HIGH COURT OF ORISSA: CUTTACK W.P.(C) No.22915 of 2010 In the matter of an application under Articles 226 and 227 of the Constitution of India. -------- Sri Manbodh Putel, Son of late Basudev Putel, AT/PO/PS: Kegaon, Dist: Kalahandi, Working as Ward Member, Ward-3, Kegaon Gram Panchayat … Petitioner -Versus- State of Orissa & others … Opp. Parties For Petitioner : Mr. Sanjit Mohanty, Sr. Advocate M/s B.P.Mohanty, A.N.Ray, K.K.Sahoo, P.K.Mishra & R.P.Kar For Opp. Parties : Addl. Government Advocate (for O.Ps. 1 to 4) M/s Jaydeep Pal, MD. Madani, G.N.Rana & A.K.Behera (for O.P. 5) ---------- P R E S E N T: THE HONOURABLE THE CHIEF JUSTICE SHRI.V.GOPALA GOWDA AND THE HONOURABLE SHRI JUSTICE B.N.MAHAPATRA Heard and disposed of on 11.04.2011 B.N. Mahapatra, J. This writ petition has been filed for quashing the notice dated 12.03.2010 (Annexure-10) issued by O.P. No.3-Collector, Kalahandi and O.P. No.4-Superintendent of Excise, Kalahandi inviting objections from the public for the purpose of grant of exclusive privilege of retail sale of foreign liquor in Kegaon for the period from 01.04.2010 to 31.03.2011 and also for quashing Annexure-12 by which O.P. No.5-Kirtan Mahalik has been authorized by the Collector, Kalahandi to open a shop on renewal basis at Kegaon for retail sale of potable foreign liquor from 08.05.2010 to 31.03.2011 on the ground that the Collector and the Superintendent of Excise have no authority/jurisdiction for grant of such licence on renewal basis when undisputedly the IMFL Off shop was not in existence in the year 2009-10 and no exclusive privilege by way of licence was granted in favour of O.P. No.5. 2. Mr.Sanjit Mohanty, learned Senior Advocate appearing for the petitioner submits that for the year 2009-10 no licence was issued by virtue of order of this Court and the lottery held for the year 2009-10 has become infructuous by efflux of time. Therefore, no licence could be issued in favour of O.P. No.5 for the year 2010-11 without making due compliance of the process of law as to opening of a new IMFL Off shop. It was argued that opp. parties 3 and 4 have no authority and jurisdiction to grant exclusive privilege to O.P. No.5 in shape of licence for operation of Kegaon IMFL Off shop for the year 2010-11 by assigning reason that this Court has vacated the stay order and given clearance for issue of licence, particularly when this Court had never vacated the interim order nor given any clearance for issue of licence for the year 2010-11. The earlier writ petition filed by the petitioner is in relation to the excise year 2009-10. The opp. parties ought to have commenced the proceedings from the stage of issuance of public notice to the stage of holding of lottery and grant of licence. The opp. parties 1 to 4 have committed wrong in granting exclusive privilege in favour of O.P. No.5 ignoring the strong objection of the people of Kegaon locality as to opening of an IMFL Off shop in their locality. By virtue of a public notice bearing No.587/Ex., dated 2 12.05.2009 published by the Collector, Kalahandi for the year 2009-10 objections were invited from the public in respect of opening of a new IMFL Off shop at Kegaon Gram Panchayat. There was a General Body meeting in the Kegaon Gram Panchayat and after thorough discussion it was resolved by the Kegaon Gram Panchayat vide its proposal No.4 not to open IMFL Off shop at Kegaon. Accordingly, an objection in letter bearing No.12 dated 28.05.2009 was submitted to the Collector, Kalahandi with a copy to Superintendent of Excise and Excise Minister by the Sarapanch, Kegaon Gram Panchayat against opening of the proposed IMFL Off shop at Kegaon under Golamunda Panchayat Samiti. The Chairman, Golamunda Panchayat Samiti in his objection dated 27.05.2009 also made strong objection for opening of IMFL Off shop at Kegaon as already there is a country liquor bhatti and a foreign liquor shop in the locality. Pursuant to such objection, the Inspector of Excise was deputed to enquire into the public objection vis-à-vis the viability of the proposal. The said Inspector of Excise submitted his report dated 12.06.2009 wherein he has opined that the Sarpanch along with members of Kegaon Gram Panchayat has objected for opening of the shop in question and the Chairman, Golamunda Panchayat Samiti has also objected to the opening of said proposed IMFL Off shop. People of Kegaon locality also in their special petition made strong objection to opening of such shop. Despite such objections, the Collector, Kalahandi vide his letter No.795 dated 19.06.2009 submitted proposal to the Excise Commissioner, Orissa for opening of the shop in question for the year 2009-10 although he has dropped the proposal of opening of such shop in the similar circumstances