IN THE HIGH COURT OF JUDICATURE AT BOMBAY

APPELLATE SIDE

 

WRIT PETITION NO. 514 OF 2005.

 

Karunakar Mudarma Shetty,                                    )

Proprietor, Ambar Wine Mart, Lokmanya )

Thilak Road, No. 46 (A), Near Railway                   )

Station, Ambarnath, Dist- Thane                             )           Petitioners

 

Versus

1.         The State of Maharashtra.                           )

2.         The Collector, Excise and Prohibition        )

            having his office at Thane                            )           Respondents

 

……….

 

Shri. P.M. Pradhan for the Petitioner

Shri. W.N. yande, Additional Government Pleader with

 Shri. V.H. Parshuramy, Asst. Govt. Pleader for the respondents.

……

 

CORAM: M.L. PENDSE & E.D.D.S. DA SILVA

Monday, the 8th October 1990

 

ORAL JUDGMENT (Per Pendse. J.):

1.         On April5, 1973 one Madansingh Manyan Singh residing at Ambarnath was granted license in Form II bearing License No.19 for selling Indian made foreign Liquor by trade name M/s. Ambar Wines Mart at Lokmanya) Thilak Road, Ambarnath, Thane     Madan Sinhg expired on November 23,1974 leaving behind his widow Tarabai. The License was transferred on Febrauary 25,1975 in the name of Tarabai as the sole legal representative of deceased Madan Singh.   Prior to that date, on January 15, 1975 Tarabai entered into a partnership agreement with the Petitioner for running the business of sale of liquor in the Shop on July 17, 1975 an application was made by Tarabai for inclusion of the name of the Petitioner as a partner  in the license. The request was considered by the collector and the name of the Petitioner was admitted as partner in the license.

 

  1. On July28, 1979, Tarabai died and the Petitioner gave intimation of her death on July 30,1979 and also requested that the name of Tarabai should be deleted from the license and the Petitioner should be permitted to avail of the privileges under the license. The request was turned down by Collector of Thane and the License granted to Tarabai was forfeited to Government . The collector observed in the impugned order dated Febraury 4,1982 that the Petitioner is not a member of the family of deceased licensee, but was admitted as a partner only and therefore cannot claim the continuance of licensed privileges after the death of Tarabai. The order of the Collector is under challenge in this Petition filed under Article 226 of the Constitution of India.

 

3.                  Shri. Pradhan, learned counsel appearing on behalf of the Petitioner, submitted that the order of the Collector is in Violation of Rule 40 of the Bombay Foreign Liquor Rules, 1953. Rule 40(1) reads as Under:-

 

“ No person shall be recognized of the holder of a Vendor’s license for the purpose of his license, unless the partnership has been declared to the Collector before the License is granted and the names of the partners have been entered into after the granting of the license, unless the Collector agrees on application made to him, to alter the license and to add the name or names of the partner or partners in the License.”The plain reading of this rule indicates that the Collector has been given power to accept the agreement of partnership entered into by the original licensee and entered the name of the partner in the license. In accordance with this provision, the Collector accepted the Petitioner as partner in license on application of Tarabai in the year 1975. it is difficult to appreciate how the continuance of the privileges under the license can be denied to the Petitioner on the death of Tarabai. The collector declined to continue the privileges obly on the ground that the Petitioner is not related to Tarabai. We enquired from Shri. Yande, learned Government pleader as to what is the discretion of the Collector to deny the relief and the learned counsel invited our attention to Condition No.8. The condition prescribes that the licensee, his heirs, legal representatives or assigns shall have no claims whatsoever for the continuance or renewal of the License after the expiry of the period for which it is granted and it shall be entirely within the discretion of the Collector to permit or not assign the license. We fail to appreciate how this condition is relevant to the facts of the present case. The Petitioner is neither claiming as heir, legal representative or assignee of the original licensee, but merely as surviving partner and the surviving partner is neither heir, legal representative or assignee. The collector accepted the  Petitioner as partner of the license in the year 1975 and it is impossible to appreciate how such a partner can be denied advantage of the license on the death of the other partner who was the original licensee. In our judgment, the order of the Collector is entirely unsustainable and is required to be quashed.

4.                  Accordingly , rule is made absolute and the impugned order dated February 4,1982 a copy of which is annexed as Ex- ‘F’ to the Petition, passed by the Collector, Thane is set aside and the Collector is directed to permit the Petitioner to enjoy the privileges of the License by deletion of name of deceased Tarabai. It is made clear that this order would not take any action against the Petitioner in case any of the conditions of license are violated. In the circumstances of the case, there will be no order as to costs.

