IN THE HIGH COURT OF KERALA AT ERNAKULAM PRESENT : THE HONOURABLE MR. JUSTICE K.BALAKRISHNAN NAIR & THE HONOURABLE MR. JUSTICE P.BHAVADASAN FRIDAY, THE 18TH SEPTEMBER 2009 / 27TH BHADRA 1931 WA.No. 913 of 2008() -------------------- (AGAINST THE JUDGEMENT/ORDER DATED 10.12.2007 IN OP.5112/2000) .................... APPELLANT(S): -------------- 1. THE STATE OF KERALA REPRESENTED BY ITS SECRETARY, MINISTRY OF EXCISE SECRETARIAT, TRIVANDRUM 2. THE JOINT EXCISE COMMISSIONER OFFICE OF THE COMMISSIONERATE OF EXCISE TRIVANDRUM BY SR. GOVERNMENT PLEADER MR.NOBLE MATHEW RESPONDENT(S): --------------- 1. MR.K. SWAMIDAS, MANAGING DIRECTOR )( MRS, KRISHNA DISTRILLERY )( KANNANCODE PUTHEN VEEDU, AYRAKUZHY P.O.,KOLLAM )(DIED DISTRICT, PIN 691 559 )( 2. P.N.MEENAKUMARI, AGED 47 YEARS W/O.LATE SWAMIDAS KANNANCODE PUTHENVEEDU, ARYRAKUZHY PO KOLLAM 3. DHANYA DAS, AGED 17 YEARS, D/O.LATE SWAMIDAS KANNANCODE PUTHENVEEDU, ARYRAKUZHY PO KOLLAM 4. HARIKRISHNA DAS, AGED 15 YEARS, S/O.LATE SWAMIDAS KANNANCODE PUTHENVEEDU, ARYRAKUZHY PO KOLLAM (SUPPLEMENTAL RESPONDENTS 2 TO 4 IMPLEADED AS PER ORDER DATED 18.09.2009 IN IA NO.819/08) ADV. SRI.DEVAN RAMACHANDRAN FOR R 2TO 4 SRI.K.M.ANEESH FOR R2 TO 4 THIS WRIT APPEAL HAVING BEEN FINALLY HEARD ON 18.09.2009, THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING: K.BALAKRISHNAN NAIR & P.BHAVADASAN, JJ. ------------------------------------------------------------------ WA NO.913 OF 2008 ------------------------------------------------------------------ Dated 18th September 2009 Judgment Balakrishnan Nair, J. The point that arises for decision in this appeal is whether an application for licence for compounding, blending and bottling of foreign liquor should be disposed of, having regard to the law prevailing on the date of application or the law prevailing at the time of consideration of the application. The brief facts of the case are the following : 2. Mr.K.Swamidas, Managing Director of M/s.Krishna Distillery, Aryakuzhy.P.O., Kollam, submitted an application for grant of licence for an industrial unit for compounding, blending and bottling of Indian made foreign liquor, on 23.11.1998. The said application was produced as Ext.P11 in the Original Petition. He was called upon to fill up a proforma and the same was submitted by him as per Ext.P13. When he found that while his application was not considered, the applications of others were being allowed, he approached this Court by filing OP No.17895/99. The said OP was disposed of by Ext.P14 Judgment dated 9th August 1999, directing WA 913/08 2 the second respondent therein, the Joint Commissioner of Excise, Office of the Commissionerate of Excise, Thiruvananthapuram, to consider his application for licence. Soon thereafter, the Government took a policy decision on 29.09.1999 to the effect that thereafter, no application for setting up of new distillery/compounding, blending and bottling unit will be sanctioned except to Mannam Sugar Mills, which is run by a Co-operative Society. In view of the said policy decision of the Government, the Commissioner of Excise, by Ext.P16 order dated 30.12.1999, rejected the application filed by Mr.Swamidas. The reason given for the rejection was the aforementioned policy decision of the Government dated 29.09.1999. Feeling aggrieved by the above decision, the appellant approached this Court by filing OP No.5112/00. The learned Single Judge, who heard the said OP, allowed the same, by a short judgment, which reads as follows : “The impugned Ext.P16 has been issued, refusing the request of the petitioner for IMFL blending and bottling licence. That decision is based on a Government Order dated 29.9.1999. Admittedly, the application of the petitioner, even going by paragraph 5 of the counter affidavit is dated 23.11.1998. Therefore, the Government could not have relied on the Government Order dated 29.09.1999 to reject the request of the petitioner. Accordingly, Ext.P16 is quashed and the respondents are directed to reconsider the application of the petitioner within a period of WA 913/08 3 three months from the date of receipt of a copy of this judgment after affording him an opportunity of being heard.” 3. The respondents in the OP, feeling aggrieved by the judgment quoted above, have preferred this appeal. Since Mr.Swamidas is no more, his legal representatives have been impleaded as respondents in the Writ Appeal. While admitting the Appeal, this Court granted stay of the judgment under appeal, taking the view that the decision of the learned Single Judge requires reconsideration, in view of the judgment of the Apex Court in Kuldeep Singh v. Govt. of NCT of Delhi (2006(5) SCC 702). 