IN THE HIGH COURT OF JUDICATURE AT MADRAS DATED: 18.03.2010 CORAM: THE HON’BLE MR.JUSTICE K.CHANDRU W.P.No.21851 of 2008 and M.P.No.1 of 2008 Indian Officers Club Rep. By its Secretary ... Petitioner Vs 1.The Commissioner of Prohibition and Excise, Chepauk, Chennai – 600 005. 2.The District Collector, Tuticorin District, Tuticorin. 3.The Assistant Commissioner (Excise) Tuticorin. 4.The Managing Director, Tamilnadu State Marketing Corporation, CMDA Building, Tower – II, Gandhi Irwin Bridge Road, Egmore, Chennai – 600 008. ...Respondents Prayer :Petition under Article 226 of the Constitution of India praying for a Writ of Certiorarified mandamus, calling for the records of the 1st Respondent herein in RC.No.P&E 2(1)/ 28830/2007 dated 26.08.2008 in respect of Petitioner FL-2 License No.3/2000-2001 at Indian Officers Club, Tuticorin and quash the same and consequently direct the 1st Respondent to renew the Petitioner license. For Petitioner : Mr.ARL.Sundaresan, S.C. For Ms.AL.Ganthimathi For Respondents: Mr.P.Subramanian,A.G.P. For R1 to R3 Mr.J.Ravindran for R4 O R D E R The petition is a Club known as Indian Officers Club, which https://hcservices.ecourts.gov.in/hcservices/ was registered as a Society under the Tamil Nadu Societies Registration Act,1975 with Registration No.1/1927-28. The petitioner has come forward with the present writ petition, challenging the order passed by the first respondent – Commissioner of Prohibition and Excise dated 26.08.2008. 2. By the impugned order, the FL-2 licence granted to the Club was cancelled and they were also informed that renewal of the said licence for the year 2008-2009 cannot be renewed. The impugned order was passed based upon the letter dated 12.06.2008 of the District Collector – the second respondent informing that the licensed premises was leased out to third parties in violation of the Rules. In view of the fact that the licence itself has been cancelled, the renewal of license was also not considered as per Rule 22(3) of the Tamil Nadu Liquor (Licence and Permit) Rules 1981. They were also informed that they cannot claim any compensation on account of cancellation. 3. Notice was ordered to the respondents and they were directed to file counter. Pending the writ petition, no interim relief was granted. 4. On notice from this Court, the first respondent had filed a counter affidavit dated Nil (October 2008). It was stated that the petitioner's Club were holders of FL-2 license bearing No.3/2000-01. It was informed by the District Collector, Thoothukudi that the licence given to the club was leased out by the Secretary and Vice- President of the Club to one R.Henry for a period of 5 years. Subsequently, the bar was let out on lease to another person J.Prakash. Based upon the said report of the second respondent, a show cause notice was issued to the petitioner Club. The petitioner club was reminded the condition under Rule 24 of the Tamil Nadu Liquor (Licence and Permit) Rules, 1981 wherein and by which they were prevented from making any subrent of the premises. The petitioner-Club was directed to show cause as to why their licence should not be cancelled. 5. The petitioner Club had sent a detailed reply dated Nil together with supporting documents. They have also enclosed a letter from the R.Henry stating that he had never taken out sublease of the premises. It was also informed that Henry was a member of the governing Board and two members who were removed from the Club Membership M/s.AVM.Rajan and A.Kumar had created such false records stating that the bar had been leased out to third parties. It was also informed that the Club had been functioning right from Colonial rule since 1927 and even very senior IAS Officers like P.C.Alexander and N.Arumugam when they were District Collectors were members of the Club. It was also stated that they did not even know who the said J.Prakash, whose https://hcservices.ecourts.gov.in/hcservices/ name was mentioned in the alleged report sent by the District Collector. The Club was functioning for the last 80 years without any complaint. The copy of the balance sheet for the year 2004-2005 was also enclosed to show that the club was very much within the control of the Board and the income derived from the Club was also referred to in the balance sheet. 6. Notwithstanding their explanation, the petitioner -Club was directed to send a representative for a personal hearing before the first respondent on 11.08.2008. Thereafter, the impugned order came to be passed on 26.08.2008, which is under challenge. 7. The substance of the impugned order found in paragraphs 6 and 7, may be usefully extracted below:- "6.The show cause notice issued to Tvl.Indian Officers Club, Thoothukudi holders of FL.2 licence bearing No.3/00-01, has been examined carefully with the explanation offered, the statement given during the personal hearing on 11.08.2008 and with the connected records. In the statement given before the Assistant Commissioner (Excise), Tuticorin on 29.10.2007 and in the statement given during the personal hearing on 11.08.2008, the Secretary, Tvl.Indian Officers Club has stated that it is a fact in a Circular dt:7.02.2006, the application were invited to lease out the bar premises. But, subsequently in the Executive meeting conducted on 30.03.2006, it was decided not to lease out the premises, since such action will amount to violation of Rules. 7.The action of the licensee, in having invited applications to lease out the bar is itself a violation of Rule. Further, the District Collector, Tuticorin has reported that the enquiry reveals that it is a fact that the above bar premises has been leased out. The District Collector added that the Bar premises has been leased out in a business motive, with a view to get more profit in violation of rules." 8. Mr.ARL.Sundaresan, learned Senior Counsel for the petitioner contended that the Club had not only denied their subletting the bar but also they were never served with copy of the report given by the District Collector making a complaint against the Club alleging that they had sublet the premises. In respect of this assertion, there was no denial in the counter affidavit. It is incumbent that when an allegation is made and it is based upon any third party information, the first https://hcservices.ecourts.gov.in/hcservices/ respondent ought to have provided such information. Further, in the present case, the petitioner had denied the role of M/s.R.Henry and J.Prakash, enclosing a copy of the letter from the Henry. They had also denied any knowledge of the said Prakash. For all these stand taken by the petitioner, there was no finding in the impugned order. However, the annexures enclosed along with the explanation was also not referred to in the impugned order. 9. In view of the fact that the impugned order though was passed after a personal hearing, but since it had failed to take into account all the relevant circumstances including the possible defence put forth by the Club, this Court is obliged to interfere with the impugned order. Accordingly, the impugned order stands set aside and the matter is remitted back to the first respondent. The first respondent is directed to give another opportunity to the petitioner -Club and consider all the relevant circumstances including the defence taken by the petitioner and also about their long history that they had in running the Club and consider the grant of licence. 10. With these observations, the writ petition stands allowed. No costs. Consequently, connected miscellaneous petition is closed. Sd/ Asst.Registrar /true copy/ Sub Asst.Registrar svki To 1.The Commissioner of Prohibition and Excise, Chepauk, Chennai – 600 005. 2.The District Collector, Tuticorin District, Tuticorin. 3.The Assistant Commissioner (Excise) Tuticorin. https://hcservices.ecourts.gov.in/hcservices/ 4.The Managing Director, Tamilnadu State Marketing Corporation, CMDA Building, Tower – II, Gandhi Irwin Bridge Road, Egmore, Chennai – 600 008. +1cc to Mr.AL.Ganthimathi, Advocate SR 18105 +1cc to Mr.J.Ravindran, Advocate Sr 18658 +1cc to Govt. Pleader Sr 18324 TRM(CO) km/30.3. W.P.No.21851 of 2008 https://hcservices.ecourts.gov.in/hcservices/