O.M. Kareem v. State of Kerala and District Treasury Officer, Ernakulam

# **`IN THE HIGH COURT OF KERALA AT ERNAKULAM`** # **`PRESENT`** ## **`THE HONOURABLE THE CHIEF JUSTICE MR.S.MANIKUMAR`** ## **`&`** ``` THE HONOURABLE MR. JUSTICE SHAJI P.CHALY ``` ``` FRIDAY, THE 10[TH] DAY OF DECEMBER 2021 / 19TH AGRAHAYANA, 1943 ``` ``` WA NO. 322 OF 2021 ``` ``` AGAINST THE JUDGMENT IN WP(C) 16531/2019 OF HIGH COURT OF KERALA ``` ## **`APPELLANT/PETITIONER:`** ``` O.M. KAREEM, AGED 55 YEARS, S/O. LATE O.M MUHAMMED, OLAPPILA HOUSE, KALADY ROAD, SREEMOLANAGARAM - 683 580. ``` ``` BY ADVS. S.KRISHNAMOORTHY SMT.NITHYA SUGUNAN ``` ## **`RESPONDENTS/RESPONDENTS:`** - `1 STATE OF KERALA REPRESENTED BY PRINCIPAL SECRETARY(TAXES) GOVERNMENT SECRETARIAT, THIRUVANANTHAPURAM-695 001.` - `2 DISTRICT TREASURY OFFICER, ERNAKULAM PIN-682 018.` ``` SRI.K.P.HARISH, SR GP ``` ``` THIS WRIT APPEAL HAVING COME UP FOR ADMISSION ON 10.12.2021, THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING: ``` **W.A.No.322 of 2021** **2** ## **JUDGMENT** ## Dated this the 10[th] day of December, 2021 ## **Shaji P.Chaly, J.** This is an appeal preferred by the petitioner in W.P. (C)No.16531 of 2019 challenging the judgment of the learned single Judge dated 02.02.2021 whereby the following reliefs sought for by the petitioner were declined and the writ petition was dismissed: - “i. Issue a writ in the nature of certiorari or any other writ or order quashing Exhibit-P8 after calling for the records leading to the same; - ii. Issue a writ in the nature of mandamus or any other appropriate writ, order or direction, directing the 1[st] respondent to issue license to the petitioner for stamp vending in the premises of the Hon’ble High Court of Kerala at Ernakulam.” 2. The learned single Judge, after taking into account the rival submissions made by the parties, has dismissed the writ petition holding as follows: - “12. The issue that arises for consideration in this - writ petition is as to whether any interference is warranted **W.A.No.322 of 2021** **3** on Ext.P8 order dated 01.06.2019of the 1st respondent State, whereby Ext.P3 application made by the petitioner for stamp vendor license, under sub-rule (4) of Rule 35 of the Kerala Manufacture and Sale of Stamp Rules, 1960, stands rejected for the reasons stated therein. 13. The petitioner submitted Ext.P2 application before the 2nd respondent for issuing stamp vendor license in the premises of this Court, in the existing vacancy. The 2nd respondent rejected that application citing sub-rules (1) and (2) of Rule 35 of the Kerala Manufacture and Sale of Stamp Rules, substituted by the Kerala Manufacture and Sale of Stamp (Amendment) Rules, 2007. As per the amended provisions, the District Committee consisting of the District Collector as the Chairman, the District Registrar (General) and the District Treasury Officer as the members, have to appoint the stamp vendors, after examining the necessity of stamp vendors in a district and notifying the vacancies by giving wide publicity through newspapers and electronic media, after considering the report from the Committee chaired by the District Collector. In the wake of the implementation of e-stamping in the State, the Government vide letter No.106260/Estt.C4/2012 dated 14.06.2013 and Ext.P5 letter dated 16.01.2016 clarified not to issue new stamp vendor licenses, not to issue permanent licenses in lieu of temporary licenses, and not to create new stamp vendor posts. Hence the application made by the petitioner for stamp vendor license was rejected. As per G.O.(P)No.23/2017/TD dated 07.04.2017, the instruments chargeable with stamp duty for an amount above Rs.1 lakh shall be stamped with e-stamp only. Now the Government have decided to introduce e- stamping for all categories of stamps and stamp papers and the process and modalities for implementing e- stamping facilities for judicial stamps and stamp papers are in progress, in continuation of implementation of e- stamping for non-judicial stamps and stamp papers. The software has been developed by the National Informatics Centre for e-stamping of lower denomination stamp papers. Therefore, the 1st respondent rejected the application made by the petitioner for stamp vendor license by Ext.P8 order, in view of Ext.P5 communication dated 16.01.2016. **W.A.No.322 of 2021** **4** 14. Rule 35 of the Kerala Manufacture and Sale of Stamp Rules, 1960 was substituted by the Kerala Manufacture and Sale of Stamp (Amendment) Rules, 2007, with effect from 13.07.2007. As per sub-rule (1) of Rule 35, the sale of stamps shall be made