IN THE HIGH COURT OF KERALA AT ERNAKULAM PRESENT : THE HONOURABLE MR. JUSTICE M.SASIDHARAN NAMBIAR TUESDAY, THE 9TH NOVEMBER 2010 / 18TH KARTHIKA 1932 Crl.MC.No. 4284 of 2010 (C) ------------------------- (CR.NO.99/2010 OF EXCISE RANGE OFFICE, ADOOR, PATHANAMTHITTA DIST.) PETITIONERS/ACCUSED NOS.1 & 2 ---------------------------------------------------- 1. J.GOPAKUMAR,AGED 56 YEARS, S/O.JANARDHANAN PILLAI,SREE VILASAM HOUSE, BHARANIKKAVU MURI,KATTANAM VILLAGE, MAVELIKKARA TALUK, ALAPPUZHA DISTRICT. 2. MRS.P.V.RAJAMMA,AGED 66 YEARS, W/O.SWAMINADHAN,VIDHYA BHAVAN,PANDALAM PO, PATHANAMTHITTA DISTRICT. BY ADVS. SRI.M.G.KARTHIKEYAN SRI.NIREESH MATHEW RESPONDENT//COMPLAINANT --------------------------------------------- 1. STATE OF KERALA, REP.BY EXCISE INSPECTOR, EXCISE RANGE OFFICE, ADOOR, PATHANAMTHITTA DISTRICT. 2. THE CIRCLE INSPECTOR OF EXCISE, ADOOR , PATHANAMTHITTA DISTRICT. 3. THE EXCISE COMMISSIONER, COMMISSIONERATE OF EXCISE, THIRUVANANTHAPURAM. (ALL REPRESENTED BY PUBLIC PROSECUTOR, HIGH COURT OF KERALA,ERNAKULAM). BY SRI. P.N. SUKUMARAN (ADDL. DGP) THIS CRIMINAL MISC. CASE HAVING COME UP FOR ADMISSION ON 09/11/2010, THE COURT ON THE SAME DAY PASSED THE FOLLOWING: VK M.SASIDHARAN NAMBIAR,J. =========================== CRL.M.C.No.4284 OF 2010 =========================== Dated this the 9th day of November,2010 ORDER Second respondent, the Circle Inspector of Excise, Adoor conducted search in Hotel Shine at Pandalam on 9.8.2010 and seized 44 bottles of 750ml., 2 bottles of 500 ml., 865 bottles of 375 ml. of Indian made foreign liquor and a cash of Rs.14,430/-. In addition 97 bottles having 375 ml. each of admire rum and 18 bottles of 1.5 lites of marker XXX rum were also seized. Crime 99/2010 of Adoor Excise Range was registered under Annexure C crime and occurrence report against the petitioners for the offence under section 55(i) and 56(b) of Kerala Abkari Act. Later by Annexure E report the offence under section 55(i) was deleted. The case was registered on the allegation that in violation of the Conditions Crl.M.C.4284/2010 2 of Licence of Foreign Liquor Rules bottles of liquor were seen stored in the cash counter for sale to outside and thereby petitioners the licensee and the manager violated the conditions of the license and committed the offence under section 56(b) of the Kerala Abkari Act. Petition is filed under section 482 of Code of Criminal Procedure to quash Annexure C Crime and Occurrence report in Crime 99/2010 contending that no offence as alleged was committed and to direct Judicial First Class Magistrate Adoor to release the liquor seized and produced under Annexure B mahazar before the Magistrate. 2. Learned senior counsel appearing for the petitioners and learned Public Prosecutor were heard. 3. Learned senior counsel pointed out that under Annexure A, FL-3 license, first petitioner was permittd to conduct bar, in hotel Shine at Pandalam and conditions of the license does not prohibit storing of bottles of Indian made foreign Crl.M.C.4284/2010 3 liquor within the licensed premises and the only allegation is that bottles of Indian made foreign liquor were found stored in the cash counter, in the bar room, to be sold to the customers which could be removed outside. There is no allegation that any of the bottles of liquor was found being removed out of the licensed premises and therefore there is no violation of the Conditions of the Licence or the Abkari Act or Foreign Liquor Rules and therefore the crime registered only is an abuse of the process of law and it is to be quashed. 4. Learned senior counsel argued that in any case the bottles of liquor which were found in the cash counter could not have been seized or confiscated as no offence was committed in respect of those liquors. It is also argued that in any case when there is no provision for confiscation of the sale proceeds of a liquor in violation of the Conditions of License or Rules identical to Section 121 of the Customs Act, Excise authorities cannot seize the cash from the cash counter and Crl.M.C.4284/2010 4 therefore a direction is to be issued to the Magistrate to release them. It was argued that even if confiscation is permissible, confiscated articles are to be produced before the Deputy Commissioner as provided under section 67B of the Kerala Abkari Act and when bottles of liquor are produced before the Magistrate, no confiscation proceedings can be initiated. 