IN THE HIGH COURT OF KERALA AT ERNAKULAM PRESENT : THE HONOURABLE MR. JUSTICE ANTONY DOMINIC WEDNESDAY, THE 3RD SEPTEMBER 2008 / 12TH BHADRA 1930 WP(C).No. 22823 of 2008(P) -------------------------- PETITIONERS ----------------- 1. JANEESH P.S., AGED 27 YEARS, S/O. SADAGOPAN, LATHA NIVAS, CLAPPANA P.O., KARUNAGAPPALLY, KOLLAM DISTRICT. 2. MOHANAN, AGED 53 YEARS, S/O. SAHADEVAN,PARISSERIL HOUSE, ADINAD SOUTH MURI,KARUNAGAPPALLY, KOLLAM DISTRICT. 3. ANANDAN, AGED 48 YEARS, S/O. RAGHAVAN, AJI BHAVAN, EDAKKAD P.O., KUNNATHOOR, KOLLAM DISTRICT. 4. RAVEENDRAN, AGED 50 YEARS, S/O. CHELLAPPAN, KALLELI BHAGOM, MEENATHEVADAKKETHIL, KARUNAGAPPALLY, KOLLAM DISTRICT. 5. BINU, AGED 38 YEARS, S/O. RAJAN, SUNIL BHAVAN, KALLELI BHAGAM, KARUNAGAPPALLY, KOLLAM DISTRICT. 6. RAMAKRISHNAN, AGED 58 YEARS, S/O. NANU, RTHEESH BHAVAN, PAVUMBA P.O., KARUNAGAPPALLY, KOLLAM DISTRICT. 7. RAVI, AGED 39 YEARS, S/O. DAMODHARAN, ALUVILAYIL PAVUMBA P.O., KARUNAGAPPALLY, KOLLAM DISTRICT. 8. BHARATHAN, AGED 54 YEARS, S/O. NANU, KALARIKKAL PADEETTATHIL, MANAPPALLY P.O., KARUNAGAPPALLY, KOLLAM DISTRICT. BY ADV. SRI.NIREESH MATHEW WPC NO.22823/08 -2- RESPONDENTS: ------------------- 1. STATE OF KERALA, REPRESENTED BY SECRETARY, TAXES (A) DEPARTMENT GOVERNEMNT SECRETARIAT, THIRUVANANTHAPURAM. 2. THE EXCISE COMMISSIONER, THIRUVANANTHAPURAM. 3. THE ASST. EXCISE COMMISSIONER, KOLLAM. 4. THE CIRCLE INSPECTOR OF EXCISE, KARUNAGAPPALLY, KOLLAM DISTRICT 5. THE EXCISE INSPECTOR, KARUNAGAPPALLY, KOLLAM DISTRICT. BY GOVT.PLEADER SRI.K.V.MANOJ KUMAR THIS WRIT PETITION (CIVIL) HAVING BEEN FINALLY HEARD ON 08/08/2008, THE COURT ON 03/09/2008 DELIVERED THE FOLLOWING: WPC NO.22823/08 APPENDIX PETITIONERS EXHIBITS EXT.P1: PHOTOCOPY OF THE AGREEMENT DATED 19.3.2008 EXECUTED BETWEEN THE PETITIONERS. EXT.P2: PHOTOCOPY OF THE NOTICE DT 31.3.2008 WITH NO.Q-4- 5555/07 ISSUED BY THE 3RD RESPONDENT. EXT.P3: PHOTOCOPY OF THE CRIME AND occurrence REPORT IN CR NO.59/2008 AND MAHAZAR PREPARED BY THE 4TH RESPONDENT DT 17.4.2008. EXT.P4: PHOTOCOPY OF THE REPRESENTATION DT 21.4.2008 SUBMITTED BEFORE THE 2ND RESPONDENT. EXT.P5: PHOTOCOPY OF THE JUDGMENT DATED 2.5.2008 INW PC NO.13725/2008 PASSED BY THIS HON'BLE COURT. EXT.P6: PHOTOCOPY OF the ORDER NO.XA7-10962/08 DT 16.5.2008 PASSED BY THE 2ND RESPONDENT. EXT.P7: PHOTOCOPY OF the ORDER DT 28.5.2008 IN BA NO.2778/2008 PASSED BY THIS HON'BLE COURT. EXT.P8: PHOTOCOPY OF the ORDER NO.XA7-10962/08 DT 4.7.2008 PASSED BY THE 2ND RESPONDENT. EXT.P9: PHOTOCOPY OF THE JUDGMENT DT 18.3.2008 IN WPC NO.9044/08 PASSED BY THIS HON'BLE COURT. //TRUE COPY// P.A. TO JUDGE ANTONY DOMINIC, J. =============== W.P.(C) NO. 22823 OF 2008 P ==================== Dated this the 3rd day of September, 2008 J U D G M E N T The prayer made in this writ petition is to quash Ext.P8 order passed by the 2nd respondent. There is a further prayer to direct the respondents to issue licence of toddy shop Nos. 33, 35, 36, 44, 45 and 46 in Group No.VIII of Karunagapally Excise Range to the petitioners forthwith. 2. Briefly stated, the facts of the case are that the allotment of the toddy shops referred to above were confirmed in favour of the petitioners by Ext.P2 order passed by the 2nd respondent and the petitioners were required to execute a permanent agreement in Form No.3, to conduct the shops on that basis. It is stated that thereupon they applied for licence. Coming to know that licence have been sanctioned and are with the 4th respondent, they approached the 4th respondent, when petitioners were informed that following the seizure of artificial toddy in plastic cans and bottles, from a building owned by two persons, a case was registered as C.R.No.59/08. Petitioners submit that they were also informed that on the statement of the second accused in the case that the toddy was manufactured by himself for sale and that he had supplied the WPC 22823/08 :2 : same to the Thattassery toddy shop No.45 of which the petitioners are allottees, they were arrayed as accused in the case as A3 to 10. Ext.P3 is the crime and occurrence report in CR No.59/08. 