IN THE HIGH COURT OF JUDICATURE, ANDHRA PRADESH AT HYDERABAD (Special Original Jurisdiction) SATURDAY, THE EIGHTEENTH DAY OF APRIL TWO THOUSAND AND NINE PRESENT THE HON'BLE MS JUSTICE G.ROHINI WRIT PETITION NO : 22330 of 2005 Between: M/s. Saptagiri Wines B.Narender S/o. late B.Narayana R/o. Inamguda, Hayatnagar (M) R.R. District. ..... PETITIONER AND 1 The Commissioner for Proh&Excise, Govt. of A.P. MJ Road, Hyderabad 2 The Proh& Excise Superintendent, R.R. District Hyderabad .....RESPONDENTS Petition under Article 226 of the constitution of India praying that in the circumstances stated in the Affidavit filed herein the High Court will be pleased to issue a Writ of mandamus declaring the action of the respondent in not consiering the request of the petitioner for adjustment of proportionate licence fee from 1.7.2005 towards the licence for payable for the 2nd instalment for the period from 1.10.2005 to 31.12.2005 in respect of M/s. Saptagiri Wines, Shardnagar, Ward No.8, of L.B. Nagar, Muncipality R.R. Dist., as illegal, unlawful and arbitrary and unconstitutional and consequentially direct the respondents to adjust the proprotionate licence fee from 1.7.2005 to 22.9.2005 towards the licence fee payable for the 2nd instalment in respect of the petitioner wine shop Counsel for the Petitioner:MR.M.DAMODAR REDDY Counsel for the Respondent No.: GP FOR PROHIBITION & EXCISE The Court made the following : THE HON’BLE MS JUSTICE G.ROHINI W.P.NO.22330 of 2005 ORDER The petitioner herein was the successful bidder in the auction conducted for establishment of a shop for sale of liquor in Ward No.8 of L.B. Nagar Municipality for the Excise year 2005-06. The premises selected by him in Ward No.8 of L.B.Nagar Municipality for locating the shop was approved by the competent authority under the provisions of the A.P. Excise (Lease of right of selling by shop and conditions of licence) Rules,2005 (for short “the Rules”) and accordingly a licence was issued to the petitioner for the period from 01-07-2005 to 30-06- 2006. However, the petitioner could not open the shop in the said premises due to the protest raised by the residents of the locality. That apart, some of the residents filed W.P.No.15371 of 2005 in the name of Sharadanagar Residents Welfare Association seeking a direction to shift the retail shop of the petitioner to a different place and by order dated.19-07-2005 a Division Bench of this Court granted interim order restraining the petitioner herein from running the shop. The petitioner herein filed WVMP No.2076 of 2005 to vacate the interim order and the same was allowed on 20.09.2005 on the ground that there was no representation for the writ petitioner. Thereafter, on 13-10-2005 the present writ petition was filed seeking a direction to the respondents not to collect the licence fee during the period for which the petitioner could not conduct the business on account of the protest raised by the residents of the locality as well as the order of stay granted by this Court. In the meanwhile, at the instance of the Sharadanagar Residents Welfare Association, the interim order of stay datued.19.07.2005 in W.P.No.15371 of 2005 was restored and consequently the petitioner’s shop was closed. Since the respondents had collected the entire licence fee from the petitioner in spite of the fact that he could not run the shop, the petitioner filed WPMP No.14854 of 2006 in W.P No.15371 of 2005 seeking a direction to the respondents to refund the entire licence fee. After hearing both the parties the said application was dismissed by order dated.03.07.2006 observing that such a relief cannot be granted in a writ petition, which was directed against the location of the liquor shop. The main writ petition was also disposed of on 03.07.2006 as infructuous since the licence period came to an end on 30-06-2006. Thereafter the petitioner made an application dated.19.07.2006 requesting the respondents herein to refund the entire licence fee since he could not run the shop. As there was no response from the respondents, the prayer in this writ petition has been amended by seeking a further direction to the respondents to consider the request of the petitioner dated.17-06-2006 for refund of the entire licence fee paid for the Excise year 2005-06. In the counter-affidavit filed on behalf of the respondents it is stated that as per the counterpart agreement entered into between the petitioner and the respondents and as per the Rules.18 and 19 of the Rules the petitioner is liable to pay the second installment on or before 30-09-2005. As the petitioner failed to remit the second installment of the licence fee, the bank-guarantee furnished by the petitioner for a sum of Rs.5,77,200/- was invoked by the respondents. Similarly the third installment of Rs.5,76,500/- was also recovered by invoking the bank guarantee. It is further contended that there is no provision either in the A.P. Excise Act, 1968 (for short “the Act”) or in the Rules for adjustment of licence fee under any circumstances much less for refund and therefore no writ of Mandamus can be issued directing the respondents to act contrary to the terms and conditions agreed between the parties. It is also stated that as per the counterpart agreement executed, the petitioner had agreed to pay a sum of Rs.17,14,599.77 paise being the lease amount for the period from 01-07-2005 to 30-06- 2006 and therefore he is not entitled for the relief as prayed for. I have heard the learned counsel for the petitioner as well as the learned Government Pleader for Prohibition and Excise appearing for the respondents. The fact that the petitioner was the successful bidder for establishing the shop in Ward No.8 and that the premises selected by him for locating the shop was approved by the competent authority is not in dispute. It is also not in dispute that the petitioner could not run the business in the premises approved on account of the protest raised by the residents of that locality who also approached this Court and filed W.P.No.15371 of 2005 in which a Division Bench of this Court granted interim stay restraining the petitioner from carrying on the business. Admittedly the entire licence fee payable by the petitioner for the Excise year 2005-06 was already recovered by the respondents by invoking the bank guarantee furnished by him. In the light of the above set of admitted facts, the question is whether the petitioner is entitled for refund of the licence fee. The A.P. Excise (Lease of right of selling by shop and conditions of licence) Rules,2005 made under G.O.Ms.No.998 