5. Learned Public Prosecutor submitted that under the Conditions of the License liquor could be supplied and sold only within the specified licensed premises in accordance with the condition of the license and while granting licence a plan was submitted wherein the cash counter the bar counter and the bar room were separately marked and when petitioners stored liquor in the cash counter for the purpose of sale to be removed outside, those articles are liable to be confiscated and therefore they cannot be released. Learned Public Prosecutor also argued that as there was a violation of Conditions of Licence attracting an Crl.M.C.4284/2010 5 offence under section 56(b) of Abkari Act Annexure C crime and occurrence report cannot be quashed as sought for. 6. It is not disputed that there is a subsisting valid FL-3 licence permitting sale of foreign liquor in Hotel Shine when the search was conducted and the liquor was seized and the crime was registered. The conditions of the licence in Annexure A license are as provided in Form FL-3 hotel restaurant license shown in the Foreign Liquor Rules. Under condition No.2, no liquor shall be sold under the licence for removal outside the hotel to anyone including residents of the hotel. But it is provided that liquor may be sold and served to resident of the hotel in the rooms wherein they reside or in the restaurants where they partake food by the employees of the bar. It is further provided that the hotel can serve liquor along with meals by the side of swimming pools, lawns and the roof gardens of the hotel on obtaining special annual permit from Excise Crl.M.C.4284/2010 6 Commissioner, provided such hotels have an exclusive restaurant for the use of families and others where no liquor shall be served. A further proviso was added that the licensee can serve liquor at restaurants to persons other than residents on payment of Rs.25,000/- per year. Therefore condition No.2 only provides that no liquor shall be sold outside the hotel to anyone including the residents of the hotel. There is no allegation either in Annexure C crime and occurrence report or Annexure B mahazar that at the time when the Excise Officials conducted the search any liquor was found being removed outside the hotel in violation of condition No.2. 7. Condition No.7 provides that the sale or possession except subject to the rules applicable to unlicensed persons by the licensee, of any liquor outside the limits of his licensed premises is prohibited. There is no allegation in Annexure B or C that there was any sale or possession by the licensee of any liquor outside the limits of Crl.M.C.4284/2010 7 his licensed premises as provided in Annexure A license. As rightly pointed out by the learned senior counsel, there is no allegation that even a single bottle of Indian made foreign liquor was illicit or was not bought from the Beverages Corporation as provided under the license. The very case is that the cash counter is within the licensed premises. The only case is that storing for sale Indian made foreign liquor in the cash counter is in violation of the conditions of the license and the Rules. In such circumstances, it cannot be said that any offence was committed under the Act in respect of the liquor seized, so as to be confiscated as provided under section 65 of Abkari Act. When the cash counter is within the licensed premises, it cannot be said that keeping bottles of the liquor there would be violation of the conditions of license or the Foreign Liquor Rules unless there is a specific bar against it. 8. Section 65 provides what things are liable to confiscation. Under the section, in any case Crl.M.C.4284/2010 8 in which an offence has been committed under the Act, the liquor, drug, materials, still, utensil, implement or apparatus in respect or by means of which an offence has been committed shall be liable to confiscation. It also provides that any liquor or intoxicating drug lawfully imported, exported, transported, manufactured had in possession or sold or toddy lawfully drawn or tapped along with, or in addition, to any liquor, intoxicating drug or toddy are liable to confiscation. So also receptacles, packages and coverings in which any such liquor, intoxicating