at other locality. In turn, the Excise Commissioner, Orissa in his letter No.4232 dated 30.06.2009 3 recommended the proposal for opening of the shop in question at Kegaon for the year 2009-10 on the ground to cover up the dry and vacuum areas and to stop illegal sale of liquor. Ultimately, O.P. No.1-Commissioner-cum-Secretary to the Government of Orissa in the Department of Excise in their letter No.3681 dated 24.07.2009 sanctioned for opening of the shop in question at Kegaon for a consideration of Rs.25,000/-. Consequent upon the order of the State Government granting sanction for opening of the shop in question O.P. No.3-Collector, Kalahandi issued notice in Form-‘A’ bearing No.952 dated 24.07.2009 inviting applications for settlement of the IMFL Off shop in question at Kegaon along with others through lottery for the year 2009-10 fixing the date to 07.08.2009. 3. Being prejudiced by the impugned action of opp. parties 1 to 4, the petitioner on behalf of people of Kegaon locality approached this Court by filing Writ Application bearing W.P.(C). No.11269 of 2009. While issuing notice to opp. parties, this Court vide its order dated 06.08.2009 has been pleased to direct that the process of settlement for IMFL ‘OFF’ shop at Kegaon may continue, but the shop shall not be opened without leave of this Court. By order dated 29.03.2010, this Court refused to vacate the interim order already passed and on 13.04.2010 this Court disposed of the writ petition with the observation that the period of licence in question was for the year 2009-10, which has expired on 31.03.2010. Consequently, the writ petition has become infructuous by efflux of time. On 12.03.2010, while the matter was sub-judice before this Court, O.P. No.3 issued notice calling upon the people of Kegaon locality to file objection for opening of the IMFL Off shop at Kegaon for the year 2010-11 and the said notice was never affixed 4 conspicuously nor the same was proclaimed by beat of drum nor an extract of the said notice was sent to the Kegaon Gram Panchayat. Thus, the people of Kegaon locality had no knowledge about the aforesaid public notice requiring them to file objection(s), if any by 28.03.2010. The villagers of Kegaon locality came to know about the aforesaid notice only on 06.04.2010 and on the very same day, they filed the objection. Petitioner being much prejudiced sought for information from the Superintendent of Excise, Kalahandi under R.T.I. Act about the matter regarding grant of licence for opening of the shop in question for the year 2010-11. 4. Mr.Sanjit Mohanty further submits that grant of exclusive privilege by way of issuance of licence for operation of Kegaon IMFL Off shop for the year 2010-11 on renewal basis by O.P. No.3 is not sustainable in law as the said shop was not in existence for the year 2009-10. If the State Government would have intended to open the said IMFL Off shop at Kegaon for the year 2010-11 it should have followed the procedure provided under Section 22 of the Bihar and Orissa Excise Act, 1915 (in short, ‘the Act’) read with Rules 3, 4, 5 of Orissa Excise (Exclusive Privilege) Foreign Liquor Rules, 1989. But O.P. No.3 has issued the licence in favour of O.P. No.5 for operation of the shop in question for the year 2010-11 without following the said procedure of law and therefore the issuance of licence under Annexure- 12 is void and without jurisdiction and without any authority of law. Issuance of the public notice inviting objection under Annexure-10 is also void and illegal. In absence of a sanction order from the State Government in accordance with Rule-4, issuance of licence for operation of the shop in question for the year 2010-11 is not sustainable in law. Since the Kegaon 5 IMFL Off shop was not in existence for the year 2009-10, it cannot be said that the shop was settled for a period of three years and thus the said finding of O.P. NO.4 in Annexure-13 is misconceived, unreasonable and incorrect. The documents contained in Annexures-1, 5, 6, 7 and 8 having become infructuous by efflux of time the same cannot lend any assistance to the opp. party-authorities for grant of licence of the shop in question for the year 2010-11. This Court while disposing of the earlier writ petition has never given any clearance for issue of licence for the year 2010-11 and also has not passed any order vacating the order of stay as granted vide order dated 06.08.2009. Therefore, grant of licence by O.Ps. 3 and 4 in favour of O.P. No.5 under Annexure-12 on the ground that this Court has vacated the stay and given clearance for licence is misconceived and contrary to the order of this Court. The excise duty, fee structure and guidelines for the year 2010-11 provide that all the existing IMFL Off shop will be renewed for the year 2010- 11 with 10% increase over and above the existing consideration money. Since the shop in question at Kegaon had never been opened for a day in the year 2009-10, no such licence can be renewed for the year 2010-11. Annexure-12 was issued without considering the public objections. 