IN THE HIGH COURT OF KERALA AT ERNAKULAM PRESENT : THE HONOURABLE MR. JUSTICE THOTTATHIL B.RADHAKRISHNAN WEDNESDAY, THE 9TH DECEMBER 2009 / 18TH AGRAHAYANA 1931 WP(C).No. 28837 of 2009(Y) ----------------------------------- PETITIONER(S): --------------------- DARLEY GEORGE, W/O.GEORGE, AGED 48, MATTATHIL KULATHINANIL HOUSE, KURUVILANGAD, KOTTAYAM, PIN-680036, JOINT LICENSEE AND MANAGING PARTNER, JAIRAJ LODGE, PERUMBAVOOR. BY ADV. SRI.S.SREEKUMAR SRI.P.MARTIN JOSE SRI.P.PRIJITH SRI.S.VAIDYANATHAN RESPONDENT(S): ---------------------- 1. STATE OF KERALA, REP. BY ITS PRINCIPAL SECRETARY(TAXES), GOVERNMENT SECRETARIAT, THIRUVANANTHAPURAM. 2. THE COMMISSIONER OF EXCISE, THIRUVANANTHAPURAM. 3. THE DEPUTY COMMISSIONER OF EXCISE, ERNAKULAM. 4. THE CIRCLE INSPECTOR OF EXCISE, KUNNATHUNADU, PERUMBAVOOR. 5. M.D.RAJAN, S/O.LATE M.N.DAMODARAN, JAYA RAJ BHAVAN, PERUMBAVOOR. 6. V.K.MALLIKA, W/O.LATE M.N.DAMODARAN, JAYARAJ BHAVAN, PERUMBAVOOR. ADV. SRI.RAJESH VIJAYAN FOR R6 SRI.G.SREEKUMAR (CHELUR) FOR R5 SRI.K.RAVI (PARIYARATH) FOR R5 GOVERNMET PLEADER MR. V. MANU THIS WRIT PETITION (CIVIL) HAVING BEEN FINALLY HEARD ON 09/12/2009, THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING: WP(C).No. 28837/2009 APPENDIX PETITIONER'S EXHIBITS :- P1 : COPY OF THE ORDER NO.XC6-15106/2001/R.DIS DATED 19.6.01 OF 1st RESPONDENT. P2 : COPY OF DEED DATED 9.11.2001 P3 : COPY OF THE AGREEMENT DATED 1.4.2008 EXECUTED BETWEEN PEITIONER AND 5TH RESPONDENT. P4 : COPY OF THE AGREEMENT DATED 1.4.2008 EXECUTED BETWEEN PEITIONER AND 5TH RESPONDENT. P5 : COPY OF REPRESENTATION DATED 11.5.2009 BEFORE THE 3RD RESPONDENT. P6 : COPY OF THE LICENCE DATED 6.4.2009 ISSUED BY LOCAL AUTHORITY FOR THE YEAR 2009-2010. P7 : COPY OF THE ORER CETIFICATE DATED 1.4.2009 ISSUED BY THE SALES TAX OFFICER. P8 : COPY OF THE JUDGMENT IN WP(C) NO.13798/09 DATED 11.6.2009. P9 : COPY OF THE ADVOCATE NOTICE DATED 15.5.2009 ON BEHALF OF RESPONDENTS 5 AND 6. P10 : COPY OF OBJECTION FILED BY THE 5TH RESPONDENT BEFORE 3RD RESPONDENT. P11 : COPY OF THE ORDER DATED 30.6.2009 OF 3RD RESPONDENT. P12 : COPY OF THE JUDGMENT IN WP(C) nO.22217/09 DATED 5.8.2009 PASSED BY THIS HONOURABLE COURT. P13 : COPY OF THE APPEAL DATED 11.8.2009 FILED BY THE PTITIONER BEFORE THE 2ND RESPONNDENT. P14 : COPY OF THE ORDER DATED 29.8.2009 SERVED ON THE PETITIONER ON 15.9.2009 P15 : COPY OF REVISION PETITION FILED BY THE PETITIONER BEFORE THE 1ST RESPONDENT P16 : COPY OF THE JUDGMENT IN WP(C) NO.26407/09 DATED 18.9.2009 PASSED BY THIS HONOURABLE COURT. P17 : COPY OF THE ORDER IN REVISION PETITION DATED 1.10.2009. P18 : COPY OF ORDER ISSUEUD BY 1ST RESPONDENT DATED 30.10.2009. THOTTATHIL B. RADHAKRISHNAN, J -------------------------------------------------------------- WP(C) NO.28837 OF 2009 & I.A. No.15336/09 ---------------------------------- Dated this the 9th day of December, 2009 JUDGMENT Sometime in the 1970's, an FL-3 licence was issued to a partnership firm which is hereinafter called 'Jai Raj Lodge'. Renewed from time to time, the then managing partner M.N. Dhamodharan was shown as the licensee on behalf of the firm of which, Dhamodharan, his wife Mallika and their sons, Rajan and Jayaraj were partners. Following the demise of Dhamodharan, the FL -3 licence for the firm was issued in the name of Mallika. Thereafter, it was issued in the joint names of Jayaraj and Rajan. Subsequently, the firm was re-constituted, Jayaraj going out and the petitioner Darley George joining as a partner. The licence was thereafter issued in the name of the joint managing partners Rajan and Darley George, from 2001-2002, or so. 2. The two star classification certificate issued to the firm by the Tourism Department in the Government of India had expired in 2006. It is stated that the process of renewal of that certificate is progressing with site inspections etc. Disputes cropped up between the partners and issues WP(C) NO.28837 OF 2009 & I.A.No.15336/09 2 arose in connection with the renewal of the FL-3 licence for the year 2009- 2010. The application filed by the petitioner Darley George for renewal of licence was objected to by Rajan who is a 5th respondent herein. The Deputy Commissioner refuse to renew the licence. The petitioner appealed to the Commissioner . This Court directed the Commissioner to decide that appeal and also any request for grant of licence even in the interregnum. That direction was obviously to take decision in accordance with law. The Commissioner refused to issue any provisional order and ultimately affirmed the decision of the Deputy Commissioner. In doing so, the Commissioner stated that the practice in procedure, adopted in cases of licence for firms and joint licencees is that all the joint licencees have to make a common application. This means that the joint licensees who hold the licence on behalf of the firm have to join the application for renewal. The petitioner moved the government seeking revision of Commissioner's decision. That was also decided against the petitioner. 