TMI Blog1996 (12) TMI 383X X X X Extracts X X X X X X X X Extracts X X X X ..... of 9 of 1995 is neither unconstitutional nor is it ineffective to achieve the objective it set out to achieve - object set out in the Preamble. - C.A. 15112 OF 1996 - - - Dated:- 3-12-1996 - Mr. B.P. Jeevan Reddy and Mr. K.S. Paripoornan, JJ. For the Appellant: S.B. Sanyal, Sr. Adv. and B.B. Singh, Adv. with him For the Respondent : Y.V. Giri, Sr. Adv., Jyoti Saran, Praveen Kumar, Advs. with him. JUDGMENT B.P. JEEVAN REDDY, J. Leave granted. The distribution and sale of country liquor in the State of Bihar is regulated by the Bihar Excise Act, 1915 and the rules made thereunder. It was a two-tier system. The wholesale dealers (contractors) were lifting the liquor from the distilleries and supplying it to the retailers. Both the wholesale dealers and retailers were selected on the basis of auction/tender process. The price at which the wholesale supplied the country liquor from the warehouse to the retailer was fixed by the Government either statutorily or on the basis of negotiations between the wholesalers (contractors) and the Government. The price so determined was known as the cost price of country liquor which was payable by the retailer at the t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... iquor. having regard to the crucial relevance of this letter it would be appropriate to extract the letter in full. Patna, dated 19th February, 1990 Sub: Meeting between Excise Officers and representatives of Distilleries on 15.12.1989 presided by Member, Board of Revenue: regarding refixation of cost price of country spirit/liquor. Sir, Your attention is drawn towards the subject noted above, and to state that the Government has taken a decision to fix the cost price of rectified spirit to be supplied as country spirit/liquor from the country spirit warehouses with immediate effect @ Rs.3.42 (Rupees three and paise forty-two only) for L.P. Litre by following components:- (i) Cost of spirit Rs.1.72 per L.P.L. (ii) Transport/Working Wastage, etc. Rs.0.08 -do- (iii) Sales Tax Rs.0.27 -do- (iv) Transportation Charges of spirit Rs.0.45 -do- (v) Maintenance charge of spirit/liquor warehouses (expenses on coolies wag ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tification No.23- 17/89-5, dated 19.12.89 for the amendment in Clause No. 15 of Licence Form No. 27, a separate order is being sent to the non- contracted distilleries for payment of the aforementioned Cost price for their supply of Spirit to the Warehouses for manufacture of Country Liquor. Yours faithfully, Sd/- Illegible Commissioner of Excise, Bihar Evidently, supplies were being made by the distilleries as per the letter dated 19th February, 1990. On 26th July, 1990, the Excise Commissioner, Bihar addressed a letter to all the Collectors/Deputy Commissioners in the State directing them to deduct 70 paise per L.P.L. from the cost price of Rs.342 paise per L.P.L. and remit it to the Government account. para 2 of the letter which alone is relevant reads thus: 2. In this context, this is to state that the earmarked component for meeting the expenses of maintenance of warehouses e.g. wages to coolies (engaged n the warehouses), house-rent etc. be deposited under budget head - 8433 - Civil deposit - 800 other deposit - cost price of country spirit/liquor, ganja, etc. after recovering from distilleries or deducting @ Rs.0.70 paise per L.P.L. form th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ng reasoning; under Section 90(2) of the Bihar Excise Act, the Board of Revenue is given the power to fix maximum and minimum price of country liquor but the Board has not chosen to excise that power; instead of doing that the Commissioner of Excise has chosen to issue Annexures 5,6 and 7 (Annexure 5 is the communication dated 26.7.1990 and Annexures 6 and 7 are the consequential directions/demands made by the Superintendents of Excise); the Commissioner cannot be said to have exercised the jurisdiction, if any, vested in the Board of Revenue. * Annexures 5 to 7 are not backed by any authority of law and are therefore, unforceable. The High Court quashed the said orders/communications with the observation that the Government or the respondents cannot force the petitioners for the refund of the amount already paid to the petitioner and as a logical conclusion, they are bound to carry out the obligations created earlier by the interim orders of the said Court. For some unexplained reasons, the Government of Bihar and its Officials did not choose to appeal against the said judgment, with the result the judgment became final. Contempt petitions were taken out by the distilleries ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 989 and other similar cases a situation arose whereby and whereunder the Patna High Court ordered that till contract is settled and till further order from the Court, the supply of country liquor shall be made to the retailers directly by the State through its Officers: AND, WHEREAS, in pursuance to the said direction the country liquor had to be supplied from different warehouses situated in the State, by the State Government through its Officers: AND, WHEREAS, after the Final Order of the High Court in the above writs in the year 1990 the situation emerged that in certain areas of the State the supply of country liquor to the retailers continued to be made by the State Government through its Officers due to non-functioning of the concerned Contractors; AND, WHEREAS, during this period the warehouses were required to be maintained by the State; AND, WHEREAS, in fixing the price of country liquor to be supplied by the Contractor holding exclusive privilege licence the State Government had taken into account the cost of spirit, the cost of transportation of such spirit, the cost of maintenance of warehouses, sales tax and dividend; AND, WHEREAS, while fixing the price ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ry liquor, by the State Government.- (1) The State Government, while granting exclusive privilege of manufacturing supplying wholesale or of selling wholesale or retail of country liquor may fix the cost price which includes the price of the spirit, the transportation charges, warehouse maintenance charges, taxes, if any, and other charges, such as bottling, packing etc. and dividend. (2) Any person to whom the State Government has granted exclusive privilege of manufacturing, supplying wholesale or selling wholesale or retail country liquor during the year 1990 wherein the cost price of the country liquor was fixed by the State Government taking different components into account including warehouse maintenance charges at the rate of 70 paise per L.P. Litre shall be deemed to have been fixed under this Section. 