by the Treasurers as exofficio stamp vendors and by licensed stamp vendors appointed by a District Committee consisting of the District Collector, the District Registrar (General) and the District Treasury Officer as members. The license shall be issued by the District Treasury Officer to the vendors so appointed on the basis of the recommendations of the District Committee. As per sub-rule (2) of Rule 35, the Government shall, from time to time determine the number of stamp vendors required in an area in a district after examining the necessity and notify the vacancies by giving wide publicity through the newspapers and electronic media after considering the report from the Committee chaired by the District Collector. As per subrule (4) of Rule 35, an application in Form IA for appointment as licensed stamp vendor shall be submitted to the District Treasury Officer concerned before such date, as may be specified, by the District Treasury Officer in the notification inviting application. 15. As per sub-rule (7) of Rule 35 of the Kerala Manufacture and Sale of Stamp Rules, no person shall be eligible to apply for stamp vendor license, if he has not completed the age of 18 years or has completed 60 years on the 1st of January of the year of notification of the vacancy and has not passed the SSLC or equivalent examinations. As per sub-rule (9) of Rule 35, the authority for ad hoc appointment of stamp vendors shall vest with the District Treasury Officer. As per sub-rule (22) of Rule 35, in the event of the death of a licensed stamp vendor, the District Treasury Officer shall take immediate steps for filling up the vacancy. As per the proviso to sub-rule (22), if the death occurs before attaining the age of 65 years, a legal heir duly authorised by the other legal heirs, if any, may be appointed as the licensed vendor in the vacancy if he is otherwise qualified to be appointed and makes out an application before the District Treasury Officer within three months from the date of death. 16. In the instant case, the petitioner submitted Ext.P3 application dated 27.07.2017, in Form IA, under sub- **W.A.No.322 of 2021** **5** rule (4) of Rule 35 of the Kerala Manufacture and Sale of Stamp Rules, for appointment as licensed stamp vendor in the premises of this Court, along with Ext.P1 no-objection certificate dated 20.06.2017 issued by the Registrar of this Court. As per sub-rule (4) of Rule 35, such an application has to be submitted to the District Treasury Officer concerned before such date, as may be specified in the notification inviting application. The appointment of licensed stamp vendors has to be made by the District Committee and the District Treasury Officer has to issue licence to the vendors so appointed on the basis of the recommendations of the District Committee. In the absence of any notification inviting application for the appointment of licensed stamp vendor, the petitioner is not entitled for appointment as licensed stamp vendor in the premises of this Court, based on Ext.P3 application submitted in Form IA. 17. In Mampad Grama Panchayat v. The Convenor Mampad Friends All India Sevens Football Tournament Committee and others [2016 (5) KHC 846] this Court held that, it is well settled that, when the statute requires to do certain thing in certain way, the thing must be done in that way or not at all. Other methods or mode of performance are impliedly and necessarily forbidden. The said proposition of law is based on a legal maxim “expressio unius est exclusion alteris” meaning thereby that, if the statute provides for a thing to be done in a particular manner, then it has to be done in that manner and in no other manner, and following other course is not permissible. The said proposition of law about limitation of exercise of statutory power has first been identified by Jassel M.R. in the case of Taylor v. Taylor (1876 (1) Ch.D. 426), wherein it was laid down that, where a power is given to do a certain thing in a certain way, that thing must be done in that way, or not at all, and that other methods of performance are necessarily forbidden. The Privy Council applied the said principle in the case of Nazir Ahmed v. King Emperor (AIR 1936 PC 253). 