United Breweries Limited v. the State of Karnataka

Karnataka HC10 Jan 2025CRL.P/3398/2024

Case brief

AI extract

What is this about?

United Breweries Ltd; FIR Crime No.79/202324/75SE/754405 dated 03.04.2024 quashed; Karnataka Excise Act 1965 Ss.9-12, 14, 32, 34, 38(A), 43; S.54 non-compliance vitiates search/seizure and proceedings; delayed export/despatch permit (applied 13-03-2024, granted 30-03-2024 7.15 p.m.); lorries returned to Nanjangud brewery on Kerala permit lapse; information to Excise Inspector; S.482 Cr.P.C.; Crl.P. No.3398/2024; High Court of Karnataka; M. Nagaprasanna J; decided 10-01-2025; K.L. Subbayya (1979) 2 SCC 115 followed; Amangoua Magne Arlatte and Damera Upendra Rao relied on.

What did the court decide?

Criminal Petition allowed; First Information Report in Crime No.79/202324/75SE/754405 registered by the Karnataka Excise Department, Nanjangud Sub-Division, quashed; consequently I.A.No.1 of 2024 disposed of. ¶167

United Breweries Limited Vs the State of Karnataka — Company and Corporate | Karnataka HC (2025)

What the court decided

AI extract

Outcome

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Issue for consideration

Whether the crime/FIR registered on 03-04-2024 against the petitioners for offences punishable under Sections 9 to 12, 14, 32, 34, 38(A) and 43 of the Karnataka Excise Act, 1965 ought to be quashed. +1 more

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Court's answer

The proceedings were initiated against the petitioner for the fault of the officers of the Excise Department, who despite reminders did not issue the despatch/export permit for 17 days after the application of 13-03-2024; the crime was registered on frivolous grounds.

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Ratio / Principle

None of the ingredients necessary for the offences alleged under Sections 9 to 12, 14, 32, 34, 38(A) and 43 of the Act are even remotely present in the case.

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Key takeaways

The Additional State Public Prosecutor's contention (that absent a re-entry permit the return transportation became illegal) is rejected as unacceptable, because the Rule requires information to be given to the nearest Police Station or to the Excise Officer, which the petitioner complied with by informing the 8th respondent/Excise Inspector, whose acknowledgment is on record.ratio¶73
For an offence under Sections 32, 33 and 34 of the Act, the procedure stipulated under Section 54 of the Act (recording of grounds of belief before warrantless search/seizure) is necessary and must be followed; it is admittedly not followed in the case at hand, rendering the proceedings procedurally vitiated.ratio¶160

Detailed headnote1 paragraphs

Criminal Petition No.3398 of 2024 (under S.482 Cr.P.C.), decided 10-01-2025 by M. Nagaprasanna, J. (CAV order), High Court of Karnataka: ALLOWED; FIR/Crime No.79/202324/75SE/754405 dated 03.04.2024 of the Karnataka Excise Department, Nanjangud Sub-Division, against United Breweries Limited and its Brewery Head for offences punishable under Sections 9 to 12, 14, 32, 34, 38(A) and 43 of the Karnataka Excise Act, 1965 (pending before Prl. Civil Judge and J.M.F.C., Nanjangud) QUASHED. Facts: 7000 cases of beer destined for Kerala under permits expiring 30-03-2024; export/despatch permit applied for on 13-03-2024 was issued only at 7.15 p.m. on 30-03-2024; seven lorries that could not clear the forest check-post before permit lapse returned to the brewery, the petitioner informing the Excise Inspector (R-8) and unloading before excise guards (R-6/R-7); a search/panchanama followed and crime was registered on 03-04-2024. Held: (i) the crime was registered on frivolous grounds, the proceedings stemming from the Excise Department's own 17-day delay in issuing the permit, and none of the ingredients of the alleged offences are even remotely present; (ii) the Rule requiring information to the nearest Police Station/Excise Officer was complied with, making the State's contention unacceptable; (iii) for offences under Sections 32, 33 and 34, the Section 54 procedure must be followed and was admittedly not followed - following K.L. Subbayya, (1979) 2 SCC 115, and coordinate-Bench decisions (Smt. Amangoua Magne Arlatte, Cri.P. No.793/2022; Damera Upendra Rao, Cri.P. No.2121/2022), non-compliance vitiates the proceedings; failure to quash would amount to abuse of process and miscarriage of justice.

