Partly allowed

Kerala State Beverages (Manufacturing & Marketing) v. the Secretary

Kerala HC24 Mar 2014WA/477/2014

Case brief

AI extract

What is this about?

The High Court held that the Corporation was justified in taking immediate action under Section 532(5) due to urgency in closing the shop. It dismissed the claim of natural justice violation and quashed the order relying on a separate application, directing the Council to decide on a fresh license application within three weeks.

What did the court decide?

Direction to the Council of the respondent Corporation to take a decision on the application dated 20.03.2014 within three weeks from 20.04.2014.

Kerala State Beverages (Manufacturing & Marketing) Vs… — Service and Employment | Kerala HC (2014)

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IN THE HIGH COURT OF KERALA AT ERNAKULAM

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PRESENT:

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THE HONOURABLE MR.JUSTICE K.M.JOSEPH & THE HONOURABLE MR. JUSTICE A.K.JAYASANKARAN NAMBIAR

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MONDAY, THE 24TH DAY OF MARCH 2014/3RD CHAITHRA, 1936 WA.No. 477 of 2014 () IN WP(C).7955/2014 -----------------------------------------AGAINST THE JUDGMENT IN WP(C) 7955/2014 DATED 19.03.2014

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APPELLANT(S)/PETITIONER IN WPC: --------------------------------KERALA STATE BEVERAGES (MANUFACTURING & MARKETING) CORPORATION LIMITED, P.B.NO.2263 SASTHAKRIPA OFFICE COMPLEX, SASTHAMANGALAM P.O. TRIVANDRUM -695 010 REPRESENTED BY ITS REGIONAL MANAGER - N-1 MR.G.MOHANAN.

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BY ADV. SRI.C.S.AJITH PRAKASH

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RESPONDENT(S)/RESPONDENTS IN WPC: ----------------------------------

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1. THE SECRETARY LOCAL SELF GOVERNMENT DEPARTMENT GOVERNMENT SECRETARIAT, THIRUVANANTHAPURAM.

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2. THE SECRETARY CORPORATION OF THIRUVANANTHAPURAM VIKAS BHAVAN P.O. THIRUVANANTHAPURAM PIN - 695 033.

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3. THE SUPERINTENDENT ZONAL OFFICE, NEMAM CORPORATION OF THIRUVANANTHAPURAM.

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4. THE DEPUTY COMMISSIONER OF EXCISE, THIRUVANANTHAPURAM OFFICE OF THE DEPUTY COMMISSIONER OF EXCISE THIRUVANANTHAPURAM.

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BY GOVERNMENT PLEADER SRI.ABUBACKER BY SRI.P.K.MANOJKUMAR,SC,TVPM CORPORATION R2 & R3 BY SRI.NANDAKUMARA MENON, SR.

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THIS WRIT APPEAL HAVING COME UP FOR ADMISSION ON 24-03-2014, THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING:

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WA.No. 477 of 2014 () IN WP(C).7955/2014

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APPENDIX

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PETITIONER'S ANNEXURES:

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ANNEXURE A1:A TRUE COPY OF THE ORDER PASSED BY THE 2^ND RESPONDENT NO.ZN3/MS/503/14 DATED 17.3.2014

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ANNEXURE A2:A TRUE COPY OF THE ORDER DELEGATING THE POWER TO THE HEALTH INSPECTOR DATED 17.3.2014

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ANNEXURE A3:A TRUE COPY OF THE MAHAZAR DATED 18.3.2014

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RESPONDENTS' ANNEXURES: NIL

//TRUE COPY//

P A TO JUDGE

K.M.JOSEPH &

A.K.JAYASANKARAN NAMBIAR, JJ.

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W.A.No.477 of 2014

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Dated this the 24^th day of March, 2014

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JUDGMENT

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K.M.JOSEPH, J.

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Appellant is the writ petitioner. The prayers sought for

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by the writ petitioner are that:

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“i. To call for the records leading to the issuance of Ext.P13 order of the 2^nd respondent and quash the same, declaring it as illegal and the one passed in violation of the principle of natural justice.