5. Learned Government Advocate supporting the action of the governmental authorities contended that because of the stay order granted by this Court licence could not be issued to O.P. No.5 and following the due procedure and guideline of the Government for the year 2010-11 licence has been validly renewed in favour of O.P. No.5. In response to notice issued under Annexure- 10, no objection was filed by the petitioner. Therefore, there 6 is no illegality in issuing licence for operation of the shop in question at Kegaon for the year 2010-11. 6. Mr.J. Pal, learned counsel appearing for opp. party No.5 submits that issuance of notice under Annexure-10 inviting objection and also the grant of licence on renewal basis for the year 2010-11 was as per the provisions of Sections 22 and 20 of the Act read with Rule 3 of the 1989 Rules and there is no violation of any statutory provision. The petitioner filed W.P. (C) No.11269 of 2009 before this Court challenging the proposal of the Collector to open the shop in question at Kegaon for the year 2009-10 on the ground that there is an IMFL Off shop at Golamunda at a distance of 10 kilometers for which there is no need for opening of such shop. For the year 2009-10, the State Government and O.P. No.2 took a decision for opening of the shop in question in vacuum areas to avoid the illegal liquor trade. The petitioner has not filed any valid objection against grant of IMFL Off shop at Kegaon. The objection filed by others were enquired into by the Inspector of Excise who reported that illegal sale of liquor is going on secretly. The Inspector of Excise proposed to open the said shop as required under Rule 32 of the said Rules 1965 and accordingly, O.P. No.3 by its letter dated 19.06.2009 submitted the proposal before the Government for sanction in respect of the shop in question. The Government after considering the materials on record has been pleased to sanction the said IMFL Off shop at Kegaon to cover the dry and vacuum area to earn additional excise revenue for the year 2009-10. Pursuant to the said sanction letter of the Government, O.P. No.3 on 24.07.2009 issued the sale notice for settlement of the Kegaon IMFL Off shop through lottery to be held on 07.08.2009 with the terms and 7 conditions mentioned therein. The shop was settled in favour of O.P. No.5 for the year 2009-10. By virtue of interim order dated 06.08.2009 of this Court, the process of settlement of IMFL Off shop at Kegaon was allowed to be continued. Since the shop in question was sanctioned by the Government granting exclusive privilege in favour of O.P. No.5 through lottery as provided under Section 29(2) of the Act, it is not correct to say that the lottery held for the year 2009-10 is infructuous. For the year 2010-11, the State Government issued guidelines dated 25.02.2010 and paragraph 22 of the said guidelines provides that all the existing IMFL Off shops will be renewed for the year 2010-11 with 10% increase in the licence fee and in case the shops remain unsettled, the same will be settled by way of inviting applications through draw of lottery. The Collector issued public notice dated 12.03.2010 inviting objections by 28.03.2010 for grant/renewal of IMFL Off shop at Kegaon for the year 2010-11 and the petitioner along with others filed objections on 06.04.2010 which is beyond the stipulated date fixed in the public notice. Thus, the objection filed by the petitioner was not entertainable. O.P. No.5 being the lottery winner, the shop in question was settled in his favour for the year 2009-10 with the condition that the exclusive privilege granted shall continue for a consecutive period of three years on renewal basis. O.P. No.3 issued licence on 08.05.2010 on renewal basis for the remaining period of the year 2010-11. O.P. No.5 operated the shop in question at Kegaon without any objection from the public of the locality and has paid huge amount as government revenue in shape of licence fee and duty on MGQ. The objection of the petitioner was motivated and baseless and with a view to protect the illicit liquor traders to sell spurious and non-duty paid liquor depriving the 8 consumers of getting the quality liquor in the government outlet. After disposal of the writ petition the documents under Annexures-7 and 8 will not become redundant as the privilege once granted by the Government and the shop in question is settled through lottery by the Collector, the right of the exclusive privilege holders of the entire State of Orissa including O.P. No.5 accrues for renewal of licence from the policy decision/guideline of the Government dated 25.02.2010. O.P. No.5 operated the shop in the locality for the year 2009-10 without any objection from the villagers of Kegaon and has paid huge amount towards government revenue in shape of licence fee and duty on lifting MGQ for the year 2010-11. 