The High Court dismissed petitions seeking renewal and restoration of a cancelled toddy shop license. The court held that a validly passed cancellation order acquiescing under the Excise Act is not reviewed merely by the licensee's subsequent acquittal in a criminal case, as departmental and criminal findings are distinct.
This page shows the compact analysis of this judgement. The full analysis — procedural history, issue-by-issue holdings with ratio and obiter, advocates, and paragraph-level evidence for every claim — is being added to the record in batches and will appear here when this judgement has been through it.
THE HON’BLE SRI JUSTICE RAMESH RANGANATHAN WRIT PETITION Nos.12274 and 21934 OF 2012
COMMON ORDER:
The petitioner, in both W.P. Nos.12274 and 21934 of 2012, is the same. W.P. No.12274 of 2012 is filed seeking a mandamus to declare the proceedings of the 1st respondent dated 27.11.2010; the proceedings of the 2nd respondent dated 29.10.2010; and the respondents failure to restore the petitioner’s TFT license for the toddy shop at Chandapur Village, Tadwai Mandal, Nizamabad District, for the remaining part of the license period, even though he was acquitted by the Judicial Magistrate of I Class, Kamareddy, Nizamabad District in C.C. No.90 of 2011 dated 5.3.2011; as arbitrary and illegal. The petitioner seeks a consequential direction to the respondents to renew his license, after expiry of the license period of his toddy shop, in view of his acquittal in C.C. No.90 of 2011 dated 5.3.2011.
The petitioner was granted a TFT license on 27.5.2011 in respect of the toddy shop at Chandapur village. A criminal case, in COR No.160/2010-11 dated 3.9.2010, was registered against the petitioner under Section 37(a) of the A.P. Excise Act, 1968, alleging adulteration of toddy. The petitioner’s license was suspended on 14.9.2010. Thereafter a notice was issued on 8.10.2010 calling upon the petitioner to show cause why his license should not be cancelled. The petitioner’s license was, thereafter, cancelled by proceedings of the Prohibition & Excise Superintendent, Kamareddy dated 29.10.2010. Aggrieved thereby
the petitioner preferred an appeal the 1st respondent who, by proceedings dated 27.11.2010, dismissed the appeal holding that the petitioner had submitted an application on 13.9.2010 requesting that the second sample bottle be sent for analysis to an independent laboratory after lapse of the stipulated time; the petitioner did not submit his explanation to the show cause notice within time; his license was cancelled thereafter; a copy of the cancellation order was served on him; and the proceedings of the 2nd respondent dated 29.10.2010, cancelling the petitioner’s license and in refusing to send the second sample to an independent laboratory, was valid. After the appellate authority passed the order dated 27.11.2010, confirming the order of the 2nd respondent dated 29.10.2010, the petitioner was acquitted in C.C. No.90 of 2011 on 5.3.2011.
W.P. No.21934 of 2012 is filed seeking a mandamus to declare the action of the respondents, in not considering the petitioner’s representations dated 30.6.2012 and 10.7.2012, as illegal, arbitrary and unconstitutional; and to consequently direct the respondents to renew the petitioner’s license, in respect of the toddy shop at Chandapur village, Tadwai Mandal, Nizamabad District, valid upto 30.9.2012 for a further period of five years from 1.10.2012 to 30.9.2017. The petitioner submitted a representation to the 2nd respondent on 30.6.2012 seeking renewal of his TFT license, which according to him was to expire by 30.9.2012, for a further block period of five years. As no orders were passed on his representation, the petitioner submitted a representation to the 1st respondent requesting him to direct the 2nd respondent to
renew his TFT licence. As no orders were passed on his representations, the petitioner has invoked the jurisdiction of this Court.
The only contention urged by Sri B. Sairam Goud, Learned Counsel for the petitioner, is that, since the petitioner has been acquitted in the criminal case instituted against him, suspension and cancellation of his TFT license necessitates being set aside, and his license being extended for a further block period of five years from 1.10.2012 to 30.9.2017. Learned counsel would rely on K. Narayana v. Superintendent of Excise, Mahabubnagar[1] ; Toddy Tappers Cooperative Society, Ramachandrapuram v. Government of A.P.[2] ; Toddy Tappers Cooperative Society, Agaram v. Collector (Excise), Mahaboobnagar[3] ; R.Yadaiah v. Prohibition and Excise Superintendent[4] ; Mallaiah v. The Superintendent of Excis e[5] ; and TCS Kosgi Group rep. by its Licensee M.Chandraiah v. Prohibition & Excise Superintendent[6] . He would also place reliance on the circulars dated 22.9.2012 and 24.9.2012.
