M R RAJU & MRS. ANNAMMA CHACKO v. STATE OF KERALA & OTHERS

## **IN THE HIGH COURT OF KERALA AT ERNAKULAM** ## **PRESENT** ## **THE HONOURABLE MR.JUSTICE K.VINOD CHANDRAN** ## **&** ## **THE HONOURABLE MR.JUSTICE C. JAYACHANDRAN** **FRIDAY, THE 24[TH] DAY OF FEBRUARY 2023 / 5TH PHALGUNA, 1944** **WA NO. 1301 OF 2022** ## **AGAINST THE JUDGMENT IN WP(C) 20135/2022 OF HIGH COURT OF** ## **KERALA** ## **APPELLANTS:** 1 M R RAJU AGED 73 YEARS S/O.RAGHAVAN, KATHALIKALAYIL HOUSE, PERUMBAIKKADU.P.O, KOTTAYAM DISTRICT. 2 MRS.ANNAMMA CHACKO, AGED 64 YEARS W/O.CHACKO(LATE), CHIRAYIL HOUSE, KOTHANELLOOR.P.O, KOTTAYAM DISTRICT. BY ADVS. M.G.KARTHIKEYAN C.C.THOMAS (SR.) ## **RESPONDENTS:** 1 STATE OF KERALA REPRESENTED BY TAXES(A) DEPARTMENT, GOVT. SECRETARIAT, GOVT. OF KERALA, THIRUVANANTHAPURAM695001. 2 THE EXCISE COMMISSIONER COMMISSIONERATE OF EXCISE, EXCISE HEAD QUARTERS, NANDAVANAM, THIRUVANANTHAPURAM-695033. 3 THE DEPUTY COMMISSIONER OF EXCISE, EXCISE DIVISION OFFICE, COLLECTORATE.P.O, KOTTAYAM-686002. 4 THE CIRCLE INSPECTOR OF POLICE EXCISE CIRCLE OFFICE, MINI CIVIL STATION, KOTTAYAM-686001. 5 ADDL. R5. THE DISTRICT COLLECTOR, COLLECTORATE .P.O, KOTTAYAM-686601. 6 B.SASANKAN, AGED 63 YEARS S/O.BHASKARAN.K.M, NARAYANA SADANAM, UZHAVATHU, CHANGANACHERRY.P.O, KOTTAYAM DISTRICT, PIN-686101. 7 JOKUTTY S/O.JOSEPH JOSE, NEELETTU VEETTIL, KEEZHUKKUNNU KARA, MUTTAMBALAM VILLAGE, KOTTAYAM TALUK, KOTTAYAM DISTRICT **Writ Appeal No.1301 of 2022** ## **- 2 -** *ADDITIONAL R7 IS IS IMPLEADED AS PER ORDER DATED 14.02.2023 IN I.A.1/2023 IN W.A.1301/2022 BY ADVS. SENIOR GOVERNMENT PLEADER(B/O) Devan N R ## **OTHER PRESENT:** SR.GP-SRI.T.K.VIPINDAS THIS WRIT APPEAL HAVING BEEN FINALLY HEARD ON 24.02.2023, THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING: **Writ Appeal No.1301 of 2022** **- 3 -** **K.VINOD CHANDRAN & C.JAYACHANDRAN, JJ. ----------------------------------------------------------Writ Appeal No.1301 of 2022 --------------------------------------------------------Dated this 24[th] February, 2023** ## **JUDGMENT** ## **K.Vinod Chandran, J.** The appeal is from the judgment of a learned Single Judge dismissing the writ petition challenging Ext.P7 order, which rejected the preferential claim for allotment of toddy shop to the petitioners. The learned Single Judge found that composition of an offence would not result in an acquittal and the preferential right can be exercised only when a person is so exonerated. Hence Ext.P7 rejecting the preferential claim was unimpeachable, was the reasoning. 2. Sri. Karthikeyan, the learned Counsel appearing for the appellant would contend that the learned Single Judge was misled insofar as the petitioner having never sought for a preferential claim. The appellant had requested the Government to restore the licence, cancelled on the allegation of commission of an offence, which on the basis of the later amendment to the Act stood compounded. Only if restoration is granted, as is the consequence of a composition of offence, only then would a preferential claim arise. The learned Counsel took us through the **Writ Appeal No.1301 of 2022** **- 4 -** relevant provisions and the judgment of a Division Bench of this Court, produced as Ext.P8, which found the compounding provisions to be applicable even for offences charged prior to the amendment. The cancellation of the licence was only by reason of the offence charged against the appellant, the rigour of which has been considerably reduced by the amendments. It is submitted that as of now the offence of presence of starch in toddy, is not deemed to be a serious offence entailing cancellation of the licence. The cancellation effected could be revisited as per the specific direction in the Division Bench judgment; which was the prayer made by the appellants before the Government. The Government also misunderstood the prayer made to be one for a preferential claim and rejected it. As of now the additional 7[th] respondent is carrying on the licence and the appellants do not want to disturb it. But the 7[th] respondent was granted the license, due to the cancellation of the appellant's license. If the cancellation is revoked at least the appellants would be deemed to have continued with the license for the purpose of putting forth a preferential claim in the next year. The prayer of the appellants