4. We heard the learned counsel on both sides. The learned Government Pleader appearing for the appellants submitted that by reason of submission of an application, the applicant does not get any vested right. If, during the pendency of the application, the policy of the Government is changed, the application can be dealt with only in accordance with the new policy. The relevant law that should be applied is the law in force at the time of consideration of the application. In support of his submission, the learned Government Pleader relied on the decision of the Apex Court in “Chief of Marketing (Marketing Division), Coal India Limited v. Mewat WA 913/08 4 Chemicals & Tiny SSI Coal Pulverising Unit (2004(4) SCC 146) and also the decision in Kuldeep Singh v. Govt. of NCT of Delhi (supra). The learned counsel for the respondents, on the other hand, submitted that though their predecessor-in-interest submitted the application on 23.11.1998, there was inordinate delay on the part of the Commissioner of Excise, in considering the same. The other applicants, who filed their applications after the submission of application by Mr.Swamidas, were granted with licences. Only because of the delay from the part of the competent authority, his application happened to be pending. Therefore, the same cannot be rejected, based on the policy evolved by the Government on 29.09.1999, it was submitted. 5. We considered the rival submissions made at the Bar. If a licence is granted to a person, it is used for operating a compounding, blending and bottling plant in future. So, normally, the law applicable during the period, when the licence is intended to become operational, should be taken into account while granting the licence. An application submitted in the past, which could have been granted in accordance with the law prevailing then, could not be granted now, if the law prohibits grant of such a licence. The WA 913/08 5 respondents have failed to bring to our notice, any provisions of the Abkari Act or the relevant Rules, which confer on them, a vested right on submission of an application for licence to have it considered in accordance with the law prevailing at the time of submission of the application. We agree with the submission of the learned Government Pleader that this view is supported by the two decisions cited by him. The decision in Chief of Marketing (Marketing Division), Coal India Limited (supra) was a decision, arising under a colliery control order issued under the Essential Commodities Act, 1955. In that case, the contesting respondents made the application before the competent authority for allotment of coal and also applied for linkages. Since their applications were not considered, they filed Writ Petitions before the High Court, which were disposed of by judgment dated 25.09.1995, directing the Coal Controller to consider their applications within six weeks. Though the Coal Controller, on 21.6.1996 passed favourable orders on their applications, the Central Government issued an order dated 30.07.1996, stating that the order of the Coal Controller was contrary to the instructions issued by the Central Government on 23.4.1996 and therefore, restrained supply of coal, till the matter was finally decided by the Government. WA 913/08 6 Challenging the order of the Central Government dated 30.07.1996, a Writ Petition was filed before the High Court, which was allowed by judgment dated 11.09.1997. The appeal filed by the official respondents against the said judgment was dismissed on 20.03.1998. The High Court took the view that since the party respondents filed their applications before the issuance of the circular dated 23.4.1996, restrictions subsequently introduced cannot be applied, while considering their applications. The official respondents appealed to the Honourable Supreme Court. The appeal was allowed by the Apex Court. The relevant portion of the said judgment reads as follows : “ In our view, the High Court was also in error in concluding that the position prevailing on the date of the application must apply. It is settled law that there is no vested right when a person makes an application. The position prevailing at the time of the allotment is to apply. Before the allotment was made, the circular dated 5.1.1995 had already been issued. The Coal Controller whilst allotting was bound to take note of that circular. The Joint Secretary by his fax dated 8.1.1996 had brought it to the notice of the Coal Controller. Thereafter, guidelines had also been issued on 23.4.1996. The Coal Controller was bound to take note of those guidelines also. We are unable to understand the reasoning given by the High