On the other hand, Learned G.P. for Prohibition and Excise would submit that the proceedings instituted for suspension and cancellation of a license is independent of the proceedings initiated for criminal prosecution; mere acquittal in a criminal case would not result in the order of suspension and cancellation being set aside; in the present case both the orders i.e., the order whereby the petitioner’s licence was suspended, and the order whereby his
license was cancelled, were passed much prior to his acquittal in the criminal case; an order of cancellation of the TFT licence cannot be set aside on the basis of a subsequent acquittal in a criminal case; there is no provision under the Act conferring powers on the Commissioner of Prohibition and Excise to review the orders passed by him in appeal; and, as such, the question of petitioner’s representation necessitating favourable consideration does not arise. Learned Government Pleader would place reliance on the judgment of the Division Bench of this Court in Toddy Cooperative Society, Toddy Group of Khammam v. Stat of A.P.[7] .
Before examining the contentions urged by Counsel on either side, it is necessary to note the contents of the circular issued by the Government dated 22.9.2012 and the circular issued by the Commissioner of Prohibition and Excise dated 24.09.2012. By the circular dated 22.09.2012, the Commissioner of Prohibition and Excise was informed that Rule 6 of the A.P. Excise (Grant of License to Sell Toddy, Conditions of License and Tapping of Excise Trees) Rule, 2007 stipulated that the TCS/TFT shall be renewed after expiry of the license period of five years; the licensee was required to observe all other conditions; the formalities to be completed by TCS/TFT was prescribed in Rule 5(3) of the same Rules; blank challan forms and formats of counter-part agreements should be supplied free of cost by the department to the TCS/TFT concerned; senior officers, from the headquarters level, may be deputed to the major toddy districts to ensure smooth license renewal operations; complaints, regarding
failure to renew licenses, should be duly registered and remedial action taken; and the complaint register should be monitored every day till the renewal process was completed. The Commissioner was requested to issue suitable administrative instructions to the field officials to ensure that the renewal process was completed smoothly without giving scope for any complaints. In compliance with the directions issued by the Government in its memo dated 22.9.2012, the Commissioner of Prohibition and Excise vide memo dated 24.9.2012 informed all Deputy Commissioners of Prohibition and Excise of the instructions issued by the Government in its memo dated 22.9.2012. He directed the Deputy Commissioners to scrupulously follow the said Government instructions, and informed them that any deviation would be viewed seriously. Both the memo issued by the Government dated 22.9.2012, and the Commissioner of Prohibition and Excise dated 24.9.2012, relate to renewal of TFT licenses.
It is not in dispute that cancellation of a TFT licence would disentitle the licensee from being granted renewal, as his license has already been cancelled. The only question which necessitates examination is whether the subsequent acquittal of the petitioner in the criminal case would necessitate the prior orders, of suspension and cancellation of his licence, being set aside?
It is necessary, at this stage, to refer to the judgments relied on behalf of the petitioner. I n K. Narayana1 , a writ of mandamus was sought to restrain the respondents from proceeding to cancel or suspend the licence of the excise shops of the petitioners on the ground that no order had been passed by the
respondents cancelling their licenses for non-payment of rentals. This Court held that the licensee was entitled to run the shop for the licence period provided he complied with the conditions of the licence, for the breach of which action could be taken to suspend or cancel the licence after giving him an opportunity of being heard; though there was no specific rule, or provision in the Act, regarding service of notices and orders of cancellation or suspension, it was implicit in the very nature of things that an order of cancellation or suspension must be served on the petitioner especially as he had a right of appeal under Section 63 of the Excise Act; even otherwise, the petitioner’s valuable right to carry on business was affected by the cancellation of his licence; and it is only if he is informed that his license had been cancelled could any further action be taken on the basis of the cancellation of the licence; the reasonable modes of service of notice were through registered post to the address given by the licensee or through personal service or atleast by serving on any one of his authorized agents in the shop at which business was being carried on; in case the addressee was not found, it must be effected by way of substituted service including by pasting it on the door of the residence of the person; in the present case none of the reasonable modes of service were resorted to; the orders of suspension and cancellation were pasted on the door of the arrack depot which was always kept under lock and key as arrack was stored therein; in such circumstances, it could not be said that the order of cancellation had been served; unless the order is served on a party, against whom the said order is passed, it does not
have any effect; and, in the case on hand, none of the reasonable modes of service were undertaken, and it was not an effective mode of service. It is in such circumstances that this Court held that all further proceedings, taken pursuant to the order of cancellation, were illegal and arbitrary.
I n Toddy Tappers Cooperative Society,
Ramachandrapuram2 this Court held that, as long as the scheme was in force, it was not open to the state government to give special instructions in derogation of the general scheme; the state government, having evolved a general scheme, could not issue a special order in derogation thereof; the state government or the excise authorities had, therefore, to renew the license; and they could not refuse to renew the license as long as the society fulfilled the terms of the scheme evolved by the government.
