CWP No. 17157 of 2011 -: 1 :- IN THE HIGH COURT FOR THE STATES OF PUNJAB AND HARYANA AT CHANDIGARH 1. CWP No. 17157 of 2011 . Kuldeep Kumar ... Petitioner v. State of Punjab & another ... Respondent(s) 2. CWP No. 17420 of 2011 M/s Shree Punjab Traders ... Petitioner v. State of Punjab & another ... Respondent(s) Date of Decision: November 11, 2011. CORAM: HON'BLE MR. JUSTICE HEMANT GUPTA HON'BLE MR. JUSTICE G.S. SANDHAWALIA Present: Shri J.P. Sharma, Advocate, for the petitioner. Shri APS Mann, Additional Advocate General, Punjab for the respondents. Hemant Gupta , J. (Oral): This order shall dispose of CWP Nos.17157 and 17420 of 2011. The challenge in these writ petitions is to the order of closure of liquor vends from September 16, 2011 to September 18, 2011. The petitioners have also claimed a writ of mandamus directing the respondents to compensate the petitioners and to refund the proportionate licence fee for CWP No. 17157 of 2011 -: 2 :- the period of closure during which they could not operate their liquor vends. The petitioners are L-2 licensees in the State of Punjab for the period 1.4.2011 to 31.3.2012. Such licence is governed by the provisions of the Punjab Excise Act, 1914 (for short the Act) and the rules framed thereunder. The Central Government announced holding of Gurdwara elections under the Sikh Gurdwara Act, 1925 on 18.9.2011. The Chief Commissioner, Gurdwara Elections directed the State authorities to declare dry days during which sale of liquor becomes prohibited on 4.8.2011. Consequent to the said order, the District Magistrate passed an order on 7.9.2011 that in view of the elections, the liquor vends in the District of Sahibjada Ajit Singh Nagar shall remain closed from 16.9.2011 to 18.9.2011. Though, initially the petitioners claimed writ of certiorari to seek quashing of the direction of closing of liquor vends but the said challenge is not now insisted upon and only claim in the writ petition is to compensate by way of refund of the proportionate licence fee for the period the liquor vend remained closed in view of the directions of the District Magistrate. In reply filed on behalf of the respondents, it has been pointed out that the similar issue in respect of closure of liquor vends during the General Elections of the Parliament and the State Legislature was raised and decided against the licensees vide judgment dated 29.5.1997 in CWP No.652 of 1997 (M/s Satnam Singh and Co. v. State of Punjab and others). A copy of the same has been attached along with written statement as Annexure R-1. It is pointed out that in terms of Sections 54 of the Act, the District Magistrate has the power to order closure of liquor vends for such period as he may think necessary for the preservation of the public peace. It CWP No. 17157 of 2011 -: 3 :- is further pointed out that Rule 37 (9) of the Punjab Liquor Licence Rules, 1956 (for short Rules) contemplates that every licensee shall keep his shop closed on Republic Day, Independence Day and on Mahatma Gandhi's birthday and on such other days not exceeding three days in a year as may be declared by the Government in this behalf. Rule 37 (35) of the Rules provides that no compensation shall be due for any closure made under Section 54 of the Act. Learned counsel for the petitioners relies upon the judgments of the Hon'ble Supreme Court in State of U.P. And others v. Jagjeet Singh and others (2003)8 SCC 270 and Secretary, Department of Excise & Commercial Taxes and others v. Sun Bright Marketing (P) Ltd., Chhattisgarh and another (2004)3 SCC 185 to contend that on account of closure of liquor vends, petitioners are entitled to be compensated with proportionate reduction in the licence fee. However, both the judgments are not applicable to the facts of the present case. In Jagjeet Singh's case (supra), the claim for proportionate reduction in licence fee was allowed as there was no provision in the rules at the relevant time for denying remission of the licence fee. Rule 34 denying such proportionate reduction in tax fee was amended on 10th March, 1992, which was further amended in March 1998. It was concluded as under:- “17. The position which finally emerges out is that an application for remission/damages for closure of shops in entirety auctioned in a group as is the case in the appeals in hand would be maintainable. But it is for the authorities concerned to consider the merit of the claim for CWP No. 17157 of 2011 -: 4 :- remission/damages and pass any appropriate order looking to the facts and circumstances of the case in accordance with law. It would be the position as it relates to cases prior to the amendment of Rule 34 in 1998.” Therefore, the aforesaid judgment is in terms of the rules then applicable in the State of U.P., whereas, in terms of Rule 37(35) of the rules, there is a provision that no compensation shall be due for any closure made under Section 54 of the Act. In Sun Bright Marketing (P) Ltd.'s case (supra) claim of proportionate reduction was accepted in view of