Case: Nagendra Nath Bora Vs. The Commissioner of Hills Division

2. (I) Civil Appeal No. 668 of 1957. - The two appellants Nagendra Nath Bora and Ridananda Dutt are partners, the partnership having been formed in view of the Government notification dated November 30, 1956, amending rule 232 of the Assam Excise Rules, to the effect that the settlement of the country spirit shops which may be declared by the Government to be big shops, shall be made with two or more partners who shall not belong to the same family nor should be related to one another (vide correction slip at p. 106 of the Assam Excise Manual, 1946). In accordance with the rules framed under the Act, tenders were invited by the Deputy Commissioner of Sibsagar, for the settlement of Jorhat country spirit shop for the financial year 1957-58, in December, 1956. The appellants as members of the partnership aforesaid, submitted a tender in the prescribed form. Respondents 3 and 4, Dharmeshwar Kalita and Someswar Neog, respectively, also were amongst the tenderers. The Commissioner of Hills Division and Appeals, Assam, and the Commissioner of Excise, Assam, are the first and the second respondents in this case. It is necessary to state at this stage that in respect of the financial year 1956-57, the shop in question was ordered by the first respondent as the Exercise Appellate Authority to be settled with the first appellant Nagendra Nath as an individual, setting aside the orders of the Deputy Commissioner and the Excise Commissioner. The other competitors for the settlement of the said shop being dissatisfied with the orders of the first respondent, moved the Assam High Court and challenged the validity of the settlement made in the first appellants favour. Similar writ cases challenging orders of settlement by the 1st respondent as the Excise Appellate Authority had been instituted in the High Court. All those cases were heard together, and the High Court, by its judgment dated May 22, 1956, quashed the orders passed by the first respondent, chiefly on the ground that the Appellate Authority had been illegally constituted. The matter was brought by way of special leave to this Court, and was heard by the Constitution Bench which, by its judgment dated January 31, 1957, decided that the constitution of the Commissioner of Hills Division and Appeals as the ultimate appellate Authority under the Act, was not unconstitutionalThe judgment of this Court is reported in the case of State of Assam v. A. N. Kidwai, 1957 SCR 295  : ((S) AIR 1957 SC 414  ) (A). It will be necessary, in the course of this judgment, to make several references to that decision which for the sake of brevity, we shall call the ruling of this Court. The result of the ruling of this Court was that the determination by the Assam High Court that the orders passed by the first respondent, were void, was set aside, and the settlement made by that Authority, consequently, stood restored. But in the meantime, as the orders of the first respondent stood quashed as a result of the judgment of the High Court, the direction of the Excise Commissioner that the shop in question be re-settled, was carried out, and the settlement was made with the third respondent aforesaid as an individual. He continued in possession of the shop until February 26, 1957, on which date, the first appellant was put in possession as a result of the ruling of this Court. Even so, the first appellant could exercise his rights as a lessee of the shop only for a few months during the financial year ending March 31, 19573. For the financial year 1957-58, the Deputy Commissioner, in consultation with the local Advisory Committee, settled the shop in question with the third and the fourth respondents aforesaid. The tender submitted by the appellants, was not considered by the licensing authority on the erroneous ground that the orders passed by the first respondent as the ultimate Revenue Authority in the matter of settlement of excise shops, had been rendered null and void as a result of the decision of the High Court, referred to above. The appellants, as also others who were competitors for the settlement aforesaid, preferred appeals to the Excise Commissioner who set aside the settlement made in favour of the respondents 3 and 4, and ordered settlement of the shop with the appellants. The Excise Commissioner took into consideration the fact that the order of the High Court, nullifying the proceedings before the first respondent, had been set aside by the ruling of this Court. The consequence of the order of this Court was, as the Commissioner of Excise pointed out, that a supposed disqualification of the appellants as competent