1 SBCivil Writ Petition No.4575/2010 Narendra Kumar v. State of Rajasthan & Ors. Date of Order :: 27th August, 2010 HON'BLE MR.JUSTICE GOVIND MATHUR Mr. Hemant Jain, for the petitioner. Mr. MR Singhvi, for the respondents. .... The petitioner was having licence to run country made liquor shops at Gadarkheda, Khairuwala and Budhsinghwala. On inspection a team of the Department of Excise on 25.8.2009 found at Khairuwala shop 20 quarters of country liquor adulterated. A penal action, therefore, was taken and under an under dated 31.3.2010 the licence granted to the petitioner to have shop at Khairuwala was cancelled. A challenge to the order dated 31.3.2010 by way of filing a petition for writ before this Court also failed under an order dated 8.4.2010. So far as licence relating to liquor shops at Gadarkheda and Budhsinghwala is concerned, those were renewed on 1.4.2010 and the petitioner purchased liquor for those shops from Ganganagar Sugar Mills, a public sector enterprise. On 23.4.2010 the District 2 Excise Officer, Sriganganagar issued a notice to the petitioner for cancellation of licence relating to country made liquor shops at Gadarkheda and Budhsinghwala in view of the fact that the liquor was found adulterated at Khairuwala liquor shop. A reply to the notice was submitted, however, vide the order dated 6.5.2010 the competent authority cancelled licence of the petitioner to have shops at Budhsinghwala and Gadarkheda and also forfeited the earnest money relating to grant of licence for the shops aforesaid while exercising powers under sub- section (2) of Section 34 of the Rajasthan Excise Act, 1950 (hereinafter referred to as “the Act of 1950”). While challenging the order dated 6.5.2010 the contention of counsel for the petitioner is that a penal action for a wrong found at Khairuwala shop was already taken by the respondents under an order dated 31.3.2010, therefore, no action could have been taken as per provisions of Section 34(2) of the Act of 1950 against the petitioner relating to other shops, specially looking to the fact that after 31.3.2010 licence for the shops concerned was renewed. It is also submitted that the order impugned is bad as the powers under Section 34(2) of the Act of 1950 are quasi judicial powers and those could have not been exercised without adhering principles of natural justice. A violation of principles of natural justice is alleged in view of the fact that the order dated 3 6.5.2010 is a non-speaking and unreasoned order and also being passed in quite mechanical manner. A reply to the writ petition has been filed on behalf of the respondents with assertion that Section 34(2) of the Act of 1950 empowers the competent authority to cancel licences of other shops, if a person whose licence is cancelled because of any reason prescribed under sub-section(1) of Section 34 of the Act of 1950. The District Excise Officer exercised his statutory authority looking to the fact that the liquor at Khairuwala shop was found adulterated. Heard counsel for the parties. Section 34 of the Act of 1950 provides that “when a licence, permit or pass held by any person is cancelled under sub-section(1), the authority aforesaid may cancel any other licence, permit or pass granted to such person under this Act or any other law for the time being in force relating to excise, revenue or under the Opium Act, 1878 (Central Act I of 1878)” It is not in dispute that the District Excise Officer was having statutory power to cancel the licences for the liquor shops at Budhsinghwala and Gadarkheda as licence of the petitioner for the liquor 4 shop at Khairuwala was cancelled as per provisions of sub-section(1) of Section 34 of the Act of 1950. Subsequent to 31.3.2010, the day on which licence for Khairuwala shop was cancelled the respondents renewed licences in favour of the petitioner to have country made liquor shops at Budhsinghwala and Gadarkheda. The renewal so made in no way restricts the competent authority from taking an appropriate action as per sub-section(2) of Section 34 of the Act of 1950, however, such power is a discretionary one and, therefore, the same was required to be exercised judiciously. The competent authority would not have cancelled the licences ipse dixit on the count that the licence of one shop was cancelled as per sub- section(1) of Section 34 of the Act of 1950. The competent authority while exercising powers under sub- section(2) of Section 34 should have recorded the reasons as to why the cancellation of other shops is also warranted on cancellation of a licence relating to one shop as per provisions of sub-section(1) of Section 34 of the Act of 1950. In the present case no such reason is given in the order impugned and the respondents admittedly have also not recorded any reason for taking impugned action in their own records while considering the action as per sub-section(2) of Section 34. It is well settled that every penal action should be taken cautiously and by taking adequate care for adhering the principles of natural justice. The non-consideration by the competent authority about the 5 circumstances warranting cancellation of licences of other shops while exercising powers under sub-section (2) of Section 34 of the Act of 1950 depicts mechanical exercise of powers and that amounts a violation of principles of natural justice. In the circumstances, I am having no hesitation in holding that the order impugned dated 6.5.2010 is bad in eye of law. The question now survives is that for what relief the petitioner is entitled? In normal course, this Court would have quashed the order impugned in totality, but in the present case as per the respondents after cancellation of licence under the order impugned re-auction was made and the shops concerned now have already been given to certain other parties and those are running liquor shops for the account year 2010-11. The persons to whom licences to run shops at Budhsinghwala and Gadarkheda are granted are not present before this Court. In the event of acceptance of this petition for writ the rights of those persons shall certainly be adversely effected. In these circumstances, I do not consider it appropriate to restore the licences cancelled under the order the order impugned dated 6.5.2010. However, the petitioner is certainly entitled to receive the earnest money forfeited with interest @ 6.5% per annum. The respondents are also 6 required to purchase the stored liquor available with the petitioner as in view of the cancellation of the licence he is not having any authority to sale the same in open market. With the directions aforesaid this petition for writ stands disposed of. ( GOVIND MATHUR ),J. kkm/ps.