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IN THE HIGH COURT OF KARNATAKA AT BENGALURU

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DATED THIS THE 10^TH DAY OF JANUARY, 2025

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BEFORE

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THE HON'BLE MR. JUSTICE M. NAGAPRASANNA

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CRIMINAL PETITION No.3398 OF 2024

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BETWEEN:

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1 . UNITED BREWERIES LIMITED UB TOWER, LEVEL 3,4, VITTHAL MALLYA ROAD, BENGALURU – 560 001, REPRESENTED BY ITS AUTHORISED SIGNATORY MR.M.V.KARTHICK.

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2 . MR.M.V.KARTHICK

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BREWERY HEAD

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AGED ABOUT 46 YEARS, S/O LATE M.S.VEDASEKAR

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RESIDENTIAL ADDRESS:

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107, SAI BRINDAVAN APARTMENTS, VIDYARANYAPURA

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MYSURU – 570 008.

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... PETITIONERS

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(BY SRI SANDESH J.CHOUTA, SR.ADVOCATE A/W SRI YASHODHAR HEGDE, ADVOCATE)

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AND:

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1 . THE STATE OF KARNATAKA ACTING THROUGH THE MINISTRY OF EXCISE VIDHANA SOUDHA BENGALURU – 560 001 REPRESENTED BY STATE PUBLIC PROSECUTOR HIGH COURT BUILDING.

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2 . THE DEPUTY COMMISSIONER OF EXCISE 2^ND FLOOR, TTMC ‘A’ BLOCK, BMTC BUILDING, SHANTINAGAR, BENGALURU – 560 027.

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3 . THE JOINT COMMISSIONER OF EXCISE MYSURU DIVISION, BUILDING NO.22/1, 1 , I BLOCK, JAYANAGAR, KUVEMPU NAGARA, MYSURU – 570 023.

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4 . THE DEPUTY COMMISSIONER OF EXCISE MYSURU (RURAL) DIVISION, BUILDING NO.1/SMT, JCST NEAR SAMRAT KALAYNA MANTAPA UDAYA RAVI ROAD, I BLOCK, KUVEMPU NAGAR, MYSURU – 570 023.

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5 . THE COMMISSIONER OF EXCISE CHAMARAJANAGAR DIVISION, DOUBLE ROAD, CHAMARAJANAGAR – 571 313.

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6 . THE DEPUTY SUPERINTENDENT OF EXCISE C/O UNITED BREWERIES LIMITED, THANDYA INDUSTRIAL AREA, NANJANGUD TALUK MYSURU DISTRICT.

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7 . THE SUPERINTENDENT OF EXCISE C/O UNITED BREWERIES LIMITED, THANDYA INDUSTRIAL AREA, NANJANGUD TALUK MYSURU DISTRICT.

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8 . THE EXCISE INSPECTOR C/O UNITED BREWERIES LIMITED, THANDYA INDUSTRIAL AREA, NANJANGUD TALUK MYSURU DISTRICT.

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9 . THE EXCISE INSPECTOR C/O UNITED BREWERIES LIMITED, THANDYA INDUSTRIAL AREA, NANJANGUD TALUK MYSURU DISTRICT.

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... RESPONDENTS

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(BY SRI B.N.JAGADEESHA, ADDL.SPP)

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THIS CRIMINAL PETITION IS FILED UNDER SECTION 482 OF CR.P.C., PRAYING TO a) QUASH THE FIR NO.79/202324/75SE/754405 DATED 03.04.2024 (ANNEXURE-J) REGISTERED BY THE KARNATAKA EXCISE DEPARTMENT THE RESPONDENT NO.5 QUA THE PETITIONER HEREIN PENDING BEFORE PRL.CIVIL JUDGE AND J.M.F.C NANJANGUD MYSORE FOR THE OFFENCES P/U/S 9, 10, 11, 12, 14, 32, 34, 38, 43 OF THE KARNATAKA EXCISE ACT AND ETC.,

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THIS CRIMINAL PETITION HAVING BEEN HEARD AND RESERVED FOR ORDERS, COMING ON FOR PRONOUNCEMENT THIS DAY, THE COURT MADE THE FOLLOWING:-

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CORAM: THE HON'BLE MR JUSTICE M.NAGAPRASANNA

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CAV ORDER

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The 1^st petitioner/United Breweries Limited along with Brewery Head are before this Court calling in question registration of a crime in Crime No.79/2023-24/75SE/754405 registered by the Karnataka Excise Department for offences punishable under Sections 9 to 12, 14, 32, 34, 38(A) and 43 of the Karnataka Excise Act, 1965 (‘the Act’ for short).

