment in Ashok Lanka \026 I (supra)
merely gave the objectors an additional opportunity to place materials before
the District Level Committees to show that some of the applicants might be
ineligible.
Our attention has further been drawn to the fact that certificates issued
by the doctors or dental surgeons, orthpaedics as regards proof of age of the
applicants had been taken into consideration. The same was wholly illegal.
But, it does not appear that such a contention had been raised before the
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High Court. It is expected that in future the competent authority shall
consider the desirability of verification of age for arriving at the satisfaction
that a person below the age of 21 years is not granted a licence.
NOTIFICATION
Before us the Hindi version of the notification has been read
wherefrom it appeared that the requirement of providing the certificate as
regards the alleged criminal background of the family members of the
licensees had inadvertently appeared in the English version of the
notification, but were absent in the Hindi version.
It is true that this Court had delivered the judgment in Ashok Lanka - I
(supra) on 11th May, 2005. A clarificatory notification was issued on
5.7.2005 by deleting the words "as well as his family members" from the
notification dated 15.3.2005. The relevant portion of the said notification
reads as under:
"\005In the said rules, -
(1) In sub rule 3 of clause (d) of rule 9 the
words "as well as his family members"
shall be omitted."
The said notification was given a retrospective effect.
Ordinarily a subordinate legislation cannot be given a retrospective
effect. The Notification dated 15.3.2005, however, is said to be clarificatory
in nature. A clarificatory Notification can be given retrospective effect.
Such a clarification, according to the State, was necessary to be issued as
there was an apparent conflict between the Hindi version and the English
version of the Notification.
It may be true that before the High Court such a contention has not
been raised but we are satisfied about the bona fide of the State in this
behalf. In that view of the matter, it was not necessary for the District Level
Committee or the State to verify the criminal background of the family
members of the applicants.
Presumably, character certificates were required to be issued by the
respective Superintendents of Police in respect of the candidates concerned.
Of course, if they had been residing at different places at different points of
time, such character certificates were required to be issued by the
Superintendent of Police of each such place. But the same would not mean
that character certificates were required to be produced by the candidates in
respect of their family members also particularly when it was not certain as
to who would come within the purview of the said term. It was in that sense
the Notification dated 15.3.2005 was a clarificatory one, and, therefore,
could be given a retrospective effect.
CHARACTER CERTIFICATES
In view of the directions contained in sub-paragraph (xi) of Paragraph
90, we do not accept the contention of Mr. Desai that only certificate issued
by the Superintendent of Police of the place of his permanent residence is to
be filed. It, however, appears that the Commissioner of Excise had issued
letters to the concerned Superintendents of Police as regard requirement to
comply with the provisions of Rule 9 of the Rules. The reason why we say
so is that if a person is resident of any district for a year, the certificate
which may be issued by the Superintendent of Police of that place may
remain valid only for that year. He would not be in a position to vouchsafe
about the conduct of the person concerned or as to whether he has any
criminal antecedents prior or subsequent thereto.
It may, therefore, be necessary that the applicant should state the
details of the places where he had stayed or carried on business and produce
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a certificate from the concerned authorities from each such place.
ADDRESS OF THE APPLICANT
No case, however, has been pointed out before us where such
certificates had been given by the Superintendent of Police other than from
the place wherein the applicant is a permanent resident. Terms and
conditions of the advertisement did not mandate that a person residing
outside the State of Chhattisgarh would be ineligible for filing an
application. If that be so, then those who were residents of places other than
the State of Chhattisgarh would also be eligible therefor. They may have a
temporary address in Chhattisgarh or they may not have a permanent address
within the said State but by way of temporary address, they cannot give an
address which is not their residence even for temporary purpose. Even in
paragraph 71 of the judgment in Ashok Lanka - I (supra), this Court pointed
out the said fact. No serious dispute has been raised that the said contention
of the writ petitioners was not correct. But, even if they had no temporary
address but they had been able to file their character certificates and proof of
permanent address, they cannot be held to be ineligible for the grant of
licences. Furthermore, there is nothing to indicate that the District Level
Committees had information as to whether the applicants were defaulters in
respect of some other State. Such mechanism of scrutiny is not available in
the statutory scheme and in our opinion should be provided.
We hope and trust that in future, i.e., for the following excise year,
appropriate steps shall be taken to make the position clear that if the
applicants are not residents of the State of Jharkhand either on a temporary
or permanent basis, they would not be shown to be residents of such places
wherefrom their antecedents cannot be verified. Such applicants, therefore,
should not be allowed to furnish an address only for the purpose of
communication and if so, the same should clearly be stated in the
application.
In the Act or the Rules, again no particular authority had been
mentioned as having been authorized to issue certificate. No particular
method of verification of proof of address and identity had also been shown
to exist. It will be appropriate if a clarification is issued in this behalf.
The Scrutiny Committee appears to have relied upon certificates
issued by Tahsildars, Municipal Counsellors, etc. which had not been
objected to by the writ petitioners. It is stated that most of the applicants are
income tax payees. They have been granted a PAN Card. In future,
however, the authorities should insist that the applicants must enclose
Xeroxed copies of their PAN Cards along with their applications.
CONCLUSION
The period for which licences had been granted is over. For all
practical purposes, the State and the licensees have succeeded in their
attempts to defeat the purpose for which the writ petitions were filed by the
writ petitioners \026 Respondents. We must express our dismay that despite
our directions, the applications filed by the Appellants had not been
scrutinized minutely which should have been done. The State of
Chhattisgarh, we are not very sure, whether was aware of its constitutional
duties and functions. It seems to have been more concerned with raising of
revenue. To that extent it had succeeded, as the High Court in the first round
of litigation despite directing a fresh scrutiny of the applications did not
direct refund of the huge amount collected by it by way of application fees.
We would, however, expect the State and its officers to scrupulously follow
the constitutional mandate in future. It was with this intention we have dealt
with these matters at some detail.
We hope and trust that the State of Chhattisgarh and its authorities
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would not commit the same mistakes in the coming years keeping in mind
the mandate of Article 47 of the Constitution of India and scrupulously
observe the rules for disposal of liquor shops.
With the aforementioned observations and directions, these appeals
are allowed. The parties, however, are directed to pay and bear their own
costs.
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