IN THE HIGH COURT OF KERALA AT ERNAKULAM PRESENT : THE HONOURABLE MR. JUSTICE J.B.KOSHY & THE HONOURABLE MR. JUSTICE P.N.RAVINDRAN FRIDAY, THE 6TH JUNE 2008 / 16TH JYAISHTA 1930 WA.No. 1260 of 2002(A) --------------------------------- AGAINST THE JUDGEMENT IN O.P.NO.8318/1994 DATED 01/02/2002 .................... APPELLANTS/PETITIONERS 1 & 2 IN O.P: ----------------------------------------------------------- 1. ESTHAPPAN CHERIAN, MALAYIL HOUSE, NJEEZHOOR VILLAGE, VAIKOM TALUK. 2. ESTHAPPAN THOMAS, MALAYIL HOUSE, NJEEZHOOR VILLAGE, VAIKOM TALUK, REP. BY HIS POWER OF ATTORNEY HOLDER, ESTHAPPAN CHERIYAN, DO. BY ADV. SRI.C.C.THOMAS (SR.). RESPONDENTS/RESPONDENTS: ----------------------------------------------- 1. THE ASSISTANT EXCISE COMMISSIONER, KOTTAYAM. 2. THE COMMISSIONER OF EXCISE, THIRUVANANTHAPURAM. 3. STATE OF KERALA, REPRESENTED BY THE CHIEF SECRETARY TO GOVERNMENT, THIRUVANANTHAPURAM. 4. THE DEPUTY TAHSILDAR (R.R), VAIKOM. BY GOVERNMENT PLEADER SMT. MEERA. THIS WRIT APPEAL HAVING BEEN FINALLY HEARD ON 06/06/2008,THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING: J.B.KOSHY & P.N.RAVINDRAN, JJ. -------------------------------------- W.A.No.1260 OF 2002 ------------------------------------- Dated 6th June, 2008 JUDGMENT Koshy,J . Appellants were granted licence of arrack shops at Kaduthuruthy range during the year 1993-94. Licence was cancelled during the course of abkari year and it was conducted through departmental management. The question is regarding the recovery of damages caused. Government wanted to take the benefit of amendment of Rule 13 of the Departmental Management Rules with effect from December, 1994. When an identical case came up before this court challenging the similar demand in O.P.No.8271 of 1994, a Division Bench of this court in which one of us (Justice J.B.Koshy) was a party held as follows: “........ In the absence of contract to the country, recovery of more amount than the loss incurred will amount to undue enrichment as held by the Supreme Court in Dy.Commr., Andaman Distt., Port Blair v. Consumer Coop. Stores Ltd. ((1999) 1 S.C.C. 507). Since all the contracts in these original petitions were entered into before amendment of Rule 13, the petitioners are liable to pay only the actual loss suffered by the Government in realisation of rentals and excise duty. Apart from the absence of any clause in the agreement for forfeiture of departmental management fee, while W.A.1260/2002 2 calculating the loss suffered by Government, Rule 13 of the Departmental Management Rules existing at the time of executing the agreement, specifically provided for giving credit to departmental management fee collected unless the contractor fails to compensate security in case of resale. Therefore, balance amount taking into account the amount collected can be realised while calculating the loss suffered by the Government in view of cancellation of licence. Hence, all the demands are set aside and the Government is directed to pass fresh demands in accordance with the rules and agreements executed with the licencees and rules recovering only the actual loss suffered by the Government taking into account the income received by the Government during the abkari year while it was under departmental management also.” The S.L.P. filed from the above judgment was numbered as an appeal and heard along with various other similar cases and the appeals were dismissed by order in Civil Appeal Nos.4976 – 4987. Validity of amendment was left open with prospective operation in the earlier judgment. The operative portion of the Division Bench judgment is made applicable in this case also and this appeal is disposed of in terms of the above observations. As submitted by the Government Pleader, we make it clear that after the fresh demand as per the W.A.1260/2002 3 directions of this court, it is for the appellant to apply for amnesty scheme presently announced by the Government and fresh demand should be issued. J.B.KOSHY JUDGE P.N.RAVINDRAN JUDGE tks