I n Toddy Tappers Cooperative Society, Agaram3 , this Court relied on the memo dated 19.9.1979 wherein it was held that if the criminal proceedings launched against the license holder, for adulteration of toddy with chloral hydrate, ended in acquittal he was entitled to be granted a licence, or for renewal of his licence, as the case may be. I n Mallaiah5 , this Court held that the authorities could not refuse renewal of a license merely because of the pendency of departmental proceedings or criminal proceedings, as mere filing of a criminal case would not necessitate the conclusion that the petitioners had indulged in a criminal act. I n TCS Kosgi Group rep. by its Licensee M.Chandraiah6 this Court, relying on Mallaiah5 , held that a request for renewal of the licence could not be rejected on the
mere ground of pendency of a criminal case.
I n R. Yadaiah4 , the petitioners were acquitted in the criminal case on 6.4.2001. The Prohibition and Excise Superintendent, in exercise of his powers under Section 31(1)(b), issued proceedings dated 2.8.2001 and cancelled the petitioner’s license. This Court, relying on its earlier judgment in Toddy Tappers Cooperative Society, Agaram3 , held that, if the licensee is acquitted in the criminal case, he is entitled to the grant or renewal of licence. This Court, relying on Mallaiah5 , further held that refusal by the authorities to renew the petitioner’s TFT licence, on the ground that the licensee was involved in adulteration cases, and their action in putting the shops to auction, pending criminal proceedings, was not legal. This Court also held that, when on same set of facts a competent criminal court had arrived at a particular conclusion, the licensing authority was expected to take into consideration the said fact also, while making an order either renewing or cancelling the licence; and to this extent, at least, the acquittal recorded by the competent criminal court was relevant.
However, in Toddy Cooperative Society, Toddy Group of Khammam7 , a Division bench of this Court observed:-
“……….A close scrutiny of the law laid down by the Supreme Court as well as this Court would clearly indicate that the scope of departmental and criminal proceedings is different and distinct from each other. Mere acquittal will not entail the departmental proceedings as illegal. If the departmental proceedings are already culminated into imposition of punishment, subsequent acquittal in the criminal case will not entail the delinquent to renew the earlier order passed imposing punishment/cancellation of licence for violating the conditions of the
licence, if any.
It is fairly well settled that the finding of the criminal court is not binding in civil proceedings/departmental enquiry, whereas the findings recorded in the civil proceedings will have a pervasive value in the criminal proceedings………….” (emphasis supplied)
In view of the law laid down by the Division Bench of this Court, in Toddy Co-operative Society, Toddy Group of Khammam7 , reliance placed by Sri B. Sairam Goud, Learned Counsel for the petitioner, on judgments, which were rendered earlier by Single Judges of this Court, are of no avail. In the present case, as the proceedings initiated under the Act had already culminated in the cancellation of the petitioner’s licence, his subsequent acquittal in the criminal case will not confer on him any right to seek review of the earlier order whereby his license was cancelled for violation of the conditions of licence.
As the order of cancellation of the petitioner’s license has been subjected to challenge on the sole of ground of his subsequent acquittal in the criminal case instituted against him, the order of cancellation passed by the 2nd respondent, and confirmed by the 1st respondent, does not necessitate interference in proceedings under Article 226 of the Constitution of India. As there is no provision in the Act conferring power, either on the 1st respondent or the 2nd respondent, to review their orders the petitioner’s representation seeking renewal of his licence, on the ground of his subsequent acquittal in the criminal case, could not have been, and was rightly not, entertained.
Both the Writ Petitions are dismissed. The Miscellaneous Petitions pending, if any, shall also stand dismissed. However, in
the circumstances, without costs.
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27-12-2012
asp
2 issues framed by the court
Whether subsequent acquittal in criminal proceedings entitles a licensee to set aside or review an earlier departmental order cancelling the license.
Merely because the proceedings were culminated, does the cancellation of a license incur the right to seek review.
Colour shows how this judgement treated each authority
K. Narayana v. Superintendent of ExciseReferred¶14
K. Narayana v. Superintendent of Excise, Mahabubnagar
Toddy Tappers Cooperative Society, RamachandrapuramReferred¶17
Toddy Tappers Cooperative Society, Ramachandrapuram v. Government of A.P.
Toddy Tappers Cooperative Society, AgaramReferred¶18
Toddy Tappers Cooperative Society, Agaram v. Collector (Excise), Mahaboobnagar
Mallaiah v. Superintendent of ExciseReferred¶19
Mallaiah v. The Superintendent of Excise
TCS Kosgi GroupReferred¶19
TCS Kosgi Group rep. by its Licensee M.Chandraiah v. Prohibition & Excise Superintendent
Toddy Cooperative Society, KhammamDistinguished¶22
Toddy Cooperative Society, Toddy Group of Khammam v. State of A.P.
2 provisions across 2 enactments
Petitioner
Prohibition & Excise Superintendent
Appellate Authority (1st Respondent)
RAMESH RANGANATHAN
As recorded by the court registry
Judgements on the same questions, provisions and authorities, from every court