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ii. To issue a writ of mandamus or any other appropriate writ, order or direction directing the 2^nd respondent Corporation to consider the application for change of occupancy submitted by the landlord within a time limit processing by this Hon'ble Court.

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Iii. To issue a writ of mandamus or any other appropriate writ, order or direction directing the 2^nd respondent Corporation to accept the trade license application Ext.P11 and pass appropriate order on the same within a time limit prescribed by this Hon'ble Court.

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iv. To declare that the petitioner has already obtained D&O license and there is no need to take a fresh trade license in the new building No.TC 51/2475, as there is already a deemed license.”

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Briefly put, the case of the appellant is as follows:

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The appellant herein is the Kerala State Beverages (M &

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W.A.No.477 of 2014

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M) Corporation (hereinafter called as 'KSBC'). The KSBC is granted with the privilege to run the FL-1 shop, retail outlet in Kerala. By virtue of Exhibit-P1 licence issued by the Excise Department, the Petitioner KSBC is running an FL-1 shop No.1023 at Pappanamkodu, Nemom, Thiruvananthapuram, from 2003 onwards, in building No.TC.51/2471, 2471(1) 2471 (2) & 2471 (4) of Thiruvananthapuram Corporation. Due to the road widening by the NH authorities, the petitioner KSBC was compelled to shift the shop from the aforesaid building. The petitioner KSBC located a new building near to the earlier shop and obtained permission from the Excise Authority as evidenced by Exhibit -P8. The petitioner had applied for trade licence for the earlier shop as early as on 10.01.2014 and since no orders were passed on the same it was holding a deemed licence for the year 2013-14. It is contended that in order to shift the shop, a new licence is not required as per the settled legal position. However the petitioner made Exhibit-P11 application for the new premises but the 2^nd respondent Corporation refused to accept the same with ulterior motive to help a nearby Bar Hotel run by a known Abkari business man. The actual shifting of the shop was effected on 08.03.2014 and on 14.03.2014 the petitioner was

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W.A.No.477 of 2014

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served with Exhibit-P13 notice ordering to close down the shop on the ground that the shop was being conducted without trade licence. Exhibit-P13 notice contains a predecision to close down the shop and thereafter the 2^nd respondent conducted a hearing on 17.03.2014 and an order was passed conforming the earlier order dated 14.03.2014 on the same day itself. In furtherance to that, on 18.03.2014, the Corporation officials came to the shop premises and forcefully closed the shop. Challenging the said action, on the ground of violation of natural justice, on the ground that no previous permission is required for existing Abkari shop even after ordinance 64 of 2012, on the ground of unreasonable and hasty action etc. the petitioner approached this Hon'ble Court. The learned Single Judge after hearing the matter dismissed the writ petition with an observation that trade license application, if any submitted, is to be considered at the earliest. The refusal to interfere with the impugned action resulted in closure of the shop, which is a privilege granted by the State and thereby causing loss to the Corporation and to the State Revenue. Hence the appellant is filing this writ appeal.

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W.A.No.477 of 2014

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Learned Single Judge found that the writ petition deserves no merit and the same was accordingly dismissed. Paragraphs 11 and 12 of the judgment reads as follows:

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“11. However, learned counsel for the petitioner had raised a contention that the application for licence submitted before the 2^nd respondent was not received. It is made clear that it will be left open to the petitioner to apply for licence in the building where the retail shop is now proposed. If any such application is submitted before the 2^nd respondent, the 2^nd respondent shall receive the same and take appropriate decision with respect to grant of licence, if necessary after placing the same before the Council of the Corporation.

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Needless to observe that a decision on such application if any submitted shall be taken at the earliest, without any further delay. It is further observed that, application if any submitted by the land lady with respect to change of occupancy shall also be dealt with by the 2^nd respondent without any further delay.”

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Feeling aggrieved by the same, the appellant is before

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us.

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Heard the learned counsel for the appellant and the learned Senior counsel for the respondents 2 and 3.