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Heard Sri Sandesh J. Chouta, learned senior counsel appearing for the petitioners and Sri B.N. Jagadeesha, learned Additional State Public Prosecutor appearing for the respondents.

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Facts, in brief, germane are as follows:

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1^st petitioner is a Company incorporated under the Companies Act, 1956 having its registered office at Bangalore. M/s United

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Breweries Limited and its head are the petitioners (referred to hereinafter as ‘the petitioner’). The petitioner, inter alia, is engaged in the business of manufacture and sale of beer in the State of Karnataka and operates through its brewery located at Thandya Industrial Area, Nanjangud Taluk, Mysore District. The State acting through the Ministry of Excise is empowered to deal with the issues pertaining to levy, collection and administration of State excise duties in the State of Karnataka. The 2^nd respondent/Commissioner of Excise and Chief Controlling Authority is connected with the administration of the Act. The 3^rd respondent/Joint Commissioner and the Deputy Commissioner of Excise, Mysore are the authorities to approve the permits required by the petitioner in the discharge of other statutory responsibilities under the Act.

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The petitioner, as observed hereinabove, manufactures alcoholic beverages in an excise bonded factory/brewery and is in the business of inter-State transportation of beverages. The petitioner has obtained permits from importing and exporting States in terms of the provisions of the Act. The import and export permits contained a detailed description and quantity of liquor,

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route to be followed for transportation, validity of permit etc. Post receipt of import and export permits, goods are transported along with the copies of such permits. The goods are required to cross Karnataka into the designation State within the validity period specified in the export permit. If they do not, the consignment of liquor would be held at the check-post and proceedings would be initiated for transportation of liquor without valid permit. After having obtained permits from the importing State of Kerala which was valid up to 30-03-2024, the petitioner applied for permit from the exporting State i.e., the State of Karnataka on 13-03-2024. For 17 days, no permit was issued. The permit comes about only on 30-03-2024 when the petitioner had less than a day to ensure that alcoholic beverages reach Kerala before 30-03-2024, failing which, the goods that are transported would be seized by the Kerala Excise Department.

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The petitioner holding the despatch permit, sent through lorries the liquor under the despatch permit dated 30-03-2024. Few of the lorries could pass through the check-post at Kerala and the others could not, as the time for passing through the forest was

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over. Therefore, the goods returned to the brewery under the supervision of excise officials. Upon return of the goods to the brewery, the petitioner is said to have informed the respondents immediately seeking permission to unload the trucks which returned to the brewery. Pursuant to acknowledgment of the letter, the petitioner unloaded the trucks in the presence of excise guards of respondents 6 and 7. All these activities are said to be evident from the CCTV camera at the petitioner’s brewery. In the meantime, the excise officials conduct a panchanama at the unit where the goods had stationed on return and hold that the goods from 31-03-2024 had been illegally kept in the factory and registered a crime on 03-04-2024 for several of the afore-quoted offences. Registration of crime is what has driven the petitioner to this Court in the subject petition.

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The learned senior counsel appearing for the petitioner would vehemently contend that the goods had to be brought back not because of any violation of law, but the trucks could not pass through Madhumalai forest before time. The export permit was granted with only few hours left to load and transport the goods.

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Therefore, out of 17 trucks, only 10 trucks carrying 7000 cases passed through as time was still left in the forest and 7 were held, as the time for passing in the forest for movement of vehicles ended. As required in law, the excise officials were informed. The excise guards were present when the trucks came back to the brewery and goods was unloaded in the brewery. He would thus, contend that there can be no offence under the Act at all, as the Act requires information to be given to the nearest Police Station or to the excise officials. That having been complied with, the learned senior counsel submits that there cannot be any offence. He seeks quashment of first information report laid by the respondents.

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Per contra, the learned Additional State Public Prosecutor would vehemently refute the submissions to contend that the petitioner is guilty of the offence. The reason for the petitioner to be guilty of the offence is that, excise officials were not informed prior to bringing back lorries loaded with liquor. There was only an export permit and there was no entry permit to enter back to the brewery, from the Excise Department. Therefore, it becomes an illegal transportation in terms of the Act. He would contend that no

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fault can be found with the proceedings initiated against the petitioner.

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The learned senior counsel would join issue in contending that the petitioner had to initiate proceedings before this Court in Writ Petition No.10490 of 2024 seeking release of seized beer as it was a perishable commodity. The reason for initiating proceedings against the petitioner is that United Breweries is taken over by a Hollish Company. That Company has zero tolerance for corruption. None of the demands that are generally generated were ever met in the case at hand. That is the reason how the seizure has happened. He seeks quashment of proceedings.