3. As according to the petitioners, they were innocent of the allegations, they filed Ext.P4 representation to the 2nd respondent for appropriate direction for the issue of licence and complaining of delay in passing orders on Ext.P4, filed WP(C) No.13725/08 before this court. The writ petition was disposed of by Ext.P5 judgment directing that orders be passed on Ext.P4 within one month. Thereafter, Ext.P6 show cause notice was issued to the petitioners calling upon them to show cause why the licence should not be cancelled under Section 26(b) of the Abkari Act read with Rule 5(19) of the Kerala Abkari Shops Disposal Rules, 2002. They obtained anticipatory bail by Ext.P7 order of this court in BA No.2778/08, and on that basis were enlarged on bail. In pursuance to Ext.P6 show cause notice, petitioners were heard by the 2nd respondent and by Ext.P8 order, the privilege and licence granted in respect of the shops in Group No.VIII of Karunagapally Excise Range, issued in their favour was cancelled. It is in this background writ petition has been filed with the prayers mentioned above. WPC 22823/08 :3 : 4. Learned counsel mainly contends that question of cancellation of a licence arises only after the licence is issued. According to him, since licence was not issued, though allotment was confirmed in their favour, there arise no occasion for its cancellation. It is also stated that the seizure which led to the registration of the crime was on 17/4/2008 when the petitioners were not even conducting the shops and as they had nothing to do with the accused Nos. 1 and 2, the registration of the crime can be no reason for denying them the benefit of the privilege granted in their favour. Yet another contention raised is relying on Ext.P9 judgment of this court and it is argued that unless a person is charged with an offence, they cannot be denied the benefit of licence. 5. On the other hand, the learned Government Pleader contended that as mentioned by the 2nd respondent in Ext.P7, petitioners had admitted in writing of having purchased artificial toddy from accused Nos.1 and 2. It is also stated that sale was confirmed in their favour on 30/3/2008 and they commenced business w.e.f. 2/4/08. According to the learned Government Pleader Tree Tax was paid on 2/4/2008 and agreement was also signed on 01.04.2008. Out of the 7 shops licenced, licences in respect of 4 shops were issued on 16/4/2008. In respect of WPC 22823/08 :4 : shop No.45, licence was issued on 23/4/2008 and in respect of the remaining one, it was issued on 29/4/2008. It is stated that the occurrence was on 17/4/2008 and therefore, action initiated against the petitioners cannot be faulted. 6. This argument raised by the learned Government pleader is sought to be contradicted by the counsel for the petitioner mainly relying on Section 18(A)(2) of the Act, which provides that business can be commenced only after licence is issued. According to him, even going by the submission made by the learned Government Pleader, in respect of Shop No.45, from the vicinity of which, the seizure was allegedly effected was issued only on 23/4/2008 and the seizure being on 17/4/2008, the licencee cannot be proceeded against. 7. True as contended by the learned counsel for the petitioner, in terms of Section 18(A)(2) of the Abkari Act, business can be commenced only after licence is issued. Even going by the submissions made by the learned Government Pleader, the issue of licence in respect of shop No.45 was was only on 23/4/2008. In view of Section 18(A)(2), unless respondents are in a position to satisfy with adequate materials that the petitioners had commenced business on 2/4/2008, I cannot accept the WPC 22823/08 :5 : said plea. In this case, apart from making a submission as above, respondents have not produced anything to conclude that the petitioners had commenced business on the basis of the communication issued to them confirming allotment in their favour. 