tenderers, stood vacated as a result of the first respondents order. The third and the fourth respondents, as also other dissatisfied tenderers preferred appeals to the first respondent against the order of the second respondent (the Excise Commissioner). The first respondent dismissed those appeals and confirmed the order settling the shop with the appellants, by his order dated June 10, 1957. The respondents 3 and 4, then, moved the High Court under Arts. 226 and 227 of the Constitution, for an appropriate writ for quashing the order passed by the first respondent. The High Court, by its order dated August 6, 1957, quashed the aforesaid order of settlement in favour of the appellants by the first respondent. The High Court further directed that all the tenders be re-considered in the light of the observations made by it. The main ground of decision in the High Court was that the Excise Appellate Authority had acted in excess of its jurisdiction, and that its order was vitiated by errors apparent on the face of the record. The prayer for a certificate that the case was a fit one for appeal to this Court, having been refused by the High Court, the appellants obtained special leave to appeal4. (II) Civil Appeal No. 669 of 1957. - This appeal relates to the settlement of the Murmuria country spirit shop in the district of Sibsagar, for the financial year 1957-58. The appellant Lakhiram Kalita and the first respondent Bhanuram Pegu, amongst others, had submitted their tenders for the settlement of the shop. The Deputy Commissioner, after consulting the Advisory Committee, settled the shop with the first respondent aforesaid. The appeals filed by the appellant and other disappointed tenderers, were dismissed by the Excise Commissioner by his order dated March 25, 1957. Against the said order, the appellant and another party filed further appeals to the Commissioner of Hills Division and Appeals, who by his order dated May 30, 1957, set aside the settlement in favour of the first respondent, and ordered settlement with the appellant. In pursuance of that order, the appellant took possession of the shop with effect from June 5, 1957. The first respondents application for review of the order aforesaid, stood dismissed on June 11, 1957. Against the aforesaid orders of the Commissioner of Hills Division and Appeals, the first respondent moved the High Court under Arts. 226 and 227 of the Constitution, for a proper writ for quashing them. On June 17, 1957, the writ petition was heard ex parte, and the High Court issued a rule to show cause why a writ as prayed for should not be issued. The rule was made returnable within three weeks. The High Court also made the further order in these terms:"Meanwhile, the status quo ante will be maintained."This last order was mis-interpreted by the first respondent and his advisers as entitling them to be put in possession of the shop, and it is stated that the first respondent threatened the appellant to oust him from the shop on the basis of the order of the High court quoted above. The appellant moved the High Court for a clarification of its order aforesaid. The High Court naturally observed that by maintaining status quo ante, the High Court meant the whoever was in possession of the shop on June 17, 1957, will continue to be in possession during the pendency of the case in the High Court. But, curiously enough, the Deputy Commissioner, by an ex parte order, on June 21, 1957, directed that the first respondent be put in charge of the shop forthwith, and the order was carried out. When the Deputy Commissioner was approached by the appellant to restore him to possession in view of the observation of the High Court, he asked the appellant to obtain further order from the High Court. Thereafter, the appellant again moved the High Court on June 28, 1957, stating all the facts leading to his wrongful dispossession, and seeking relief in the High Court. No order was passed on that petition. Ultimately, the High Court, by its order dated July 31, 1957, set aside the order of the Commissioner of Hills Division and Appeals. The appellants prayer for a certificate that the case was a fit one for appeal to this Court, having been refused by the High Court, he moved this Court and obtained special leave to appeal5. (III) Civil Appeal No. 670 of 1957 - This appeal is on behalf of the Commissioner of Hills Division and Appeals, Assam, against the judgment and order of the High Court relating to the Murmuria shop which is the subject-matter of Civil Appeal No. 669 referred to in the previous paragraph. The first respondent to this appeal is Bhanuram Pegu who is also the first respondent in Civil Appeal