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2016 (4) TMI 1028 - KERALA HIGH COURT

2016 (4) TMI 1028 - KERALA HIGH COURT - TMI - What 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 .....

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dmittedly 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 punish .....

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toxicating 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 commo .....

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re-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 la .....

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e 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 .....

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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 - WP (C). No. 20619 o .....

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fifth respondent as the protagonist. 3. The fifth respondent was the licencee for the toddy shops of Group No.I in Kunnamangalam till 31.03.2014. While the licence was subsisting, the Excise officials periodically drew samples and sent them for chemical analysis. In two instances, the samples were tested adverse. 4. In elaboration, on 20.12.2012, the Department received Exhibit R5(d) chemical analysis of A-Sample taken from one of the shops of the fifth respondent. Consequently, on 20.02.2013, .....

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B- Sample was made available. The result was negative: it was in favour of the fifth respondent. 6. Armed with Exhibit R5(e), the chemical analysis report of B-Sample, the petitioner filed W.P.(C)No.8094/2013 challenging the Excise Commissioner's order of suspension- cum-show cause dated 17.03.2013. In fact, the fifth respondent obtained an interim stay on 22.03.2013 and continued his business. 7. Soon thereafter, based on the chemical analysis report dated 19.10.2012, obtained on a sample .....

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fth respondent once again approached this Court by filing W.P. (C)No.12135/2013 and obtained an interim stay, whereby he continued his business. 9. It is the contention of the fifth respondent that in 2013, there was no policy of regular allotment of the licence or privilege to vend toddy. In that abkari year, the licence was extended periodically, on three occasions, till 31.04.2014. 10. As it emerges from the record, pending those two writ petitions, the fifth respondent filed Crl.M.C.No. 1606 .....

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fth respondent on 19.02.2014 obtained a certified copy of the final report and filed petitions for his discharge on the premise that the final reports did not contain even a whisper about the chemical analysis reports of B-Samples, leave alone any challenge to their correctness. 12. The Judicial First Class Magistrate through Exhibit R5(k) dated 25.03.2014 and this Court through Exhibit R5(i) order discharged the fifth respondent and other accused from the crimes. In the interim, on the parallel .....

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rhaps oblivious of the interim order, the authorities went ahead and declared that the petitioner was successful to have the privilege for the year 2014-2015. 14. This Court eventually disposed of W.P.(C)No. 6324/2014 through Exhibit P6 common judgment. Since there were other writ petitions involving the same issue of granting the privilege, the direction in Exhibit P6 judgment was to the Excise Commissioner to consider the rival claims of the incumbent licencees and the new allottees. 15. In co .....

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fect case of poetic justice. On earlier occasion, the fifth respondent obtained a stay against the confirmation in petitioner's favour; this time, it was the petitioner's turn to obtain a similar direction against the fifth respondent. 17. Later, this Court through Exhibit P9 common judgment, which is elaborate, further directed the Excise Commissioner to consider the issue afresh taking into account all the issues raised by the parties. Eventually, the Excise Commissioner passed Exhibit .....

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ng taken by the Government, he remained silent till the penultimate day. He approached this Court only on 04.03.2014. He has further submitted that this Court consciously did not stymie the entire process; instead, it only directed that there should not be any confirmation of sale. 19. According to the learned counsel, had this Court been even prima facie satisfied that there was any merit in the fifth respondent's claim, it would have stalled the entire process instead of granting limited r .....

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s on time to obtain any preference certificate. Though he made his efforts, without the preference certificate, to participate in the auction, his application was rightly rejected in the scrutiny. According to the learned counsel, despite the rejection of his application by the authorities, the fifth respondent was very much present at the time of the allotment. 22. In other words, it is the singular contention of the learned counsel for the petitioner that since Rule 5 mandates that any allotme .....

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n of his submissions, the learned counsel has submitted that the provisional allotment is subject to the confirmation in terms of Rule 5(15) of the Rules. He contends that any disqualification or objection to having the allotment confirmed must be attributable to the lapses or latches on the petitioner's part. In this case, even in Exhibit P10, the Excise Commissioner, avers the learned counsel, has not found any shortcoming or any statutory violation or non-compliance by the petitioner. It .....