8. However, the fact remains that recovery was effected though it is from accused Nos.1 and 2 in C.R.No.59/08. But then, as is seen from Ext.P8 order passed by the 2nd respondent, petitioners have admitted that they were purchasing illicit toddy from the possession of the first accused. Ext.P8 to the extent relevant reads as follows. In the light of the records as revealed and the statements given by the licensees S/Sri.Janeesh, Mohanan, Anandan, Binu, Ravi and Bharathan and considering the gravity of the offence and the violation committed by the licensees, the privilege and licence of toddy shop Group No.VIII of Karunagappally Range issued in favour of S/Sri.Ravi, 2, Ramakrishnan, 3, Bharathan, 4, Janeesh, 5, Mohanan, 6, Anandan, 7) Raveendran and R.Binu is hereby cancelled and licence fee remitted by the licensees forfeited to Government as per Section 26(b) read with Rule 5(19) & 7(31) of Kerala Abkari Shops Disposal Rules, 2002. The Asst. Excise Commissioner, Kollam is directed to take immediate steps for conducting resale of the toddy shops in the above groups as per rules. 9. Petitioners have a case that the statements could not have been relied on. It is also stated that when the petitioners surrendered before the Investigating Officer, he obtained some blank papers from the WPC 22823/08 :6 : petitioners and that the petitioners are not informed of anything that was written in those papers. It is also stated that they have not been given any signed statement and that if any statements are created/concocted by the Investigating Officers, petitioners deny the same. 10. At least to the limited extent of having given blank signed papers, petitioners admit the same. If that be so, it is their burden to prove before the 2nd respondent that the statements were created or concocted as alleged by them. A reading of Ext.P6 show cause notice shows that the 2nd respondent has not placed reliance on the signed statements now relied on against the petitioners in Ext.P8. In my view, if the 2nd respondent wanted to place reliance on the signed statements, the same should have been disclosed in Ext.P6 show cause notice so that the petitioners would have had an opportunity to prove their case that the signed statements proposed to be relied on was unreliable for the reason that it was concocted or created. 11. Since the only incriminating material relied on for cancellation of the licence is the signed statements allegedly given by the petitioners and as this was not a material that was relied on in the show cause notice, I must hold that Ext.P8 order of the Commissioner of Excise is violative of WPC 22823/08 :7 : the principles of natural justice for the reason that the said order was issued without disclosing the materials relied on against the petitioners. For that reason Ext.P8 is liable to be set aside and I do so. 12. However, this will not stand in the way of the respondents from initiating fresh proceedings by issuing proper show cause notice disclosing the materials to the petitioners and giving the petitioners opportunity to rebut the case against them. It is directed that if respondents are to proceed against the petitioners, show cause notice shall be issued and the adjudication following shall be continued and concluded, as expeditiously as possible, at any rate within 4 weeks of production of a copy of this judgment. 13. Since I have invalidated Ext.P8 only on the ground of violation of principles of natural justice, it is clarified that I have not examined the correctness or otherwise of the other contentions raised by both sides and these contentions are left open. Writ petition is disposed of as above. ANTONY DOMINIC, JUDGE Rp