No. 669 of 1957. The second respondent is Lakhiram Kalita who is the appellant in Civil Appeal No. 669 of 1957. Both these respondents, as already indicated, are the competing tenderers for the shop in question. The facts of this case have already been stated in relation to Civil Appeal No. 669 of 1957. This appeal has been brought with a view to getting the legal position clarified in view of the frequent appeals made to the appellant in the matter of settlement of excise shops6. (IV) Civil Appeal No. 672 of 1957. - This appeal relates to the Tinsukia country spirit shop in the district of Lakhimpur. The appellants, Rafiulla Khan and Mahibuddin Ahmad, are partners, and as such, are interested in the settlement of the shop for the financial year 1957-58. This shop had been jointly settled with the first appellant and his father for a number of years. For the year 1956-57 also, the lease had been granted to them by the Deputy Commissioner, after consultation with the Advisory Committee. A number of unsuccessful tenderers filed appeals before the Commissioner of Excise questioning the settlement with the first appellant and his father in respect of the year 1956-57. The Excise Commissioner set aside the settlement, and ordered a resettlement. The first appellant and his father filed an appeal before the Excise Appellate Authority, against the order of the Commissioner of Excise. The Appellate Authority allowed the appeal, and set aside the orders of the Commissioner and the Deputy Commissioner. One Rafiqul Hussain, one of the competitors for the shop, filed a writ petition before the High Court under Arts. 226 and 227 of the Constitution. This writ application, along with other similar applications, was heard and decided by the High Court, as aforesaid, by its judgment dated May 23, 1956. Against the judgment of the High Court, the first appellant and his father appealed to this Court by special leave, with the result indicated above. During the pendency of the appeal in this Court in the absence of a stay order, the direction of the Commissioner for a resettlement, was carried out. The Deputy Commissioner, with the unanimous advice of the Advisory Committee, settled the shop with the first appellant on July 25, 1956. The first respondent and some others preferred appeals before the Commissioner of Excise, against the order aforesaid of the Deputy Commissioner. As the special leave appeals to this Court were pending at that time, the Excise Commissioner, under a misapprehension of the effect of this Courts order refusing interim stay, set aside the Deputy Commissioners order, and directed the settlement to be made with the first respondent. As there was no Excise Appellate Authority functioning at the time as a result of the decision, aforesaid, of the High Court, declaring the constitution of such an Authority to be void, the first appellant moved the High Court under Arts. 226 and 227 of the Constitution, on the ground that the order of the Excise Commissioner was vitiated by an error apparent on the face of the record in so far as he had misunderstood the order of the Supreme Court passed on the stay petition. The High Court admitted the application but rejected the prayer for maintenance of status quo in the sense that the first appellants possession be maintained. On the stay petition being rejected by the High Court, the first respondent took possession of the shop from the first appellant as a result of the Excise Commissioners order in his favour. The High Court ultimately dismissed the writ application by its order dated December 6, 1956. The appeal filed by the appellant and his father, already pending in this Court, was heard and determined as aforesaid, in January, 1957. This Court reversed the decision of the High Court, and restored the status of the Excise Appellate Authority. As a result of the ruling of this Court, the Excise Appellate Authority, by its order dated February 25, 1957, directed delivery of possession back to the first appellant and his father, holding that the order of re-settlement and the re-settlement, itself, in pursuance of that order, were all wiped out. Against the said order, the first respondent moved the High Court under Arts. 226 and 227 of the Constitution for quashing the order for delivery of possession, on the ground of want of jurisdiction, and for ad interim stay. The High Court issued a rule and passed an order for interim stay on February 26, 1957. The High Court made the rule absolute by its order dated March 26, 1957, taking the view that the attention of this Court had not been drawn to the interim settlement of the shop in the absence of an order of stay. It