Court that those guidelines had been issued by a Director and thus could not be said to be guidelines issued by the Central WA 913/08 7 Government. These guidelines have been issued by the Ministry of Coal. Merely because they are forwarded not by a Joint Secretary, but by a Director, would not mean that they are not binding on the Coal Controller. If there was any doubt as to whether they had been issued by the Central Government, the Coal Controller should have asked for clarification from the Central Government. In the above view, we find ourselves unable to sustain the order of the Single Judge or the Division Bench. They are accordingly set aside. The writ petitions filed by the respondents stand dismissed.” (emphasis supplied) 6. The next decision in Kuldeep Singh v. Govt. of NCT of Delhi (supra) is one, arising under the Abkari Law. In that case, the Government of NCT of Delhi invited applications by notification dated 22.11.2004 from the public for granting licence to vend foreign liquor during the financial year 2004-05. Since large number of applications were received, the receipt of further applications was stopped by a notice published on 7.2.2005. Mr.Kuldeep Singh submitted his application in time, but the same was rejected by the competent authority. On appeal, the appellate authority, by order dated 11.5.2005, remitted the application to the original authority. Since there was delay in reconsideration of his application, he moved the High Court, by filing a Writ Petition, which was disposed of, WA 913/08 8 directing the respondents to dispose of his application for grant of licence, on the same terms and conditions of the policy existing on or before 16.09.2005. The Government took a policy decision on 16.09.2005, against the grant of licence to vend foreign liquor. Relying on the said decision of the Government, the Collector of Excise rejected all the applications received pursuant to the advertisement dated 22.11.2004, including that of Mr.Kuldeep Singh. The aggrieved applicants filed Writ Petitions before the High Court and the learned Single Judge allowed the Writ Petitions and directed the Government to grant licences within one month, provided they fulfil the requirements prevailing before 16.09.2005. But, on appeal, the Division Bench reversed that decision. Therefore, Mr.Kuldeep Singh and others appealed to the Hon'ble Supreme Court. The Apex Court dismissed the appeal. The relevant portion of the said judgment reads as follows : “It is not in dispute that the State received a large number of applications. It was required to process all the applications. While processing such applications, inspections of the proposed sites were to be carried out and the contents thereof were required to be verified. For the said purpose, the applications were required to be strictly scrutinised. (See Ashok Lanka (2006) 9 SCC 90). WA 913/08 9 30. Unless, therefore, an accrued or vested right had been derived by the appellants, the policy decision could have been changed. 31. What would be an acquired or accrued right in the present situation is the question. 32. In Director of Public Works v. Ho Po Sang (1961 AC 901) the Privy Council considered the said question having regard to the repealing provisions of the Landlord and Tenant Ordinance, 1947 as amended on 9.4.1957. It was held that having regard to the repeal of Sections 3-A to 3E, when applications remained pending, no accrued or vested right was derived stating : 'In summary, the application of the second appellant for a rebuilding certificate conferred no right on him which was preserved after the repeal of Sections 3-A to 3-E, but merely conferred hope or expectation that the Governor-in-Council would exercise his executive or ministerial discretion in his favour and the first appellant would thereafter issue a certificate. Similarly, the issue by the first appellant of notice of intention to grant a rebuilding certificate conferred no right on the second appellant which was preserved after the repeal, but merely instituted a procedure whereby the matter could be referred to the Governor-in-Council. The repeal disentitled the first appellant from thereafter issuing any rebuilding certificate where the matter had been referred by petition to the Governor-in-Council but had not been determined by the Governor.' (See also Lakshmi Amma v. Devasssy (1970 KLT 204). WA 913/08 10 33. The question again came up for consideration in Howrah Municipal Corpn. v. Ganges Rope Co. Ltd.