IN THE HIGH COURT OF UTTARAKHAND AT NAINITAL Writ Petition No. 219 (MS) of 2002 Himalayan Distillers …Petitioner Versus State of Uttaranchal and another …Respondents Mr. B.P. Nautiyal, Senior Advocate assisted by Mr. Jayvardhan Kandapl, Advocate present for the petitioner. Mr. Subhash Upadhyay, Brief Holder present for the State of Uttarakhand Hon’ble Sudhanshu Dhulia, J. (Oral) 1. Heard Mr. B.P. Nautiyal, Senior Advocate assisted by Mr. Jayvardhan Kandpal, Advocate for the petitioner and Mr. Subhash Upadhyay, Brief Holder for the State of Uttarakhand. 2. The petitioner has filed present writ petition before this Court challenging the order dated 23.10.2001 passed by the Excise Commissioner, Uttaranchal, Dehradun by which the licence given to the petitioner for opening a distillery was cancelled and also order dated 5.3.2002 whereby his revision against the said order was dismissed. 3. This matter pertains to the year 2001-02. In this case counter affidavit and rejoinder affidavit have already been exchanged between the parties. 4. In the erstwhile State of Uttar Pradesh as well as in the present State of Uttarakhand the law governing the field of excise including the manufacturing and distribution of liquor is governed by the U.P. Excise Act, 1910 (from hereinafter referred to as the Act). Under Section 40 of the said Act, the State has got powers to make rules for the purposes of carrying out the 2 provisions of the said Act. In the year 1910 the said rules were framed by the erstwhile Government of Uttar Pradesh which are known as Rules under the U.P. Excise Act, 1910. Chapter IX of the said Rule pertains to distillery. The rule with which we are presently concerned is Rule 702, which reads as under: “702. (1) Any person desiring a licence to establish a distillery shall submit an application in Form P.D. 32 to Collector of the district in which he wishes to establish his distillery and the Collector will forward his application for the orders of the Excise Commissioner. (2) On his application being entertained, the applicant shall file for approval description and plans of the building in which he purposes to construct his distillery and also an inventory giving the description and size of the stills and all other permanent apparatus. The plans shall be drawn to scale on tracing cloth. Showing the exact position and the dimension of each vessel to be used, and tracing course of all pipes or channels in the colours which would be actually used in accordance with rules on the subject, together with the elevations of all the more important parts of the distillery, as such the receiver room and the warehouse. (3) If after such enquiry as he may deem necessary, the Excise Commissioner is satisfied, he shall subject to such conditions as the State Government may deem fit to impose grant a licence in Form P.D. 33 authorising the establishment of the distillery on payment of fee of ` 25,000 (Rupees twenty- five thousand). Note.- The Excise Commissioner shall have power to grant or refuse any application for licence having regard to the actual requirement in the State. (4) The aforesaid licence be valid, unless specifically extended for a year from the date of issue, within which period the holder thereof shall arrange to secure the land, buildings, plant machinery and other equipment required for grant of licence for the manufacture of spirit and is liable to be revoked or withdrawn 3 at any time, in public interest, after giving the holding a notice to show cause, against such action and after hearing him, if he so desires. No compensation for damage or loss shall be payable when the licence is so revoked or withdrawn.” 5. Under the said provision, a person desiring to open a distillery has to obtain a licence in Form P.D. 32 from the Collector of the District and such a form is then forwarded by the Collector to the Excise Commissioner of the State. Admittedly the petitioner moved such an application under the above provision in form P.D. 32 to the Collector of District Haridwar, which was duly forwarded to the Excise Commissioner. There is no record before this Court nor it has been pleaded by the petitioner as to the exact date and time when such an application was moved, but in any case such an application was moved prior to 24.09.2001 when the said licence was granted to the petitioner under Rule 702 made in form P.D. 33 by the Excise Commissioner, State of Uttarakhand. This licence was granted to the petitioner on 24.09.2001. The very next day though a notice was sent to the petitioner i.e. on 25.09.2001, whereby the Excise Commissioner sought certain information from the petitioner. The information sought was as to whether the petitioner has procured the land for the construction of such distillery and the papers in proof thereof and whether the ‘No Objection Certificate’ from the District Board has been obtained, also whether registration certificate from the District Industrial Centre has been obtained and other ‘No objection Certificate’ from the State Pollution Control Board is obtained and whether the arrangement made regarding the water and electricity has been made and the progress thereon. The availability 4 of molasses and the sources from which the molasses have to be obtained by the petitioner and the quantity of such molasses and other related certificates of the company and other proof were also sought. The petitioner was asked to send this information within three days and he was further cautioned that only after such an information, as sought by the authorities are furnished he should start any construction/establishment of the distillery. All the same, since no reply of the said notice was received by the Excise Commissioner he cancelled the licence earlier given in favour of the petitioner vide order dated 23.10.2001. This order was sent to the petitioner by registered post, as is evident from the document annexed by the petitioner. Learned Brief Holder for the State of Uttarakhand states that earlier the petitioner was given licence by order dated 24.09.2001. Subsequently by order dated 25.09.2001 certain information was sought from the petitioner and direction was given to him to give the reply but since the petitioner chose not to give any reply to the said notice and the information as sought by the Excise Commissioner, were not furnished, therefore, it was concluded that the petitioner has no intention to establish the distillery and hence licence given to the petitioner in form P.D. 33 was cancelled. 6. Aggrieved by this cancellation order the petitioner moved a revision under Section 11(2) of the Act before the State Government. Since at the relevant time the Secretary Excise was also holding the charge of Excise Commissioner and he had cancelled the licence of the petitioner, the Excise Commissioner forwarded the matter to the Principal Secretary, Revenue. After giving 5 an opportunity of hearing to the petitioner, the Revisional authority rejected the revision of the petitioner on the ground that he was asked to furnish certain information by order/letter of the Excise Commissioner dated 25.09.2001, which was served to him as per the report of the postal department, and he chose not to make any reply to the authority. The State Government agreed with the conclusion drawn by the Excise Commissioner that the petitioner is not interested in opening the distillery as he did not furnish the information sought by the Excise Commissioner. Therefore, the Excise Commissioner rightly concluded in the opinion of the State Government; that the petitioner has lost interest to open the distillery. In other words, the revisional authority i.e. the State Government agreed with the findings and the conclusion reached by the Excise Commissioner while cancelling the licence of the petitioner. Consequently, he rejected the revision of the petitioner. 7. Aggrieved by the order of the cancellation of the licence, the petitioner has filed present writ petition challenging the validity, legality and propriety of the said two orders; firstly order dated 23.10.2001 passed by the Excise Commissioner and subsequently order dated 05.03.2002 passed by the Principal Secretary, Revenue, Government of Uttarakhand, Dehradun. 8. Counter affidavit has been filed by the State where the action of the State Government has been justified. Consequently, rejoinder affidavit has also been filed by the petitioner. The main contention of the petitioner is that he was granted the licence to open a distillery on 24.09.2001 and on the very next day i.e. 25.09.2001 6 information was sought from the petitioner, as such, there is a mala fide apparent on the face of record, as there was no occasion for seeking such an information within 24 hours after grant of the licence. The petitioner submits that he did not receive such notice and therefore, could not furnish any information as sought by the Excise Commissioner. Nevertheless, the Excise Commissioner considering that the notice has been served upon the petitioner and proceeded with the matter and cancelled the licence without hearing the petitioner on 23.10.2001. The petitioner has made heavy reliance upon the Rule 702, which has already been referred above, that though a person has no right or privilege for the grant of such licence yet it could only be revoked or withdrew in public interest and that too after giving him a notice to show cause as to why such a licence be not revoked and after giving him an opportunity of hearing on that aspect. Since this has not been done, there is a clear violation of the mandatory provision of Rule 702 and thereafter the order dated 23.10.2001 passed by the Excise Commissioner, Uttaranchal, Dehradun and consequential order dated 5.3.2002 whereby revision against the said order was dismissed are liable to be quashed. 