Case: State Of Kerala  Vs. Unni

3. Abkari Act (for short, the Act) was enacted by Maharaja of Cochin By Act No.10 of 1967, it was extended to the whole of Kerala. By reason of the provisions of the said Act, manufacture or sale of liquor, including country liquor is regulated. The regulatory statute, indisputably, is made in terms of Entry 8 of List II of the 7th Schedule of the Constitution of India. A licence is granted under the Act. The licensee is indisputably required to carry out the manufacture or sale of country liquor in terms of the provisions of the Act, rules framed thereunder as also the terms and conditions of the licence.On obtaining samples of toddy taken from the business premises of the licensees, it was, inter alia, found that ethyl contained therein was 9.50% v/v. They were prosecuted under Section 57(a) of the Act.12. It is not in dispute that if a prosecution is instituted under Section 57(a) of the Act, renewal of the licence shall not be granted, whereas renewal of the licence would not be a bar if the licensee is prosecuted under Section 56 thereof.13. Writ petitions were filed, inter alia, questioning the validity or otherwise of Rule 9(2) of the Rules and/or applicability of Section 57(a) of the Act, in the event sample of toddy was found to be exceeded 8.1%.14. A learned Single Judge of the Kerala High Court by a judgment and order dated 31.03.2003 held the said rules to be ultra vires. The learned Single Judge, however, did not consider it necessary to go into the question of interpretation of the two penal provisions viz. Section 56(b) and Section 57(a) of the Act. The criminal proceedings as against the licensee were quashed. In an intra-court appeal, the Division Bench, however, upheld the validity of Rule 9(2) of the Rules, opining that it had not imposed any condition which was unworkable and/or was impossible to be performed. Upon construction of Section 56(b) and Section 57(a), it was opined that having regard to the fact that ethyl alcohol is an essential component or ingredient of toddy, only because percentage of ethyl alcohol found to be more, it would not amount to addition of a foreign ingredient as envisaged under Section 57(a) of the Act. It was, therefore, heldthe result, the challenge against the vires of Rule 9(2) of the Abkari Shops (Disposal in Auction) Rules, 2002 is repelled. Prosecution proceedings against the Respondents under Section 56(b) of the Abkari Act are not liable to be declared illegal. Proceedings to prosecute the Respondents under Section 57(a) of the Act are quashed.The Division Bench of the High Court in subsequent cases followed its earlier orders.

Court's reasoning:
21. Rule 9(2) of the said Rules, in our opinion, should be given a plain meaning. It should be read in its entirety. It is in two parts. The intention of the legislature must be gathered having regard to the expressions used therein. Rule 9(2) read in its entirety, states the context that thereby what is essentially sought to be prevented is adulteration of toddy. It is aimed at prevention of adulteration. The penal provision contained in first part not only directs that all toddy kept or offered for sale should be of good quality and unadulterated but also provides that nothing shall be added to it to increase its intoxicating power or for any other purpose. If the second part prescribing the contents of the ethyl alcohol in toddy is read in the context of the first part vis-a-vis Section 57(a) of the Act, it would be evident that prohibition is aimed at adulteration by addition of any foreign substance to increase its intoxicating power or for any other purpose.22. Validity of Rule 9(2), therefore, can be saved if the said provision is read in its entirety and rule of harmonious construction is resorted to. If, however, Rule 9(2) is sought to be invoked even for the purpose of initiating a prosecution as against a licensee even he does not add any foreign substance to it, the same, in our opinion, would render the same ultra vires, as would appear from the discussions made hereinafter.23. It is not in dispute that there does not exist any mechanical devise to measure the contents of ethyl alcohol present in toddy. It also stands admitted that contents of ethyl alcohol in toddy would depend upon various factors including weather, season or pot in which it is kept etc.24. Judicial notice can be taken of the fact that each village would not have a chemical laboratory where the process of analysis of ethyl alcohol can be carried out. For example, if a sample is taken in a village, by the time sample is sent for and is analyzed, the volume of ethyl alcohol may increase. Although we are informed that some chemical is mixed when a sample is taken, no material has been placed in that behalf.25. The validity or otherwise of Rule 9.2 must be considered from this point of view.The constitutionality of a statute is presumed in view of the principles laid down in ut rest magis valeat quam pareat. The principles on which constitutionality of a statute is judged and that of a subordinate legislation are different.Unreasonableness is one of the grounds of judicial review of delegated