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I have given my anxious consideration to the submissions made by the respective learned counsel and have perused the material on record.

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The afore-narrated facts are not in dispute. The issue that brings the petitioner to this Court is registration of crime on 03-04-2024 for the afore-quoted offences. The reason for

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registration of crime is that the petitioner manufactures beer and exports it to various States in the country on export permits being granted by the Excise Department. Kerala is one of the States to which beer is exported. An application was made for grant of export permit on 13-03-2024. For 17 days, despite reminders, no despatch permit was issued. The import permit issued by Kerala State was to expire at 12 mid-night on 30-03-2024. The permit was granted at 7.15 p.m on 30-03-2024. Holding the despatch permit, 7000 cases of consignment of beer was sought to be transported in GPS enabled trucks. The submission of the learned senior counsel is that certain lorries could not cross the border on 30-03-2024, as it had to pass through forest and had returned back to the goal, the goal is the breweries at Nanjangud. While so returning, the petitioner has immediately informed the respondents of the events and also files a letter on 30-03-2024 itself seeking permission to unload the trucks which returned to brewery. The communication reads as follows:

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“The Superintendent of Excise United Breweries Ltd., Thandya Industrial Area, Nanjangud – 571 301.

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Dear Sir,

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Sub: Kerala export permit cancellation, due to permit laps

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Export pass to Kerala was approved and received from DC office on 30.03.2024 and same is planned to export on 30.03.2024

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Due to permit validity 30.03.2024, Transporter not willing to carry the goods since permit was expiring the same day.

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Hence hereby request your kind self to allow us to unload the Truck.

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Permit details are tabulated as below.

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Depot	IP No.	IP EXPIRY DATE	PERMIT NO.	QUANTITY	LORRY NO.
KERALA- KOZHIKODE	IP-BEER/2023- 24/4522	30-03-2024	ES2024031363	700.000	KA 11 C 4967
KERALA- PATHANAMTHITA	IP-BEER/2023- 24/4520	30-03-2024	ES2024031358	700.000	TN 01 V 6375
KERALA-ALUVA	IP-BEER/2023- 24/4518	30-03-2024	ES2024031352	700.000	KA 34 B 4374
KERALA- TRIPUNITHURA	IP-BEER/2023- 24/4517	30-03-2024	ES2024031351	700.000	TN 52 E 7609
KERALA- ALUVA	IP-BEER/2023- 24/4525	30-03-2024	ES20240313104	700.000	KA 34 B 4374
KERALA- PERINTHALMAN	IP-BEER/2023- 24/4526	30-03-2024	ES20240313111	700.000	TN 43 Z 4736
KERALA- TIRUVALLA	IP-BEER/2023- 24/4524	30-03-2024	ES2024031369	700.000	TN 40 L 2538
KERALA- TRIPUNITHURA	IP-BEER/2023- 24/4521	30-03-2024	ES2024031360	700.000	TN 52 E 7609
KERALA- KOTTARAKARA	IP-BEER/2023- 24/4529	30-03-2024	ES20240313114	700.000	TN 28 AF 1674
KERALA- KOTTARAKARA	IP-BEER/2023- 24/4579	30-03-2024	ES20240313127	700.000	TN 28 AF 1674

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Thanking you sir

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For UNITED BREWERIES LIMITED

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Sd/Authorized Signatory”

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The excise officials/respondents 6 and 7 had come to the spot i.e., the brewery and respondent No.6 stationed at the brewery sought further permission from respondent No.7 and got all the 7 trucks unloaded. Since unloaded material was stored in the brewery, a search is conducted, panchanama is drawn and several thousand cases of beer were held to be unlawful, more so, on the score that code of conduct for, parliamentary election was in force at the time of return of lorries to the brewery. The submission now is that it is in violation of the Act and the Rules.

