P. D. Jayan and U. Vineesh v. State of Kerala and others

IN THE HIGH COURT OF KERALA AT ERNAKULAM PRESENT: THE HONOURABLE MR. JUSTICE DAMA SESHADRI NAIDU TUESDAY, THE 19TH DAY OF JANUARY 2016/29TH POUSHA, 1937 WP(C).No. 30284 of 2015 (I) ---------------------------- PETITIONERS: ---------------- 1. P.D.JAYAN, S/O. DAMODHARAN, LICENSEE T.S NO 7/2015-16 AND T.S NO 10/2015-16 IN GROUP NO.II OF KOLLAM EXCISE RANGE, RESIDING AT LITTLE FLOWER KAVILAYIL VEEDU, KAVANADU P.O, VIVEKANANDA NAGAR, KUREEPUZHA, KOLLAM DISTRICT 2. U.VINEESH, S/O. UPENDRAN, LICENSEE T.S NO 7/2015-16 AND T.S NO 10/2015-16, IN GROUP NO.II OF KOLLAM EXCISE RANGE, RESIDING AT J.U MANDIRAM, AYATHIL P.O, AYATHIL CHERRY, VADAKKEVILA VILLAGE, KOLLAM. BY ADV. SRI.B.MOHANLAL RESPONDENTS: ------------------ ## 1. STATE OF KERALA, REPRESENTED BY THE SECRETARY TO GOVERNMENT, TAXES DEPARTMENT(EXCISE), SECRETARIAT, THIRUVANANTHAPURAM - 695 001. 2. THE COMMISSIONER OF EXCISE, GOVERNMENT OF KERALA, NANDAVANAM, PALAYAM P.O., THIRUVANANTHAPURAM 33. ## 3. THE DEPUTY COMMISSIONER OF EXCISE, EXCISE COMPLEX, CHINNAKKADA , KOLLAM 691 001. 4. THE EXCISE RANGE INSPECTOR, KOLLAM EXCISE RANGE EXCISE COMPLEX, CHINNAKKADA, KOLLAM 691 001 ## 5. THE CIRCLE INSPECTOR OF EXCISE, EXCISE ENFORCEMENT ANTI-NARCOTIC SQUAD KOLLAM 691 001. R3 BY ADV. SRI. V. VIJULAL, GOVERNMENT PLEADER THIS WRIT PETITION (CIVIL) HAVING COME UP FOR ADMISSION ON 19-01-2016, THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING: WP(C).No. 30284 of 2015 (I) : 2 : ## **APPENDIX** ## PETITIONER'S EXHIBITS: |EXT.P1|:|TRUE COPY OF THE RELEVANT PAGES OF THE LICENCE| |---|---|---| |||NO.49/2014-15 ISSUED BY THE 3RD RESPONDENT TO THE| |||PETITIONERS AND ITS ENGLISH TRANSLATION.| |EXT.P2|:|TRUE COPY OF THE RELEVANT PAGES OF THE LICENCE| |||NO.50/2014-15 ISSUED BY THE 3RD RESPONDENT TO THE| |||PETITIONERS AND ITS ENGLISH TRANSLATION.| |EXT.P3|:|TRUE COPY OF THE TODDY TRANSPORT PERMIT| |||NO.500/15-16/ID/IHY DATED 30.03.2015 ISSUED BY THE| |||DEPUTY COMMISSIONER OF EXCISE, PALAKKAD TO THE| |||PETITIONERS.| |EXT.P4|:|TRUE COPY OF THE TODDY TRANSPORT PERMIT| |||NO.348/15-16/ID/IHY DATED 30.03.2015 ISSUED BY THE| |||DEPUTY COMMISSIONER OF EXCISE, PALAKKAD TO THE| |||PETITIONERS.| |EXT.P5|:|TRUE COPY OF THE CERTIFICATE NO.7041/15 DATED| |||02.09.2015 ISSUED BY THE CHEMICAL ANALYST.| |EXT.P6|:|TRUE COPY OF THE CRIME AND OCCURRENCE REPORT IN| |||CRIME NO.262/2015 OF KOLLAM EXCISE RANGE.| |EXT.P7|:|TRUE COPY OF THE CRIME AND OCCURRENCE REPORT IN| |||CRIME NO. 263/2015 OF KOLLAM EXCISE RANGE.| |EXT.P8|:|TRUE COPY OF THE APPLICATION CRL.M.P.NO. 6233/2015| |||IN CRIME NO.262/2015 OF KOLLAM EXICE RANGE FILED| |||BY THE 2ND PETITIONER BEFORE THE JUDICIAL FIRST| |||CLASS MAGISTRATE COURT-II, KOLLAM.| |EXT.P9|:|TRUE COPY OF THE APPLICATION CRIL.M.P NO.6232/2015| |||IN CRIME NO.263/2015 OF KOLLAM EXCISE RANGE FILED| |||BY THE 2ND PETITIONER BEFORE THE JUDICIAL FIRST| |||CLASS MAGISTRATE COURT-II, KOLLAM.| |EXT.P10|:|TRUE COPY OF THE ORDER NO.XA7-25996/15 DATED| |||14.10.2015 ISSUED BY THE 2ND RESPONDENT TO THE| |||PETITIONERS.| ## RESPONDENTS' EXHIBITS: EXT.R2(a) : TRUE COPY OF THE NOTIFICATION SRO NO.145/2007 PUBLISHED AS G.O.(P) NO.25/2007/TD., DATED 14.02.2007. //TRUE COPY// P.A. TO JUDGE rv ## DAMA SESHADRI NAIDU, J. ---------------------------------- W.P. (C) No. 30284 of 2015 (I) ---------------------------------Dated this the 19[th ] day of January, 2016. ## JUDGMENT Heard the learned counsel for the petitioners and the learned Government Pleader, apart from perusing the record. 2. The petitioners are the Conveners of workers' Union, which have been granted the privilege to vend toddy in shop Nos. 7 and 10 in Group No.II of the Kollam Excise Range for the year 20142015; later, they had their licences renewed for the year 20152016, valid up to 31.03.2016. 3. On 09.02.2015, the Preventive Officer of the Excise Enforcement, Anti Narcotic Special Squad, Kollam, drew samples from the petitioners' shops and subjected them to chemical analysis. As a result, Crime Nos. 262 and 263 of 2015 were registered concerning shop Nos. 7 and 10 respectively for the alleged offences under Sections 57(a) and 56B of the Abkari Act. As can be seen from Ext.P5, both the samples concerning shop Nos. 7 and 10 tested positive for the presence of the starch, a foreign material which is prohibited from being used in toddy in terms of Ext.R2(a) notification. 4. Before the authorities could proceed further, the W.P.(C). No. 30284/2015 -2- petitioners, in anticipation, filed the present writ petition. Soon thereafter, the petitioners filed an application before the Jurisdictional Magistrate for sending the second sample for chemical analysis. As can be seen, on 19.10.2015, in response to the petition filed by the petitioners, the Jurisdiction Magistrate is said to have sent the second sample for chemical analysis. 