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he time the allotment took place; (4) that in Exhibit P10, the Excise Commissioner has not found any shortcomings on the petitioner's part; and (5) that he ought to have recognised the petitioner's vested right to have the confirmation. In the end, the learned counsel has urged this Court to allow the writ petition. 26. Per contra, the learned counsel for the fifth respondent has strenuously contended that the officials in these instances have taken recourse to gross abuse of process. To .....

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both instances, even before the final report could be filed, the reports of B-Sample were very much available, and the findings were in petitioner's favour. For the reasons not fathomable, the respondent officials, contends the learned counsel, filed final reports entirely disregarding the B- Sample reports. Under those circumstances, the Judicial First Class Magistrate has discharged the fifth respondent from the crime. 28. The learned counsel, addressing the issue whether the fifth respond .....

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erence certificate, but he could not secure it. The reason for rejection was that crimes were registered against the fifth respondent. 29. It is the specific contention of the learned counsel for the fifth respondent that only under those circumstances, as the rejection was just a couple of days prior to the date fixed for allotting the privilege, did the fifth respondent rush to the Court and seek its intervention. 30. The learned counsel has laid a heavy stress on twin aspects: First, in the l .....

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ng note of the B-Sample reports and hold that the fifth respondent has not violated any of the statutory provisions. As a consequence, without much ado, contends the learned counsel, the privilege statutorily recognised in fifth respondent's favour automatically springs into action. In support of his submissions, the learned counsel has placed reliance on Exhibit R5(c) judgment rendered by a learned Division Bench of this Court. 32. The learned counsel has also submitted that this Court has .....

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ould contend that the Excise Commissioner had taken into account the rival pleas and rendered his findings, especially based on the binding judicial pronouncements of this Court. 34. The learned counsel lays specific emphasis on the fact that all the judgments he has referred to, the Excise Commissioner himself is a party. They squarely bind him. The learned counsel has further contended that on the very 05.03.2014, when the allotment had to take place, the fifth respondent made a complaint to t .....

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developments. According to the learned counsel, any such consideration, otherwise, would lead to incongruity and uncertainty. 36. It is also the specific contention of the learned counsel for the petitioner that just because there is a semblance of justification in the fifth respondent's claim, the vested rights of the third parties cannot be defeated. According to him, only in the absence of any objection at the time of allotment, despite the presence of the fifth respondent, was the petit .....

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the fact that the very Excise Commissioner had expressed doubt about the manner of registering the crime. According to the learned counsel, no such situation prevails in the present instance as the registration of crime against the fifth respondent had not been doubted. As regards Exhibit R5(c) judgment, the learned counsel would contend that it was rendered at an interlocutory stage. On these grounds, the learned counsel has urged this Court to allow the writ petition. Issues: I. What is the tr .....

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indefeasible, even after the incumbent licencee is exonerated of the criminal charges before the proceedings of granting the privilege could attain finality? Issue Nos.I & II: 39. As it is a pure question of law, it needs, I reckon, a careful analysis. Rule 5(1)(a) which is the pivot for our purpose of adjudication reads as follows: "While giving privilege, preference shall be given to those licensees who has conducted toddy shops during the preceding three years consecutively from 2006 .....

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e 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. 41. In the p .....

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t has submitted that in the course of time the fifth respondent had been discharged by a competent court in both the crimes that had been registered against him for the offence under all provisions, including Section 56(a). He has further contended that this Court has earlier held that to attach the stigma of disqualification to the incumbent licencee, a crime ought to have been validly registered. 43. The issue, thus, turns upon the expression "validly registered". Indeed, the learned .....

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te, before whom the crime is pending, that the crime has not been validly registered renders the issue fait accompli and the criminal trial a mere mockery, or rather otiose. 44. In the light of the above rival claims, it is apposite for us to examine Section 57(a) of the Act. The said provision to the extent relevant reads as follows: "57. For adulteration, etc., by licensed vendor or manufacturer.- Whoever being the holder of a licence for the sale or manufacture of liquor or of any intoxi .....