18. In Mampad, this Court also relied on the decision of the Apex Court in Ajanta Industries v. Central Board of Direct Taxes (1976 (1) SCC 1001), wherein a Three-Judge Bench of the Apex Court held that, when law requires reasons to be recorded in a particular order, affecting **W.A.No.322 of 2021** **6** prejudicially the interest of any person, who can challenge the order in court, it ceases to be a mere administrative order and the wise or violation of the principles of natural justice on account of omission to communicate the reasons is not expiated. The said decision of the Apex Court was in the context of Section 127(1) of the Income Tax Act, 1961 which empowers the Commissioner of Income Tax to transfer any case from one Income Tax Officer subordinate to him to another, also subordinate to him, after giving the assessee a reasonable opportunity of being heard in the matter, wherever it is possible to do so, and after recording his reasons for doing so. After taking note of the corresponding section in the Income Tax Act, 1922, i.e., Section 5(7A), the Apex Court held that, unlike Section 5(7A) of the 1922 Act, Section 127(1) of the 1961 Act requires reasons to be recorded prior to the passing of an order of transfer. However, the impugned order does not state any reasons whatsoever for making the order of transfer. The Apex Court held that, the requirement of recording reasons under Section 127(1) of the 1961 Act is a mandatory direction under the law and noncommunication thereof is not saved by showing that the reasons exist in the file although not communicated to the assessee. The Apex Court held further that, the reason for recording of reasons in the order and making those reasons known to the assessee is to enable an opportunity to the assessee to approach the High Court under its writ jurisdiction under Article 226 of the Constitution or even the Apex Court under Article 136 of the Constitution in an appropriate case for challenging the order, inter alia, either on the ground that it is a mala fide or arbitrary exercise or that, it is based on irrelevant and extraneous considerations. 19. In the instant case, the appointment of a licensed stamp vendor can be made only in terms of the provisions under Rule 35 of the Kerala Manufacture and Sale of Stamp Rules, 1960, based on a notification issued by the competent authority and considering the applications received before the cut off date specified in the said notification, by the concerned District Committee. Therefore consideration of Ext.P3 application made by the petitioner for appointment as a licensed stamp vendor bypassing the procedure prescribed in Rule 35 is not legally permissible. **W.A.No.322 of 2021** **7** 20. In Union of India v. Dinesh Engineering Corporation [(2001) 8 SCC 491], the Apex Court held that where the decision of the authority is in regard to the policy matter, the Court will not ordinarily interfere since these policy matters are taken based on expert knowledge of the persons concerned and courts are normally not equipped to question the correctness of a policy decision. But then this does not mean that the courts have to abdicate their right to scrutinise whether the policy in question is formulated keeping in mind all the relevant facts and the said policy can be held to be beyond the pale of discrimination or unreasonableness, bearing in mind the material on record. Any decision be it a simple administrative decision or policy decision, if taken without considering the relevant facts, can only be termed as an arbitrary decision. If it is so, then be it a policy decision or otherwise, it will be violative of the mandate of Article 14 of the Constitution. 21. In Parisons Agrotech (P) Ltd. v. Union of India [(2015) 9 SCC 657] the Apex Court held that once the court finds that there is sufficient material for the Government to take a particular policy decision, even by bringing Article 14 of the Constitution into play, courts cannot judicially review and determine the correctness of the policy decision. Backed by cogent material, if the authorities demonstrate that the decision is not arbitrary or irrational, but is taken in public interest, the Court must respect the Executive's decision. 22. The specific stand taken by the 1st respondent State in Ext.P8 order dated 01.06.2019 and also in the statement filed in this writ petition is that, in the wake of the implementation of estamping in the State, vide letter No.106260/ Estt.C4/2012 dated 14.06.2013 and Ext.P5 letter dated 16.01.2016 decided that, since the Government is proposing to implement e-stamping facility, no new stamp vendor licence need be issued, no temporary stamp vendor licence need be made permanent, and no new vacancy of stamp vendor need be created. For that reason, the application made by the petitioner for stamp vendor licence was rejected. 23. In the statement, the 1st respondent has pointed out that, as per G.O.