legislation. Reasonableness of a statute or otherwise must be judged having regard to the various factors which, of course, would include the effect thereof on a person carrying on a business.31. While we are not oblivious of the fact that nobody has any fundamental right to carry on business in toddy or liquor, but all the licensees are entitled to be treated equally. If the matter of validity or otherwise of the subordinate legislation is to be considered, Article 14 of the Constitution of India shall be attracted. [See State of Punjab and Another v. Devans Modern Breweries Ltd. and Another (2004) 11 SCC 26 , Ashok Lanka and Another v. Rishi Dikshit and Others (2005) 5 SCC 598  and Ashok Lanka-II v. Rishi Dikshit (2006) 9 SCC 90 ]32. When a statute provides for a condition which is impossible to be performed, unreasonableness of a statute shall be presumed. It would be for the State in such a situation to justify the reasonableness thereof.33. The Division Bench has, in our opinion, posed a wrong question unto itself when it proceeded on the premise that availability of a mechanical instrument to measure the contents of ethyl alcohol is of no moment. When a subordinate legislation imposes conditions upon a licensee regulating the manner in which the trade is to be carried out, the same must be based on reasonable criteria. A person must have means to prevent commission of a crime by himself or by his employees. He must know where he stands. He must know to what extent or under what circumstances he is entitled to sell liquor. The statute in that sense must be definite and not vague. Where a statute is vague, the same is liable to be struck down. [Hamdard Dawakhana (Wakf) Lal Kuan, Delhi and Another v. Union of India and Others AIR 1960 SC 554 ].34. The learned Single Judge although did not deal with the matter in details, but was of the opinion that the statute is not workable.35. Workability of a statute vis-a-vis the question as to whether it is vague or otherwise must also be considered having regard to the question as to whether it is at all practical.36. We must state that where two interpretations are possible, having regard to the workability or unworkability of a statute, the one which leads to the workability of the statute must be preferred than the other, keeping in view the principle ut rest magis valeat quam pereat.45. A person may be held to be guilty even if the contents of ethyl alcohol exceed 8.1% marginally. He must, therefore, be in a position to know as to what extent he can go and to what extent he cannot. The matter cannot, thus, be left to an act of nature. A penal provision must be definite. Unless the statutory intention otherwise provides, existence of mens rea must be read into a penal statute. It must be a deliberate act and not an unintentional one, unless the statute says so explicitly or by necessary implication. The Act or the Rules do not say either. It is in that sense vague or unreasonable.46. Once, thus, it is found to be ex facie unreasonable and unworkable, the court would not hesitate to strike down the said rule. We do so.47. We for the reasons aforementioned, hold Rule 9(2) to be unworkable being vague in nature, unless read in the manner as suggested supra.In this case we are satisfied that the High Court was correct in its view that the ingredients of Section 57 of the Act are not attracted in the instant case.We are, however, dealing with a different situation. Section 57 must also receive strict construction, having regard to the fact that thereby an offence proved would lead to a higher penalty; although on the self-same fact another penal provision involving a minor punishment, viz., Section 56 would be attracted. It has to be read having regard to the constitutional protection available to an accused as also other civil consequences, if any, entailing therefor. While construing a penal statute, in a case of this nature, it is necessary to apply the rule of strict construction.It is not in dispute that whereas if an offence is committed under Section 56 of the Act, renewal of licence is permissible; but in a case where a licensee faces a prosecution under Section 57, renewal of licence would be denied to him. Consequences of attracting the provisions of Section 57, thus, must also be judged from the said angle.63. Reliance placed by Mr. Bhat upon Sundaram Pillai (supra), in our opinion, is wholly misplaced. The court therein was considering a rent control statute. It laid down law with regard to the interpretation of proviso and explanation.Ironing out the creases is possible but not rewriting the language to serve a notation of public policy held by the Judges. Legislature must have legislated for a purpose by Act 23 of 1973 and used the expression "shall be construed" in Explanation in the manner it did.It, however, added a note of caution that a purposive construction can be applied if the statute is read as a whole, requires such application.66. Reliance upon Bhagwan Das Jain (supra), in our opinion, is also misplaced. In fact, upon construction of a statute, we have held that the licensees are not guilty of any adulteration. The said decision has, therefore, no application.