IN THE HIGH COURT OF JUDICATURE, ANDHRA PRADESH AT HYDERABAD (Special Original Jurisdiction) TUESDAY, THE NINTH DAY OF JUNE TWO THOUSAND AND NINE PRESENT THE HON'BLE MR JUSTICE C.V.NAGARJUNA REDDY WRIT PETITION No.11189 of 2009 Between: 1 V. Anjaiah Goud S/o. Peddaiah R/o. H.No. 2-45,. Indira Nagar Kalwakurthy, Mahabubnagar District. 2 P. Jangaiah Goud S/o. Buchanna Goud R/o. H.No. 4-148,. Subhash Nagar, Kalwakurthy, Mahabubnagar District. 3 Buchanna Goud S/o. Muthyalu Kalwakurthy, Mahabubnagar District. 4 Nagarjun Goud S/o. Keshavulu R/o. H.No. 2-187, Indira Nagar, Kalwakurthy, Mahabubnagar District. 5 Sreeramulu Goud S/o. Balram R/o. H.No. 18-114, Jansilakshmi Bai Road, Kalwakurthy, Mahabubnagar District. 6 Bekkari Balram Goud S/o. Ramaiah R/o. H.o. 14-2, Hanuman Nagar, Kalwakurthy, Mahabubnagar District. 7 Narayana Goud S/o. Balaiah R/o. 12-76, Kalyan Nagar, Kalwakurthy, Mahabubnagar District. 8 R. Ramaswamy GOud S/o. Ramaiah R/o. H.No. 2-124, Indira Nagar, Kalwakurthy, Mahabubnagar District. ..... PETITIONERS AND 1 The State of Andhra Pradesh Rep. its Commissioner of Prohibition & Excise Hyderabad. 2 The Director, Prohibition & Excise (Enforcement) A.P Hyderabad. 3 The Superintendent (FAC) Prohibition & Excise, Nagarkurnool, Mahabubnagar District. 4 The Sub Inspector of Police Prohibition & Excise , Kalwakurthy, Mahabubnagar District. .....RESPONDENTS Counsel for the Petitioners:MR. S.LAKSHMINARAYANA REDDY FOR MR.G.VENUGOPAL REDDY Counsel for the Respondents:AGP FOR PROHIBITION & EXCISE The Court made the following: ORDER: In this writ petition, the petitioners sought for a writ of mandamus to set aside order, dated 13.01.2009 of respondent No.3 whereby he suspended the licenses bearing No.10 of the petitioners for selling toddy in Counter Nos.1 to 4, 6, 7, 9 and 10 of shop No.1 of Kalwakurthy Village and Mandal, Mahabubnagar District, and also to direct the respondents not to proceed in pursuance of show cause notice, dated 23.05.2009. The petitioners are the TFT licensees of individual counters attached to shop No.1 of Kalwakurthy. On the basis of inspection conducted in counter No.5, proceedings were initiated against the petitioners. By order, dated 13.01.2009, respondent No.3 suspended the petitioners’ licenses in respect of 9 counters. Later on, in exercise of the power conferred by Section 31(1) of the Andhra Pradesh Excise Act, 1968 (for short ‘the Act’), show cause notices were issued by him on 23.05.2009 calling upon the petitioners to show cause why their licenses shall not be cancelled. At the hearing, Sri S.Lakshminarayana Reddy, learned counsel for the petitioners submitted that the order of suspension is not preceded by a notice as envisaged in proviso to Section 31(1) of the Act and, therefore, the said order is liable to be quashed. He further submitted that as the very inspection itself, on the basis of which the show cause notices were issued, was illegal, respondent No.3 is not entitled to proceed with the further action in pursuance of the said show cause notices. In support of the first contention that an order of suspension should be preceded by a notice, the learned counsel for the petitioner placed reliance on the Division Bench judgment of this Court in Goka Bujjamma v. Prohibition and Excise Superintendent, Srikakulam and others[1]. Section 31 of the Act empowers the licensing authority to cancel or suspend the license. However, proviso to Section 31 of the Act stipulated that no license or permit shall be cancelled or suspended unless the holder thereof is given an opportunity of making his representation against the action proposed. The question as to the interpretation of the said proviso fell for consideration of the Full Bench of this Court in Tappers Cooperative Society, Maddur v. Superintendent of Excise, Mahaboobnagar[2]. The Full Bench has drawn a distinction between suspension as an interim measure pending enquiry and suspension as a penalty. It held that in the former case, it is not incumbent upon the licensing authority to issue a notice before suspending the license, while in the latter case, proviso to Section 31 of the Act is attracted and a prior notice is required to be given. It held in paragraph 44 as under: “The power of suspension which is concomitant or adjunct is no doubt restricted by the statutory provision under the proviso in question to pass final orders of suspension but that power cannot be said to have been taken away to pass an interim order of suspension not intended to be a penalty but only interim measure to pass effective orders. This conclusion of ours applies with greater force when we notice that we are concerned with the liquor licenses in which the citizen has no right guaranteed under Article 19(1)(g) of