Case: State of Punjab Vs. Messrs Dial Chand Gian Chand and Company

The number of liquor and intoxicating drug shops which may be licensed in any local area, shall be subject to the orders of the State Government.4. Shops may be licensed for the sale of liquor and intoxicating drugs in only such villages and in such wards or quarters of towns as the Financial Commissioner shall, subject to the control of the State Government, from time to time, direct.5. No licence for the sale of liquor or drugs may be given unless either there is an ascertained demand for such liquor or drugs in the locality concerned, or it is granted to counteract the illicit supply of liquor or drugs in that locality, nor in the cases of liquor licenses for no consumption without the inquiry prescribed by Orders 8 to 15 of these Orders.Interpreting paragraph 3, the High Court held that as paragraph 3 is couched in negative language, it appears to be mandatory and therefore, no new country liquor vend can be opened without the sanction of the State Government. The High Court then proceeded to observe that no document was placed on record to show that the State Government had sanctioned opening of a vend at Gulwati. The High Court, in this connection, referred to Annexure B/1 issued by respondent 5 Excise and Taxation Officer, Patiala giving public notice of the auction to be held on March 26, 1969 for 15 liquor vends at various places in Patiala district and observed that Gulwati does not find place in this list. It is difficult to appreciate the approach of the High Court in this cases. Rule 4 of the 1956 Order shows that the Financial Commissioner had the power to open licensed shops for sale of liquor and intoxicating drugs and this power could be exercised subject to the control of the State Government. It appears that the Punjab Government had empowered in the month of February 1969 the Excise and Taxation Commissioner to exercise powers of Financial Commissioner, that changes in excise arrangement regarding the opening and closing etc. of the vends may be made by the Excise and Taxation Commissioner, if felt necessary by him under intimation to Government in respect thereof. Mr. H. S. Gill, Deputy Excise and Taxation Commissioner has stated in the return filed by him that the Excise Department considering the overall demand of liquor in the relevant area and the trends of the sales, came to the conclusion that the vend at Gulwati may be opened. If the State Government had empowered the concerned officer and if in exercise of the power a vend was directed to be opened, we fail to see how such opening of the vends at Gulwati could be said to be not in accordance with law. The assertion of Mr. Gill could not be lightly brushed aside on the specious plea that no order or communication of the Punjab Government issued in February 1969 was produced before the High Court. Assuming that the High Court is right ins holding that the delegate the functions enjoined on it by clauses (a) of Rule 3 of 1956 Order, the High Court ought to have examined the various provisions power of general superintendence and administration on the Financial Commissioner in matters relating to excise, subject to restrictions therein mentioned. And Mr. Gill asserts in the return that the Excise Commissioner was authorised to exercises powers of Financial Commissioner. This was not controverted and it cannot be rejected in a cavalier manner. We are therefore unable to accept the conclusion recorded by the High Court that the opening of a country liquor vend at Gulwati was not in accordance with law.8. The High Court approached the matter from a slightly different angle and held that there is not material to show that Rule 5 of 1956 Order was complied with. The High Court overlooked the fact that there is a presumption, undoubtedly rebuttable that official acts are presumed to be done in proper manner.9. The High Court also did not appreciate that writ petition was filed by a licensee who participated in the auction with eyes wide open and on untenable plea wanted to wriggle out of the bargain. In this connection, one can advantageously refer to decision of the Constitution Bench of this Court in Har Shankar v. Dy. Excise and Taxation Commissioner wherein it has been held that the writ jurisdiction of the High Courts under Article 226 of the Constitution is not intended to facilitate avoidance of obligations voluntarily incurred. It was also held that by attempting to exploit the licences without the burden of licence fees subject to which the licence fees subject to which the licence was granted, the licensee are seeking to work the licences on such terms as they find convenient.10. Lastly, Mr. Sharma urged that the High Court granted a prayer not sought by the respondent in the High Court and the prayer is as if damages were awarded for some wrongful act on the part of the officers of the Excise Department. The High Court having held that a direction for closing down the liquor vend at Gulwati cannot be issued, it was not open to the High Court to work out for itself and rewrite the contract between the parties. The respondent was under an obligation to pay the amount of the bids. The High Court gives remission to the respondent on an untenable grounds that presumably the opening of the liquor trade of the respondent. The proportion of remission is worked out on the basis that the bid for Gulwati vend would be directly proportionate to the loss presumably suffered by the respondent. This assumption is wholly untenable. There is no material for reaching this conclusion. The High Court could not have converted writ petition into a suit for recovery of damages ands that too without recording a finding that there was any breach of contract. We are satisfied that the High Court was in error in granting the relief.