drug, materials, still, utensil, implement or apparatus is or are found, and the other contents, if any, of the receptacles or packages in which the same is or are found, and the animals, carts, vessels or other conveyance used in carrying the same, shall likewise be liable to confiscation. Therefore to confiscate Indian made foreign liquor seized from the cash counter under Annexure B mahazar, there should be a case that with that liquor or in respect of the liquor an Crl.M.C.4284/2010 9 offence was committed. When the only allegation is that in violation of the Conditions of License, bottles of Indian made foreign liquor seized under Annexure B were found stored in the cash counter, they are not liable to confiscation as provided under section 65 of the Act. Moreover, if the liquor seized is liable to be confiscated under section 65, the procedure as provided under section 67B is to be followed. Under sub section (1) of Section 67B, notwithstanding anything contained in the Act or in any other law where any liquor, intoxicating drug, material, still, utensil, implement or apparatus or any receptacle, package or covering in which such liquor, intoxicating drug, material, still, utensil, implement or apparatus is found or any animal, car, vessel, or other conveyance used in carrying the same is seized and detained, the officer seizing the same shall produce the same before an officer authorised by the Government in that behalf by notification in the Gazettee, without any Crl.M.C.4284/2010 10 unreasonable delay and under sub section (2) where an authorised officer seizes and detains any property specified in sub section (1) or where any such property is produced before an authorised officer and he is satisfied that an offence under the Act has been committed in respect of or by means of that property and that such property is liable to be confiscated, such authorised officer whether or not a prosecution is instituted for the commission of such offence, order confiscation of such property and where such property consists of any receptacle or package, the authorised officer may also order confiscation of all contents thereof. Therefore if the bottles of liquor which were seized from the bar hotel, are liable to confiscation under section 65, the procedure to be adopted by the Excise Officer, is to produce them before the Deputy Commissioner, the authorised officer to be confiscated, as provided under section 67B of the Act. But the liquor seized in this case were not produced before the authorised Crl.M.C.4284/2010 11 officer but before the Magistrate. The Magistrate cannot order confiscation as confiscation could only be made as provided under section 67B and that too only by the authorised officer only which could be on production of the liquor before him. 9. As rightly argued by the learned senior counsel Kerala Abkari Act does not contain any provision for seizure or confiscation of the sale proceeds of any liquor, in violation of the conditions of licence or the rules. Section 121 of the Customs Act provides that where any smuggled goods are sold by a person, having knowledge or reason to believe that the goods are smuggled goods, the sale proceeds thereof shall be liable to confiscation. Such a provision is absent in the Abkari Act. In the absence of such provision, even if the case is that the cash seized from the cash counter was obtained by sale of liquor in violation of the conditions of the license, they cannot be seized or confiscated. Therefore petitioners are entitled to get the liquor and the Crl.M.C.4284/2010 12 cash seized under Annexure B mahazar and produced before the learned Magistrate. 10. Though petitioners sought to quash the crime and occurrence report, I do not find that at this stage when the investigation is not completed, the inherent power is to be exercised to quash the same. Petitioners are entitled to challenge the final report, if any, submitted. Petition is allowed in part. Judicial First Class Magistrate, Adoor is directed to release the liquor and the cash seized by the Circle Inspector of Excise, Adoor under Annexure B mahazar and produced before the court in CR. No.99/2010 of Excise Range Office, Adoor. M.SASIDHARAN NAMBIAR JUDGE tpl/- M.SASIDHARAN NAMBIAR, J. --------------------- W.P.(C).NO. /06 --------------------- JUDGMENT SEPTEMBER,2006