(P)No.23/2017/TD dated 07.04.2017, the instruments chargeable with stamp duty for an **W.A.No.322 of 2021** **8** amount above Rs.1 lakh shall be stamped with e-stamp only. Now the Government have decided to introduce e- stamping for all categories of stamps and stamp papers and the process and modalities for implementing e- stamping facility for judicial stamps and stamp papers are in progress, in continuation of implementation of estamping for non-judicial stamps and stamp papers. The 1st respondent has also pointed out that, software has been developed by the National Informatics Centre for e- stamping of lower denomination stamp papers. 24. The decision taken by the 1st respondent State that, no new stamp vendor licence need be issued, no temporary stamp vendor licence need be made permanent, and no new vacancy of stamp vendor need be created, since the Government is proposing to implement e-stamping facility, is not under challenge in this writ petition. The said policy decision taken by the 1st respondent State is neither arbitrary nor irrational, but is taken in public interest, which warrants no interference in exercise of the extraordinary jurisdiction of this Court under Article 226 of the Constitution of India. In the result, the writ petition fails and the same is accordingly dismissed. No order as to costs.” It is thus challenging the legality and correctness of the judgment, the appeal is preferred. 3. The paramount contention advanced in the appeal is that the learned single judge erred in holding that the decision of the 1[st] respondent State that no new stamp vendor license need be issued; that no temporary stamp vendor license need be made permanent and no new vacancy of stamp vendor need be created, since the Government is **W.A.No.322 of 2021** **9** proposing to implement e-stamping facility, is not under challenge in the writ petition is totally a wrong finding; that the proposal cannot be treated as a policy decision that such a proposal of a policy decision cannot be pre-maturely challenged. It is also contended that it is an admitted fact that out of the five stamp vending permits existing at the High Court premises, at least one vacancy is still vacant (though actually it is two vacancies). The appellant only intends to fill up the said vacancy. It is also the contention of the appellant that the learned single judge erred in interpreting Rules 35(2) and 35(4) of the Kerala Manufacture and Sale of Stamps Rules, 1960. The requirement of R.35(2) in this particular case does not arise for the reason that already five vacancies of stamp vendors have been allotted by the government in the High Court premises. No new vacancy to be created. As such, R.35(2) is not applicable in this case; that in respect to R.35(4), the only format for making an application is in Form 1A, even for filling up the existing vacancy and such an application cannot be treated as an application for a new **W.A.No.322 of 2021** **10** license but the same has to be treated to fill up the existing vacancy. 4. That apart, it was contended that it is a mandatory requirement under Rule 35(22) of the Kerala Manufacture and Sale of Stamp Rules, 1960 to take immediate steps to fill up the vacancy in the event of death of a licensed stamp vendor. Such a vacancy arose in the High Court premises on 11.12.2008 and subsequently on 27.7.2017. Though there were applications of the legal heirs of the deceased, the same was rejected. As such, those vacancies are existing and as early as on 1.7.2017 on the strength of Exhibit P1 No Objection Certificate of the Registrar (Administration), High Court of Kerala on 20.6.2017, the application Exhibit P3 is submitted by the appellant. There was no impediment in scrutinizing the application as per the procedure and to fill up the said vacancy granting the stamp vendor license in favour of the applicant/appellant. 5. According to the appellant, the rejection in Exhibit P4 on the strength of Exhibit P5 as well as the final rejection in **11** ## **W.A.No.322 of 2021** Exhibit P8 stating that the policy decision of the Government that no new stamp vender license will be issued, existing license or provisional licenses shall not be regularized and no new vendor posts will be created are not at all binding the case of the appellant because appellant has only made his application on the strength of the NOC given by the administrative side of this court and the said policy decision would not attract in granting license to the appellant to fill up the existing vacancy. 