Kanupriya Jaiswal Vs State of U.P. and 5 Others

Court No. - 6

Case :- WRIT TAX No. - 623 of 2022

Petitioner :- Kanupriya Jaiswal Respondent :- State Of U.P. And 5 Others Counsel for Petitioner :- Rakesh Kumar,Sr. Advocate Counsel for Respondent :- C.S.C.

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Hon'ble Pankaj Bhatia,J.

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Heard learned counsel for the petitioner and learned Standing Counsel.

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Present petition has been filed challenging the order dated 02.04.2022 whereby the license of the petitioner to run the country liquor shop situated at Eeet Pajawa Chauraha has been cancelled, as well as the license of the petitioner at BDA Colony, Bareilly for the excise year 2020-21 has also been cancelled.

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The facts, in brief, are that the petitioner applied for allotment of a country liquor shop situate at Eeet Pajawa Chaurha, Bareilly for the year 2020-21 and the same was allotted to the petitioner. Subsequently, the license was renewed for the year 2021-22. It is stated that for the excise year 2022-23, the petitioner had applied for renewal of license and had deposited the requisite fees.

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It is urged that the petitioner had also applied for license for running the liquor shop at BDA Colony, Bareilly for the excise year 2019-20, which was allotted to the petitioner. Subsequently, the petitioner applied for renewal of the shop for the excise year 2020-21. As such, the petitioner had applied for two shops which were initially granted in favour of the petitioner and were renewed on the petitioner complying with the requisite conditions for the year 2020-21.

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It is stated that subsequently for the excise year 2021-22, the petitioner was having license of only one liquor shop situated at Eeet Pajawa Chauraha, Bareilly for which the petitioner had also moved an application for its renewal for the excise year 2022-23 by completing the requisite formalities before 31.03.2022.

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It is stated that the husband of the petitioner Shri Manoj Kumar Jaiswal was not on good terms with the petitioner and the petitioner was staying separately from her husband. On 04.04.2021, a show-cause notice was issued by respondent no.4 calling upon the petitioner to show-cause as to why the license of

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the country liquor shop situated at Eeet Pajawa Chauraha, Bareilly for the excise year 2021-22 and the license of the other shop situated at BDA Colony for the excise year 2020-21 may not be suspended/cancelled.

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In terms of the said show-cause notice, the allegations levelled against the petitioner was that the husband of the petitioner was accused of an offence and the petitioner being the family member, her licenses were liable to be cancelled. The petitioner gave a reply to the said show-cause notice denying the allegations. It also bears from record that the husband of the petitioner was also having two licenses - FL 6 & FL 7 - for two shops and also had a license for one country liquor shop at Quila, Bareilly for the excise year 202021. It is stated on record that the mother-in-law of the petitioner was also the holder of excise license and proceedings were initiated against her also on identical grounds. However, unfortunately she died on 23.02.2021 and her license was transferred in the name of her other son Mr. Vivek Jaiswal.

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It appears that an FIR being Case Crime No.215/2021 on 24.03.2021 was registered against the husband of the petitioner under Section 60/72 of the U.P. Excise Act with regard to certain allegations. It is also on record that apart from the aforesaid FIR, two FIRs being Case Crime No.97 & 98 of 2021 dated 04.03.2021 were registered at P.S. Kotwali Dehat, District Saharanpur and in the course of investigation of the said two FIRs, name of the husband of the petitioner surfaced in the statement of one of the persons. It is also on record that on the basis of the FIRs registered against the husband of the petitioner, the shop licenses granted to the husband of the petitioner were suspended by respondent no.5.

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The show-cause notice issued to the petitioner was on the sole ground that the husband of the petitioner was implicated in the criminal offences and thus, why the licenses of the petitioner may not be cancelled. The petitioner replied to the same stating that the petitioner was a licensee in her individual rights without any interference from the husband of the petitioner.

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After considering the reply submitted by the petitioner in response to the said show-cause notice, the District Magistrate - the Licensing Authority - passed an order dated 15.11.2021 (Annexure - 5) whereby the said show-cause notice was dropped.

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Respondent No.4 challenged the order dated 15.11.2021 by filing Appeal No.163 of 2021 as prescribed under Section 11(1) of the U.P. Excise Act (hereinafter referred to as 'the Act'). The said

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appeal was allowed and the matter was remanded for fresh adjudication vide order dated 31.01.2022 (Annexure - 7). In pursuance to the remand, the petitioner was called upon to appear for the hearing after the remand. The petitioner moved applications for adjournment on the ground that she was unwell, however, without considering the same, an order came to be passed against the petitioner cancelling the licenses. The said order is under challenge.

