TMI Blog2006 (4) TMI 490X X X X Extracts X X X X X X X X Extracts X X X X ..... ow the constitutional mandate in future. It was with this intention we have dealt with these matters at some detail. We hope and trust that the State of Chhattisgarh and its authorities would not commit the same mistakes in the coming years keeping in mind the mandate of Article 47 of the Constitution of India and scrupulously observe the rules for disposal of liquor shops. With the aforementioned observations and directions, these appeals are allowed. - Appeal (civil) 2152 of 2006, CIVIL APPEAL NO.2154 OF 2006 TO CIVIL APPEAL NO. 2161 OF 2006 - - - Dated:- 21-4-2006 - S.B. Sinha P.K. Balasubramanyan, JJ. JUDGEMENT S.B. SINHA, J: Leave granted. INTRODUCTION The Appellants are before us in the second round. They, except the State of Chhattisgarh, were granted excise licences. Grant of such licences indisputably is governed by the Chhattisgarh Excise Act, 1915 (for short the Act ). On or about 15.3.2002, the State Government under 'the Act' made rules known as Chhattisgarh Excise Settlement of Licences for Retail Sale of Country/ Foreign Liquor Rules, 2002 (for short the Rules ). The State issued notices inviting tenders for grant of lic ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f the selection of the select candidates. 7.2 The respondents 1 to 12 be directed to satisfy this Hon'ble Court regarding the compliance of the mandatory directions as given by the Hon'ble Apex Court in the case of Ashok Lanka Vs. Rishi Dikshit. 7.3 That the Hon'ble Court may be pleased to issue a writ in the nature of mandamus quashing and annulling the entire selection of respondents 13 to 89 and also quashing the temporary licences by issuing a writ in the nature of certiorari. That, the Hon'ble Court may be pleased to issue a writ in the nature of mandamus commanding the respondents 1 to 12 to make selection strictly in accordance with law, rules and the directions of the Hon'ble Supreme Court, afresh. 7.4 That the contempt' proceedings be initiated against the respondents 2 to 12 for the non- compliance of the order of the Hon'ble Apex Court. Before the High Court, the questions raised by the parties inter alia were: (i) The permanent addresses of the persons in whose favour licences were granted were not property verified. (ii) The temporary addresses given by them were wrong and in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... noticed the contents of the additional return filed by the State on 23.02.2006 but apparently the contents thereof had not been taken into consideration on the ground that the same was by way of sur- rejoinder to the rejoinder filed by the writ petitioners and, as such, such pleadings are impermissible without permission of the court. It was furthermore held that in the said additional return, untenable defences were set up covering up serious lapses committed by Respondent Nos. 1 to 12. The High Court thereafter proceeded to cite examples in support of its findings. It was noticed that the official respondents wrongly placed the burden of proof on the objectors like the writ petitioners to prove that the applicants for grant of licences did not possess the prescribed eligibility, as the writ petitioners objectors were not supposed to prove the negative facts by producing evidence. The responsibility cast on the statutory authorities has, thus, been sought to be placed on the objectors which constituted a serious flaw in the enquiry vitiating the selection process. Before the High Court, a chart was produced by the writ petitioners showing common addresses of a number of lic ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e had not been issued by an authority competent therefor, other documents such as driving licence, PAN Card, Election ID Card were taken into consideration. (v) The High Court, in arriving at the conclusion as regards purported non-compliance of the rules, failed to notice various documents and drew inferences which were contrary to the records. (vi) So far as the alleged non-compliance of Rule 9(c) of the Rules is concerned, a consolidated list of defaulters along with their complete addresses was available with all the licensing authorities and the same had been relied upon while scrutinizing the various applications. (vii) As regards, alleged compliance of Rule 9(d) of the Rules, it was submitted that the Superintendent of Police of the respective districts where the applicant was a resident of more than one district and one State had issued character certificates. (viii) In terms of Rule 12, in the case where there had been multiplicity of applications, a lottery was held which was completely above board being a computer generated programme operated by a Central Government organization, viz. National Informatics Centre. