M.R. Raju and Annamma Chacko v. State of Kerala and others

## **IN THE HIGH COURT OF KERALA AT ERNAKULAM** ## **PRESENT** ## **THE HONOURABLE MR. JUSTICE AMIT RAWAL** **TUESDAY, THE 12[TH] DAY OF JULY 2022 / 21ST ASHADHA, 1944** ## **WP(C) NO. 20135 OF 2022** ## **PETITIONERS:** 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 NIREESH MATHEW ## **RESPONDENTS:** 1 STATE OF KERALA, REP. BY TAXES (A) DEPARTMENT, GOVT. SECRETARIAT, GOVT. OF KERALA, THIRUVANANTHAPURAM- 695 001. 2 THE EXCISE COMMISSIONER, COMMISSIONERATE OF EXCISE, EXCISE HEAD QUARTERS, NANDAVANAM , THIRUVANANTHAPURAM- 695 033. 3 THE DEPUTY COMMISSIONER OF EXCISE, EXCISE DIVISION OFFICE, COLLECTORATE P.O, KOTTAYAM 686 002. 4 THE CIRCLE INSPECTOR OF EXCISE, EXCISE CIRCLE OFFICE, MINI CIVIL STATION, KOTTAYAM 686 001. 5 ADDL.R5 THE DISTRICT COLLECTOR, COLLECTORATE P.O, KOTTAYAM-686 002 [ADDL.R5 IS IMPLEADED AS PER ORDER DATED 24/06/2022 IN I.A NO:3/22 IN WP(C) 20135/2022] WP(C) No.20135/2022 2 6 ADDL. R6 B.SASANKAN, AGED 63 YEARS S/O.BHASKARAN.K.M. NARAYANA SADANAM, UZHAVATHU CHANGANACHERRY P.O., KOTTAYAM DISTRICT PIN 686 101. IMPLEADED AS PER ORDER DATED 12.7.2022 IN I.A.NO.4/2022 BY ADV GAJENDRA SINGH RAJPUROHIT SMT RASHMI K M, SR.GOVERNMENT PLEADER THIS WRIT PETITION (CIVIL) HAVING COME UP FOR ADMISSION ON 12.07.2022, THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING: WP(C) No.20135/2022 3 ## **JUDGMENT** Order Ext.P7 dated 14.6.2022 of the Joint Secretary, Tax Department (Excise) rejecting the request of the petitioner for giving preference for allotment of toddy shop licence is under challenge. 2. The facts in brief are that both the petitioners along with one V.Sasankan were allotted toddy shop in Group No.IV Ettumanoor Excise Range for the year 2014-17 as per the provisions of Rule 5(1)(a) of the Kerala Abkari Shops Disposal Rules, 2002 dealing with the preferential right, on preferential basis. In other words, the persons who had already been in business were given preference for allotment of licence. However, during the period 2015-16, some toddy samples were found to contain starch resulting into registration of Criminal Case No.2318 of 2016 under Section 57(a) of the Abkari Act. The aforementioned Section provided a punishment of five years and a fine. However, during the pendency of the criminal case, the aforementioned provision came under amendment and Section 57(aa) was inserted treating the said offence to be a milder i.e. a provision of compounding was also added. Since many toddy WP(C) No.20135/2022 4 licence holders were implicated on account of detection of starch or other adulteration, Writ Petitions were filed before this Court for taking steps to direct the respondent complainant and the Magistrate, seized of the matter, for compounding of the offence as well as for reconsideration of the issuance of licence which, as a result of adulteration was cancelled. The Single Judge rendered the judgment on 25.10.2018 which was assailed before the Division Bench and reported in _**Excise Commissioner v. Sridharan** [2021 (2) KLT 585]_ . The aforementioned judgment was rendered on 10.2.2021. In view of the directions contained in the judgment of the Single Bench and partly affirmed by the Division Bench, the respondents rejected the application of the petitioners for preferential allotment and therefore, the present Writ Petition has been filed. 3. Learned counsel for the petitioners submits that the reasoning assigned in the order is totally alien to the direction and the findings rendered by the Single Bench and the Division Bench inasmuch as that once the offence was found compounded and the licence allotted to the “person” for the remaining period has been cancelled as he was not found to be resident of Kerala, thus the respondents ought to have taken into consideration WP(C) No.20135/2022 5 allotment of toddy shop on preferential basis. The judgment of the Division Bench has not been interpreted in the correct perspective. After the introduction of 2002 Rules toddy shops were allotted one by one to those who