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e." 45. 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 be .....

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erning A-Samples turned out to be positive. The reports relating to B-Samples, obtained at the behest of the fifth respondent, both turned out to be negative. 47. In fact, on the strength of the B-Sample reports, the fifth respondent has been discharged from both the crimes. Chronologically examined, the samples were drawn in and around December 2012. The two crimes were registered in February and April 2013. The B-Sample reports were received thereafter. The fifth respondent soon got discharged .....

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evident from the record, when the Excise Commissioner passed Exhibit P7 order upholding the fifth respondent's claim that he was entitled to preference, the said order was once again called into question by the petitioner. And it resulted in another direction from this Court to the Excise Commissioner to re-consider the issue afresh. Eventually, in Exhibit P10 order the Commissioner has reiterated his earlier findings. 50. Viewed narrowly, it can be held that Rule 5(1)(a) contemplates regis .....

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e. And on the strength of those reports, the fifth respondent has come out clean-exonerated. At this juncture, it is pertinent to observe that Rule 5(1)(a), in fact, provides for a contingency: If the licencee is subsequently exonerated, he could also re-assert his claim for preference. In the present instance, the learned counsel for the fifth respondent would have concluded that since the fifth respondent has been exonerated, the licencee has suffered no disqualification. In other words, at th .....

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heir Lordships have laid down as a proposition of law that the crime ought to have been validly registered. 53. In Exhibit R5(c) judgment, another learned Division Bench has considered a case somewhat similar to the one present before me. Considering the impact of the second analysis report, their Lordships have observed that even if a criminal case has been registered and still pending, once the second analysis report is in the negative, the very crime becomes untenable and will have to end in .....

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ent is entitled to the preference, for the ratio of Exhibits R5(a) and R5(c) judgments rendered by two learned Division Benches bind me. There lies a catch, however. Interlocutory orders-Binding Nature: 55. The learned counsel for the petitioner has submitted that in both instances-Exhibits R5(a) and R5(c) judgments-the learned Division Benches were called upon to examine the legality of interim orders passed in the writ petitions. According to him, Exhibits R5(a) and R5(c) do not have any prece .....

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roceeding. 57. In Vishnu Traders v. State of Haryana 1995 Supp (1) SCC 461, the Apex Court has held that in the matters of interlocutory orders, the principle of binding precedent cannot be said to apply. However, the need for consistency of approach and uniformity in the exercise of judicial discretion respecting similar causes and the desirability to eliminate occasions for grievances of discriminatory treatment require that all similar matters should receive similar treatment except where fac .....

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intermediate stage stand merged in the judgment finally rendered in the writ petition. 59. It is essential, at this juncture, to observe that such a course of events, as has been indicated above, does not abdicate the judicial observation provided the said observation stands, as a matter of law, least dependent on the facts or the conclusion of proceedings; in other words, if it is a declaration on a pure question of law, it persuades-if not binds. 60. It is too well settled to be ignored that .....

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pure question of law, has the persuasive effect. 61. As Exhibits R5(a) and R5(c) judgments fall within the exceptions indicated above, I justifiability feel persuaded to follow the dictum, for the judicial priority demands. 62. Without hesitation, we may accept that in Exhibit R5(a) judgment the learned Division Bench, while holding that a crime ought to have been registered, has inter alia taken into account the observation of the Commissioner of Excise that there is something amiss in the aut .....

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nnot be denied the right to preference. In the present instance, the fifth respondent, I believe, stands on a better footing. It is not a case of any pending criminal proceedings in the face of a negative second sample report; on the contrary, it is the case of a clean discharge. Validly Registered Crime: 64. Coming back to the issue of registering a crime validly, I may have to tread carefully for any sweeping observation in this regard may have far-reaching consequences, especially if the crim .....

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e, it may not affect the new licencee's right to continue with the licence. 66. Following the last limb of Rule 5(1)(a), I may further observe 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. 67. In the same breadth, I am to observe further, especially in the light of the ratio laid .....

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said policy. That accepted, 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. 69. The legislature is conscious that once a policy of preference is to be operational, until the right under the said policy has been conclusive .....

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