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... be valid proof therefor. In some cases, only dwelling certificates had been produced by way of proof of residence which again could not have been considered to be valid proof having not been certified by any statutory or public authority. In view of the admitted fact that several persons have shown the same addresses, fictitious persons might have been granted licences. STATUTORY PROVISIONS The Act was enacted to consolidate and amend the Excise Law in the State of Chhattisgarh. Section 7(e) of the Act provides that the State Government may, by notification, for the whole or for any specified part of the State, delegate to the Chief Revenue Authority or the Excise Commissioner all or any of its powers under the said Act except the power conferred by Section 62 to make rules. Rule 4 provides for formation of groups of liquor shops; clause (iii) whereof prohibits an applicant/firm/company from obtaining licences for more than two groups of shops. Rule 5 provides for the period of licence which would be for an excise year or part thereof. Rules 6 and 7 of the Rules read as under: 6. Application fee with application - The application fee with the applica ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ership firm whose partners are citizen of India. No change in partnership shall be allowed after settlement of shop (s) groups of shops except with the permission of the Excise Commissioner. (b) Should be above 21 years of age. (c) Should not be defaulter/ blacklisted or debarred from holding an excise licence under the provisions of any rules made under the Act. (d) Has to submit an affidavit duly verified by public notary as proof of the following, namely - (1) That he possessed or has an arrangement for taking on rent suitable premises in that locality for opening the shops in accordance with the rules. (2) That he possess good moral character and have no criminal background and have not been convicted of any offence punishable under the Act or Narcotic Drugs and Psychotropic Substances Act, 1985 or any other law for the time being in force or any other cognizable and non-bailable offence. (3) That in case he is selected as licensee, he will furnish a certificate issued by Superintendent of Police of the district of which he is the resident, showing that he as well as his family members possess good moral character and have no criminal background or criminal re ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... forwarded by the District Excise Officer/Assistant Commissioner to the Excise Commissioner, who will circulate the consolidated list of the State to all the licensing authorities of the State. CONSTITUTIONAL SCHEME When a law is made, having regard to the phraseology used in Part IV of the Constitution of India, it is expected that law made or actions taken would be in furtherance thereof. In terms of the Directive Principles of State Policy, the State is bound to make endeavours to promote public health which is one of its primary duties of the State. One important component of the said directions was regulation and control over the trade in intoxicating drinks so as to enable the State to curb or minimize, as far as possible, the consumption thereof. The State may or may not prohibit manufacture, sale or consumption of liquor but it is vital that while parting with its exclusive privilege to deal with intoxicating liquor, the provisions of the Act and the Rules for which the same had been enacted must be strictly complied with. The Act and the Rules deal only with control and regulations. There was no provision which gives any discretion to the authorities concerned t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... bits were reinforced by the Koranic injunction in relation to intoxicating liquor, supported the insertion of such a provision. The learned Author stated: The prohibition of intoxicating liquor had long been a part of the policy of the Indian National Congress; and its inclusion in Art. 47 received support from the Mohammedan community whose social habits were reinforced by the Koranic injunction against intoxicating liquor. In considering the directive in Art. 47, it may be observed that alcohol (the intoxicating ingredient of liquor) is a narcotic , a word replaced by the word depressant to describe the same effects contrary to the popular belief that it is a stimulant. It is not mere accident that intoxicating liquor and dangerous drugs have been clubbed together in entry 8, List II. Article 47 has a unique feature in the sense that the first part refers to public health, whereas the second part specifically refers to prohibition of liquor. Similar provisions are found in the Constitution of U.S. and Lithuania as well. It is of some significance to note that Section 70 was inserted in the draft Constitution after the first part was suggested by Shri B.N. Ra ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f events, experiences and struggles. In general people equate medical care with health, but the vast majority of research into the health of populations identifies so called 'societal factors' as the major determinants of health status. Public health, although starting as a social movement, has at least in recent years, responded relatively little to this profound knowledge about the dominant impact of society on health, such as behaviour like excess alcohol. Given that the major determinants are societal in nature, it seems evident that only a framework that expresses fundamental values in societal terms, and a vocabulary of values that links directly with societal structure and function, can be useful to the work of public health. [See Jonathan M. Mann, Public Health and Human Rights, American Bar Association Journal on Human Rights, Fall 1998, Vol. 25 No.1, pp. 2,3 and 4.] Grant of licence as a measure of control of intoxicating liquor is an age-old phenomenon. Even in England several statutes have been enacted therefor including the current one which was enacted in 2003. (See Halsbury's Laws of England, 