7. On the rival contentions, the question that arises for consideration by this Court is as to whether the opp. party-authorities are justified to grant exclusive privilege in favour of O.P. No.5 by way of issuance of licence for operation of Kegaon IMFL Off shop for the year 2010-11 on renewal basis under Annexure-12 on the basis of the result of the lottery held for the year 2009-10 though opp. party No.5 was not issued with the licence for the year 2009-10. 8. The Government of Orissa in Excise Department vide memo No.923/Ex. dated 25.02.2010 has been pleased to adopt the Excise Duty, Fee Structure and Guidelines for settlement of excise shops for the year 2010-11. Paragraph-21(a) of the said guidelines reads thus: “21 OUT-STILL SHOPS. (a) The licences of all the existing Out Still shops operating in 21 districts namely Sambalpur, Bargarh, Jharsuguda Deogarh, Sundargarh, Bolangir, Sonepur, Kalahandi, Nuapara, Boudh, Koraput, Rayagada, Malkanagiri, Nabarangpur, Angul, Keonjhar, Mayurbhanj, Ganjam (including 9 newly created Berhampur excise district after bifurcation of Ganjam district into two excise districts), Gajapati, Dhenkanal and Kandhamal shall be renewed for the year 2010-11 with 10% increase over and above the existing consideration money and while renewing VAT clearance may be called for.” Thus, as per the above said guidelines, licence granted in respect of the existing Out-Still Shops will be renewed for the year 2010- 11 with 10% increase over and above the consideration money after observing all the formalities. 9. Admittedly, in the present case the operation of IMFL Off shop at Kegaon was settled in favour of O.P. No.5 for the year 2009-10. However, the licence could not be issued to operate the said shop in view of the stay order dated 06.08.2009 passed in W.P.(C). No.11269 of 2009. The said writ petition was disposed of on 13.04.2010 with the observation that since the period of licence in question was for the year 2009-10, which expired since 31.03.2010, the writ petition became infructuous by efflux of time. Thus, in the eye of law so also for all practical purposes, O.P. No.5 was not issued with any licence to operate the shop in question during the year 2009-10 and for all practical purposes such a licence is not in existence. Sub-section (2) of Section 22 of the Act provides that no grantee of any privilege under Sub-section (1) or Sub- section (1-a) shall exercise the same unless or until he has received a licence in that behalf from the Collector or the Excise Commissioner. In the instant case, O.P. No.5 had not been issued with any licence for the year 2009-10 to operate the shop in question; therefore since no licence was granted for the year 2009-10 in favour of O.P. No.5, question of renewal of the same for the year 2010-11 in terms of memo No.923/Ex. Dated 25.02.2010 issued by the 10 Government of Orissa in Excise Department providing for excise duty, fee structure and guideline for the year 2010-11 does not arise. In the case of Gajraj Singh etc. vs. The State Transport Appellate Tribunal and others, AIR 1997 SC 412 the Hon’ble Supreme Court held that grant of renewal is a fresh grant though it breathes life into the operation of previous lease or licence granted as per existing appropriate provisions of the Act, rules or orders. In the present case, no licence was granted to O.P. No.5 for the year 2009-10. Moreover, information was furnished to the petitioner under the R.T.I. Act pursuant to his application dated 26.06.2010 that this Court had vacated the stay order and given clearance for issuance of licence and accordingly, the licence for the year 2010-11 was issued/renewed. The aforesaid reason given for renewal of the licence in favour of opposite party no.5 for the year 2010-11 is also not correct. 10. In the above fact situation, Annexure-12 cannot be sustained and the same is quashed. Opp. parties 1 and 4 are directed to settle the shop in question through auction sale forthwith strictly adhering to the procedure prescribed under the Bihar and Orissa Excise Act, 1915 and Rules framed thereunder. 11. In the result, the writ petition is allowed to the extent indicated above. No order as to costs. …………………………… V. Gopala Gowda, C.J. ……………………………….. B.N. Mohapatra,J Oissa High Court, Cuttack The 11th April, 2011/ss 11