is that they may be permitted to withdraw the writ petition itself leaving the question open, to be agitated in the next year. 3. Learned Senior Government Pleader Sri.Vipin Das stoutly opposed the appeal and the prayer for withdrawal of the writ petition. It **Writ Appeal No.1301 of 2022** **- 5 -** is pointed out that even the Division Bench in Ext.P8 refused to interfere with the discretion of the Commissioner to cancel the licence and only directed reconsideration in cases, where there was a compounding opted by the licensees. Without the cancellation being reviewed there is no question of restoration of the licence and the preferential claim even then, does not inure to the appellants. As per the extant Abkari Policy Ext.P7 order was passed, which was challenged and found to be on valid grounds and there is no question of reviving the entire issue to be agitated in the next year. 4. We are also of the opinion that there is no question of permitting the appellant to withdraw the writ petition itself and leaving the question open especially when considerable judicial time was spent for consideration of the writ petition and a judgment passed by a learned Single Judge of this Court. We cannot efface the interpretation given to the legal provisions by the learned Single Judge and leave the question to be considered by the authorities afresh, without reference to the judgment impugned. We draw support from a Division Bench judgment in Sunrise Academy of Medical Specialities (India) Private Limited v. Income Tax Officer [2018 (3) KLT Online 2062], which held so on an almost similar situation: 11. The learned Counsel then would submit that the assessee would **Writ Appeal No.1301 of 2022** **- 6 -** definitely approach the Appellate Authority, but the adjudication be untrammeled by the observations made by the learned Single Judge. We are not inclined to so efface the declaration made by the learned Single Judge; when this Court has also laboured on the contentions raised and found the findings to be above board and without fault and perfectly in accordance with the provisions. The judicial time spent by the learned Single Judge and this Bench cannot be lightly ignored, to merely set aside the observations while relegating the matter to the Appellate Authority; thus permitting the Appellate Authority to enter into a finding contrary to that of this Court. This would in fact egregiously meddle, impede and obtrude upon the well recognised hierarchy of Courts and adjudicatory authorities and would not be a proper exercise to be carried out by a Division Bench in appeal. The appellate powers, according to us, is not a weapon to obliterate a perfectly legal and reasonable construction given to the provisions in a statute by a learned Single Judge. The assessee sought to by-pass the statutory remedies, to approach this Court under Article 226; the jurisdiction under which is circumscribed as held in ((M/s.State of H.P. v. Gujarat Ambuja Cement Ltd. (2005 (3) KLT OnLine 1102 (SC) = (2005) 6 SCC 499)). Having opted to challenge the order on the ground raised of a proceeding totally without jurisdiction; when it is answered against the assessee, then they cannot seek the luxury of a fresh consideration on the very same aspect by the subordinate authority. That would be waste of judicial time and an abuse of process; especially in the present times of escalating litigation and undue backlog of cases. 5. The brief facts to be noticed are that the appellants along with the additional 6[th] respondent was a licensee under the Government for the years 2014 - 2017. In the year 2015 - 2016, on allegation of presence of starch in the toddy kept for sale an offence was charged against the appellants under Section 57(a) and their license stood cancelled under Section 26 of the Abkari Act. The additional 7[th] respondent was granted the license on the cancellation of the appellant’s licence, who has been carrying on the licence in the subsequent years. The additional 7[th] **Writ Appeal No.1301 of 2022** ## **- 7 -** respondent's license in the interregnum was cancelled by ExtP1 for extraneous reasons, which was interfered with by the Government itself and the license now stands restored to the 7[th] respondent. The writ petition was filed when the cancellation of the 7[th] respondents license was in vogue, for restoration of the appellants' license. 