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The learned counsel for the appellant would point out

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W.A.No.477 of 2014

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that the appellant had applied for licence under Section 447 of the Kerala Municipalities Act (the Act for short) for the year 2013-2014 by Ext.P4 application. There was no decision taken on the application within a period of one month and that is why the appellant became entitled to a deemed licence. It is while so, that on account of the acquisition proceedings, appellant was constrained to shift the business premises. The Excise authorities agreed and they passed Ext.P8. The appellant accordingly shifted the new premises on 08.03.2014 on the strength of the order dated 07.03.2014 (Ext.P8). Appellant thereafter filed application for licence on 10.03.2014 before the Corporation but it was not accepted. Instead, the appellant was served with Ext.P13 notice. Appellant drew our attention to Section 532 of the Kerala Municipalities Act, contending that there is violation of natural justice in that the appellant was not given any opportunity before Ext.P13 was issued. He further pointed out that thereafter, on 17.03.2014, by Annexure-A1 the objection of the appellant was closed. It is pointed out that Annexure-A1 can be treated as a consequential order and this Court may quash Ext.P13 and the consequential order must also fall to the ground. He also drew our attention to the decision of this

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W.A.No.477 of 2014

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Court in Unnikrishnan A.G. v. Commissioner of Excise, Tvm. And another [2014 (1) KHC 140 (DB)] wherein with effect from 2012 there is an amendment in place in Section 447. He also drew our attention to a decision of this Court in W.A.No.1143/2012. He would contend that there is no immediacy as required under Section 532 (5) of the Act to warrant the issuance of Ext.P13.

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Per contra, the learned Senior counsel for the respondents 2 & 3 after getting instructions, would submit that though appellant had made an application on 10.03.2014, that was returned and after the disposal of the writ petition, the appellant had submitted an application on 20.03.2014. That is being processed. He would submit that this is a case where there is a change of occupancy required for sustaining the activities of the appellant in the new premises. That is to say the premises is shown as residential and without change of occupancy the appellant cannot be permitted to carry on business in liquor which it is doing. He denies the allegation that a bar owner is behind the actions of the Corporation. He would submit that this is a clear case wherein the appellant was carrying on business without a licence when a licence was

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W.A.No.477 of 2014

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required under the Dangerous and Offensive Trade and Factory Rules. He would submit that there was immediacy required and giving a notice would have been a futile exercise.

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It may be true that the appellant had applied for a licence for the year 2013-14. Admittedly, at that time the appellant was conducting business in another premises. May be the said premises, according to the appellant, is situated nearby but nonetheless it is proposed to carry on business at a different premises now. If that be so, the appellant would require a licence under Section 447(1) of the Act. There is no dispute infact by the appellant that in a case where business is shifted from one place to another the original licence must be surrendered and a new licence must be obtained. In fact the appellant has made an application also as even according to it that was returned. A fresh application was made on 20.03.2014. Under the statute, the Council is expected to deal with the application. The Council is given 30 days time from the date of receipt. The applications are to be received by the Secretary. There is dispute that the application dated 10.03.2014 was received, as according to the learned Senior counsel, the application would have been given back on the

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W.A.No.477 of 2014

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same date. About the receipt of the application dated 20.03.2014, there is no dispute.

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We see no merit in the contention of the appellant based on Section 532 of the Kerala Municipality Act, which reads as follows:

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“ 532. Consequences of failure to obtain licences, etc., or of breach of the same.- (1) Where, under this Act or any rule, bye- law or regulation made thereunder, the licence or permission of the Municipality or the Secretary of registration with the Municipality is necessary for the doing of any act and where such act is done without such licence or permission or registration or in a manner inconsistent with the terms of any such licence or permission-

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(a) the Secretary may, by notice, require the person doing such act to alter, remove, or as far as practicable, restore, to its original state the whole or any part of any property, movable or immovable, public or private affected thereby within a time to be specified in the notice; or

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(b) the Secretary or any officer duly authorised by him may enter any building or land where such act is done and take all such steps as may be necessary to prevent the continuance of such act.

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(2) Where the notice under sub-section (1) is not complied with, the Secretary may seize the unlicensed article or articles kept in unlicensed premises and all the articles

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W.A.No.477 of 2014

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seized shall be disposed of in the manner provided for the disposal of articles seized under section 474;

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Provided that where the articles are released, an undertaking shall be obtained from the person obtaining the release that he shall comply with the provisions relating to licence, permission or registration under this Act or any rule, bye-law or regulation made thereunder or the terms of the licence, permission or registration as the case may be.

