IN THE HIGH COURT OF KERALA AT ERNAKULAM PRESENT : THE HON'BLE THE CHIEF JUSTICE MR.H.L.DATTU & THE HONOURABLE MR. JUSTICE K.M.JOSEPH THURSDAY, THE 3RD JANUARY 2008 / 13TH POUSHA 1929 WA.No. 971 of 1999 ---------------------------------- AGAINST THE JUDGEMENT IN OP.18936/1996 DT. 19.12.1998 .................... APPELLANTS/RESPONDENTS 1 TO 3 IN OP: ------------------------------------------------------------ 1. THE EXCISE COMMISSIONER, THIRUVANANTHAPURAM. 2. THE BOARD OF REVENUE (EXCISE), REPRESENTED BY ITS SECRETARY, THIRUVANANTHAPURAM. 3. THE ASSISTANT EXCISE COMMISSIONER, THIRUVANANTHAPURAM. BY SR. GOVERNMENT PLEADER SMT. K. MEERA. RESPONDENTS/PETITIONER & ADDL. R4 IN OP: -------------------------------------------------------------------- 1. AMMINI GEORGE, T.C. NO.12/314, POTTANKULAM, M.N. LANE, PLAMMODU, THIRUVANANTHAPURAM. 2. D. DILEEP KUMAR, S/O. BALAMOHANAN NAIR, "RADHA NIVAS", PANDARAVILA, PAPPANAMCODE P.O., THIRUVANANTHAPOURAM - 18. BY ADV. SRI.GEORGE POONTHOTTAM THIS WRIT APPEAL HAVING BEEN FINALLY HEARD ON 03/01/2008, THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING: H.L. DATTU, CJ. & K. M. JOSEPH, J. -------------------------------------------------- W. A. NO. 971 OF 1999 --------------------------------------------------- Dated this the 3rd January, 2008 JUDGMENT H.L.DATTU, C.J: De-novo hearing of this Writ Appeal is warranted in view of the orders passed by the Hon'ble Supreme Court in Civil Appeal No.5338/07 dated 16.11.2007. The Apex Court has set aside the orders passed by the Division Bench of this Court in Writ Appeal No.971/99 dated 30.8.2005 and has requested this Court to re-hear the matter and dispose of the same preferably within three weeks from the date of communication of the order. 2. We will be referring, in the course of our Judgment, the parties as arrayed in the Original Petition. 3. Petitioner is the widow of one K.T. George, who expired on 2.12.1990. During his life time, he was granted FL3 licence by the Authorities under the Foreign Liquor Rules for the excise year 1976 - 1977. The licence was renewed till March, 1988, and further renewal was not made, in view of the fact that the licensee had not requested for the renewal of the licence for the subsequent years. Nearly, after eight years, the petitioner had filed an application on 4.11.1996 for renewal of the licence and to shift the bar hotel to building No.TC 27/2365(1) of Hotel Padma Tourist Home. This application was rejected by the Board of Revenue by its order dated 27.11.1996. The order passed by the Board of Revenue is as under: "It is found out that there are 35 FL3 licences are being operated within the Corporation limits of Thiruvananthapuram. Almost at every half a kilometre distance, there is some bar available for meeting the normal requirements of the public. Since there is no requirement, the Board is not in a position to renew your defunct bar licence." WA 971/99 2 4. Being aggrieved by the aforesaid order passed by the Board of Revenue, petitioner was before this Court in OP No.18936/96. The learned Single Judge while entertaining the Original Petition, by his order dated 8.4.1997, had issued an interim direction, inter alia, directing the respondents in the Original Petition to renew the excise licence of the petitioner provisionally, subject to the result of the Original Petition. 5. Pursuant to the direction so issued by this Court, the respondents in the Original Petition had renewed the defunct licence of the petitioner and also had permitted shifting of the licence to a new premises as requested in the application after accepting defunct rental of Rs.25,000/- for each year of defunction. The licence is renewed from time to time and even to this day, the petitioner is making use of the FL3 licence granted pursuant to the interim direction issued by this Court. 6. The learned Single Judge by his order dated 19.12.1998 has allowed the Original Petition and in that, has observed that the need of the locality for having a bar and restaurant can be decided only after a proper enquiry and that since it has not been made by the Secretary (Excise), the application filed by the petitioner could not have been rejected. In fact, in paragraph 6 of the order, the learned Single Judge has observed that the reason assigned by the Secretary (Excise) may be his personal view and not based on any material gathered by him. That only means that the Secretary (Excise), without holding any enquiry, could not have come to the conclusion that there is no requirement of any further FL3 licences within the Corporation limits of Thiruvananthapuram, and that could not have been the reason for rejecting the request made in the application for renewal of the licence. The learned Single Judge has further observed that the need for renewal of FL3 licence could have been made only after a proper enquiry. Having come to the aforesaid conclusion, the learned Judge had allowed the Original WA 971/99 3 Petition. 7. The State had carried the matter by filing an Appeal before this Court in W.A. No.971/99, being aggrieved by the order passed by the learned Single Judge. A Division Bench of this Court by Order dated 30.8.2005 has confirmed the orders passed by the learned Single Judge. In the said Judgment, the learned Judges have only observed that the reason assigned by the Secretary (Excise) for rejecting the application filed by the petitioner for renewal of the licence is only his personal view, and not based on any materials gathered by him. Accordingly, the Division Bench rejected the Appeal. 8. The State had carried the matter by filing Special Leave Petition before the Apex Court in No.234/06. The Apex Court after granting leave has disposed of the Civil Appeal No.5338/07 on 16.11.2007 and has remanded the matter to this Court to re-hear the matter and pass a fresh order. 