IN THE HIGH COURT OF KERALA AT ERNAKULAM PRESENT : THE HONOURABLE MR. JUSTICE KURIAN JOSEPH & THE HONOURABLE MR. JUSTICE P.R.RAMACHANDRA MENON THURSDAY, THE 22ND JANUARY 2009 / 2ND MAGHA 1930 WA.No. 716 of 2008() -------------------- AGAINST THE JUDGEMENT IN WPC.2708/2007 Dated 28/01/2008 .................... APPELLANTS/ RESPONDENTS: -------------------------- 1. STATE OF KERALA, REPRESENTED BY THE CHIEF SECRETARY TO GOVERNMENT, THIRUVANANTHAPURAM. 2. THE SECRETARY TO GOVERNMENT, TAXES (A) DEPARTMENT, GOVERNMENT SECRETARIAT, THIRUVANANTHAPURAM. 3. THE COMMISSIONER OF EXCISE, COMMISSIONERATE OF EXCISE, THIRUVANANTHAPURAM. 4. THE JOINT COMMISSIONER OF EXCISE, COMMISSIONERATE OF EXCISE, THIRUVANANTHAPURAM. BY GOVERNMENT PLEADER SRI.V.T.K.MOHANAN RESPONDENT/PETITIONER: -------------------------- M/S. KANDATH DISTILLERIES, S.N. BUILDING, G.B.ROAD, PALAKKAD, REP. BY ITS MANAGING PARTNER K.S.KRISHNADAS. ADV. SRI.GEORGE POONTHOTTAM THIS WRIT APPEAL HAVING BEEN FINALLY HEARD ON 22/01/2009, THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING: KURIAN JOSEPH & P.R.RAMACHANDRA MENON, JJ. ------------------------------------------------- W.A.No.716 of 2008 -------------------------------------------------- Dated this the 22nd day of January, 2009 JUDGMENT Kurian Joseph,J. The State and the other respondents in W.P(C) No.2708/2007 are the appellants in the writ appeal. The writ petitioner is the respondent. The parties are referred to as they appear in the writ petition. The writ petition was filed praying for a declaration that the petitioner is entitled to get licence for a blending unit under the Foreign Liquor (Compounding, Blending and Bottling) Rules, 1975, in view of Exts.P11 and P15 judgments. That prayer for declaration was sought in the background of Ext.P21 order passed by the Government rejecting the application. The said order was also under challenge in the writ petition. In view of the chequered history of the case and the entitlement of the writ petitioner for a favourable consideration of the petitioner's application, the learned single Judge issued a direction to grant licence. Hence the writ appeal. W.A.No.716 of 2008 -:2:- 2. Before we refer to the contentions advanced by the learned Senior Government Pleader it is necessary to refer to the facts in brief. On 12-1-1987 petitioner made Ext.P1 application for licence. According to the petitioner the application was submitted since it was learnt that more than 75% of the requirement of foreign liquor in Kerala was met by import from other States. As per Ext.P2 communication dated 28-6-1994 from the Board of Revenue petitioner and others were informed that the approval of Government of India was necessary for setting up new blending and bottling units. Thereafter the Supreme Court considered the matter leading to Ext.P3 judgment dated 29-1-1997 wherein it has been held that the power to permit establishment of any industry engaged in the manufacture of potable liquors, including Indian made foreign liquors, is exclusively vested in the State concerned. Apparently in view of the clarification as above, four distilleries were granted licence in the year 1998 as per Exts.P4 to P7. Since the application filed by the petitioner was not considered, Ext.P8 representation was filed W.A.No.716 of 2008 -:3:- by the petitioner. It was submitted in the representation that the Government may take up the application already filed by the petitioner and grant licence since the petitioner also satisfied all the requirements. As per Ext.P9 communication dated 11-11- 1999 the petitioner was informed that the application cannot be considered since the Government had, by that time, decided that no applications for setting up new distillery/compounding, blending and bottling units were to be sanctioned. The Government order referred to in Ext.P9 communication of the Excise Commissioner is Ext.P10. It is seen from Ext.P10 Government order dated 29-9-1999 that the Government had constituted a Scrutiny/Selection Committee to short list the applications, by order dated 3-3-1999 and in the light of the recommendations of the said Committee, the Government had decided not to sanction any new units except the one run by a Co-operative Society. Aggrieved by the rejection of the application made by the petitioner as per Ext.P9, the petitioner filed O.P.No.7727/2000 leading to Ext.P11 judgment. After W.A.No.716 of 2008 -:4:- referring to the entire history, the learned single Judge held at paragraph 4 of the judgment as follows:- “The main grievance of the petitioner is that its application should also have been considered along with the applications granted as per Exts.P4 to P7. Instead of doing that, it was kept pending. Later, the Government took a policy decision not to grant any application for establishing distilleries and thereafter its application was rejected. I find considerable force in the submission of the petitioner that it has been discriminated in the matter of consideration of its