appears further that during the pendency of the appeal in this Court, fresh settlement for the financial year 1957-58, took place towards the end of 1956, and the beginning of 1957. The Tinsukia shop was settled with respondents 1 and 2 though the appellants also had jointly submitted a tender for the same. The appellants and other parties preferred appeals against the said order of settlement made by the Deputy Commissioner. The Excise Commissioner set aside the settlement by the Deputy Commissioner, and directed settlement in favour of the appellants by his order dated April 16, 1957. Against that order, respondents 1 and 2 and others preferred appeals before the Excise Appellate Authority who, by an order dated June 3, 1957, dismissed the appeals. Accordingly, the appellants were given possession of the shop on June 7, 1957. The respondents 1 and 2 again moved the High Court for quashing the order of the Excise Appellate Authority, affirming that of the Excise Commissioner, and also prayed for the status quo being maintained. The High Court admitted the petition and ordered "meanwhile, status quo ante be maintained." This took place on June 10, 1957. In pursuance of the aforesaid order of the High Court, the appellants were dispossessed of the shop even though they had been put in possession only three days earlier. This was done on a complete misapprehension of the true effect of the order of the High Court maintaining status quo ante. If the High Court had passed its order in a less sophisticated and more easily understood language in that part of the country, perhaps, the party in possession would not have been dispossessed of the shop settled with it. The appellants moved the High Court against the Commissioners order directing possession to be given to the respondents 1 and 2. The High Court issued a rule but refused to grant stay of the operation of the order directing possession to be given. During the final hearing of the rule before the High Court, the appellants again moved a petition on July 5, 1957, for vacating the order of possession which was based on a misapprehension of the order of the High Court maintaining status quo ante, but apparently, no order was passed because possession had already been given to the respondents 1 and 2. During the hearing of the rule by the High Court, an unfortunate incident occurred, for which the appellants cannot altogether be absolved of some responsibility, as a result of which, one of the learned judges constituting the Bench, namely, Deka, J., expressed his unwillingness to proceed with the hearing of the case. The hearing had, therefore, to be adjourned on July 15, 1957, until a new Bench could be constituted. The appellants renewed their application already made on July 5, as aforesaid, for undoing the unintended effect of the order of the High Court, that the status quo ante was to continue. But on July 30, the Chief Justice directed that the matter be placed before a Division Bench. As there was no third judge at the time, the disposal of the case, naturally had to stand over until the third judge was available. The matter of delivery of possession was again mentioned before the Division Bench of the Chief Justice and Deka, J. The High Court rejected the application on grounds which cannot bear a close scrutiny. The petitioners also approached the Excise Appellate Authority, but it refused to re-consider the matter as the case was then pending before the High Court. Again on August 14, 1957, a fresh application was made to the High Court, along with a copy of the orders passed by the Excise Appellate Authority and the Deputy Commissioner, Lakhimpur, giving delivery of possession to respondents 1 and 2. But, this time, Deka, J., refused to hear the matter and naturally, the Chief Justice directed the matter to be placed before him, sitting singly. On August 19, 1957, the matter was placed before the Chief Justice sitting singly, and he directed a rule to issue on the opposite party cited before that Court, to show cause. Apparently, the learned Chief Justice treated the matter as a new case and not as an off-shoot of the case already pending before the High Court. The High Court closed for the long vacation on September 2, and was to re-open on November 3, 1957. The vacancy of the third judge had not been filled till then, and as the appellants felt that they had been wrongfully deprived of their right to hold their shop, as a result of an erroneous interpretation of the order of the High Court, passed on June 10, as aforesaid, and as there was no prospect of the case being disposed of quickly, the appellants moved this Court and obtained special leave to appeal.