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Learned Standing Counsel raises a preliminary objection of the availability of alternative remedy of appeal and thereafter, revision also.

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The petitioner argues that the alternative remedy is not an efficacious remedy in view of the neat submission of the petitioner that from the plain reading of the provisions of the Act, the order is passed on the basis of grounds which are alien to the Act and the relevant Rules framed therein.

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He further argues that when the petition was entertained, this preliminary objection was raised and after considering the same, the Court had entertained the petition vide its order dated 18.04.2022 and had called for counter affidavit. He further argues that the pleadings have been exchanged and in view of the legal submissions only, the petition can be decided by this Court.

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Considering the said submissions and in view of the legal pleadings being raised, I do not deem it appropriate to relegate the petitioner to avail the alternative remedy as is being argued by learned Standing Counsel.

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On perusal of the impugned order and the show-cause notice served upon the petitioner, the only ground that emerges for the department taking action for cancelling the license of the petitioner is that the husband of the petitioner was involved in an offence registered under Section 60/72 of the U.P. Excise Act and his name surfaced in another criminal case - although he was not an accused initially, subsequently, he has been impleaded as an accused in the said offence also.

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Learned counsel for the petitioner argues that the power to cancel/revoke or suspend license is provided under Section 34 of the Act, which is as under:

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"34. Power to cancel or suspend licences, etc. - (1) Subject to such restrictions, as the State Government may prescribe, the authority granting

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any licence, permit or pass under this Act may cancel or suspend it-

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(a) if any duty or fee payable by the holder thereof be not duly paid; or

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(b) in the event of any breach by the holder of such licence, permit or pass or by his servants, or by any one acting on his behalf with his express or implied permission of any of the terms or conditions of such licence, permit or pass; or

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(c) if the holder thereof is convicted of any offence punishable under this Act or any other law for the time being in force relating to revenue, or of any cognizable and non-bailable offence, or of any offence punishable under the Dangerous Drugs Act, 1930, or under the Merchandise Marks Act, 1889, or of any offence punishable under Sections 482 to 489 (both inclusive) of the Indian Penal Code; or

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(d) where a licence, permit or pass has been granted on the application of the grantee of an exclusive privilege under this Act, on the requisition in writing of such grantee; or

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(e) if the conditions of the licence or permit provide for such cancellations or suspension at will.

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(2) When a licence, permit and pass held by any person is cancelled under clauses (a), (b) or (c) of sub-section (1), the authority aforesaid may cancel any other licence, permit or pass granted to such person by, or by the authority of the State Government under this Act or under any other law for the time being in force relating to excise revenue or under the Opium Act, 1878.

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(3) No compensation or refund claimable for cancellation or suspesnion of license, etc. under this section.- The holder shall not be entitled to any compensation for the cancellation or suspension of his licence, permit or pass under this section nor to a refund of any fee paid or deposit made in respect thereof."

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He further argues that in respect of the license of country liquor shop, separate rules have been framed by the State Government known as 'Uttar Pradesh Excise (Settlement of Licenses for Retail Sale of Country Liquor) (Thirteenth Amendment) Rules, 2020' (hereinafter referred to as 'the Rules, 2020') wherein Rule 21 provides for suspension/cancellation and compounding of the license penalties. Relevant portion of Rule 21 reads as under:

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"21- Suspension/cancellation and Compounding of the license and penalties.

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(1) Licensing authority may suspend or cancel the license-

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(a) if any bottle/tetra pack or container of country liquor is found in the licensed premises on which duty has not been paid and which does not carry

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security code affixed duly approved by the Excise Department as proof of payment of duty:

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(b) if any bottle or container of any other kind of liquor or intoxicating drug (for which license is not granted) is found in the licensed premises:

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(c) If any liquor or intoxicating drug is found in the possession of licensee against the provisions of the Act or rules:

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(d) if the affidavit submitted by the licensee at the time of application is found incorrect and assertions made therein are found to be false:

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(e) If it is found that the licence has been obtained in a false name or the licensee is holding the licence on behalf of some other person.

