IN THE HIGH COURT OF KERALA AT ERNAKULAM PRESENT : THE HONOURABLE MR. JUSTICE P.N.RAVINDRAN TUESDAY, THE 29TH MARCH 2011 / 8TH CHAITHRA 1933 WP(C).No. 18842 of 2010(E) ------------------------------------- PETITIONER(S): -------------------- 1. OMANAKUTTAN.C., S/O.CHANDRAN, AGED 50 YEARS,RESIDING AT ODAYIL VADAKETHIL, CANTONMENT NORTH, KOLLAM P.O., KOLLAM DISTRICT. 2. UPENDRA BABU, S/O.YESODHA, AGED 47 YEARS RESIDING AT CHETTIYARUVILA VEEDU, VADAKEVILA P.O., KOLLAM DISTRICT. 3. KAMALASANAN, S/O.NARAYANAN, AGED 60 YEARS, RESIDING AT VAYALIL, PUTHENVEEDU, ASRAMAM P.O., KOLLAM DISTRICT. BY SRI.K.RAMAKUMAR, SENIOR ADVOCATE BY ADVS. SRI.T.RAMPRASAD UNNI SMT.SMITHA GEORGE RESPONDENT(S): ------------------------- 1. THE COMMISSIONER OF EXCISE, KERALA, THIRUVANANTHAPURAM, PIN CODE 695 102. 2. THE DEPUTY COMMISSIONER OF EXCISE, KOLLAM, PIN 691510. 3. THE EXCISE INSPECTOR, EXCISE CIRCLE OFFICE, KOLLAM, PIN 691510. 4. THE EXCISE RANGE OFFICER, KOLLAM, PIN 691510. R2 & R4 BY GOVERNMENT PLEADER SRI.BASANT BALAJI THIS WRIT PETITION (CIVIL) HAVING BEEN FINALLY HEARD ON 06/09/2010, THE COURT ON 29/03/2011 DELIVERED THE FOLLOWING: W.P.(C) NO.18842/2010 APPENDIX PETITIONER'S EXHIBITS P1:- COPY OF THE PROCEEDINGS OF THE COMMISSIONER OF EXCISE, DTD. 29.5.2010. P2:- COPY OF THE REPRESENTATION DTD. 5.6.2010 SUBMITTED BY THE PETITIONERS BEFORE R1. P3:- COPY OF THE PROCEEDINGS OF THE COMMISSIONER OF EXCISE NO.XA7- 14014/2010 DTD. 10.6.2010. P4:- COPY OF THE G.O.(MS) NO.26/2011/TD DTD. 14.2.2011 BY THE GOVERNMENT OF KERALA. RESPONDENT'S EXHIBITS NIL:- TRUE COPY P.A. TO JUDGE tss P.N. RAVINDRAN, J. ------------------------------- W.P.(C) No.18842 of 2010 ------------------------------- Dated this the 29th day of March, 2011 J U D G M E N T The petitioners are joint licensees of toddy shops Nos.7 to 11 in Group No.II of Kollam Excise Range. On 28.5.2010, respondents 3 and 4 seized 33 litres of spirit from the premises of toddy shop No.8 in Group No.II of Kollam Excise Range while it was being unloaded from an autorickshaw bearing registration No.KL-05 D 3335 which was stationed at a distance of 5 meters from the entrance to the said toddy shop. Pursuant thereto, Crime No.49 of 2010 of Kollam Excise Range was registered against the petitioners and the owner and the driver of the autorickshaw. The third petitioner is the first accused, the driver and the owner of the autorickshaw are accused 2 and 3, the first petitioner is the 5th accused and the second petitioner is the 4th accused in the aforesaid crime. 2. After Crime No.49 of 2000 was registered, the Deputy Commissioner of Excise, Kollam, reported the said fact to the Commissioner of Excise. The Commissioner of Excise thereupon issued Ext.P1 order dated 29.5.2010 suspending the licences issued to the petitioners in respect of toddy shops Nos.7 to 11 in Group No.II of Kollam Excise Range. The petitioners were also called upon to show cause why the licences issued to them in respect of the aforesaid W.P.(C) No.18842 of 2010 2 toddy shops should not be cancelled. Reference was made to section 26(b) of the Abkari Act and rules 5(19) and 7(31) of the Kerala Abkari Shops Disposal Rules, 2002. 3. On receipt of Ext.P1 order and show cause notice, the first petitioner submitted Ext.P2 representation dated 5.6.2010. In that representation he contended that the 3rd petitioner is not associated with toddy shops Nos.7 and 9 to 11, that the 3rd petitioner is the person concerned with toddy shop No.8 and therefore the mere fact that a case has been registered in respect of toddy shop No.8 managed by the 3rd petitioner is not a ground to suspend the licences issued in respect of the other toddy shops or to cancel the said licences. It was contended that if such a course of action is adopted, it will cause serious prejudice to the licensees of the said shops. The Commissioner of Excise considered Ext.P2 objections filed by the first petitioner and the objections filed by the other licensees and passed Ext.P3 order dated 10.6.2010 cancelling the licences issued to the petitioners to run toddy shops Nos.7 to 11 in Group No.II of Kollam Excise Range. Ext.P3 is under challenge in this writ petition. It is contended that the Commissioner of Excise has proceeded on the erroneous assumption that toddy laced with spirit was sold through W.P.(C) No.18842 of 2010 3 the toddy shops in question and that the seizure of spirit from the premises of one particular toddy shop is not a ground to proceed against the licences in respect of the other shops in that group merely because the licensees are running the shop in a group. It is further contended that even if all the allegations levelled in Ext.P1 are taken as true, the licence issued in respect of toddy shop No.8 in Group No.II alone is liable to be cancelled. 4. The third respondent has filed a counter affidavit dated 15.7.2010. It is stated therein that on 28.5.2010, 33 litres of spirit was seized from the compound of Toddy Shop No.8 in Group No.II of Kollam Excise Range, while the spirit was being unloaded from an autorickshaw bearing registration No.KL-05-D-3335, which was stationed at a distance of 5 metres from the entrance to the said shop; that thereupon C.R.No.49 of 2010 of Kollam Excise Range was registered against the petitioners; that the spirit is not meant for supply to toddy shops; that the spirit that was seized was not accompanied by a transport permit and therefore, it was concluded that it was brought for sale as spirit diluted with water or to be laced with toddy. As regards the contention of the petitioners that as the spirit was seized from the premises of toddy shop No.8, the licences in W.P.