the Constitution of India but only a privilege. No doubt once a licence is granted valuable right would accrue to him and that can be taken away as per the provisions of the Act. But as a rule of construction the proviso cannot have a larger affect than it intended to govern the final disciplinary proceedings of suspending or cancelling a licence or permit. Rule 18 of Andhra Pradesh Rectified Spirit Rules, 1971 is as follows: “18. (1) If the licensee or permit holder under these rules is guilty of breach of any of the rules, his licence or permit is liable for cancellation and he will also be prosecuted under the relevant provisions of the Act. Provided that subject to the provision of Section 47 of the Act, the licensing authority may accept from any person guilty of breach of any provision of the Act or the Rules or from any person whose property is liable to confiscation, such compounding fees as may be necessary, subject to a maximum of Rs.1,000/- in lieu of punishment for breach of any of the provision of the Act or of the rules or of confiscation of the property. (2) The licence is also liable to be suspended by the licensing authority pending investigation or enquiry into breach of these rules or licence conditions by the licensee or by any person in his employ. Provided that revocation under sub-rule (1) and suspension under sub-rule (2) shall not be made until the holder of the licence has been given an opportunity showing cause against the action proposed to be taken. (3) Every such order shall be in writing and shall specify the reasons for the suspension or revocation and shall be communicated to the licensee. (4) When a licence is cancelled or suspended under this rule, the holder of the licence shall not be entitled to claim from the Government any compensation or refund of licence fee for such cancellation or suspension.” It is clear that the rule provides suspension pending an investigation and the proviso enjoins the authorities to give opportunities. The question is would this rule lend support to the petitioner. To our mind it is not. If the proviso to sec.31(1) is sufficient and the authorities are bound to issue the notice even for suspension pending enquiry the sub-rule 2 with its proviso is unnecessary as the law presumes such power pending enquiry. The rule specially provided an opportunity even for suspension pending enquiry. It shall be noticed that under Rule 18 there is no suspension as a substantive punishment but provides only for cancellation and a suspension pending enquiry. Further it is not permissible rule of construction to construe the power under the statute with reference to the rule made by the Executive even though the rules have statutory powers. Hence, we are clearly of the opinion that the licensing authority can suspend a licence or permit pending final orders.” (Emphasis added) The judgment of the Full Bench was not brought to the notice of the Division Bench in Goka Bujjamma (1 supra). Therefore, in the face of the Full Bench judgment, the judgment of the Division Bench has not laid down good law. As regards the second contention of the learned counsel, I find no merit in it either. This contention is based on the fact that the inspection was conducted only in respect of counter No.5 whereas the show cause notices for cancellation were given in respect of other counters also. Prima facie, this contention is not tenable because in paragraph 1 of the show cause notices, it is mentioned that when the inspecting officials demanded, the licensee of counter No.5 disclosed that he was selling toddy on behalf of 8 other TFT licensees also and that the toddy was found adulterated with chloral hydrate. Whether the said statement was correct or not is required to be decided by the licensing authority after the petitioners submit their objections. Therefore, in the face of the said allegation, it is not proper for this Court to interdict the licensing authority from exercising its statutory powers vested in Section 31(1) of the Act. Therefore, I do not find any jurisdictional error in respondent No.3 issuing the show cause notices on the basis of the inspection conducted by the Assistant Commissioner of Prohibition and Excise, Ranga Reddy, on 12.01.2009. The petitioners are permitted to submit all their legally permissible objections before respondent No.3, who shall consider the same and pass appropriate orders after giving proper opportunity of hearing to them. The writ petition is accordingly, dismissed. As a sequel to dismissal of main petition, WPMP.No.14372 of 2009 filed by the petitioners for interim relief is disposed of as infructuous. C.V.NAGARJUNA REDDY, J 9th JUNE, 2009. kvni [1] 2003(2) ALT 549(D.B.) [2] 1984 (2) APLJ 1