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The submission of the learned Additional State Public Prosecutor becomes unacceptable, as the Rule requires information to be given at the nearest Police Station or to the Excise Officer. The petitioner calls up 8^th respondent/Excise Inspector and informed him about the situation that it could not transport the goods into the State of Kerala and had to get back. This is acknowledged by the 8^th respondent. The petitioner unloads the liquor from the lorries and places in the brewery. Two days thereafter, a search is

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conducted and liquor that was found in the lorries and unloaded, is seized. The crime comes to be registered for the afore-quoted offences. There cannot be a better illustration of crime being registered on frivolous grounds, on the score that despatch/export permit that was applied was on 13-03-2024 and permit was granted only on 30-03-2024 that too at late hours on the said date, since the import permit by the Kerala State was to expire at the mid-night of 30-04-2024. For 17 days the Department of Excise does not issue the permit, for reasons best known, to it and for the fault of officers of the Excise Department, the proceedings are now initiated against the petitioner. The offences alleged are the ones punishable under Sections 9 to 12, 14, 32, 34, 38(A) and 43 of the Act. None of the ingredients that are necessary to be present are even remotely present in the case at hand.

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Interpretation of offences under the Act need not detain this Court for long or delve deep into the matter. The Apex Court in the case of K.L. SUBBAYYA v. STATE OF KARNATAKA¹ has held as follows:

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1 (1979) 2 SCC 115

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“2. Thus this section relates to a contingency where the statute enjoins that any inspector before searching a place must obtain a warrant from the Magistrate. Section 54 is a special provision which arises in urgent cases where it may not be possible for the officer concerned to get a warrant from the Magistrate. Section 54 runs thus:

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“Whenever the Excise Commissioner or a Deputy Commissioner or any police officer not below the rank of an officer in charge of a police station or any Excise Officer not below such rank as may be prescribed has reason to believe that an offence under Section 32, Section 33, Section 34, Section 36 or Section 37 has been, is being or is likely to be, committed, and that a search warrant cannot be obtained without affording the offender an opportunity of escape or of concealing evidence of the offence, he may after recording the grounds of his belief—

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( a ) at any time by day or by night enter and search any place and seize anything found therein which he has reason to believe to be liable to confiscation under this Act; and

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( b ) detain and search and, if he thinks proper, arrest any person found in such place whom he has reason to believe to be guilty of such offence as aforesaid.”

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3. In the instant case, it is admitted that the inspector who searched the car of the appellant had not made any record of any ground on the basis of which he had a reasonable belief that an offence under the Act, was being committed before proceeding to search the car and thus the provisions of Section 54 were not at all complied with.

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4. This, therefore, renders the entire search without jurisdiction and, as a logical corollary, vitiates the conviction. We feel that both Sections 53 and 54 contain valuable safeguards for the liberty of the citizen in order

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to protect them from ill-founded or frivolous prosecution or harassment. The point was taken before the High Court which appears to have brushed aside this legal lacuna without making any real attempt to analyse the effect of the provisions of Sections 53 and 54. The High Court observed that these two sections were wholly irrelevant. With due respect, we are unable to approve of such a cryptic approach to a legal question which is of far-reaching consequences. It was, however, suggested that the word “place” would not include the car, but the definition of the word “place” under the Act clearly includes vehicle which would include a car. Thus the ground on which the argument of the petitioner has been rejected by the High Court cannot be sustained by us. We are satisfied that there has been a direct non-compliance of the provisions of Section 54 which renders the search completely without jurisdiction. In this view of the matter, the appeal is allowed, the conviction and sentence passed on the appellant is set aside and he is acquitted of the charges framed against him.”

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(Emphasis supplied)

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Following the said judgment, this Court in the case of SMT. AMANGOUA MAGNE ARLATTE v. STATE OF KARNATAKA²

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has held as follows:

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“…. ….

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Learned counsel for the petitioner would submit that the entire issue of bringing charges against the petitioner stands covered by the judgment rendered by the Co-ordinate Bench of this Court in the case of LAKSHMI VENKATESHWARA VS. STATE OF KARNATAKA reported in 2019 SCC OnLine Kar 3316, wherein it is held as follows:

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2 Criminal Petition No.793 of 2022 decided on 14th March, 2022

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“3. The case of the prosecution is that on credible information, the lodging house belonging to the petitioner herein viz., Lakshmivenkateshwara Boarding and Lodging was raided on 08.10.2016 by the Deputy Superintendent of Excise of Shahapur Division along with panchas. They found 4441 numbers of bottle corks of different companies in a plastic bag in one of the rooms in the lodge.

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4. Learned counsel for the petitioner at the outset submitted that the investigating officer has failed to comply with the requirements of Sections 53 and 54 of the Act while conducting the search and seizure and therefore, the very initiation of the proceedings are illegal and tainted. Further, the allegations made against the petitioner do not attract the ingredients of the offences under Sections 11,12 and 13 of the Act. These offences relate to possession or manufacture of excisable articles, transport of intoxicant, Permits for transport and manufacture of excisable article prohibited except under a licence. Seizure of bottle carks do not fall under any of the provisions. Therefore, the prosecution of the petitioner for the alleged offences is wholly opposed to the provisions of the Act and consequently, abuse of the process of the Court.