6. According to the appellant, the principle of the legal maxim "expressio unius est exclusio alteris" and also the Supreme Court judgment wherein the procedure prescribed by the law has been followed, is not at all applicable to the facts and circumstances of this case for the reason that except Rule 35(22), no other procedure has been prescribed to fill up the existing vacancy of stamp vendor. Therefore, the said finding is not correct in respect to granting license to the appellant, filling up the existing vacancy. ## **W.A.No.322 of 2021** **12** 7. According to the appellant, the declaration of the learned single judge that in the absence of any notification inviting application for appointment of licenced stamp vendor, the appellant is not entitled for appointment as licenced stamp vendor in the premises of this court is a wrong finding. No such notification need be necessary under Rule 35(2) as far as an existing vacancy is concerned to be filled up by the 1[st] respondent. It is also the contention that the finding of the learned single judgment in paragraph 19 of the judgment interpreting Rule 35 of the Kerala Manufacture & Sale of Stamp Rules, 1960 would not be applicable in the appellant's case wherein he made the application only to fill up an existing vacancy. Hence, the said finding has to be set aside. 8. It is further contended that even assuming that it is a policy decision, the appellant intends to sell only judicial stamps and stamp papers in the High Court premises. The value of less than Rs.1 lakh non-judicial stamp papers are permitted to be sold by licenced stamp vendors. So long as the existing system has not been abolished by the ## **W.A.No.322 of 2021** **13** Government through an enactment, introduction of an e- stamping facility could not itself take away the right of statutory stamp vendors. The existing vacancy has to be filled in accordance with Rule 35(22) of the said rules and the applicant is eligible, especially where there is no competition and this Court has given NOC in favour of the appellant, the 1[st] respondent shall consider the same in favour of the appellant and to grant the license. 9. We have heard, learned counsel for the appellant Sri.S.Krishnamoorthy and learned Senior Government Pleader Sri.K.P. Harish and perused the pleadings and materials on record. 10. The sole question emerging for consideration is whether any interference is required to the judgment of the learned single Judge. On a reading of the judgment of the learned single Judge, it is categoric and clear that the State Government has taken a policy for implementation of e- stamping for non-judicial stamps and stamp papers. The case projected by the appellant was that though he had applied for **W.A.No.322 of 2021** **14** a stamp vendor license in the premises of the High Court, it was rejected by the State Government as per Exhibit P8 order dated 01.06.2019. It is the case of the appellant that there are two vacancies for stamp vending license in the High Court and as per the Kerala Stamp (Amendment) Rules, 2007, the Government has to take necessary steps to fill up the vacancies of the stamp vendors. Exhibit P8 order of the Government can be extracted so as to have a proper appreciation of the grounds raised by the appellant: ## “GOVERNMENT OF KERALA Tax Department-Issuing the Order rejecting the application for Stamp Vendor License submitted by Sri. O.M. Karim --------------------------------------------------------------------------------------------------- ## Tax (E) Department G.O(Rt) No. 384/2019/TAXES Thiruvananthapuram, 01/06/2019 --------------------------------------------------------------------------------------------------Reference: 1. Application submitted by Sri. O.M.Karim. 2. Letter No. 752/E3/2015 dated 16-01-2016. 3. Judgment dated 29-05-2018 rendered by Hon'ble High Court of Kerala in WP(C) No.17451/2018. 4. Order No. G.O(P) 23/2017/LD dated 07-04-2017. 5. Letters bearing No. F/1527/2018 by the Treasury Director dated 26-09-2018 and 19-08-2018. 6. COC No. 627/19 filed by O.M.Karim. ORDER **W.A.No.322 of 2021** **15** 1. Application for Stamp Vendor License submitted by Sri. O.M.Karim was rejected by the District Treasury Officer at the instance of e-Stamping being adopted. Ref no. 1 application was submitted before the Government. In this matter Sri. O.M. Karim had moved WP(C) No 17451/2018 before the Hon'ble High Court of Kerala and the Hon'ble Court had directed to consider the application submitted by the petitioner and to take appropriate steps within a period of three months. 