IN THE HIGH COURT OF KERALA AT ERNAKULAM PRESENT : THE HONOURABLE MR. JUSTICE ANTONY DOMINIC WEDNESDAY, THE 20TH AUGUST 2008 / 29TH SRAVANA 1930 WP(C).No. 21186 of 2008(V) -------------------------- PETITIONER: -------------- KURUVILLA ULAHANNAN, 72 YEARS S/O.LATE ULAHANNAN, NIRAPPUKATTIL HOUSE, PIRAVOM PO., ERNAKULAM BY ADV. SRI.M.G.KARTHIKEYAN RESPONDENTS: ----------------- 1. EXCISE COMMISSIONER, COMMISSIONERATE OF EXCISE, THIRUVANANTHAPURAM 2. THE ASST.EXCISE COMMISSIONER, TRIVANDRUM 3. THE CIRCLE INSPECTOR OF EXCISE NEYYATTINKARA, TRIVANDRUM BY GOVERNMENT PLEADER SMT.K.R.DEEPA FOR R1 TO 3 THIS WRIT PETITION (CIVIL) HAVING COME UP FOR ADMISSION ON 20/08/2008, THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING: ANTONY DOMINIC, J. =============== W.P.(C) NO. 21186 OF 2008 V ==================== Dated this the 20th day of August, 2008 J U D G M E N T During 1993-94, petitioner was contractor of abkari shops in group 1 of Kattakkada Excise Range. According to the petitioner, on account of the scarcity of arrack which was being supplied by the Excise Department, shops had to be closed down and were taken over on departmental management w.e.f.10.9.93. It is stated that the kist was in arrears from June 93 and following the closure of the shops, the licence also was cancelled. 2. The liability of the petitioner to make payments to the Department was the subject matter of a suit filed by the petitioner before the Sub Court, Trivandrum as OS 423/94, resulting in Ext.P1 judgment and Ext.P2 decree in his favour. Counsel for the petitioner submits that this judgment and decree is subject matter of FAO 33/05 pending before this Court. 3. During the pendency of the appeal, the Government of Kerala have issued Ext.P4, introducing an Amnesty scheme and the petitioner submits that he has submitted Ext.P5 for availing of the benefit of the said WPC 21186/08 :2 : scheme, enclosing Ext.P6 statement. Orders were not passed and thereupon this writ petition was filed. The claim made by the petitioner is that the Departmental Management Fee realised by the respondents for the period subsequent to 10/9/93 should be adjusted towards his liability and that towards the balance due from him, his claim for the benefit of Ext.P4 amnesty scheme should be considered for settling his liability. Therefore, the question that arises for consideration is whether the petitioner is entitled to get the amount collected towards the Departmental Management Fee, adjusted towards his balance outstanding liability. 4. From the additional statement filed on behalf of the respondents, it is seen that the total outstanding liability of the petitioner as on 01/04/1994 is Rs.22,02,324/- with future interest at the rate of 18% per annum and Rs.2,10,975 being the interest without further interest. It is also stated that Rs.5,99,740 was collected towards Departmental Management Fee for the period from 10/12/93 to 31/03/94. According to the respondents, the petitioner is not entitled to get the aforesaid amount of Rs.5,99,740 adjusted towards his aforesaid liability for the reason that the petitioner had not complied with Rule 13 of the Abkari Shops Departmental Management Rules. It is stated that the petitioner had failed in replenishing the security amount which was adjusted towards his WPC 21186/08 :3 : kist dues and that for that reason, he is not entitled to such adjustment in terms of Rule 13 referred to above. 5. However, learned counsel for the petitioner makes reference to Ext.P8 judgment rendered by a Division Bench of this court in OP No.8271/94 and connected cases where interpreting the aforesaid Rule 13, this court has held as follows: Since all the contracts in these original petitions were entered into before amendment of Rule 13, the petitioners are liable to pay only the actual loss suffered by the Government in realisation of rentals and excise duty. Apart from the absence of any clause in the agreement for forfeiture of departmental management fee, while calculating the loss suffered by Government, Rule 13 of the Departmental Management Rules existing at the time of executing the agreement, specifically provided for giving credit to departmental management fee collected unless the contractor fails to compensate security in case of resale. Therefore, balance amount taking into account the amount collected can be realised while calculating the loss suffered by the Government in view of cancellation of licence. Hence, all the demands are set aside and the Government is directed to pass fresh demands in accordance with the rules and agreements executed with the licencees and rules recovering only the actual loss suffered by the Government taking into account the income received by the Government during the abkari year while it was under departmental management also. 6. It is seen that this judgment of the Division Bench was upheld by the Apex Court by Ext.P9 order rendered in Civil Appeal No.4987/02 and connected cases. WPC 21186/08 :4 : 7. A reading of the aforesaid judgment shows that the Division Bench has held that in terms of Rule 13 as existing at the time when the agreement was executed, unless the contractor fails to deposit security in case of resale, he is entitled to get credit for the amount collected. It is held that the Government can only realise the actual loss it has suffered from out of the amount that is collected towards the Departmental Management Fee. 8. From the statement filed by the respondents, it can be seen that the total liability of the petitioner is quantified by them as Rs.22,02,324/-. Once the liability is quantified as above, applying the law as laid down by the Division Bench, it being the loss for which the petitioner is answerable, the amount of Rs.5,99,740/- is liable to be adjusted towards the said liability. Once such adjustment is made, the respondents will have to re quantify the petitioner's balance liability consisting of the principal amount as also the interest due and that will be the amount which is due to be paid to the petitioner. Once the aforesaid process is completed, the respondents are bound to consider Ext.P5 application made by the petitioner for availing of the benefit of Ext.P4 amnesty scheme. Accordingly, the writ petition is disposed of directing that the liability WPC 21186/08 :5 : of the petitioner shall be re quantified adjusting the Departmental Management Fee in the manner as directed above and thereafter his request vide Ext.P5 for the benefit of the Amnesty Scheme shall be considered. This shall be done by the 2nd respondent, as expeditiously as possible, at any rate within 4 weeks of receipt of a copy of this judgment. ANTONY DOMINIC, JUDGE Rp