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2016 (4) TMI 1028 - HC - Central ExciseWhat is the true scope and intend of Rule 5(1)(a) of the Kerala Abkari Shops Disposal Rules, 2002 and whether discharge of the licencee from the crime for the alleged offences under the provisions other than Section 56 of the Act entails him to the preference even after the conclusion of the proceedings concerning granting the privilege - Held that:- an analysis of the provision of Rule 5(1)(a) reveals the following: (1) While extending the privilege to vend toddy, preference shall be given to those licencees who have conducted the toddy shops during the preceding three consecutive years; (2) The incumbent licencee shall not have any crime registered against him under any provision of the Act other than Section 56 thereof; and (3) If the incumbent licencee has not been preferred because of his facing criminal charges, any subsequent exoneration should revive his claim to preference. In the present instance, the fifth respondent admittedly is the incumbent licencee, who, nevertheless, has a crime registered against him for the alleged offences under Sections 56(b) and 57(a) of the Act. Indeed, indisputably a crime registered under Section 56(b) of the Act does not disentitle the licencee from claiming privilege. The crime registered against the fifth respondent is also for the alleged offence under Section 57(a) of the Act. A perusal of the above provision makes it manifestly clear that the offence made punishable is adulteration in its various nuances. If a person mixes with the liquor sold or manufactured by him any other drug or ingredient likely to add to its actual or apparent intoxicating quality, etc., the liquor thus mixed and sold by the licencee is an adulterated one attracting the penal provision. In both the crimes registered against the fifth respondent, the allegation is that the toddy being sold by him is adulterated. In other words, a foreign substance has been added to enhance the intoxicating potency of the toddy. Prima facie, it cannot be denied that the allegation in the crime attracts Section 57(a) of the Act, and consequently the crime falls within the mischief of Rule 5(1)(a) of the Rules. On 05.03.2014, the department put in auction the privilege to vend toddy. On the same day, this Court at the instance of the fifth respondent, issued an interim direction that there should be no confirmation of the licence in petitioner's favour. This Court, through common judgment, directed the Excise Commissioner to consider the rival claims of the petitioner--a new allottee--and the fifth respondent, the incumbent licencee. Rule 5(1)(a) contemplates registration of a crime to be a pre-condition to disentitle an existing licencee to the privilege of renewal. However, the crime thus registered ought to be under any other provision than Section 56 of the Act. Indeed, crime was registered for the alleged offences under not only Section 56 but also Section 57. The pre-condition provided in Rule 5(1)(a), therefore, has come to be fulfilled. Following the last limb of Rule 5(1)(a), It may further be observed that exoneration of the previous licencee may enure to his benefit in the following year to re-claim his privilege as if no crime had been registered. For the principal needs no reiteration that any acquittal or discharge relates back to the date of the crime. In the same breadth, It is observed further, especially in the light of the ratio laid down in Exhibit R5(c) judgment, that the second analysis report is in favour of the previous licencee, and by that time the privilege had not been confirmed in favour of the new licencee. What bolsters the fifth respondent further is that he has earned a clean discharge. Whether the provisional licenceee who has been extended the privilege because the existing licencee has faced criminal proceedings has got any vested right, said to be indefeasible, even after the incumbent licencee is exonerated of the criminal charges before the proceedings of granting the privilege could attain finality - Held that:- it emerges that the existing licencee has a privilege conferred on him to have his licence renewed or his right to preference reckoned subject to his fulfilling all the conditions. In the same reckoning, it follows that the right of any other person is dependent on, if not subservient to, the right of the existing licencee. The legislature is conscious that once a policy of preference is to be operational, until the right under the said policy has been conclusively rejected, the right of any other person is only contingent. In other words, if there is any dispute, bona fide, concerning the preference denied to an existing licencee, until the issue is resolved conclusively, the subsequent allottee can have licence unhindered so long as the cloud on the previous licencee's right has not been dispelled. To that extent alone his right is indefeasible. Even after the finality of the proceedings confirming the privilege in the new licencee's favour, if the previous licencee is exonerated or acquitted at a later point of time, his right to preference gets restored. In sum and substance, viewed from any perspective, it cannot be held that new licencee has any indefeasible right and that the confirmation can be denied only on account of his failure rather than the success of the previous licencee. - Decided against the petitioner
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