application. Because of the policy decision, the Commissioner, never had occasion to consider whether the petitioner is a suitable person for grant of licence. Accordingly, Ext.P9 is quashed.” There was also a direction to take a fresh decision in the matter “... in the light of the conditions obtained at the time of grant of licence as per Exts.P4 to P7”. (Emphasis supplied) That judgment has become final. The Excise Commissioner passed Ext.P12 order dated 8-12-2004. The application was rejected stating that there was no change in Government policy and hence the request for licence could not be considered. Since obviously there was no proper consideration of the application in the said Ext.P12 order, petitioner challenged the same leading to Ext.P15 judgment in W.P(C)No.29092/2005. This court again referring to the entire history of the case, disposed of the writ W.A.No.716 of 2008 -:5:- petition quashing the impugned Ext.P12 order referred to above directing the Government “...to reconsider the matter concerning grant of sanction under Section 14 of the Abkari Act in accordance with law in the light of the directions in Ext.P11 judgment. ...” Government passed Ext.P16 order holding that there was no reason to reconsider the request of the petitioner reiterating also that the policy decision of the Government dated 29-9-1999 was still in force. Petitioner moved this court under the provisions of the Contempt of Courts Act leading to Ext.P17 order. It was observed in the said order at paragraph 2 as follows:- “2. Normally, if a wrong order is passed, this Court will leave the petitioner to work out his remedy against it. I think, the tenor of the above order, wherein, again the order of the Government dated 29-9-1999 is relied on, to reject the claim of the petitioner, is, prima facie, contumacious, which may be dealt with under the provisions of the Contempt of Courts Act.” (Emphasis supplied). Hence the matter was referred to the Division Bench for further proceedings under the Contempt of Courts Act observing also that : “... I feel that the Government have, prima facie, W.A.No.716 of 2008 -:6:- committed contempt of this Court, by ignoring the directions in Annexure-8 judgment and again relying on the Government order dated 29-9-1999, while passing the above order. The respondents herein are responsible for taking the above decision by the Government. So, I refer this case to the Division Bench for further proceedings in the matter.” 3. Faced with such a situation, the Secretary to Government filed an affidavit in the contempt case praying for liberty to withdraw the order, after tendering unconditional apology. That affidavit is Ext.P18. It was stated therein that the Government had realised that there were certain mistakes in the order and hence the same had already been recalled. The order recalling the order dated 16-3-2006 is Ext.P19 dated 17-7-2006. Narrating the entire history leading to the case, the Government passed the following order. It would be profitable to refer to the last two paragraphs which read as follows:- “Moreover, in essence, the judgment dated 29-06-2006 of the Hon'ble High Court in the Contempt Case filed by M/s.Kandath Distilleries has directed the Government that the application of the petitioner should have been considered in the light of the conditions in 1998 and could have granted permission or rejected it. In the above circumstances, Government have examined the matter again in detail and hereby recall the GO(Rt)No.158/06/TD dated 16/03/2006 decided W.A.No.716 of 2008 -:7:- to issue hearing notice to the petitioner for hearing in order to take a fresh decision in the matter as per the Orders of the Hon'ble High Court in its judgments in the W.P(C)No.29092 of 2005(L).” Accordingly the Contempt Case was closed and thereafter the Government passed the impugned Ext.P21 order. Thus this court was led to believe that there were only two options before the Government; either to grant licence or reject on merits. Surprisingly in Ext.P21 order the Government has come out with altogether new reasons for rejecting the application. Without referring to the policy as obtaining at the time of issuance of the licence as per Exts.P4 to P7(which was the direction in Ext.P11 judgment) the Government took a stand that as on the date of application of the petitioner (the date of application is taken as 21-11-1998) Government had received 52 applications and those applications were subjected to scrutiny by a Committee and on the basis of the recommendations of the Committee the Government had decided not to grant any further licence. Other reasons are also stated in the order, like; the application dated 12-11-1987 could not be treated as an application submitted by W.A.No.716 of 2008 -:8:- the partnership firm which came into existence only on 10-4- 1991; the Board of Revenue had already disposed of the application by order dated 28-6-1994 and the policy as on 21-11- 1998 was not to grant any further licence. Though the petitioner filed a contempt of court case as C.C.C.No.1385/2006 the same was disposed of relegating the petitioner to pursue his remedy of judicial review “... to redress its grievances”. Thus the writ petition. 