3. Even when this writ petition was filed on 12.10.2009 the petitioner and respondents 5 and 6 were at logger heads. The stiff opposition of respondent No.5 to the renewal of the licence on the application of the petitioner is evident from a perusal of Ext.P10 filed by the 5th respondent before the Deputy Commissioner. Even before the WP(C) NO.28837 OF 2009 & I.A.No.15336/09 3 Government, those objections were pressed. Obviously therefore, neither the Government nor the Commissioner could be found fault with, for having issued the impugned orders holding that there is no application by the joint licensees. 4. With the passage of time, I.A.No.15336/09 is filed stating that it contains the terms of a compromise between the petitioner and respondents 5 and 6 and that those terms may be recorded. A reading of those terms would show that petitioner and respondents 5 and 6 have reached at certain proposals about the final settlement of dispute between them, including that respondents 5 and 6 would go out of the firm and transfer their interest in the firm and it assets to the petitioner. I would view the terms in I.A.No.15336/09 as only proposals which the parties intend to conclude. Obviously therefore, as of now, the firm stands as it is. If that were so the departments could have processed the application for renewal, had it been made by the joint licencees. 5. As rightly pointed out by the learned Government Pleader, the department cannot be accused for the situation, which is essentially the making of the petitioner and respondents 5 and 6, depending upon their private commercial bargains. 6. Now, the learned counsel appearing for the petitioner and WP(C) NO.28837 OF 2009 & I.A.No.15336/09 4 respondents 5 and 6 states that the joint licensees in terms of the licence that they had, have resolved the disputes between them and have no objection to the petitioners application for renewal of the licence being considered. But this is not permissible in view of the fact that the joint licensees have not jointly applied for renewal of the licence. I do not find any illegality, impropriety, legal infirmity, error of jurisdiction or arbitrarinesses in the official respondents insisting that the joint licencees should make a joint application. The subject matter of the licence is within the exclusive privilege of the state; and its officers have to act in the best interest of protecting the Government exchequer, which means that they have to plug every identifiable and apparent loophole, which may later turn out to be the cause of any concern for the government when it comes to recovery of abkari dues. 7. Having found that the respondents are right on insisting on joint application, the question now is whether the joint licencees can at this point of time request consideration of an application for renewal, by making a joint application. Taking into consideration the time lag after 31.3.09, some of the rules among the Foreign Liquor Rules and the Abkari Shops Disposal Rules may tend to suggest that time may be ripe for the government to cancel the licence in question. But, if the application filed WP(C) NO.28837 OF 2009 & I.A.No.15336/09 5 by the petitioner for renewal of the licence is treated as a joint application by permitting the other co-licensees to join that application by making appropriate supplemental request supported by affidavits, that could rectify the defect in the original application and should enable the petitioner along with the co-licensee to seek renewal of the licence without re-constitution of the firm. As already noted, enormous time has been taken in proceedings before the Deputy Commissioner, Commissioner and the State Government. State had to employ its lawyers to contest the different writ petitions filed in relation to this matter, which is nothing but the bickerings and disputes between the partners of a commercial deal in running a Bar Hotel with two star licence. The official energy and time of senior officers have been spent. This has to be compensated, if the application is to be recommended as stated in this paragraph. 8. Taking all relevant facts and circumstances in to consideration, and with I.A.No.13356/09 on record, without tying down the petitioner and respondents 5 and 6 to the terms thereof, the impugned orders are set aside facilitating the co-licencee to join the petitioner's application for renewal of licence by filing appropriate supplementary application supported by affidavits of the petitioner and the co-licensees unconditionally undertaking to satisfy all statutory requirements. If such WP(C) NO.28837 OF 2009 & I.A.No.15336/09 6 request is supported by further affidavits of the other partners of the firm, the Deputy Commissioner will take up that application and consider it in accordance with law as if it were an application filed by the joint licencees on the date on which the petitioner had filed the application for renewal initially. This shall however be on condition that parties pay the 1st respondent State of Kerala an amount of Rs. 10 lakhs as costs payable by D.D to the Deputy Commissioner. Needless to say any further request on the basis of two star classification would be considered in accordance with law as and when sought for. This judgment containing the aforesaid directions is being issued on the very peculiar facts and circumstances of this case and does not lay down any principle of law to be followed as a precedent. THOTTATHIL B. RADHAKRISHNAN, JUDGE mns