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(f) If the licensee fails to deposit monthly installment of license fee or replenish the deficit in security amount within prescribed period:

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(g) If the licensee is convicted of an offence punishable under the Act or any cognizable and non-bailable offence or any offence punishable under the Narcotics Drugs and Psychotropic substances Act. 1985 or of any offence punishable under Sections 482 to 489 of the Indian Penal Code, 1860.

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(h) If any caramel, colour, essence, hologram/shrink sleeve or barcode, label, capsule, seal or other illegal material found in licence premises.

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(i) If any Adulteration with water or any other substance/dilution of liquor mixing of low category liquor with high category liquor is found in the licensed premises: Action under other relevant provisions of law shall also be taken.

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(2) In the aforesaid conditions-

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The licensing Authority shall immediately suspend the license and issue a show cause notice for cancellation of license and forfeiture of security the licensee shall submit his explanation within 7 days of the receipt of notice. There after the licensing authority shall pass suitable orders after giving due opportunity of hearing to the licensee:

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Provided that the procedure of suspension and cancellation of license related to relevant matter as adduced in the sub paragraph (f) of the aforesaid rule21(1) shall be executed in accordance with the rule-14.

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(3) In case the licence is cancelled the basic licence fee, license fee and security amount deposited by him shall stand forfeited in favour of the Government and the licensee shall not be entitled to claim any compensation or refund. Such licensee may also be blacklisted and debarred from holding any other excise license."

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In the light of the said provisions contained in Section 34 of the Act read with Rule 21 of the Rules, 2020, it is argued by the petitioner that merely because the husband of the petitioner is

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involved in an offence, none of the ingredients of Section 34 of the Act or Rule 21 of the Rules, 2020 are attracted so as to exercise power of cancellation as has been done by the department. He argues that Section 34(1)(b) of the Act provides that in the event of breach of any condition of the license either by the licensee, or by his servant or by any person acting on his behalf in respect of the conditions of the license, steps can be taken for cancellation, whereas in the present case, the husband of the petitioner does not fall in any of the said three categories and even otherwise, there is no allegation of breach of any condition of the license granted to the petitioner.

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It is also argued that in terms of Section 34(1)(c) of the Act, the powers can be invoked by the Licensing Authority only if the holder of the license is convicted of an offence, whereas admittedly in the present case, the petitioner has never been convicted of any offence, thus, it is argued that none of the conditions prescribed under Section 34(1)(a) to (e) are attracted.

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It is further argued that even in terms of Rule 21 of the Rules, 2020, steps for cancellation can be taken only when the licensee is convicted of an offence punishable and specified in Rule 21(1)(g) of the Rules, 2020, whereas in the present case the petitioner being the license holder has not been convicted in any of the offences.

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In the counter affidavit filed by the State it has been reiterated that the husband of the petitioner was involved in an offence, which is the foundation for passing of the order. It is further sought to be argued that at the time of obtaining license, the petitioner had given an affidavit that neither herself nor any of the family members are involved in any crime, whereas a criminal case was admittedly registered against the husband of the petitioner.

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In the light of the said submission and on perusal of the cancellation order, it transpires that it has been cancelled merely because the husband of the petitioner is accused for an offence. None of the ingredients of Section 34(1) of the Act or Rule 21 of the Rules, 2020 get attracted so as to enable the Licensing Authority to cancel the license on these grounds as has been done in the present case.

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Considering the fact that there is no authority vested in the authorities to take steps for cancellation either under Section 34 of the Act or under the Rules only on the ground that husband of the petitioner is an accused, the order impugned dated 02.04.2022 passed against the petitioner cancelling the license as well as the

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appellate order dated 31.01.2022 are wholly unsustainable and are quashed.

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The writ petition is accordingly allowed .

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The amount of security forfeited shall be refunded to the petitioner in accordance with law and her application for renewal of the shop license for the period 2022-23 shall be considered afresh and fresh orders thereupon shall be passed within a period of three weeks from the production of a certified copy of this order in accordance with law.

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It is further clarified that pendency of the criminal case against the husband of the petitioner would not be a ground available to the respondents in deciding the application for renewal of the license, as directed above.

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Order Date :- 29.3.2023 nishant

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Digitally signed by :- NISHANT MOHAN High Court of Judicature at Allahabad

Kanupriya Jaiswal v. State of U.P. and 5 Others

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Kanupriya Jaiswal v. State of U.P. and 5 Others

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