were having any experience in the previous years. With effect from 1.4.2007, toddy shops were grouped and allotment of shops was group wise. 4. On the other hand, learned State Counsel opposed the aforementioned prayer by supporting the order and submitted that both the judgments did not consider the impact of the liquor policy in vogue. The liquor policy of 2019-20 had only provided for consideration of the allotment of toddy shop on preferential basis in respect of the persons who were implicated, but not convicted. The offence of compounding would not amount to acquittal as it would not efface the civil liability under the Abkari Act. This is what has been held by the Division Bench in W.A.No.2451 of 2018 in paragraphs 20, 21 and 22 of the cited judgment. > _“20. While considering the meaning of the words 'shall be discharged' used in Section 67A(3) in the context of effect of composition of offence, the words preceding them viz., 'if in custody' assumes much relevance. If the word 'discharged' is given the meaning 'acquitted' then, it might suggest that upon composition the accused would be entitled to be_ WP(C) No.20135/2022 6 _acquitted only if he is in custody. Such a construction of Section 67A(3) cannot be comprehended as undoubtedly, upon composition of an offence given in the Table under Section 67A(1) of Abkari Act, the accused concerned is entitled to be discharged and that benefit cannot be confined to accused in custody and in other words, accused enlarged on bail must also obtain such entitlement. Therefore, those words 'if in custody' cannot be believed to be used for the purpose of specifying that upon composition of Abkari offence an 'accused in custody' alone is entitled to be acquitted. Taking into account the meaning ascribable to the word 'discharged' in the context of composition of criminal cases bearing in mind the aforesaid provisions and decisions and above all and taking note of the fact that Section 67A(3) deals only with the case of an accused in custody pursuant to the registration of an abkari case and upon composition of an abkari offence mentioned in Section 67A(1) with which he was charged and not with respect to an accused, not in custody, during the pendency of the case, we are of the considered view that Section 67A(3) speaks only of an accused in custody and provides that he should be discharged viz., released upon composition of the offence. In this context, we also note that the Malayalam version of Act 3 of 2010, which got authenticity and authority in view of Chapter XIV of the Rules of Procedure and Conduct of Business in the Kerala Legislative Assembly, framed in terms of Article 208(1) of the Constitution of India, would sanction and support our view. Malayalam version of Ordinance No.6 of 2010 and the Malayalam version of Act 3 of 2010 would reveal the meaning of the word 'discharged' used in Section 67A(3). They were produced by the appellants along with the argument notes. In the Malayalam version of Ordinance No.6 of 2010, 67A(3) is given as:-_ (1)-)o ഉപവക�പ� പപക�ര� ഈ ആവശ�ത�ല�ക�യ� അധ�ക�രപപട�ത�യ�ട�ള ഉല���ഗസന�, അത�ത� സ�ഗത�ലപ�പ�, അങപനയ�ള ത�കലയ�, വ��ലയ� അപ$ങ�ൽ ഇവ രണ�� ക)ട�ലയ� നല+�നത�ല-ൽ, ക�റ�ലര�പണ� പ0യപപട�ട�ള ആപ2, അയ�ൾ കസഡ�യ���പണങ�ൽ, ല6�0�പ�ലകണത��, പ�ട�പ7ട�ത വസ9� വ�ട�പക�ട�ലകണത�� ആ ആൾലക� വസ9�വ�ലന� എത�ര�യ� യ�പത�ര� ത�ടർന�ള നടപട�ക2�� സ<=കര�ക�വ�ൻ പ�ട�$�തത�6�ണ�. As per the Malayalam version of Act 3 of 2010, 67A(3) reads thus:- (1)-)o ഉപവക�പ� പപക�ര� ഈ ആവശ�ത�ല�ക�യ� അധ�ക�രപപട�ത�യ�ട�ള ഉല���ഗസന�, അത�ത� സ�ഗത�ലപ�പ�, അങപനയ�ള ത�കലയ�, വ��ലയ� അപ$ങ�ൽ ഇവ രണ�� ക)ട�ലയ� നല+�നത�ല-ൽ, ക�റ�ലര�പണ� പ0യപപട�ട�ള ആപ2, അയ�ൾ കസഡ�യ���പണങ�ൽ, ല6�0�പ�ലകണത�ണ�. _The English translation of the word '_ ല6�0�പ�ലകണത�ണ� _' can never be 'acquitted' as the Malayalam meaning of 'acquitted' is '_ ക�റവ�6�കന�ക� _'. Therefore, the meaning can be taken only as 'to be released'. As noted earlier, in the decision in Ram Chandra's case (supra),the Apex Court held that the expression 'discharge' used in sub-section(3)of Section 50 of NDPS Act,1985 is used in_ WP(C) No.20135/2022 7 _the sense that the detention is