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BOMBAY PROHIBITION (PRIVILEGES FEES) RULES, 1954

RULE 6 AND MAHARASHTRA COUNTRY LIQUOR RULES

(R.M. Lodha. J.)

 

SOMRAS DISTILLERS, NAGPUR                                              Petitioner

Vs.

STATE OF MAHARASHTRA  And others                                   Respondents

 

Bombay Prohibition (Privileges Fees) Rules, 1954, R.6 and Maharashtra Country Liquor Rules, 1973 as amended by Maharashtra Country Liquor (Amendment) Rules, 1993, R.24--  Relevant date for paying requisite fees for amending license is the date on which permission for amendment is granted by the Government and not the date on which application for amendment is made for deletion of names of partners and inclusion of new names.

 

An application was made on 02-03-1993 by a partnership firm for amending its liquor license granted under Maharashtra Country Liquor Rules, 1973, by deleting the names of two erstwhile partners and adding names of four new partners in the license. On 3-3-1993 the firm deposited an amount of Rs.1,50,000/- as fees in the matter. The Maharashtra Country Liquor Rules, 1973 were amended with effect from 16-03-1993 by the Amendment Rules, 1993 and the existing scale of fees payable was increased. On 17-04-1993, the State Government granted permission to amend the license on the assumption that requisite fee had been recovered. However on 2-6-1993, the firm was directed to deposit deficient fees of Rs.10,75,000/- as computed under Rule 6 of the Bombay Prohibition (Privileges Fees) Rules, 1954 as amended. The said communication dated 2-6-1993 was challenged by the firm in writ petition contending that as application for amendment to the license had been made on 2-3-1993 prior to the amendment of the Country Liquor Rules by the 1993 amendment, the State Government was not entitled to levy and demand the fees on the basis of 1993 amendment.

 

Held,  that the relevant date for payment of requisite fee for amendment in the license is not the date on which the application is made by the party seeking amendment of names in the licenses but the date on which the permission is granted. When on 16/3/1993 the Maharashtra Country Liquor rules, 1973 stood amended by Maharashtra Country Liquor (Amendment) Rules 1993,the firm was required to pay the fee for amendment in the license at the rate prevalent on 17/04/1993 when the permission was granted to the firm was required to pay the fee for amendment in the license at the rate prevalent on 17-4-1993 when the permission was granted to the firm by the State Government Permitting deletion of two erstwhile partners and addition of names of four new partners. The deficient fee of Rs.10,75,000/- had been claimed on the basis of the amended rules and the demand asking the firm to deposit an amount of Rs.10,75,000/- towards amendment fees in the licenses was justified. (Paras 7 and 8).

 

For Petitioner            :           S.G. Jagtap

For Respondents      :           Surehs Chawda, Asst. Govt. Pleader

 

JUDGMENT:- Rule. Returnable forthwith. At the request of the learned counsel, the writ petition is taken up for hearing at this stage.

 

2.                  The petitioner- Somras Distillers, as a partnership firm was given three licenses bearing license No. CL.I., PL.L and RS-2 by the competent authority for running the business in the manufacturing and sale of country liquor and Indian made foreign liquor. On 1-3-1993 there was a change in the constitution of the partnership firm inasmuch as two partners who were original partners in the partnership firm withdrew from the said partnership and four new partners were added. By the application dated 2-3-1993, the petitioner firm prayed before the Commissioner, State Excise, that the two partners who have withdrawn from the partnership may be deleted from the license and four new partners be added. Along with the application dated 2-3-1993 the petitioner firm annexed Photostat copy of the retirement- deed dated 1-3-1993 and affidavits of Shri. Sunderlal Gupta and Rajendra Gupta the partnership deed of reconstituted firm dated 2-3-1993 and the original licenses.   On 3-3-1993 the petitioner- firm deposited a sum of Rs.1,50,000/- vide treasury Challan No. C- 105 dated 3-3-1993 as amendment fees for deletion of names of two partners and addition of names of four partners. By the order dated 17-4-1993 the State Government granted permission  to the petitioner – firm for deletion of names of two erstwhile partners and addition of four new partners and the said permission was on the assumption that the requisite subject fee has been recovered by the Commissioner, State Excise from the applicant. The petitioner- firm by the communication dated 2-6-1993 was informed about the grant of permission by the State Government for deletion of names of two erstwhile partners and addition of four new partners in the license issued to the petitioner firm by the State Government on 17-4-1993 and the petitioner- firm was further directed to deposit the deficient amendment fee amounting to Rs.10,75,000/- immediately so that necessary correction may be made in the licenses issued to the petitioner- firm.