4th Ed. Volume 26 p.5.) Regulation of liquor under the A ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... st which was later modified by the Court of Appeal into the strict scrutiny test. (See Bugdaycay v. Secy of State for Home Department (1987) 1 All ER 940 at 952, R. v. Secy of State for Home Department, ex. p. Brind (1991) 1 AA ER 720, R. v. Ministry of Defence, ex p Smith (1996) 1 All ER 257 and B. Archana Reddy v. State of AP, (2005) 6 ALT 6). NECESSARY PARTIES The licensees whose licences were directed to be cancelled were necessary parties to the writ petition. In the absence of any opportunity of hearing given to them, their right to continue their businesses has been violated. It is not a case where the State, for one reason or the other, did not intend to part with its exclusive privilege to deal in liquor. It is also not a case where the State has acted in such an arbitrary manner which would attract the wrath of Article 14 of the Constitution of India. All the licensees in relation to whom allegations had been made, thus, were necessary parties in the writ petition and in their absence the same could not have been decided. Furthermore, it would be a travesty of justice if the parties against whom serious allegations were made and are said to have been found had ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the findings of the Public Inquiry Commission that there has been tampering of marks in respect of several candidates and as such there has been no fair and objective selection, public interest demanded annulment of the entire selection. This Court held that the same could not be done as the same would tantamount to gross violation of principles of natural justice which cannot be brushed aside on the ground that public interest demands annulment of the selection. Yet again in Onkar Lal Bajaj and Others v. Union of India and Another[(2003) 2 SCC 673], this Court while dealing with a case of en masse cancellation of the licences granted to the LPG Distributors as a result whereof unequals were said to have been clubbed by reason of arbitrary exercise of executive power, the same was held to be impermissible stating: The solution by resorting to cancellation of all was worse than the problem. Cure was worse than the disease. Equal treatment to unequals is nothing but inequality. To put both the categories - tainted and the rest -on a par is wholly unjustified, arbitrary, unconstitutional being violative of Article 14 of the Constitution It was further held: ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the statute should have been decided by taking up individual matters and upon proper scrutiny of the case. To the aforementioned extent, the judgment of the High Court cannot be sustained. It was also not a case wherein en masse cancellation was warranted as enunciated in Bihar School Examination Board v. S.C. Sinha [AIR 1970 SC 1269], Union of India v. Anand Kumar Pandey [(1994) 5 SCC 663], Hanuman Prasad and Others v. Union of India and Another [(1996) 10 SCC 742] and Union of India and Others v. O. Chakradhar [(2002) 3 SCC 146] ASHOK LENKA - I Analysing the provisions of the Act and the Rules, this Court opined that the Rules contemplated strict compliance of the Rules as also the terms and conditions of the licences. Eligibility clause contained in the advertisement was, therefore, required to be considered applying a rigorous standard. Emphasising the necessity to verify the requisite documents by the District Level Committees and the mode and manner in which the selection processes were to be adverted to in terms of Rule 11 of the Rules, it was held that the Scrutiny Committee was entrusted with the duties to oversee as to whether the conditions have been complied ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... contents whereof would be verified in terms of Order 6 Rule 15 of the Civil Procedure Code. The said affidavits shall be scrutinised by the Committee so as to enable them to arrive at a finding as to whether the applicants fulfil the eligibility criteria and are otherwise suitable for grant of licence under the Act and the Rules. (iv) The writ petitioners or any other person in the locality may file appropriate applications before the said Committee with a view to show that the selected candidates do not fulfil the eligibility criteria or are debarred or are otherwise unsuitable for obtaining a licence under the Act. (v) Such objections may also be filed within two weeks from date. The Committee may consider the said objections and, if necessary, may call for further or better particulars from the selected candidates so as to satisfy themselves about their eligibility, etc. (vi) The respective district-level committees shall strictly verify and scrutinise the affidavits as also other documents furnished by the said applicants so as to arrive at a decision that the statutory requirements have been complied with upon application of their mind. (vii) The members of the Co ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... haracter verification Details of the supervision conducted by the Chief Secretary and Excise Commissioner 1 2 8 11 12 1. Shri Amit Singhal, Ganjpara, Respondent No. 3 1. Domicile Certificate, 2. Higher Sec. Certificate, 3.Telephone Bill 32-34 Enclosed 35-36 Directions issued for time bound proceedings on 14.05.2005, meeting held by the Excise Commissioner on 16.05.2005. Video Conferencing held by the