(1004) 1 SCC 663) wherein this court categorically held : 'The context in which the respondent Company claims a vested right for sanction and which has been accepted by the Division Bench of the High Court, is not a right in relation to 'ownership or possession of any property' for which the expression 'vest' is generally used. What we can understand from the claim of a 'vested right' set up by the respondent Company is that on the basis of the Building Rules, as applicable to their case on the date of making an application for sanction and the fixed period allotted by the Court for its consideration, it had a 'legitimate' or 'settled expectation' to obtain the sanction. In our considered opinion, such 'settled expectation', if any, did not create any vested right to obtain sanction. True it is, that the respondent Company which can have no control over the manner of processing of application for sanction by the Corporation cannot be blamed for delay but during pendency of its application for sanction, if the State Government, in exercise of its rule-making power, amended the Building Rules and imposed restrictions on the heights of buildings on G.T.Road and other wards, such 'settled expectation' has been rendered impossible of fulfilment due to change in law. The claim based on the alleged 'vested right' or 'settled expectation' cannot be set up against statutory provisions which were brought into force by the State WA 913/08 11 Government by amending the Building Rules and not by the Corporation against whom such 'vested right' or 'settled expectation' is being sought to be enforced. The 'vested right' or 'settled expectation' has been nullified not only by the Corporation but also by the State by amending the Building Rules. Besides this, such a 'settled expectation' or the so- called 'vested right' cannot be countenanced against public interest and convenience which are sought to be served by amendment of the Building Rules and the resolution of the Corporation issued thereupon.' 34. In Union of India v. Indian Charge Chrome (1999) 7 SCC 314) again this court emphasised : 'The application has to be decided in accordance with the law applicable on the date on which the authority granting the registration is called upon to apply its mind to the prayer for registration.' 35. In S.B.International Ltd. v. Assistant Director General of Foreign Trade (1996) 2 SCC 439) this court repelled a contention that the authorities cannot take advantage of their own wrong viz. delay in issuing the advance licence stating : 'We have mentioned hereinbefore that issuance of these licences is not a formality nor a mere ministerial function but that it requires due verification and formation of satisfaction as to compliance with all the relevant provisions.' 36. In a case of this nature where the State has the exclusive privilege and the citizen has no fundamental right to carry on business in liquor, in our opinion, the policy which would be applicable is the one which is prevalent on the date of grant and WA 913/08 12 not the one, on which the application had been filed. If a policy decision had been taken on 16.09.2005, not to grant L-52 licence, no licence could have been granted after the said date. 37. In any event, the period for which licences could be directed to the appellants has since expired. This court, thus, cannot direct grant of licence for the next year only because some licences had been granted after 9.3.2005. Article 14 of the Constitution of India carries with it a positive concept. Equality cannot be claimed in illegalities. (See State of UP V. Rajkumar Sharma (2006) 3 SCC 330). We have moreover noticed hereinbefore, the statement made by the learned Additional Solicitor General that steps would be taken for cancellation of licences of those licensees, who had been granted licence after the said date. We do not intend to make any further observation in regard thereto. 38. It is true that some licences had been granted, but the same cannot by itself be a ground to issue a writ of mandamus, particularly in view of the fact that the appellants have no legal right in respect thereof. 39. For the reasons aforementioned, we do not find any merit in these appeals..........................................” (emphasis supplied) 7. Going by the principles laid down by the Apex Court in the above quoted decisions, we are of the view that the respondents have no right to have their applications considered with reference to the law, that was prevalent in the remote past. Since they are to operate their industrial unit now, they have to go by the law, prevailing now. In the result, the Writ Appeal is allowed. The Judgment of the learned Single Judge is reversed and the OP is WA 913/08 13 dismissed. No costs. K.BALAKRISHNAN NAIR, JUDGE P.BHAVADASAN, JUDGE sta WA 913/08 14