(1) WP 199.2006 IN THE HIGH COURT OF JUDICATURE AT BOMBAY BENCH AT AURANGABAD WRIT PETITION NO.199 OF 2006 Smt. Keti Ardeshir Kapadia, presently residing at Flat No.6, Padmavati Society, Lane No.10, Dahanukar Colony, Kothrud, Pune PETITIONER VERSUS 1. State of Maharashtra Through Principal Secretary, Home (State Excise) Department, Mantralaya, Mumbai 2. The Commissioner of State Excise, Old Custom House, Mumbai 3. The Collector of Jalgaon, (State Excise Department) Jalgaon, District : Jalgaon RESPONDENTS ..... Mr. A.R. Kale, Advocate for the Petitioner. Mr. S.V. Kurundkar, Addl. Govt. Pleader for the Respondent-State. ..... CORAM : V.R. KINGAONKAR, J. DATED : 7TH JANUARY, 2011 ORAL JUDGMENT:- 1. By this Petition, the petitioner challenges legality and validity of order rendered by respondent no.3 bearing no. F.L.R.11204/6614/3 dated 3.8.2005 whereby the amount of license fees alongwith interest (2) WP 199.2006 was demanded by the respondent for the purpose of renewal of the F.L. II license. 2. It is not necessary to elaborately set out the rival pleadings and contentions. Suffice it to say that husband of the petitioner was running business of vending foreign liquor under the name and style as "M/s. E.C. Kapadia & Sons, Subhash Chowk, Amalner". He was license holder till his death. He died on 26.3.1998. The petitioner is the wife of deceased license holder. She could not run the business due to domestic difficulties. She however applied for revalidation of the license on 5.12.2004. The competent authority considered her application (Exh.B). It is pertinent to notice here that the deceased was running the business with his brother by name Nausher Kapadia. Said Nausher Kapadia died as a bachelor and without leaving any issue, on 18.9.1991. The petitioner therefore alone was the successor of the deceased license holder. She expressed willingness to deposit the arrears of the license fees for the period during which the business was not being operated i.e. between March, 1998 till December, 2004. (3) WP 199.2006 3. The respondent no.2 allowed revalidation of the license which was surrendered by the original licensee on 25.3.1989. The revalidation has been granted, however, on condition that the petitioner shall pay the license fees of Rs.4,95,700/- for the entire period prior to the date of her application, since the date of the closure of the business alongwith interest for renewal of the license at rate of 24% for period between 1.4.1989 to 31.3.2006. The interest amount is calculated at Rs.6,00,675/-. 4. Having heard learned Advocate for the petitioner and learned Addl. Govt. Pleader, it is explicit that the dispute boils down to the demand for the amount of interest i.e. Rs.6,00,675/- which is sought to be recovered from the petitioner for the purpose of validation of the license. The petitioner had deposited the amount on adhoc basis before the Collector of Excise which is subject to the final decision of this Petition, when the license was revalidated and she was allowed to delink the business of the foreign liquor. (4) WP 199.2006 5. Mr. Kurundkar, learned Addl. Govt. Pleader contended that the petitioner has no locus standi because the license is transferred. Transfer is a subsequent event and has nothing to do with the liability, which is fastened on the petitioner and as such the Petition is maintainable. The learned Addl. Govt. Pleader invited my attention to the observations in the Division Bench judgment of this Court in Writ Petition no. 1186 of 2004. The Division Bench observed that the licensee is required to pay the license fees for the period of having the license, including the period for which the business was not being operated. It was the case in which the petitioner-Chunnilal Gandhi, proprietor of M/s. Pushpa Wines had applied for issuance of afresh license instead of seeking renewal. The Division Bench held that the license once had expired, can only be renewed but the petitioner wanted to avoid the renewal in order to avoid payment of the necessary license fees for the period for which the business was not being operated. The facts of the said case are not on same footing. Here is a case wherein the petitioner was willing to pay the license (5) WP 199.2006 fees for the period between March, 1998 till December, 2004. In "M/s. Samarth Co-operative Consumers Central Stores Ltd. V. State of Maharashtra and ors." (W.P. no. 4796 of 2003) a Division Bench of this Court held that section 49 of the Bombay Prohibition Act, 1949 does not empower or authorise the respondents to demand license fee for the period for which the petitioner had not carried out business. 6. Perusal of section 49 of the Bombay Prohibition Act would make it amply clear that the Government is entitled to recover the license fee including rent for the grant of privileges or right to any person in order to issue the license for dealing in the liquor business. Section 49 reads as follows:- "Notwithstanding anything contained in this Act, the State Government shall have the exclusive right or privilege of importing, exporting, transporting, manufacturing, bottling, selling, buying, possessing or using any intoxicant, hemp or toddy, and whatever under this Act or any license, permit, pass, thereunder any fees are levied and collected for any license, permit, pass, (6) WP 199.2006 authorization or other permission given to any person for any such purpose, shall be deemed to include the rent or consideration for the grant of such right or privilege to that person by or on behalf of the State Government". On careful consideration of section 49 of the Bombay Prohibition Act, 1949 and the relevant circulars, particularly, the circular dated 21.4.1983 issued vide B.P.A./1083/9/PRO/2, it is quite clear that there is no legal provision to recover interest over the license fees. It is well known concept that interest can be recovered only on the amount which is lent and the amount which is found due or recoverable as a debt. License fees which was not paid for the period during which the business was not being operated by the petitioner could not have been treated as a legally recoverable debt from the petitioner. The recovery of the interest is not permissible under any contract, usage or other legal provision. In this view of the matter, the impugned order to the extent of recovery of Rs.6,00,675/- is liable to be struck down. (7) WP 199.2006 7. In the result, the Petition is partly allowed. The impugned order only to the extent of recovery of Rs.6,00,675/- towards the interest charged by the respondent no.2 is set aside. Rule is accordingly made absolute. No costs. The respondent no.2 to refund the excess amount which is deposited by the petitioner within a period of four (4) months. Sd/- [V. R. KINGAONKAR, J.] arp