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(3) where no penalty has been specifically provided in this Act for the doing of such act, the person so doing shall be liable, on conviction, to a fine not exceeding [five hundred rupees] for such offence.

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(4) No claim shall lie against the Secretary or any other person authorised by him for any damage or inconvenience caused by the exercise of the power under this section or by use of force necessary for the purpose of carrying out the provisions of this section.

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(5) Notwithstanding anything contained in sub-section (1) or sub-section(2), the Secretary or any officer authorised by him in writing in this behalf may, if satisfied that immediate action is necessary, [cause it to be closed] any trade, business or premises which is held or kept open, in respect of which a licence, permission or registration has to be obtained under the provisions of this Act or any other Act from the Municipality, but has not been so obtained or the licence, permission or registration has been refused, withheld, revoked or suspended”

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Section 532 deals with the power of the authority to deal with cases where the person is found to be carrying on activities without the licence. Section 532(5) which was invoked in this

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W.A.No.477 of 2014

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case undoubtedly deals with power of the authority to issue notice in cases where urgent action is required, whereas under Section 532 (1) read with Section 533 what is contemplated is a notice being served for alteration, doing certain things, removal etc. Section 533 provides that a reasonable time must be granted. In this case, acting under Section 532 (5), 24 hours time is granted to stop the activities. Here apparently the exercise of power by the Corporation was for the reason that the appellant was carrying on trade of foreign liquor unauthorisedly in a residential area where there was objection raised from the public. In such circumstances, we cannot say that we should interfere with the sense of urgency which the Corporation perceived in the facts of this case.

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As far as the principle of Natural justice being flouted, undoubtedly, when action is taken where persons rights are affected, principles of natural justice, which are unembodied rules of justice, must be followed. There are two answers to the contention of the appellant. In the first place, what is to be done, in a case where a person carrying on activities without a licence, is specifically enumerated under

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W.A.No.477 of 2014

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Section 532. Section 532 does not contemplate grant of an opportunity before such action is taken. It is contended now that we should apply the principle of natural justice. We are considering these arguments at the appellate stage. We have already noticed the facts. Admittedly, the appellant did not have a licence as on 11.03.2014 when Ext.P13 was issued. Yet it was carrying on business. Therefore, even if notice had been issued, the entire exercise would have been a futile one. On that score also, we see no merit in this contention.

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In the circumstances of this case, we only need to fix a time limit for the disposal of the application dated 20.03.2014. We notice in this regard that this is a case where the appellant had already given application on 10.03.2014 but, for whatever reason, it was returned and appellant has also filed a fresh application. This is a case where appellant has already been favoured with an order of Excise Commissioner for shifting in view of the acquisition proceedings relating to the property in which it was earlier carrying on business. Accordingly, we modify the judgment of the learned Single Judge and direct the Council of the respondent Corporation to take a decision on the application submitted by the appellant,

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W.A.No.477 of 2014

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which is stated to be dated 20.03.2014, within a period of three weeks from 20.04.2014. We see no merit in the contention based on the judgment dated W.A.No.1143 of 2012. That was a case where the appellant's application for licence was rejected on the basis of complaints. The Bench noted that complaints received by the Panchayath were not put to the appellant and the application was directed to be considered. We see that no principle of law has been laid down. Furthermore, that is a case where the application of the appellant had been rejected on materials which were not put to the appellant. The facts are clearly different.

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We record the submission of the learned Senior counsel for the Corporation that a decision will be taken on Ext.P9 without any delay in accordance with law. The Writ Appeal is disposed of as above without any order as to costs.

K.M.JOSEPH JUDGE

W.A.No.477 of 2014

A.K.JAYASANKARAN NAMBIAR JUDGE

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mns/

Kerala State Beverages (Manufacturing & Marketing) v. the Secretary

Case brief

What is this about?

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Kerala State Beverages (Manufacturing & Marketing) v. the Secretary

Case brief

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