terminated. In the circumstances, the meaning of the word 'discharged' used in Section 67A(3) of the Abkari Act cannot be given the meaning as 'acquitted'. In short, the Writ Court ought not have held that upon composition the petitioners would stand absolved of all liabilities in respect of the offences alleged against them in terms of Section 57(aa) of the Act. True that upon such composition, the court would decline to proceed further with the criminal proceedings and at any rate, it will not preclude from putting the civil liability on the person concerned, in accordance with law. Acquittal recognizes innocence of the person concerned whereas 'discharge' pursuant to composition will not recognize innocence and it only marks lack of necessity to proceed with further._ _21. Under section 67A (3) of the Abkari Act, evidently, 'discharge' pursuant to composition is possible only on payment of such sum of money or such value or both as prescribed. The compounding fee for composition of the offence of 'mixing starch with liquor' falling under section 57(aa) of the Abkari Act is prescribed as rupees twenty five thousand. Fee is the charge or emolument or compensation for particular acts or services; reward of compensation for services rendered or to be rendered. It also got another meaning viz., a levy by an authority in return for certain functions performed by it. Whatever that be, the fact is that for compounding the offences under sub section (1) of Section 67A(1) in respect of any offence mentioned thereunder, the compounding fee prescribed thereunder is to be paid. It is only thereafter that the person, if in custody, can be discharged in the sense that he can be released from custody. When the accused concerned has to pay the compounding fee, the consequent discharge cannot be said to be an acquittal as an 'acquittal' is a state of being innocent of an offence after the conclusion of trial, especially in view of the fact that there is nothing in the Abkari Act which would suggest that discharge consequent to composition of the offence by the court is acquittal or that it would have the effect of acquittal. If a person is found innocent of an offence, where is the question of making him pay the prescribed compounding fee, which is actually equivalent to the minimum fine awardable for the offence under Section 57(aa) of the Abkari Act? Taking into account all the aforesaid circumstances, it can only be said that the meaning 'acquittal' cannot be given to the word 'discharge' employed in section 67A(3) of the Abkari Act. In such circumstances, we are of the view that the learned Single Judge was correct in holding that upon composition, the petitioners therein/respondents would stand absolved of all liabilities in respect of any penal provision in terms of the Abkari Act or the rules made thereunder, but at the same time, we hold that the latter part of the direction of the learned Single Judge that in case the compounding applications preferred by the petitioners are allowed, the issue of cancellation of licences shall be taken up and decided taking note of the fact that the petitioners stand absolved of all liabilities in respect of the offences alleged against them in_ WP(C) No.20135/2022 8 _terms of Section 57(aa) of the Act is not the correct exposition of law. We may hasten to add that we shall not be understood to have held that the direction to take up and decide the requirement or otherwise of cancellation of licences is bad in law and we will consider its correctness a little later. Our finding of incorrect exposition of law is confined only to that part of the direction to treat that the petitioners/the respondents herein stood absolved of all liabilities in respect of the offences alleged against them in terms of Section 57(aa) of the Act in case the compounding applications are allowed._ _22. We have already taken note of the the fact that application of the rule of beneficial construction on ex post facto law by virtue of Article 20(1) of the Constitution would apply if a subsequent law