Revenue (EX.II) dated.24-05-2005 provide that the grant of licence of right to sell Indian liquor and foreign liquor shall be by inviting sealed tenders from the public after due notification. As per Rule.22 of the Rules the auction purchaser has to execute a counterpart agreement in conformity with the tenor of the lease in Form-A.6 before taking out a licence for the sale of Indian liquor and foreign liquor. Under the counterpart agreement in Form A-6 the auction purchaser undertakes that he would be responsible to abide by the terms and conditions of lease and that he shall pay promptly the 2nd and 3rd installments of the lease amount as well as the amount towards penalties or any other charges or liabilities if imposed and any other dues if accrued in respect of his shop. The auction purchaser also undertakes that he shall abide by all the provisions of the Rules and other conditions relating to sale of Indian liquor and foreign liquor by shop and that he shall be bound to pay any enhanced duty and the like as may be levied from time to time. It is further declared that in default of payment of the lease amounts, excise duty or penalties if imposed, the auctioning authority reserves the right to reauction the shop and to realize the entire amounts so due by way of forfeiting the deposits and by way of destraining his movable and immovable properties what-so-ever and selling the said properties under the A.P. Revenue Recovery Act. Thus it is clear that under the counterpart agreement the petitioner has undertaken that in case he fails to pay the lease amounts the shop can be reauctioned by the auctioning authority and also the entire amounts due can be realized by forfeiting the deposits. Admittedly this is a case where the petitioner did not carry on the business for no fault of his. It is not the case of the respondents that the petitioner had contravened any of the provisions of the Act or the Rules or the terms and conditions of the lease agreement or counterpart agreement. It is true that there is no provision under the Act or the Rules providing for refund of the licence. However, except Sec.31 of the Act there is no other provision, which disentitles the lessee to claim refund of the licence fee paid or deposits made. Sec.31 of the Act runs as under:- 31. Power to cancel or suspend licence etc.:- (1) Subject to such restrictions as may be prescribed, the authority granting any licence or permit under this Act may cancel or suspend it irrespective of the period to which the licence or permit relates. (a) if any duty or fee payable by the holder thereof is not duly paid; or (b) in the event of any breach by the holder thereof, or by any of his servants or by any one acting on his behalf with his express or implied permission, of any of the terms and conditions thereof; or (c) if the holder thereof or any of his servants or any one acting on his behalf with his express or implied permission, is convicted of any offence under this Act, or (d) if the holder thereof is convicted of any cognizable and non-bailable offence or of any offence under the Narcotics Drugs and Psychotropic Substances Act 1985 (central Act 61 of 1985) or under the Medicinal and Toilet Preparations (Excise Duties) Act, 1955 or under the Trade and Merchandise Marks Act,1958 or under Section 481, Section 482, Section 483, Sections 484, 485, 486,487,488, 489 of Indian Penal Code or of any offence punishable under Section 112 or Section 114 of the Customs Act,1962, irrespective of the fact whether such conviction relates to the period earlier or subsequent to the grant of licence or permit; or (e) if the conditions of the licence or permit provide for such cancellation or suspension at will : Provided that no licence or permit shall be cancelled or suspended unless the holder thereof is given an opportunity of making his representation against the action proposed. (2) Where a licence or permit held by any person is cancelled under clause (a), clause(b), clause (c) or clause(d) of sub-section (1), the authority aforesaid may cancel any other licence granted or permit issued to such persons under this Act, or under the Opium Act,1878. (3) The holder of licence or permit shall not be entitled to any compensation for its cancellation or suspension nor to the refund of any fee paid or deposit made in respect thereof.” Whereas sub-section.(1) of Sec.31 of the Act empowers the licensing authority to cancel or suspend the licence under the circumstances specified there under, sub-section.(3) of Sec.31 made clear that the licensee shall not be entitled to any compensation or suspension nor to the refund of any fee paid or deposit made in respect thereof. A careful reading of Sec.31 makes it clear that the express prohibition to refund the fee paid or deposit made is applicable only in the cases of cancellation or suspension of licence under Sec.31 of the Act. Admittedly this is not a case of suspension or cancellation of lease granted to the petitioner. Therefore Sec.31(3) is not applicable to the present case. In the absence of any other express provision disentitling the licensee/lessee to claim refund of the fee paid, I am of the opinion that the respondents were not justified in not considering the petitioner’s request for refund of the lease amount. It is to be noted that the petitioner was the successful bidder for the year 2005-06 for a total licence fee of Rs.17,14,599-00 and the entire amount was recovered from him by revoking the bank guarantees though the petitioner did not carry any business. The failure of the petitioner to carry the business was not on any one of the circumstances mentioned in Sec.31 of the Act. In the circumstances the respondents are bound to refund the proportionate licence fee for the period for which he did not carry the business. Similar view was expressed by this Court in Naga Chengal Reddy Vs. Prohibition and Excise Superintendent, Cuddapah District and others ([1]) while considering the claim for refund of the licence fee where the renewal was refused to the licensee in view of change of policy. For the aforesaid reasons the writ petition is disposed of with a direction to the respondents to consider the representation of the petitioner dated.17-06-2006 for refund of the licence fee paid for the excise year 2005-06 in the light of the observations made above and pass appropriate orders in accordance with law as expeditiously as possible preferably within a period of eight (8) weeks from the date of receipt of this order. No costs --------------- G.ROHINI,J 18th APRIL 2008 *TSNR [1] 2003(2) ALD 509