6. In the year 2018, amendments were brought into the Abkari Act bringing down the rigor of the offence insofar as the mixing of liquor sold or manufactured, with starch. Section 57(a) deems the mixing of liquor sold or manufactured by a licensee, with any ingredient likely to add to its actual or apparent intoxicating quality or strength to be an offence, for which on conviction, punishment provided was imprisonment for a term extending to five years or fine, extending to Rs.50,000/- or both. In the year 2018, the words ' _any ingredient'_ in Section 57(a) was substituted with ' _any ingredient other than starch'_ . However, clause (aa) was incorporated, retaining as an offence, the mixture of starch with liquor sold or manufactured, but punishable only with imprisonment for a term of 6 months or with fine, which shall be not less than Rs.25,000/-. Simultaneously Section 67A was also amended making the offence of mixing starch with liquor, compoundable on payment of an amount of Rs.25,000/-. Sub section (2) of Section 67A provided for such compounding to be informed to the Court were a case involving the **Writ Appeal No.1301 of 2022** **- 8 -** offence is pending, which court was also obliged to discharge the accused person, if in custody, by sub-section (3). 7. On introduction of the above provisions, there were a batch of writ petitions filed before this Court seeking the benefit of composition to be made applicable to offences which were committed before the amendments, since the provision specifically enabled composition of offences which were pending in court. A learned Single Judge directed that such applications be considered and in the event of composition, the persons who were charged with such offence were held to be absolved of all liabilities; on which reasoning the cancellation of licenses made on the charge of such offences were also directed to be revisited. The State filed appeals before the Division Bench which were considered in **Excise Commissioner, Thiruvananthapuram v. K.Sreedharan 2021(2) KHC 99** produced as Ext.P8. 8. The Division Bench categorically held; considering the non applicability of the prohibition contained in Article 21 of the Constitution of India on an _ex post facto law_ that mollifies the rigor of the previous law, that the offence of mixing or permitting to mix starch with liquor, both under Section 57(a) as it existed before amendment and under Section 57(aa), after its incorporation, are both compoundable in terms of the amendments brought into Section 67A. The licensees were hence entitled **Writ Appeal No.1301 of 2022** **- 9 -** to apply for compounding of the offence in terms of the amendment. The Division Bench upheld the direction of the learned Single Judge enabling the licensee to approach the Commissioner to revisit the issue of cancellation of licences but interfered with the further direction to consider the issue of cancellation, taking note of the fact that the compounding allowed would absolve the licensee from all liabilities in respect of the offence alleged against them. The Division Bench found that the effect of composition of an offence would depend on what the law provided for and unless it is expressly provided to have the effect of an acquittal, the composition would not amount to such total vindication from the offence alleged. It was held that the effect of an acquittal cannot be imported to the expression; _'discharge'_ in sub-sec.(3) of S.67A especially when 'acquittal' is the state of being found innocent of an offence charged, by a court of competent jurisdiction, on the conclusion of trial. Insofar as the Criminal Procedure Code is concerned Section 320(8) specifically provides for composition to have the effect of an acquittal which however is not expressly provided for in the Abkari Act. It was emphasised that the word 'discharge' used is with respect to an accused who is in custody and if the meaning of acquittal is imported therein only an offender who is in custody would be enabled an acquittal. The discharge as spoken of in S.67A(3) confers the benefit, on **Writ Appeal No.1301 of 2022** **- 10 -** composition being effected, to the accused in custody and those enlarged on bail. The declaration of the learned Single