Chief Secretary on 26.05.2005, letter issued to the Suptd. Of Police by Chief Secretary, Chhattisgarh on 26.05.2005, letter issued to the General Director, Police, Chhattisgarh by Chief Secretary on 07.06.2005 Page No. 37 to 130 45. Shri Vikram Vishwal, Sarsiva, respondents No. 61 and 80 1. Dwelling Certificate, 2. Age Certificate by Doctor 1391-1392 Enclosed 1393 As above 47. Shri Manish Upadhyaya, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ted candidates do not fulfil the eligibility criteria or are debarred or are otherwise unsuitable for obtaining a licence under the Act. ? Respondents merely sought to raise general and omnibus objections that the addresses of some of the other successful candidates seem to be incomplete or duplicated. V Such objections may also be filed within two weeks from date. The Committee may consider the said objections and, if necessary, may call for further or better particulars from the selected candidates so as to satisfy themselves about their eligibility, etc. ? The objectors were given an opportunity for making representations before the Committee. ? The Committee decided the objections raised by the objectors after considering the objections with the documents that had been submitted by the successful Applicants. ? However, the objectors did not point out a single instance where Applicant was ineligible as not fulfilling the eligibility criteria as prescribed in Rule 9 of the Excise Rules. Vi The respective district-level committees shall strictly verify and scrutinise the affidavits as also other documents furnished by the said applicants so as to arrive at a deci ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... etent to issue the same, had been taken into consideration. It may be true that residence certificates granted in favor of the applicants who are not ordinarily inhabitants of the State of Chhattisgarh, cannot be procured from the Revenue Department of the State. The applicants, however, could procure such certificates from the competent authorities of the respective States where the applicant was a resident and who hold similar status in their State, particularly, when it is one of the eligible criteria. The High Court in paragraph 21 of its judgment has noticed the example of residence certificate of Abhay Singh, which does not even bear the revenue case number or seal of the office of the Tehsildar which are mandatory requirements. The High Court has also noticed that the certificates relating to age had been issued by Dental Surgeons and Orthopaedic Surgeons. The High Court furthermore noticed the report of the Station House Officer, Chirmiri to S.P. Koria mentioning about one licensee Pradeep Gupta that he is an employee of liquor contractor Amolak Singh Bhatia and financial condition of Pradeep Gupta is not such that he could take the financial burden of liquor trade. In spit ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rs is not granted a licence. NOTIFICATION Before us the Hindi version of the notification has been read wherefrom it appeared that the requirement of providing the certificate as regards the alleged criminal background of the family members of the licensees had inadvertently appeared in the English version of the notification, but were absent in the Hindi version. It is true that this Court had delivered the judgment in Ashok Lanka - I (supra) on 11th May, 2005. A clarificatory notification was issued on 5.7.2005 by deleting the words as well as his family members from the notification dated 15.3.2005. The relevant portion of the said notification reads as under: In the said rules, - (1) In sub rule 3 of clause (d) of rule 9 the words as well as his family members shall be omitted. The said notification was given a retrospective effect. Ordinarily a subordinate legislation cannot be given a retrospective effect. The Notification dated 15.3.2005, however, is said to be clarificatory in nature. A clarificatory Notification can be given retrospective effect. Such a clarification, according to the State, was necessary to be issued as there was an apparent c ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ons of the advertisement did not mandate that a person residing outside the State of Chhattisgarh would be ineligible for filing an application. If that be so, then those who were residents of places other than the State of Chhattisgarh would also be eligible therefor. They may have a temporary address in Chhattisgarh or they may not have a permanent address within the said State but by way of temporary address, they cannot give an address which is not their residence even for temporary purpose. Even in paragraph 71 of the judgment in Ashok Lanka - I (supra), this Court pointed out the said fact. No serious dispute has been raised that the said contention of the writ petitioners was not correct. But, even if they had no temporary address but they had been able to file their character certificates and proof of permanent address, they cannot be held to be ineligible for the grant of licences. Furthermore, there is nothing to indicate that the District Level Committees had information as to whether the applicants were defaulters in respect of some other State. Such mechanism of scrutiny is not available in the statutory scheme and in our opinion should be provided. We hope and trus ..... X X X X Extracts X X X X X X X X Extracts X X X X
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