9. Smt. K. Meera, learned Government Pleader (Excise) would submit, that the learned Single Judge having taken exception to the reason assigned by the Secretary (Excise) for rejecting the application filed by the petitioner for renewal of the defunct licence, as based on his personal view, and not based on any other material gathered by him after making enquiries, ought to have set aside that order and remanded the matter to the Secretary (Excise) to reconsider the application and pass a fresh order in accordance with law and in accordance with the provisions of the Foreign Liquor Rules. Therefore, a request is made that if for any reason this Court comes to the conclusion that the reason assigned by the Secretary (Excise) is either arbitrary or perverse or contrary to the provisions of Foreign Liquor Rules, the one and the only course open is to set aside that order and remand the matter to the Authorities for disposal in accordance with law. WA 971/99 4 10. Per contra, Shri George Poonthottam, learned counsel appearing for the licensee would submit that the learned Single Judge by relying upon the various decisions rendered by this Court on more or less similar issues, was justified in allowing the Original Petition filed by the petitioner and further directing the Authorities to renew the defunct licence of the petitioner after collecting the necessary rental for each year of the defunct as provided in the proviso to Rule 13(3) of the Foreign Liquor Rules. Apart from this, the learned counsel also submits that the petitioner is continuing business right from the year 1996 and, therefore, at this stage, it may not be proper for this Court to interfere with the orders passed by the learned Single Judge. Counsel also brought to our notice that several amendments that are made in the Foreign Liquor Rules and those amendments would suggest that the licences granted earlier, if for any reason, are renewed, which were functioning as on 31.3.2007 stands regularised. The learned counsel also submits that the petitioner has transferred the licence in the name of Smt. Ambika with prior permission of the Excise Authorities and thereby third party rights are created and therefore, it may not be necessary at this stage to interfere with the order passed by the learned Single Judge. 11. Petitioner in the Original Petition filed has primarily called in question Ext.P1 order passed by the Secretary (Excise). The reason assigned by the Secretary (Excise) for rejecting the application filed by the petitioner for renewal of the licence and to shift the bar hotel to building No. TC 27/2365(1) of Hotel Padma Tourist Home was that there are altogether 35 FL3 licences being operated within the Corporation limits of Thiruvananthapuram and, therefore, there is no requirement of any further licence and, therefore, the Board is not in a position to WA 971/99 5 renew the petitioner's defunct bar licence. 12. The learned Single Judge while entertaining the Original Petition, as we have already noticed, had directed the Excise Authorities to renew the defunct licence after collecting the necessary rental, subject to the result of the Original Petition. Pursuant to the interim direction so issued, it is not in dispute that the Excise Authorities have renewed the licence of the petitioner and the same is made use by the petitioner. 13. The learned Single Judge while disposing of the Original Petition is of the opinion that the reasons assigned by the Secretary (Excise) for rejecting the petitioner's application for renewal of the licence, is arbitrary, perverse, capricious and contrary to the Foreign Liquor Rules. In our view, having come to the conclusion that the reason assigned by the Secretary (Excise) is contrary to the provisions of the Act and the Rules, the only course that was open to the learned Single Judge was to set aside the impugned order passed and direct the Authorities concerned to reconsider the application filed for renewal of the licence in accordance with law. In the present case, the learned Single Judge while allowing the Original Petition has quashed the impugned order, but has not remanded the matter to the authority which had passed the impugned order for passing a fresh order in accordance with law, and thereby virtually granted excise licence to the petitioner to conduct the business in liquor under the provisions of the Foreign Liquor Rules. 14. Here is a case where an application was filed by the widow of one K.T. George who was having Excise licence from the years 1976 - 1977 till WA 971/99 6 March, 1988. After his death in the year 1990, his wife had filed an application for renewal of the licence and also to shift the bar licence to a new building on 4.11.1996. That application is rejected by the competent authority on a ground which cannot be traceable to any provision of the Act or the Foreign Liquor Rules. The duty to give satisfactory reasons is a duty of decisive importance which cannot be lawfully disregarded. Failure to do so has resulted the entire proceedings wholly defective. Therefore, in our view, the learned Judge was justified in taking exception to the order passed by the Secretary (Excise). Having held that the order passed is bereft of cogent reasons, the proper course would have been to set aside the impugned order and issue mandamus to rehear the application denovo. Since that has not been done, we cannot sustain the order passed by the learned Single Judge. 15. In view of the above, the Writ Appeal filed by the State Government requires to be allowed. Accordingly, we pass the following: Order The Writ Appeal is allowed and the matter is remanded to the Excise Commissioner to reconsider the petitioner's application for renewal of the licence in accordance with law and in accordance with the Foreign Liquor Rules, keeping in view the requirement as on the date of filing of the application after affording an opportunity of hearing to the petitioner/transferee and after permitting them to produce all such materials which are available in support of the claim made in the application and also to bring to the notice of the Authorities the amendments which have been made to the Foreign Liquor Rules in the years 2004 and 2007. Liberty is also reserved to the petitioner/transferee of licence to take up all such contentions which are available to her in aid of the prayer sought in the application filed for renewal of the licence dated 4.11.1996. The entire exercise shall be completed by the Excise Commissioner within fortyfive days from today. The disposal of this Writ WA 971/99 7 Appeal will not stand in the way of the petitioner's/licensee's continuing the business for a further period of two months from today. The Writ Appeal is allowed in part as above. CMP No.6731 of 1999 is dismissed. H.L. DATTU, CHIEF JUSTICE K.M. JOSEPH, JUDGE kbk/DK. WA 971/99 8 H.L. DATTU, C.J: & K. M. JOSEPH, J. W.A. NO. 971 OF 1999 JUDGMENT 3rd January, 2008.