22-B. Validating of cost price of country liquor and realisation of warehouse maintenance charges.- (1) Notwithstanding any judgment, decree or order of any court, Tribunal or Authority the price of country spirit, including the warehouse maintenance charges at the rate of 70 paise per L.P. Litre fixed during the year 1990 shall be deemed to have been fixed under this ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... basis upon which the High Court has allowed the writ petitions, without declaring the Amending Act as invalid, is better set out in their own words. The High Court said: 12. It will be evident from Section 22-A aforesaid that the same relates to manufacture/sale of `country liquor'. So far as Section 22-B is concerned, therein the words `country liquor' have not been mentioned, nor the words `rectified spirit'/Commercial spirit' has been mentioned, rather the `country spirit' has been mentioned therein. When query was made from the learned Advocate General, as to what is `country spirits', learned Advocate General submitted that the same is, in fact, `country liquor' and not `rectified spirit' from which the `country liquor' is prepared. It was accepted at the Bar by the learned Advocate General that the Hindi version of the Act 9/95 is the original one, wherein the words `DESHI SARAB' has been mentioned, which means `country liquor' and not the rectified spirit. 13. From the aforesaid plain reading of the provisions of Act 9/95, particularly, the Hindi version, it will be manifest and clear that the Act in question ha ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... High Court. He submitted that the distilleries have nothing to do with the supply of country liquor to the retailers. According to him, the distilleries manufacture only the rectified spirit and that alone is sold by them to the Government. Counsel submitted that for obtaining one litre of country liquor, 1/4th litre of rectified spirit is required and that the price of Rs.3.42 paise per L.P.L. represents the cost of said quantity of rectified spirit required for obtaining 1 litre of country spirit and that, therefore, the claim for deduction of 0.70 paise on account of maintenance charges is wholly untenable and illegal. Counsel submitted that the distilleries have nothing with the warehouses or their maintenance which was the responsibility of the Government during the relevant period. The cost of 1 litre of rectified spirit, he submitted, is much more than Rs.4.00 and, therefore, the distilleries cannot be asked to supply country liquor at the rate of Rs.2.72 per L.P.L. (i.e., Rs.3.42 minus 70 paise). The learned counsel submitted that there was no agreement between the distilleries and the Government with respect to the price of country liquor at the joint meeting held by 15.12 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ut by the High Court in its first judgment. It cannot be disputed, at this stage, by the distilleries that they were not parties to the meeting held on 15th December, 1989 or that they did not receive the letter of the Commissioner dated 19th February, 1990. If this were so, it is un-understandable on what basis and at whose request or order, they were supplying the spirit to the distilleries. It cannot but be held in the circumstances that the distilleries accepted the offer contained in the Commissioner's letter dated 19th February, 1990 and were making supplies on the basis of the said letter and the orders placed pursuant to that letter and their acceptance of it. Now coming to the reasoning in the impugned judgment, we must say with all respect that we have not been able to appreciate it. The approach of the Court, while examining the challenge to the constitutionality of an enactment, is to start with the presumption of constitutionality. The Court should try to sustain its validity to the extent possible. It should strike down the enactment only when it is not possible to sustain it. The Court should not approach the enactment with a view to pick holes or to search fo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rinciple, that the presumption is always in favour of the constitutionality of an enactment, and the burden is upon him who attacks it to show that there has been a clear transgression of the constitutional principles . In Burrakur Coal Company v. Union of India (A.I.R. 1961 S.C. 654 AT 963], Mudholkar, J., speaking for the Constitution Bench, observed: Where the validity of a law made by a competent legislature is challenged in a court of law, that Court is bound to presume in favour of its validity. Further, while considering the validity of the law the court will not consider itself restricted to the pleadings of the State and would be free to satisfy itself whether under any provision of the Constitution the law can be sustained. We may quote the pertinent propositions enunciated in Ram Krishna Dalmia, Etc. v. Justice S.R. Tendolkar Others Etc. [A.I.R. 1958 S.C. 538] to the following effect: (b) that there is always a presumption in favour of the constitutionality of an enactment and the burden is upon him who attacks it to show that there has been a clear transgression of the constitutional principles; (e) that in order to sustain the presumption of constitutionalit ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... approach adopted by the High Court in the Judgment under appeal. it helps to remind ourselves of the above observations from time to time. Now coming to the validity of the Amending Act we are unable to see on what ground can its validity impeached. All that it does is to provide statutory basis and legislative imprimatur to the price fixation done by the Commissioner and its break-up. It also provides for recovery and deduction of the 0.70 paise component on account of maintenance charges of warehouses. It can neither be suggested that the Bihar Legislature did not have the legislative competence to enact the said Amending Act nor can it be suggested that the Act violates any of the fundamental rights enshrined in para III. The general averment of Mr. Y.V. Giri that the Act is arbitrary is too vague to merit any acceptance, apart from the fact that an act of Legislature cannot be struck down merely saying it is arbitrary - See this Court's Judgment in State of A.P. And Others v. Mcdowell Company And Others [1996 (3) S.C.C. 709 at 737 to 739.] - apart from the fact that the charge does not appear to be justified in the facts and circumstances of the case. For the above ..... X X X X Extracts X X X X X X X X Extracts X X X X
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