Judge that upon composition the accused stands absolved of all liabilities in respect of any penal provision of the Abkari Act & the Rules made there under, was upheld. However, the declaration that the issue of cancellation should be considered taking note of the fact that the accused would stand absolved of all liabilities in respect of the offences alleged against them in terms of S.57(aa) of the Act was held to be, not the correct exposition of law. It was found that the power to recall the licence conferred on the Commissioner of Excise in the event of any breach by the licensee, survives the amendment. The act of mixing starch with liquor even after the amendment continues to be an offence and its commission would amount to breach of conditions of license which would also enable the Commissioner to consider whether the power under S.26 of the Abkari Act, to cancel the license, is to be invoked or not. 9. We have to look at the facts in the above case in the backdrop of the above interpretation of the amended provisions. The facts relating to the cancellation and composition have been detailed earlier. In the year 2022-23 the applicants applied to the Excise Commissioner as per Ext.P4; pursuant to the cancellation of the additional 7[th] respondent's license by Ext.P1. Relying on Ext.P8 judgment the prayer was made for restoration **Writ Appeal No.1301 of 2022** **- 11 -** of licences on payment of necessary fees. Writ Petition was filed in which Ext.P6 judgment was passed, wherein though the representation was to the Excise Commissioner, the learned Single Judge directed the 1[st] respondent State, to consider and pass orders on the representation before the scheduling of resale, after an opportunity of hearing. Ext.P7 was the order passed which indicates that the privilege conferred was only on those persons who had licenses in the year 2019-20, whose licenses were cancelled for reason of involvement in abkari offences, but later exonerated. The applicants are persons who were granted licenses in 2014-17, and their license stood cancelled in 2016 and they cannot be granted any privilege in the year 2022-23 was the finding. 10. The submission of the learned Counsel for the appellant is that if the cancellation is interfered with and restoration ordered of the licence, the applicant would be deemed to have held a licence in the year 2019-20 in which event, the applicants would also have a preferential claim as per the Abkari policy for the year 2022-23. The appellant as of now is not concerned with the years from 2019-20 to 2022-23. An actual restoration of the licence is not possible in the earlier years and even in the current year, the appellants do not want to disturb the additional 7[th] respondent. The claim is only for a preferential claim in the next year deeming the licence of the applicant to have been restored in the years **Writ Appeal No.1301 of 2022** **- 12 -** subsequent to 2016-17. 11. The primary fallacy in the argument advanced by the appellant is that the appellant never claimed for revoking the cancellation effected in the year 2016. The cancellation was done on the allegation of commission of an offence by the Commissioner of Excise. By reason of the amendment of 2018 the appellants applied for composition of offence which was granted and appellants also paid the amounts. Further proceedings in the criminal court were dropped as is seen from Ext.P3. However the offence of mixing starch with liquor still continues to be an offence under S.57(aa) and the power of the Commissioner to cancel the license under S.26, for any breach of abkari laws, continues unabated. Without the cancellation being reconsidered there is no question of a deemed restoration in the subsequent years. Ext.P8 decision of this Court also categorically held that even after the amendment the power to cancel a licence on the breach of S.57(aa) by the licensee survives on the Commissioner and it is his exclusive discretion. It was also held that the composition would enable the offender to approach the Commissioner to revisit and reconsider the cancellation. 