mollifies the rigour of law in a previous law and provides for a lesser punishment than one prescribed for the same offence. The immunity extends only against punishment by courts for a criminal offence and therefore, the beneficial construction by virtue of ex post facto law, in terms of Article 20(1) applies only in criminal proceedings that too, only when the ex post facto law mollifies the rigour of a criminal law, as held earlier. In otherwords, the prohibition by virtue of Article 20(1) applies only in proceedings which partake the character of criminal proceedings and it will not have any application in respect of civil liability. In such circumstances, the question is what exactly is the meaning of civil liability? No such term is coined and defined under the Abkari Act. However, it does not mean that the penal provisions for commission of Abkari offences or violation of conditions of licence would not be having any civil consequences or civil liability. In Blacks Law Dictionary, Eighth Edition, the term 'civil liability' is given the meaning as 1. 'liability' imposed under the civil, as opposed to the criminal law. 2. the state of being legally obligated for civil damages. In P.M.A Metropolitan v. Moran Mar Marthoma (AIR 1995 SC 2001), the Apex Court held that the word 'civil nature' is wider than the 'civil proceeding' and that the same would, therefore, be available in every case where the dispute has the characteristic of affection of one's rights which are not only civil but of civil nature. In the decision in Hatisingh Mfg.Co.Ltd v. Union of India & others reported in AIR 1960 SC 923, the Apex Court held that the prohibition under Article 20(1) would not apply to civil liability. In that case, an Act was passed in 1957 whereby liability was imposed on the employers for closing their undertaking, to pay compensation since November 28, 1956. The liability could be enforced by coercive process leading to imprisonment in case of failure to discharge it. The Apex Court held that the liability imposed by the law was a civil liability which was not an offence and so Article 20(1) could not be applied to the liability for the period concerned viz., for the period from November 28, 1956 to June 1957.”_ 5. I have heard the counsel for the parties and apprised the paper book. There is no force on merit. WP(C) No.20135/2022 9 6. It would be apt to re-produce order impugned Ext.P7. “ GOVERNMENT OF KERALA Abstract Tax department- excise - Enforcing the order of the Hon'ble High court in WPC 14308/2022 Tax (G) department Sa.U(Sadha)No.474/2022/NI.VA Date, Thiruvananthapuram 14.06.2022 _1) Order of the Hon'ble High court in WPC 14308/2022 dated 29/04/2022_ _2) Letter of the Excise Commissioner no EXC/1658/2022/XA7 dated 12/05/2022_ _1) With regard to the licensing of group IV Toddy shops in Ettumanoor Excise range Shri.M.R Raju and Smt.Annama Chacko had approached the Hon'ble High Court vide WPC 14308/2022 and the Hon'ble court was pleased to order as stated in reference (1) to direct the Secretary Excise department (1[st] Respondent) to meet the parties in person and dispose of the (Exhibit P5) complaint filed before the Excise Commissioner and make appropriate order within 1 month of receiving the copy of this judgment._ _2) During the period of 2015-17 Shri.M.R Raju, Smt Annama Chacko and Shri.Sashankan were the licensee's of Ettumanoor range group IV toddy shops whereas on detecting the presence of starch in the toddy sample collected from TS no.22 shop their license and privilege got revoked and case no. CR 71/2015 was registered against them under section 57 (A) of Abkari act, in the subsequent resale Shri.Jokutty Jose got preference and license was issued. Whereas Shri.Jokutty Jose was permanently residing in Americas-hence due to his absence his license and privilege was also revoked on 12/04/2022. Presently CR 71/15 case has been compounded by depositing the penalty. Hence the requirement of the applicants is to receive preference in the resale of license for the aforementioned group license