Court's reasoning:
9. It is true that no one has an inherent right to settlement of liquor shops, but when the State, by public notice, invites candidates for settlement to make their tenders, and in pursuance of such a notice, a number of persons make such tenders each one makes a claim for himself in opposition to the claims of the others, and the public authorities concerned with the settlement have to choose from amongst them. If the choice had rested in the hands of only one authority like the District Collector on his subjective satisfaction as to the fitness of a particular candidate without his orders being amenable to an appeal or appeals or revision, the position may have been different. But S. 9 of the Act has laid down a regular hierarchy of authorities, one above the other, with the right of hearing appeals or revisions. Though the Act and the rules do not, in express terms, require reasoned orders to be recorded, yet, in the context of the subject-matter of the rules, it be comes necessary for the several authorities to pass what are called speaking orders. Where there is a right vested in an authority created by statute, be it administrative or quasi-judicial, to hear appeals and revisions, it becomes its duty to hear judicially, that is to say, in an objective manner, impartially and after giving reasonable opportunity to the parties concerned in the dispute, to place their respective cases before it11. The provisions of the Act are intended to safeguard the interest of the State on the one hand; by stopping, or at any rate, checking illicit distillation, and on the other hand, by raising the maximum revenue consistently with the observance of the rules of temperance. The authorities under the Act, with Sub-divisional Officers at the bottom and the Appellate Authority at the apex of the hierarchy, are charged with those duties. The rules under the Act, and the executive instructions which have no statutory force but which are meant for the guidance of the officers concerned, enjoin upon those officers, the duty of seeing to it that shops are settled with persons of character and experience in the line, subject to certain reservations in favour of tribal population. Except those general considerations, there are no specific rules governing the grant of leases or licences in respect of liquor shops, and in a certain contingency, even drawing of lots is provided for, vide Executive Instructions 110 at p. 174 of the Manual. The words of sub-s. (3) of S. 9 as amended, set out above, vest complete discretion in the Appellate Authority, the Excise Commissioner or the District Collector, to pass such orders thereon as it or he may think fit. The sections of the Act do not make any reference to the recording of evidence or hearing of parties or even recording reasons for orders passed by the authorities aforesaid. But we have been informed at the bar that as a mater of practice, the authorities under the Act, hear counsel for the parties, and give reasoned judgments, so as to enable the higher authorities to know why a particular choice has been made. That is also apparent from the several orders passed by them in course of these few cases that are before usThus, the Excise Appellate Authority, for the purposes of cases arising under the Act, was vested with the power of the highest appellate Tribunal, even as the High Court was, in respect of the other group of cases. That does not necessarily mean that the Excise Appellate Authority was a Tribunal of coordinate jurisdiction with the High Court, or that that Authority was not amenable to the supervisory jurisdiction of High Court under Arts. 226 and 227 of the Constitution. But the juxtaposition of the two parallel highest Tribunals, one in respect of predominantly civil cases, and the other in respect of predominantly revenue cases (without attempting any clear-cut line of demarcation), would show that the Excise Appellate Authority was not altogether an administrative body which had no judicial or quasi-judicial functions13. Neither the Act nor the rule made thereunder, indicate the grounds on which the first Appellate Authority, namely, the Excise Commissioner, or the second Appellate Authority (the Excise Appellate Authority), has to exercise his or its appellate or revisional powers. There is no indication that they make any distinction between the grounds of interference on appeal and in revision. That being so, the powers of the Appellate Authorities in the matter of settlement, would be co-extensive with the powers of the primary authority, namely, the District Collector or the Sub-Divisional Officer14. Thus, on a review of the provisions of the Act and the rules framed thereunder, it cannot be said that the authorities mentioned in S. 9 of the Act, pass purely administrative orders which are beyond the ambit of the High Courts power of supervision and control. Whether or not an administrative body or authority functions as a purely administrative one or in a quasijudicial capacity, must be determined in each case, on an examination of the relevant statute and the rules framed thereunder.The first contention raised on behalf of the appellant must, therefore, be overruledis true that the Appellate Authority should not lightly set aside the selection made by the primary Authority, that is to say, a selection made by a Sub-Divisional Officer or by a District Collector, should be given due weight in view of the fact that they have much greater opportunity to know local conditions and local business people than the Appellate Authority, even as the appeal courts are enjoined