5. Be that as it may, on 14.10.2015, the second respondent issued Ext.P10 show cause notice cum suspension order invoking his powers under Section 26(b) of the Act r/w Rules 5(19), 9(2) and 7(31) of the Kerala Abkari Shops Disposal Rules, 2002 ('the Rules'). Consequently, the petitioners amended the writ petition and laid a comprehensive challenge against Ext.P10 as well. 6. As a matter of further development, it is apposite to mention that this Court on 20.10.2015 in I.A. No. 15261 of 2015 issued an interim direction suspending Ext.P10. It was, however, made clear in the said interim direction that the petitioners should submit their explanations in response to Ext.P10 show cause notice, though they were entitled to carry on with the business in the interim. At any rate, now the respondents have filed a petition along with the counter W.P.(C). No. 30284/2015 -3- affidavit to vacate the interim order. 7. The learned counsel for the petitioners has strenuously contended that the petitioners have already taken steps to have the second sample chemically analysed. According to him, if the authorities interdict the petitioners' right to carry on with the business before they could obtain the chemical analysis report of the second samples, it would cause extreme hardship to them. Indulging in a bit rhetoric, the learned counsel would contend that if at all the second sample turns out to be in the negative, the petitioners' position becomes unenviable and they could not be compensated for the loss of their business. 8. The learned counsel has also contended that the petitioners are not individual licencees so as to have any motive to indulge in mal- practices. In elaboration, the learned counsel has submitted that the petitioners are only Conveners of the Workers' Unions, which have been given the privilege collectively, since the shops in question could not be put to auction in the regular course. Eventually, summing up his submissions, the learned counsel has placed reliance on Rajappan and another v. State of Kerala[1] and Sabu and another v. Excise > 1 2012(2) KHC 657 W.P.(C). No. 30284/2015 -4- Commissioner, TVM and another[2] . 9. The learned Government Pleader, on the other hand, has submitted that the second respondent has ample powers under Section 26 of the Act r/w Rules 5(19), 9(2) and 7(31) of the Rules to suspend the licence pending further enquiry. He has also submitted that the registration of crime and the consequential trial of the case before a competent judicial magistrate have nothing to do with the departmental proceedings, which are distinct and different. Drawing my attention to The Excise Commissioner and others v. Devidasan[3] , the learned Government Pleader has strenuously contended that for the authorities to exercise their power of either suspension or cancellation in statutory terms, the registration of crime, leave alone obtaining a chemical analysis report, is not a pre-condition. 10. The learned Government Pleader has eventually submitted that the authorities have already taken steps to put the shops in auction and the interim interdiction issued by this Court has disabled the authorities from proceeding further. In the end, the learned > 2 2015(2) KHC 66 > 3an unreported judgment of a learned Division Bench of this Court in W.A. No. 794 of 2015 W.P.(C). No. 30284/2015 -5- counsel has placed reliance on Muraleedharan v. State of Kerala[4] . 11. Indeed, the facts are not in dispute. Shop Nos. 7 and 10 licenced to the petitioners had been subjected to inspection resulting in the registration of Crimes under Sections 57(a) and 56B of the Act. On the parallel lines, the second respondent invoking his statutory powers, has issued Ext.P10 show cause notice-cum-order of suspension. The bone of contention in the present writ petition is the validity of Ext.P10. 12. As can be seen, the learned counsel for the petitioners has made very diligent efforts to have this Court believe that obtaining the second sample report is sine qua non for either suspending or cancelling the licence. In this regard, it is apposite to examine the statutory scheme. We may begin with Section 26(b) of the Act, which reads as follows: “26. **Power to recall license, etc.-** The Commissioner may cancel or suspend any license or permit granted under this Act:- ## xxxxxxxxxxxxxxxxx (b) in the event of any breach by the holder of such license or permit by his servant, or by any one acting with his express or implied permission on his behalf, of any of the terms and conditions 4 2011(1) KLT 886 W.P.