as Exhibit P5._ _3) As per the order from the Hon'ble court dated 07.06.2022 the parties were met in person. Their contention was that they had received license for the duration 2014-17 and as per government order the period was extended to 2018 and 2019 hence their license period should be considered for the period of 2014-20,_ WP(C) No.20135/2022 10 _moreover the case registered under section 57(a) was compounded as per section 57 (aa) by paying the requisite penalty and on considering the Hon'ble High Courts order vide WA no. 2451/2018 the licensed period was contended to be considered between 2014-20._ _4) Government has carefully considered this application and it is observed that as per the liquor policy of the period 2020-21 Kerala Abkari Shops Disposal rules 5(1) (a) the preference for operating toddy shops in the state are only applicable to applicants who had carried out toddy shop operation and was implicated in abkari cases during the period of 2019-20 and thereafter acquitted by the Hon'ble High court. On finding the license period of the applicants were only limited to the period of 2014-17 the benefit of the Hon'ble High courts order in WA 2451/2018 and the application of the 202021 liquor policy is not feasible. Hence the application for resale of license by Shri.M.R Raju and Annamma Chacko for Ettumanoor excise range group IV toddy shops is hereby dismissed._ _5) Accordingly the direction of the Hon'ble court in reference (2) is complied,_ **==> picture [217 x 50] intentionally omitted <==** On perusal of the order Ext.P7, it is evident that only in respect of the policy relevant for the year 2019-20, there was a preference for operating toddy shops in the State to the applicants who had carried out the toddy shops and were implicated in abkari cases. However, the liquor policy for the period 2021 did not contain any such clause/provision. 7. The question which arises is whether the compounding offence would amount to acquittal or a punishment. In WP(C) No.20135/2022 11 paragraphs 20, 21 and 22 of the judgment of the Division Bench, it is held that compounding of the offence will not entail into a 100% acquittal as it will not absolve the person whose licence was cancelled from a civil liability. It is only absolvement from a criminal liability, thus, the preferential right in such circumstances could not have been accepted by the respondents while considering the request of the petitioner in letter and spirit or on the basis of the finding of the Single Bench and the Division Bench. This is what is the import of the order impugned. I do not find any illegality and perversity in the order. No ground for interference is made out. The Writ Petition is dismissed. **Sd/-** **AMIT RAWAL JUDGE** csl WP(C) No.20135/2022 12 ## **APPENDIX OF WP(C) 20135/2022** PETITIONER'S EXHIBITS Exhibit P1 TRUE COPY OF THE ORDER DATED 12.04.2022 PASSED BY THE 2ND RESPONDENT. - Exhibit P1(a) TRUE ENGLISH TRANSLATION OF EXT. P1. - Exhibit P2 PHOTOCOPY OF THE ORDER DATED 14.02.2022 PASSED BY THE 3RD RESPONDENT. - Exhibit P2(a) TRUE ENGLISH TRANSLATION OF EXT. P2. - Exhibit P3 TRUE PHOTOCOPY OF THE ORDER DATED 02.03.2022 IN CC NO. 2318/2016 PASSED BY THE JUDL. FIRST CLASS MAGISTRATE COURT I, ETTUMANOOR. - Exhibit P4 TRUE COPY OF THE REQUEST DATED 18.04.2022 SENT TO THE 2ND RESPONDENT. - Exhibit P5 TRUE COPY OF THE REQUEST DATED 05.03.2022 SUBMITTED TO THE 4TH RESPONDENT WITH COPY TO THE 3RD RESPONDENT. - Exhibit P6 TRUE PHOTOCOPY OF THE JUDGMENT DATED 29.04.2022 IN W.P.C NO. 14308/2022 PASSED BY THIS HON'BLE COURT. - Exhibit P7 TRUE COPY OF THE ORDER GO(MS) NO. 474/2022/T.D. DATED 14.06.2022 PASSED BY THE 1ST RESPONDENT. - Exhibit P7(a) TRUE ENGLISH TRANSLATION OF EXT. P7. Exhibit P8 TRUE PHOTOCOPY OF THE DECISION , EXCISE COMMISSIONER, TVM AND OTHERS VS. K. SREEDHARAN AND OTHERS REPORTED IN 2021 (2) KHC 99 (DB). WP(C) No.20135/2022 13 Exhibit P9 TRUE COPY OF THE NEWS ITEM PUBLISHED IN DESHABHIMANI DAILY DATED 23/06/2022 Exhibit P9(a) TRUE COPY OF THE ENGLISH TRANSLATION OF EXHIBIT-P9 RESPONDENTS' DOCUMENTS: NIL