4. The learned single Judge, as already observed by us above, apparently keeping in mind the long history, has taken the view that there is no point in further directing the Government to consider the application. Hence a positive direction was issued to grant the licence since that alone would be the proper compliance of Exts.P11 and P15 judgments of this court. 5. The learned Senior Government Pleader submits that the writ petitioner has no fundamental right to engage in the manufacture or vending of liquor and hence this court should not W.A.No.716 of 2008 -:9:- have issued such a direction to issue the licence for starting the blending unit. Yet another contention taken is that the Government is well within its powers to evolve its own policy and the policy prevailing at the time of submission of the application by the petitioner on 21-11-1998 was not to grant any new licence. Still further, it is contended that the application stated to have been filed on 12-1-1987 was defective since the firm itself had come into existence only subsequently. 6. We are afraid none of the contentions can be appreciated. We have no quarrel with the submission and the proposition that this court shall not interfere with the State policy. Precisely so only this court directed the consideration of the application filed by the petitioner for the licence in terms of the policy existed at the time of the grant of licence to similarly situated people as per Exts.P4 to P7. The direction in Ext.P11 judgment is clear and unambiguous. The direction was to consider the application in the light of the policy prevailed at the time of grant of licence as per Exts.P4 to P7. Those licences have W.A.No.716 of 2008 -:10:- been issued, no doubt, prior to 21-11-1998. Therefore, this court was aware of the factual situation that Ext.P1 application filed by the petitioner on 12-1-1987 was to be considered. It is also significant in this context to note that the appellants did not have a case of defective application prior to the impugned Ext.P21 order, when the matter was before this court on several rounds. Obviously a new reason was found out to reject the application. Even otherwise, neither in Ext.P2 reply nor in Ext.P9 impugned order passed on 11-11-1999, the appellants had a case that the application was otherwise liable to be rejected. This court in Ext.P11 judgment had specifically referred to the application pending since 1987. It was that application which was directed to be considered. The State has ingeniously made a classification obviously to weed out the petitioner to the effect that from 21- 11-1998 onwards the State had a different policy. As a matter of fact, on 21-11-1998 petitioner only made a representation (Ext.P8) requesting the Government to consider its application filed as early as in 1987. There is no application on 21-11-1998. W.A.No.716 of 2008 -:11:- The application is filed on 12-1-1987. Therefore, there is no point in saying that as on the date of application on 21-11-1998 there was a policy change. Even otherwise it appears that an anachronic error has been crept in apparently owing to the different stands taken by the Government to somehow reject the application. The change in Government policy is only as per Ext.P10 order dated 29-9-1999. The Committee referred to in the Government order to go into the question for evolving the policy itself was constituted as can be seen from the reference therein only on 3-3-1999. Therefore, such a Committee constituted on 3-3-1999 cannot make a recommendation in respect of a policy with effect from 21-11-1998. 7. Thus the picture is quite clear. Despite several directions issued by this court and despite the undertaking given before this court in the contempt of court case, the appellants for some reason do not want to issue licence to the petitioner. The appellants have no case that the petitioner is not suitable. No such contention has ever been taken in the previous litigations. W.A.No.716 of 2008 -:12:- Similarly situated persons have already been issued licence long back. It was in such circumstances only, this court issued a positive direction to grant the licence. We are of the considered view that such a direction is required in the peculiar facts and circumstances of the case to uphold the majesty of rule of law since despite several directions by this court the Government was taking shifting stands only to deny the writ petitioner the fruits of the judgments of this court. Thus we do not find any infirmity in the judgment under appeal. Therefore, the writ appeal is dismissed. (KURIAN JOSEPH, JUDGE) (P.R.RAMACHANDRA MENON JUDGE) ahg. KURIAN JOSEPH & P.R.RAMACHANDRA MENON, JJ. --------------------------- W.A.No.716 of 2008 ---------------------------- JUDGMENT 22nd January, 2009