12. The discretion has to be exercised by the Commissioner and not the Government. In the present case, the representation given by the appellants was for restoration of the license, to the Government and not **Writ Appeal No.1301 of 2022** **- 13 -** revocation of cancellation, to the Commissioner. Going by Ext.P8 decision any person against whom an offence was charged and licence cancelled due to such breach, on composition of the offence can also approach the Commissioner for revocation of cancellation. Hence, the appellants would be entitled to approach the Commissioner, for the said relief, the consideration of which would be at the discretion of the Commissioner. 13. Now we have to examine whether Ext.P7 order passed could be challenged on the basis of the policy for the year 2022-23 which is available in Rule 5 of the Kerala Abkari Shops Disposal Rules, 2002 which as applicable to the current year is extracted herein below :- 5, The Grant of privilege of vending Toddy shall be subject to the conditions, namely.- (1)(a) While giving privilege, preference shall be given to those licencees who had conducted toddy shops during the year 2019-20, provided no Abkari case is registered against him other than under section 56 of the Abkari Act. The licencees who have conducted the shops during the year 2019-20 and whose licences cancelled due to registration of Abkari cases and subsequently exonerated by the Court. _*****[xxx]**_ (2) (a) While giving privilege, preference shall be given to those applicant who had previous experience in conducting Toddy Shops not exceeding three, in any particular year between the period 1996 to 2001. (b) The Circle Inspector of Excise of an Excise Circle shall certify such eligibility after verifying the records of Toddy Workers Welfare Fund Board,” **Writ Appeal No.1301 of 2022** **- 14 -** _***** Deleted by SRO No.201/2020 w.e.£. 12-03-2020, It was: “and those licences who could not complete the year 2009-10 on account of the closure of shops shall also be given preference”.**_ 14. There are two limbs to the privilege granted as per Rule 5; the first of which is a preference given to those licensees who conducted toddy shops during the year 2019-20 against whom no abkari case is registered other than under Section 56 of the Abkari Act. The appellants would not be entitled to this privilege since the appellants are charged with an offence under Section 57, that too in the year 2015-16. There is some anomaly in so far as the second limb is concerned since while deleting the later portion by SRO No.201/2020 the words _'shall also be given preference'_ was also deleted, making the second limb superfluous and unworkable as it appears in the Rule. The intention would have been to give preference to those licensees who conducted the shops during the year 2019-20, whose licences were cancelled due to registration of abkari cases, but subsequently exonerated by the court. Even this preference, if it was properly worded, would not be applicable to the appellants since Ext.P8 decision categorically held that composition of the offence would not be an acquittal; which is what is intended by the words ' _exonerated by the court'_ . In the above circumstances, cancellation of a license would not be very relevant for consideration of the preference, since it prohibits **Writ Appeal No.1301 of 2022** **- 15 -** such preference to persons who were charged with an offence under any other provision other than Section 56, and the further proceedings has not resulted in an exoneration by the court, which took cognizance of the offence. In such circumstances, we find no reason to interfere with Ext.P7 order; which could not have been otherwise, even if the cancellation was revoked by the Commissioner. 15. Be that as it may, the abkari policy of the State may alter from year to year and we cannot speculate on the preferences granted or restrictions imposed, in the coming years. Hence, the petitioner, as declared in Ext.P8, would be entitled to approach the Commissioner for revocation of the cancellation of the licence in the year 2015-16, which would have to be considered independently by the Commissioner at his/her discretion. But for the above reservation we find no reason to interfere with Ext.P7 or the impugned judgment. Hence leaving open the above liberty we uphold Ext.P7, on our independent reasoning and dispose of the appeal, leaving the parties to suffer their respective costs. Sd/- ## **K.VINOD CHANDRAN, JUDGE** Sd/- ## **C.JAYACHANDRAN, JUDGE** **SMA /jma**