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5. Learned SPP-II has argued in support of the impugned charge sheet contending that the investigating officer has followed all the requirements laid down under the Act. Huge quantity of caps were found in the lodging house which indicate that the caps were stored only for the purpose of illegal manufacture of prohibited liquor and hence, there is prima-facie case for prosecution of the petitioner.

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6. It is not in dispute that during raid 4441 corks or bottle caps were found in a bag. It is not clear as to whether the said packet was found in any of the room of the lodge occupied by the inmates or in the room which was in exclusive possession of the owner, none-the-less the articles found in the possession of the petitioner in my view do not constitute any of the offence punishable under Sections 11 to 13 of the Act.

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7. Section 11 deals with the transport of intoxicant. Section 13 deals with manufacture of ‘excisable articles’. The section reads as under:

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8. Manufacture, etc., of excisable article

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prohibited except under a licence:

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(1) No person shall-

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(a) manufacture or collect an intoxicant; or

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(b) cultivate hemp plant; or

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(c) tap a toddy producing tree or draw toddy from any tree; or

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(d) construct or work a distillery or brewery;or

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(e) bottle liquor for sale; or

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(f) use, keep, or have in his possession, any materials, still, utensils, implement or apparatus, whatsoever for the purpose of manufacturing any intoxicant other than toddy,

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Except, under the authority and subject to the terms and conditions of a licence granted by the Deputy Commissioner in that behalf or under the provisions of Section 18.

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(2) A licence granted under this Section shall extend to and include servants and other persons employed by the licensee and acting on his behalf. 9. Section 14 which deals with possession of excisable articles 14 reads as under:

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10. Possession of excisable articles in excess of the quantity prescribed- (1) The State Government may, by notification, prescribe a limit of quantity for the possession of any intoxicant:

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Provided that different limits may be prescribed for different qualities of the same article.

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(2) No person shall have in his possession any quantity of any intoxicant in excess of the limit prescribed under sub-section (1), except under the authority and in accordance with the terms and conditions of -

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(a) a licence for the manufacture, cultivation, collection, sale or supply of such article, or

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(b) a permit granted by the Deputy Commissioner in that behalf.

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11. A bare reading of the above provisions would indicate that a person found in possession of any excisable articles as defined under Section 2(6) of the Act could be tried and prosecuted for the above offences. “Excisable Article” is defined under Section 2(6).

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2 (6) “Excisable article” means-

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(a) any liquor;

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(b) any intoxicating drug;

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(c) opium; or

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(d) other narcotic drugs, narcotics and non-narcotic Drugs which the State Government may by notification declare to be an excisable article;

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The caps by themselves do not fall within the definition of “excisable articles”. There are no allegation in the FIR that the said caps were intended for the manufacture or sale of illicit liquor. From the reading of panchanama, it cannot be gathered as to whether any manufacturing activity was carried on in the lodging house.”

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This Court in another case

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CRL.A.NO.2815/2010

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“14. The investigation under the special Act for special offences, duty is casted on investigation agency to do the investigation within the parameter of the Act. The seized articles should be proved that it was contra band. The search and seizer should be proved beyond any reasonable doubt. Further, there should not be violation of any law governing the investigation.

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15. The Hon’ble Apex Court is held in the case of K.L. Subbayya V/s. State of Karnataka , reported in (1979) 2 SCC 115 that the violation of Sections 53 and 54 of the Karnataka Excise Act, 1965 vitiates the entire investigation. It reads as follows:

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“3. In the instant case, it is admitted that the inspector who searched the car of the appellant had not made any record of any ground on the basis of which he had a reasonable belief that an offence under the Act, was being committed before proceeding to search the car and thus the provisions of Section 54 were not at all complied with.