9. Mr. Subhash Upadhyay, Brief Holder appearing for the State has urged that the requirement of Rule 702 has been complied with inasmuch as notice as contemplated under Rule 702 (4) was given to the petitioner on 25.09.2001. Although the notice does not state that it is a notice to withdraw or to revoke the licence, nevertheless the petitioner was asked to furnish important information and the requirement not 7 completed, the Excise Commissioner proceeded and passed an order on 23.10.2001. Moreover, in any case the petitioner was heard by the Principal Secretary, Revenue in exercising its power under Section 11(2) of the Act, and therefore this contention of the petitioner that the licence was revoked/withdrawn without giving any notice to him is not correct. 10. After hearing learned counsel for the parties and after going through the record, this Court is of the considered view that although the procedure adopted by the respondents i.e. both the Excise Commissioner as well as the Principal Secretary, Excise is casual and slipshod. Having said this, however, no interference is liable to be made by the Court for reasons that the petitioner failed to furnish the necessary information both before the Excise Commissioner and the revisional authority i.e. the Government. The Excise Department indeed sought certain valid and necessary information from the petitioner, which in all fairness, the petitioner ought to have furnished before the Excise commissioner. The contention of the petitioner that such a notice was not served upon him cannot be accepted. This notice was given to the petitioner by registered post and there would be a presumption that such a notice was served upon the petitioner. This fact is further strengthened from another admitted fact that the subsequent order dated 23.10.2001 was also communicated to the petitioner by way of a registered notice which the petitioner admits that he has received such notice at the same address. Therefore, this contention of the petitioner that he did not receive notice dated 25.09.2001 cannot be accepted. This Court is of the view that once the petitioner had 8 received a notice dated 25.09.2001, he was liable to furnish the information as sought by the Excise Commissioner. This not being done, the Excise Commissioner cancelled the licence of the petitioner. As such, this Court finds no merit in the case as the notice was given to the petitioner which has not been accepted by him. 11. It must also be stated that trade or business in either manufacture or sale of liquor is known as “res extra commercium”. It is not an ordinary trade and lies outside ordinary commerce. Consequently, the rights and privileges which can be asserted by a person in any other normal trade cannot be asserted here. This is a position of law reiterated by the Hon’ble Apex Court in a number of decisions [Ashok Lanka and another Vs. Rishi Dixit and others reported in (2005) 5 SCC 598]. It is also settled that the petitioner had no Fundamental Right to trade in liquor. 12. It must though be noted that the manner in which the respondents have proceeded against the petitioner cannot be called entirely proper for two reasons. Firstly, because the licence was granted on 24.9.2001 and the very next date a query was put asking the petitioner to submit necessary informations which atleast shows that at the first instance when the licence was granted the authorities have not applied their mind to these unnecessary details. Secondly, though there has been a lapse on the part of the petitioner, as he has failed to answer the queries, yet the revisional authority should atleast have passed a speaking order. The revisional 9 authority does not assign any reasons except reiterating what the Excise Commissioner has already stated. 13. Having taken note of all these lapses, nevertheless, one cannot loose sight of the fact that no prejudice has actually been caused to the petitioner, inasmuch as the licence was given to the petitioner on 24.9.2001 and the very next date he was cautioned not to proceed with the construction or make any investment on the project. In fact, there is no averment in the writ petition that the petitioner has suffered financial loss or any financial loss on the action of the respondents. Moreover, one also cannot loose sight of the fact that the petitioner does not have a Fundamental Right to do the business of liquor, as held by the Hon’ble Apex Court in Kuldeep Singh Vs. Government of NCT of Delhi reported in [(2006) 5 SCC 702] and in the case of State of Kerala and another Vs. Six Holiday Resorts Private Limited and others reported in [(2010) 5 SCC 186]. 14. This being the state of affairs and in view of the judgment of the Hon’ble Apex Court, referred above, the writ petition is liable to be dismissed and is hereby dismissed. However, the amount given by the petitioner i.e. ` One lakh to the Excise Department is liable to be given to the petitioner with 6 per cent interest within a period of six weeks from the date a certified copy of this order is produced before the said authority, if the amount has not already been returned to the petitioner. 15. No order as to costs. (Sudhanshu Dhulia, J.) Dated: 29.12.2011 Virendra