not to interfere lightly with findings of fact recorded by the original courts which had the opportunity of seeing witnesses depose in court, and their demeanour while deposing in court. But it is not correct to hold that because the Appellate Authority, in the opinion of the High Court, has not observed that caution, the choice made by it, is in excess of its power or without jurisdictionAs already indicated, the rules make no provisions for the reception of evidence oral or documentary, or the hearing of oral arguments, or even for the issue of notice of the hearing to the parties concerned. The entire proceedings are marked by a complete lack of formality. The several authorities have been left to their own resources to make the best selectionIn the instant case, no such rules have been brought to our notice, which could be said to have been contravened by the Appellate Authority. Simply because it viewed a case in a particular light which may not be acceptable to another independent tribunal, is no ground for interference either under Art. 226 or Art. 227 of the ConstitutionThis court, as observed above, has settled the law in this respect by laying down that in order to attract such jurisdiction, it is essential that the error should be something more than a mere error of law; that it must be one which is manifest on the face of the record. In this respect, the law in India and the law inn England are, therefore, the same. It is also clear, on an examination of all the authorities of this Court and of those in England, referred to above, as also those considered in the several judgments of this Court, that the common-law writ, now called order of certiorari, which was also adopted by our Constitution is not meant to take the place of an appeal where the statute does not confer a right of appeal. Its purpose is only to determine, on an examination of the record, whether the inferior tribunal has exceeded its jurisdiction or has not proceeded in accordance with the essential requirements of the law which it was meant to administer. Mere formal or technical errors, even though of law, will not be sufficient to attract this extraordinary jurisdictionIt is, thus,, clear that the powers of judicial interference under Art. 227 of the Constitution with orders of judicial or quasi-judicial nature, are not greater than the powers under Art. 226 of the Constitution. Under Art. 226, the power of interference may extend to quashing an impugned order on the ground of a mistake apparent on the face of the record. But under Art. 227 of the Constitution, the power of interference is limited to seeing that the tribunal functions within the limits of its authority. Hence, interference by the High Court, in these cases either under Art. 226 or 227 of the Constitution, was not justifiedThis was a flagrant interference with the appellants rights arising out of the settlement made in their favour by the highest revenue authorities. The High Court had not and could not have authorized the dispossession of the persons rightfully in possession of the shop. The appellants brought this flagrant abuse of power to the notice of the High Court several times, but the High Court felt unduly constrained to permit the wrong to continue. We heard the learned counsel for the respondents at great length as to whether he could justify the continuance of this undesirable and unfortunate state of affairs. It has to be remembered that the appellants, as a result of fortuitous circumstances, had been deprived of the possession of the shop during the best part of the financial year 1956-57. The appellants had been deprived of the fruits of their hard-won victory in the revenue courts, without any authority of law; and the High Court failed to right the wrong in time, though moved several times. In these circumstances, we found it necessary to hear both the parties on the merits of the orders passed by the Commissioner of Excise and the Appellate Authority, in favour of the appellants, against which, the respondents had obtained a rule. After having heard both sides, we have come to the conclusion that no grounds have been made out for interference by the High Court, under its powers under Arts. 226 and 227 of the Constitution. This case shares the common fate of the other cases before us, of having run through the entire gamut of the hierarchy created under the Act, read along with amending Act and the rules thereunder. We do not find any grounds in the orders of the Excise Authorities which could attract the supervisory jurisdiction of the High Court, there being no error of law apparent on the face of the record, or a defect of jurisdiction in the Authorities whose orders have been impugned in the High Court. We would, however, like to make it clear that we are interfering with the interlocutory order passed by the High Court in this case because of its unusual and exceptional features. It is clear that our decision on the main points urged in the other appeals necessarily leads to the inference that, even if all the allegations made by the respondents in their petition before the Assam High Court are accepted as true, there would be no case whatever for issuing a rule. Indeed, the respondent found it difficult to resist the appellants argument that, if the other appeals were allowed on the general contentions raised by the appellants, the dismissal of his petition before the Assam High Court would be a foregone conclusion. It is because of these special circumstances that we have decided to interfere with the interlocutory order in this case in the interests of justice.