Decision (1 = appeal accepted, 0 = rejected): 1

Explanation:
1[ds]Interpreting paragraph 3, the High Court held that as paragraph 3 is couched in negative language, it appears to be mandatory and therefore, no new country liquor vend can be opened without the sanction of the State Government. The High Court then proceeded to observe that no document was placed on record to show that the State Government had sanctioned opening of a vend at Gulwati. The High Court, in this connection, referred to Annexure B/1 issued by respondent 5 Excise and Taxation Officer, Patiala giving public notice of the auction to be held on March 26, 1969 for 15 liquor vends at various places in Patiala district and observed that Gulwati does not find place in this list. It is difficult to appreciate the approach of the High Court in this cases. Rule 4 of the 1956 Order shows that the Financial Commissioner had the power to open licensed shops for sale of liquor and intoxicating drugs and this power could be exercised subject to the control of the State Government. It appears that the Punjab Government had empowered in the month of February 1969 the Excise and Taxation Commissioner to exercise powers of Financial Commissioner, that changes in excise arrangement regarding the opening and closing etc. of the vends may be made by the Excise and Taxation Commissioner, if felt necessary by him under intimation to Government in respect thereof. Mr. H. S. Gill, Deputy Excise and Taxation Commissioner has stated in the return filed by him that the Excise Department considering the overall demand of liquor in the relevant area and the trends of the sales, came to the conclusion that the vend at Gulwati may be opened. If the State Government had empowered the concerned officer and if in exercise of the power a vend was directed to be opened, we fail to see how such opening of the vends at Gulwati could be said to be not in accordance with law. The assertion of Mr. Gill could not be lightly brushed aside on the specious plea that no order or communication of the Punjab Government issued in February 1969 was produced before the High Court. Assuming that the High Court is right ins holding that the delegate the functions enjoined on it by clauses (a) of Rule 3 of 1956 Order, the High Court ought to have examined the various provisions power of general superintendence and administration on the Financial Commissioner in matters relating to excise, subject to restrictions therein mentioned. And Mr. Gill asserts in the return that the Excise Commissioner was authorised to exercises powers of Financial Commissioner. This was not controverted and it cannot be rejected in a cavalier manner. We are therefore unable to accept the conclusion recorded by the High Court that the opening of a country liquor vend at Gulwati was not in accordance with law.8. The High Court approached the matter from a slightly different angle and held that there is not material to show that Rule 5 of 1956 Order was complied with. The High Court overlooked the fact that there is a presumption, undoubtedly rebuttable that official acts are presumed to be done in proper manner.9. The High Court also did not appreciate that writ petition was filed by a licensee who participated in the auction with eyes wide open and on untenable plea wanted to wriggle out of the bargain. In this connection, one can advantageously refer to decision of the Constitution Bench of this Court in Har Shankar v. Dy. Excise and Taxation Commissioner wherein it has been held that the writ jurisdiction of the High Courts under Article 226 of the Constitution is not intended to facilitate avoidance of obligations voluntarily incurred. It was also held that by attempting to exploit the licences without the burden of licence fees subject to which the licence fees subject to which the licence was granted, the licensee are seeking to work the licences on such terms as they find convenient.10. Lastly, Mr. Sharma urged that the High Court granted a prayer not sought by the respondent in the High Court and the prayer is as if damages were awarded for some wrongful act on the part of the officers of the Excise Department. The High Court having held that a direction for closing down the liquor vend at Gulwati cannot be issued, it was not open to the High Court to work out for itself and rewrite the contract between the parties. The respondent was under an obligation to pay the amount of the bids. The High Court gives remission to the respondent on an untenable grounds that presumably the opening of the liquor trade of the respondent. The proportion of remission is worked out on the basis that the bid for Gulwati vend would be directly proportionate to the loss presumably suffered by the respondent. This assumption is wholly untenable. There is no material for reaching this conclusion. The High Court could not have converted writ petition into a suit for recovery of damages ands that too without recording a finding that there was any breach of contract. We are satisfied that the High Court was in error in granting the relief.