(C). No. 30284/2015 -6- of such license or permit; or 13. Further, we may, in the same vein, examine Rules 5(19), 9 (2) and 7(31) of the Rules which reads as follows: ## R.5. **The Grant of privilege of vending Toddy shall be subject to the following conditions, namely:-** xxxxxxxxxxxxxxxxxxx (19) The Commissioner of Excise may cancel any licence issued under these Rules at any time on valid grounds. Any resale or disposal otherwise, ordered shall always be at the risk and loss of the original purchaser who shall not have any claim to any gain received by Government accruing from such disposal. Further, the original purchaser shall have no claim for refund of any amount he had paid to Government or any amount that had been forfeited from him. R.9(2) No toddy other than that drawn from Coconut, Palmyra, or Choondapana palms and on which tree-tax due under the Act has been paid shall be sold by the licensee. All toddy kept or offered for sale shall be natural and conforming to such specifications and complying to such restrictions and may be notified by Government under clause (n) of Rule 2. Nothing shall be added to it to increase its intoxicating quality or strength or to alter its natural composition or for any other purposes. ## R.7. The licencess of Toddy or Foreign Liquor- 1 **shops shall be subject to the following General Conditions, namely:-** (31) Infraction of any of the rules or the conditions of the licence either by the licensee or by any person in his employment shall entail on the licensee the forfeiture of deposit/annual rental and cancellation of licence.” 14. A perusal of Section 26(b) of the Act as well as the Rules W.P.(C). No. 30284/2015 -7- extracted above leaves no manner of doubt in my mind that the second respondent has ample powers to suspend the licence which initially was granted under Rule 5 of the Rules. The only issue to be determined is whether any fetters have been imposed on the power of the second respondent to suspend the licence pending further enquiry by the authorities into the allegations of adulteration or violation of licence conditions. 15. If we examine the ratio of Rajappan, on which the learned counsel for the petitioners has placed reliance, it is evident that the authorities have faced with two conflicting chemical analysis reports. In that context, a learned single Judge of this Court has held that the chemical analysis report of B sample assumes more importance and is to be given more evidential value in the light of the fact that the report was obtained in the course of the proceedings under the Criminal Procedure Code; on the other hand, the chemical analysis report concerning A sample precedes the registration of crime. I regret my inability to see any relevance for the proposition of law laid down in Rajappan to the facts of the present case. 16. In Sabu, this Court, per me, has held that unless a licencee W.P.(C). No. 30284/2015 -8- is charged with a particular offence, it cannot be said that there is any prosecution pending. In that event, the authorities' refusal to renew the licence is improper. 17. On the other hand, in the unreported judgment dated 14.09.2015 in W.A. No. 794 of 2015, a learned Division Bench of this Court has held: “19. In the above context, it is worth noticing that an Abkari Officer is a person who is experienced in identifying alcoholic liquors and other contraband articles prohibited by the Abkari Act. This Court has in various decisions held that, the experience of an Abkari Officer though dependent mainly upon his sensory perceptions is sufficient to prima facie detect an Abkari Offence and in some cases, even to support a conviction. In other words, the experience of an Abkari Officer in the field should not be underestimated as a valuable input in detecting and identifying the various ingredients that go into the production of contraband items prohibited by the Abkari Act.” 18. In the end, their Lordships have restored the order of suspension holding that the registration of a crime or obtaining the chemical analysis report is not a pre condition for suspending the licence. 19. In the light of a definitive pronouncement of the learned Division Bench in Devidasan, I cannot but hold that Ext.P10 show cause-cum-order of suspension is unexceptional. As a result, the W.P.(C). No. 30284/2015 -9- interim stay granted stands vacated. Consequently, this Court disposes of the writ petition leaving it open for the petitioners to submit their explanation, if already not submitted. On receipt of the said explanations, the respondent authorities shall consider the same on merits, after providing an opportunity of hearing to the petitioners, and pass appropriate orders thereon, as expeditiously as possible, at any rate, within one month from the date of receipt of a copy of this judgment. In response to the specific plea made by the learned counsel for the petitioners, it is made clear that the petitioners are at liberty to pursue their rights and remedies, if any, under Rule 5(3)(i) of the Rules. sd/- DAMA SESHADRI NAIDU, JUDGE. rv W.P.(C). No. 30284/2015 -10-