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4. This, therefore, renders the entire search without jurisdiction and, as a logical corrolary’, vitiates the conviction. We feel that both Sections 53 and 54 contain valuable safeguards for the liberty of the citizen in order to protect them from ill-founded or frivolous prosecution or harassment. The point was taken before the High Court which appears to have brushed aside this legal lacuna without making any real attempt to analyse the effect of the provisions of Sections 53 and 54. The High Court observed that these two sections were wholly irrelevant. With due respect, we are unable to approve of such a cryptic approach to a legal question which is of far-reaching consequences. It was, however, suggested that the word “place” would not include the car, but the definition of the word “place” under the Act clearly includes vehicle which would include a car. Thus the ground on which to argument of the petitioner has been rejected by the High Court cannot be sustained by us. We are satisfied that there has been a direct non-compliance of the provisions of Section 54 which renders the search completely without jurisdiction. In this view of the matter, the appeal is allowed, the conviction and sentence passed on the appellant is set aside and he is acquitted of the charges framed against him.”

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The said rule is relied on by the appellant’s counsel.

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16. On perusing of the above said authority, it is crystal clear that Section 54 of the Act has to be complied. The warrant for search and seizure should be obtained for the offences under Sections 32, 33, 34, 36 and 37. It is only in the event of contingency, Section 54 provides for search and seizure by excise officials without warrant to prevent the offender escaping or concealing the evidence that may be found against the accused.

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Whatever the information that the Commissioner of Excise or Police Officer had received regarding the commission of offence punishable under Sections 32, 33, 34, 36 or 37 of the Act would be rendered without jurisdiction and vitiates conviction. This aspect has not been considered by the trial Court.

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17. Admittedly, PW1/CW1 had received information that a person is selling illicit arrack in the public place. Thereafter, he summoned to panchas, then went to seen of occurrence. He was watching the same by standing at the distance, they noticed that the information received was found to be correct and the accused was found selling illicit arrack to the general public by keeping in a rubber tubes and vessel (Bindige) in his possession. Therefore, he filed the complaint at Ex.P2. In the presence of panchas, PW1 drew a seizure panchanama as per Ex.P1 and seized the illicit liquor, cash of Rs.110/- vessels.

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18. So far as independent pancha witnesses PW2 and PW8 are concerned they are not supported the case of the prosecution. The CW10 the Police Inspector, who registered the complaint on the basis of the grievance given by CW1.

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19. The trial Court found the evidence of PW1, 3 and 4 the corroborative of the documentary evidence at Ex.P1 Panchanama. Seizure of article is also proved by the said evidence. Therefore, the trial Court applied the presumption available under Section 40 of Karnataka Excise Act. On the basis of evidence of PW6 and Ex.P4 the chemical analysis report, the trial Court came to the conclusion that the medical seized is intoxicant. It was found, it was not fit to consume having regard to the quantity methyl and the trial Court acquitted the accused for the offences punishable under Section 272 and 328 of IPC.

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20. The trial Court convicted the accused for the offences punishable under Section 273 of IPC.

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21. In view of non following the procedure laid down under Section 53 and 54 of the Karnataka Excise Act, whole investigation is vitiated. No reasons are assigned by the

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Investigating Officer as to why the procedure laid down under law was not following before proceeding for investigation. Infact, no crime was registered after receiving the information regarding commission of offence. Therefore, investigation appears to have done before registration of the crime that is also a serious error committed by the trial Court. When the Investigating Officer proceeds with the investigation without obtaining any search warrant or seizure warrant from the Magistrate, corroboration by independent witness is necessary. In this case, pancha witnesses have not supported the case of the prosecution. No witness examined for having purchased noxious drink from the accused. Therefore, I find that the accused cannot be convicted for the above said offences. Hence, point No.1 answered in the affirmative and point No.2 answered in the negative. Hence, I proceed to pass the following:

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ORDER

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The appeal filed by the appellant-accused against the judgment of conviction and sentence dated, 18.06.2010 passed by the Presiding Officer, Fast Track and Additional Sessions Judge, Hukkeri at Hukkeri sitting at Gokak in Sessions Case No.35/2010 for the offence punishable under Section 34 of Karnataka Excise Act and for the offence punishable under Section 273 of IPC is allowed. The conviction and sentence imposed for the above offences is hereby set aside.

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The accused is acquitted of all the offences alleged against him. Fine amount if deposited by the accused shall be refunded to him.”

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The aforesaid position of law is not disputed by the learned High Court Government Pleader appearing for the respondents - State.

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In the light of the judgments rendered ( supra ), I deem it appropriate to obliterate the proceedings against the petitioner for the same reasons as is rendered by the Coordinate Benches of this Court.”