2. In High Court, two stamp Vendors had died out of total five vendors and the court had given No Objection Certificate to Sri. O.M.Karim based on the fact that there exist two vacancies. But when an application for Stamp vendor License was submitted, the same was rejected by the District Treasury Officer, Ernakulam stating that the Government had directed not to issue further Stamp Vendor License as e-Stamping have been adopted. Sri O.M.Karim had requested to grant license stating that e-Stamping is adopted for non-judicial Stamp papers and stamps, as far as for judicial purposes even now Stamp papers and stamps are being used. Hence it is requested that the Government direction regarding license has to be limited to non-judical stamp vendor and therefore the application submitted by Sri. O.M.Karim may be allowed. 3. As per the direction of the Hon'ble court, the Under Secretary, Tax Department, had considered the application and Sri.O.M.Karim was heard. 4. As per the Kerala Stamp (Amendment) Rules, 2007, Rule 45(77), the District Treasury Officer shall take immediate steps to fill the vacancy in case of death of a Licensed Stamp Vendor. As per Rule 36(3), the Government can decide the number of Stamp Vendors required for an area in a District at appropriate times, by considering the Report of the Samithi presided over by the District Collector and also the necessity. Such vacancies shall be intimated to the general public by publishing the notification in electronic medias as well as in other medias. The Licensee are to be appointed by the District wise samithi headed by the District Collector. As e-Stamping have been adopted, the government had given direction wide ref. no. (2) letter, not to allot Stamp Vendor License or to regularise any vendor licensee. Through out the **W.A.No.322 of 2021** **16** state, the appointment as well as regularisation of Stamp Vendor Licensee is kept halted. 5. As per ref no (5) letter, it is informed by the Treasury Director that following the decision of the Government, immediate steps are taken to adopt e-Stamping for judicial stamp papers as well. As per ref no. (4), at present the e-Stamping is adopted for nonjudicial stamp papers having the value above Rs.1 lakh. The application made by Sri. O.M. Karim is for License to sell Stamp papers in High court surroundings. As per the decision of the government to adopt e-Stamping for judicial Stamp papers as well as for non-judicial stamp papers below Rs.1 Lakh, immediate steps are taken to implement the adoption of e-Stamping. At this juncture, it is hereby ordered that the application for stamp vendor License submitted by Sri O.M. Karim is rejected. 6. The judgment dated 29-05-2018 issued by the Hon'ble High Court of Kerala is hereby complied. (Under the order of the Governor) SIMI A. S UNDER SECRETARY” 11. On a reading of the judgment of the learned single Judge, the relevant rules and the order passed by the State Government, it is clear that the State Government has changed its policy in the matter of stamp vending and decided for implementation of e-stamping for non-judicial stamps and stamp papers. The learned single Judge, after a threadbare discussion and analysis of the law on the point and the judgments of the Apex Court in regard to the manner in which **W.A.No.322 of 2021** **17** the Government policies are to be considered, has arrived at the definite conclusion that there is no illegality, arbitrariness or legal infirmity in the impugned Exhibit P8 Government Order. Learned Single Judge has taken into account all the legal aspects advanced by the appellant on the strength of the relevant rules and has arrived at the conclusion that no interference is required to the order of the Government in view of the policy decision taken by the Government. It is a well settled position in law that unless and until patent arbitrariness, illegality or perversity is able to be established, a writ court would not interfere in a policy exercising the powers conferred under Article 226 of the Constitution of India. 12. On going through the judgment of the learned single Judge, we do not think that there is any jurisdictional error or other legal infirmities justifying interference with the judgment of the learned single Judge in an intra court appeal exercising the powers conferred under Section 5 of the Kerala High Court Act, 1958. **18** ## **W.A.No.322 of 2021** Needless to say, the appeal fails. Accordingly, it is ## dismissed. Pending interlocutory applications, if any, shall stand closed. Sd/- **S.Manikumar Chief Justice** Sd/- **Shaji P.Chaly Judge** ## **vpv** //true copy// P.A. to Judge