(C) No.18842 of 2010 4 respect of the other shops are not liable to be cancelled, it is contended that the petitioners are joint licensees, that they have committed breach of the conditions of the licence and also the relevant provisions of the Abkari Shops Disposal Rules, 2010, and therefore, all the licences issued to them are liable to be cancelled. 5. I heard Sri.K.Ramakumar, the learned Senior Advocate appearing for the petitioners and Sri.V.Manu, the learned Government Pleader appearing for the respondents. I have also gone through the pleadings and the materials on record. The main contention raised by the petitioners is that seizure of spirit from the premises of one particular shop cannot be a reason to cancel the licences in respect of the other toddy shops in the group. The first petitioner has in Ext.P2 representation filed by him in reply to Ext.P1 show cause notice stated that though the licences stand in the joint names of the petitioners, they are running the shops separately and therefore, any irregularity committed by the licensee who was running toddy shop No.8 (the 3rd petitioner) cannot be a reason to suspend the licences issued in respect of the other shops. I am afraid the said contention cannot be accepted. A learned single Judge of this Court has in Rarichan George v. Commissioner of Excise (2008 (2) KLT 726) W.P.(C) No.18842 of 2010 5 repelled a similar contention and held that the private agreement between the licensees of a group of toddy shops to regulate the business is not binding on the Government and such agreements are wholly irrelevant for the purpose of deciding whether the licences issued to a group of persons in respect of a group of shops is liable to be cancelled or not. 6. The next contention raised by the learned Senior Advocate appearing for the petitioners is that section 26(b) of the Abkari Act and rules 5(19) and 7(31) of the Kerala Abkari Shops Disposal Rules, 2002 are not attracted in the case on hand. Section 26 of the Abkari Act empowers the Commissioner to cancel or suspend any licence or permit granted under the Act, for various reasons including any breach, by the holder of such licence, of any of the terms and conditions of such licence or permit. Rule 5(19) of the Kerala Abkari Shops Disposal Rules, 2002 enables the Commissioner of Excise to cancel a licence issued under the rules on valid grounds. Rule 7(31) of the said rules stipulates that infraction of any of the rules or the conditions of the licence either by the licensee or by any person in his employment shall entail on the licensee the forfeiture of deposit/annual rental and cancellation of licence. Rule 7(38) W.P.(C) No.18842 of 2010 6 stipulates that the licensee shall obey all rules made under the Act or under any law governing abkari revenue, as well as those laws that may be brought into force to regulate the field. In the instant case, it is not in dispute that 33 litres of spirit was seized from an autorickshaw that was stationed 5 meters away from the entrance to toddy shop No.8 in Group No.II of Kollam Excise Range while it was being unloaded from the autorickshaw. It was not accompanied by a permit. The petitioners have not satisfactorily explained the purpose for which spirit was brought to the toddy shop. The petitioners also do not possess a licence to sell spirit. In such circumstances, it can safely be presumed that spirit was brought for the purpose of sale as spirit diluted with water or to be mixed with toddy. A learned single Judge of this Court has in Binoj v. Excise Commissioner (2004 (1) KLT 777) considered the question whether a licensee can be held responsible for sale of arrack in premises close to a toddy shop. It was held that every licensee of a toddy shop has the responsibility to see that no contraband item like arrack or spirit is stored or sold near the toddy shop and nobody is engaged in such business near the toddy shop. The learned single Judge further held that the natural presumption in the case of sale of arrack or spirit in close vicinity of W.P.(C) No.18842 of 2010 7 the toddy shop is that the licensee has complicity and he is the beneficiary. In such circumstances, as the spirit was seized while it was being unloaded from the autorickshaw which was stationed 5 meters away from the entrance to toddy shop No.8 run by the petitioners, it can safely be presumed that the spirit was brought for unauthorised sale in the toddy shop. I am therefore satisfied that the decision taken by the Commissioner to cancel the licences issued to the petitioner to run toddy Nos. 7 to 11 in Group No.II of Kollam Excise Range cannot be said to be illegal. I accordingly hold that no grounds have been made out to interfere with Ext.P3. The writ petition fails and is accordingly dismissed. No costs. P.N. RAVINDRAN, JUDGE. nj.