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(Emphasis supplied)

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It is also germane to notice the judgment of the coordinate Bench, following the judgment of the Apex Court, in the case of DAMERA UPENDRA RAO v. STATE³ . The coordinate Bench holds as follows:

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On perusal of the records, it reveals that as per the complaint made by the excise officer the petitioner accused No.1 said to be carried 20 bottles of different liquor containing 15 liters and which is said to be a military liquor is not for sale in open market. The same was seized by the respondent department under the panchanama on 2.10.2020. As per Section 53 of Excise Act, before such seizure, the warrant shall be obtained from the Magistrate, however, as per Section 54 of the Excise Act, if any cause, the excise officer or police unable to obtain the warrant they shall record the reason as there is every possibility of the accused escape or conceal the evidence of the offence. Then only, the respondent police or excise officer can search and seize the liquors. Admittedly, the respondent did not obtain any warrant from the magistrate as required under Section 53 of the K.E. Act. However, the excise officer recorded the reason stating that there is no possibility for obtaining the warrant from the court. Therefore, the said officer himself prepared the record of reason on the spot, but on perusal of the seizure panchanama dated 2.10.2020 at 12.15 p.m. which reveals that panchanama was hand written by the one of the officials. but record of reason is cyclostyled form and computerized one. As per the panchanma they got credible information about transporting the liquor,

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3 Criminal Petition No.2121 of 2022 decided on 14th December, 2022

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therefore, they waited near Ambedkar stadium road. At that time the motor cycle of the accused NO.1 came. It is not the case of respondent that they prepared the record of reason prior to proceeding to the spot. But, they stated in the record of reason that on the spot it was prepared. If the record of reason is prepared on the spot, it must have been on the hand writing, but it could not be computerized. Since the seizure panchanama is hand written, it appears that after the arrest and seizure of the liquor the excise department prepared the record of reasons in their office.

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9. That apart, when the FIR sent to the Magistrate, the record of reason not sent to the Magistrate along with FIR in order to show that they are unable to obtain the warrant and therefore, they conducted search and seizer of the liquors. There is no endorsement of the magistrate on the FIR and on the record of reason under Section 54 of the K.E. Act, which reveals that the record of reason not accompanied the FIR when the FIR reached the magistrate which categorically suggest the respondent searched and seized the liquor without warrant and not recorded the reason as required under section 54 of the Act. In a similar circumstance, this court also quashed the proceedings in the case of Sunitha and Anr Vs. State of Karnataka, Excise Inspector in Crl.Rev P.2315/2013 dated 19.7.2022, where in this Court has held without registering FIR and seizing the articles is nothing but commencement of investigation prior to recording of FIR and not recording the reasons under Section 54 of Excise Act without obtaining warrant and registering the case amounts to violation of mandatory procedure, therefore on that ground, the search and seizer vitiate and prosecution cannot be sustained.

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That part, the petitioner Counsel stated that the petitioner No.1 is ex-service man and there are labels on the bottles, mentioning that is military liquor and it is not sold in the open market. Admittedly, the petitioner might have purchased from the military canteen and kept in the house and of course, he has not produced any bills but it does not mean that the

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Excise Officer/ Investigating Officer should not make any enquiry with the military canteen. Absolutely, there is nothing on record to show that investigation officer has verified from which canteen the liquor was purchased. Therefore, there is a flaw in the investigation, not only search and seizure but also in filing the charge sheet. Therefore, the trial cannot be sustained against the petitioner NO.1.

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Though, the accused No.1 being an ex-army man who is entitled to receive the liquor from the military canteen but he ought not to have carried on dry day i.e. on 2.10.2020 which is Gandhi Jayanthi. The military person should respect the Father of Nation more than an ordinary citizen and he should not have forgotten the Gandhi Jayanthi day. However, in view the faulty investigation and non compliance of the mandatory provision of section 54 of K.E. Act and not sending the entire bottles to the FSL for chemical analysis, the entire proceedings cannot be sustainable. Therefore, the criminal proceedings against the petitioners are liable to be quashed.”

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(Emphasis supplied)

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The afore-mentioned orders are on, one solitary fact that for an offence under Sections 32, 33 and 34 of the Act, which are alleged in the case at hand, it is necessary that procedure stipulated under Section 54 of the Act must be followed. It is admittedly not followed in the case at hand. Therefore, on the facts narrated hereinabove, finding no fault on the part of the petitioner and the procedural violation in registering the crime, particularly under Sections 32 and

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34 of the Act as held by the Apex Court in K.L. SUBBAYYA supra ,

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the petition deserves to succeed, failing which, it would become an abuse of the process of law and result in miscarriage of justice.

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13. For the aforesaid reasons, the following:

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O R D E R

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