the fact that liquor vend was situated beyond the municipal limits where the election was being conducted. It was found that case is covered by Clause VIII of the General Licence Conditions and not by Clause V of such conditions which permits the closure of liquor vends for the purpose of election in the municipal limits. Clause VIII of the Conditions was to keep the shops open. Sub- clause 3 of the said Clause provides that shops shall remain closed in any area, or areas for such period as the State Government may in public interest deem necessary to do, it provided that when a shop is closed under this rule, the Collector may with the previous sanction of the Excise Commissioner, award compensation to the licensee for the loss of profits. On the other hand, Clause V contemplated the closure of liquor vends during Lok Sabha and Assembly general elections/by-elections, and also elections of local bodies. In respect of local bodies, the shops of only those areas will remain closed where elections are being held. Since the liquor vend was situated not within the municipal limits of the local area where the municipal elections were being held, it was found that the closure of liquor vends fall CWP No. 17157 of 2011 -: 5 :- in Clause VIII and, thus, the liquor vendor is entitled to compensation. A Division bench of this Court in CWP No.652 of 1997 (M/s Satnam Singh and Co. v. State of Punjab and others), decided on 29.5.1997, was seized of the similar claim for proportionate reduction in licence fee on account of directions of the District Magistrate for closure of shops as per the directions of the Election Commissioner on account of elections to the legislative assemblies as well as elections conducted under the Sikh Gurdwara Act, 1925. Such claim was declined. It was stated to the following effect:- “A bare reading of Section 54(1) shows that the District Magistrate or the Sub-Divisional Magistrate can order the closure of any shop in which an intoxicant is sold if he thinks that it is necessary to do so for preservation of public peace. Under Section 54(2), the Executive Magistrate can order the closure of such shop if any riot or unlawful assembly is apprehended or occurs in the vicinity of such shop. If riot or unlawful assembly occurs, the licensee is required to close his shop without any order. The exercise of power under Section 54(1) is subject to two conditions namely, (i) District Magistrate or the Sub-Divisional Magistrate must be satisfied that the closure of liquor vends is necessary for the preservation of public peace and (ii) notice in writing is issued to the licensees. Neither under Section 54(1) nor under Section 54(2) there is any limitation on the duration for which a shop selling intoxicant can be closed. The use of expression “at such time or for such period as he may think necessary” in CWP No. 17157 of 2011 -: 6 :- Section 54(1) and the use of experience “for such period as he may think necessary” in Section 54(2) shows that the legislature has intentionally refrained from restricting or limiting the time period for which an order, passed under Section 54(1) or Section 54(2) may remain operative. Rather, complete freedom has been given to the competent authority to exercise the power to order the closure of any shop selling intoxicant if it is satisfied that such an order is necessary for preservation of public peace or to prevent riot or unlawful assembly. ...” “In our opinion, Shri Sibal is right in his submission that the petitioners are neither entitled to any compensation for the alleged loss of business nor are they entitled to remission in the amount of licence fee. Para no.5 of the conditions of auction notified by the respondents clearly mentions that no remission of licence fee shall be granted except in accordance with the provisions of law and no representation from the licensed vendors for the grant of relief on account of sales falling short of their expectations shall be entertained. Proviso to clause 5 of the conditions of auction entitles the government to consider the grant of appropriate relief in the light of prevailing situation. Similarly, clause 16(1) unequivocally speaks against the grant of compensation or damages for alleged short, supply to the licensee of country liquor. That apart, Rule 37(35) contain an express bar against the grant of compensation due to the closure of liquor vends under Section CWP No. 17157 of 2011 -: 7 :- 54. In view of this statutory provision, it is not possible for the High Court to issue a mandamus to the respondents to compensate the petitioners for the alleged loss suffered by them or to direct the respondents to give remission in the licence fee. ...” In view of the Division Bench judgment of this Court arising out of the similar circumstances and the similar order of the District Magistrate, we do not find any merit in the present petitions. The same are dismissed with no order as to costs. [ Hemant Gupta ] Judge [ G.S. Sandhawalia ] November 11, 2011. Judge Pka/kadyan