 

3.                  The  communication dated 2-6-1993 whereby the petitioner- firm has been asked to deposit the deficient fees for amendment in the licenses amounting to Rs.10,75,000/- is challenged by the petitioner- firm in this petition.

 

4.                  Mr. Jagtap, learned counsel for the petitioner- firm, submits that the deficient fees for amendment in the licenses amounting to Rs.10,75,000/- is sought by the respondents on the basis of amendment made in the Maharashtra Country Liquor Rules, 1973 which was amended on 16-3-1993 by the Maharashtra Country Liquor (amendment ) Rules, 1993 and since the application for amendment in the licenses was made on 2-3-1993 and the aforesaid amendment is prospective, the respondents are not entitled to the deficient fee claimed in the communication dated 2-6-1993.

5.                  It is true that the application for deletion  \ of names of two erstwhile partners and addition of names of four new partners was made by the petitioner- firm on 2-3-1993 and the amount of Rs.1,50,000/- towards the amendment fee in the licenses was also deposited by the petitioner on 3-3-1993, but the fact remains that the permission was granted by the State Government for deletion of names of two erstwhile partners and addition of names of four new partners in the licenses issued to the petitioner- firm on 17-4-1993. On the date when the permission was granted by the State Government for deletion of names of two erstwhile partners and addition of four new partners. The Maharashtra Country Liquor Rules, 1973 stood amended by the Maharashtra Country Liquor (Amendment) Rules, 1993. On 16-3-1993 the State Government issued the Maharashtra Country Liquor (Amendment) Rules, 1993 amending the Maharashtra Country Liquor Rules, 1973 at once, which reads as under:

“1. These rules may be called the Maharashtra Country Liquor

(Amendment) Rules, 1993.

 

2.      In the Maharashtra Country Liquor Rules, 1973 (hereinafter referred to as “the said Rules”), in 3, in sub-rule (2) for the words, brackets, letters and figures “rupees fifty thousand (Rs.50,000/-) the words, brackets, letters and figures “Rupees One lac Fifty Thousand (Rs.1,50,000/-) shall be substituted.

3.      In rule 14 of the said Rules, in sub-rule (2) for the letters, figures, brackets and words “Rs.15,000/- (Rupees Fifteen Thousand Only) the letters, figures, brackets and words Rs.65,000/- (Rupees Sixty Five Thousand Only) shall be substituted.

4.      In rule 24 of the said Rules, in sub-rule (1B) for the existing scale of fees the following scales shall be substituted namely:-

   Rs.

“a.  Town or village with population upto 5,000                                      6,000

b.   Town with population 5,000 and above but below 10,000               10,000

c.   Town and City with population of 10,000 and above but

      below 2 Lakhs                                                                                  20,000

d.   City with population of 2 Lakhs and above but below 10 Lakhs      30,000

e.   City with population of 10 Lakhs and above but below 20 Lakhs    45,000

f.    City with population of 20 Lakhs and above                                    60,000

6.                  When on 16-3-1993 the Maharashtra Country Liquor Rules, 1973 stood amended by Maharashtra Country Liquor (Amendment) Rules, 1993 obviously the petitioner- firm required to pay the fee for amendment in the license at the rate prevalent on 17-04-1993 when the permission was granted to the petitioner- firm by the State Government permitting deletion of two erstwhile partners and addition of names of four new partners. The relevant date for payment of requisite fee for amendment in the license is not the date on which the application is made by the party seeking amendment of names in the licenses but the date on which the permission is granted and in the present case admittedly the permission was granted by the State Government to the petitioner- firm for deletion of names of two erstwhile partners and addition of names of four new partners on 17-4-1993 and on that date the fee payable was in accordance with the Maharashtra Country Liquor (Amendment) Rules, 1993. There is no dispute that the deficient fee of Rs.10,75,000/- has been claimed by the competent authority on the basis of the amended rules and that being admitted  position, the communication dated 2-6-1993 asking the petitioner- firm to deposit an amount of Rs.10,75,000/- towards the amendment fees in the licenses cannot be faulted.

7.                  The State Government in exercise of the powers conferred by clause (u) of sub- section (2) of section 143 of the Bombay Prohibition Act, 1949 and in super session of the rules published in the notification of the Commissioner of Excise, Bombay, No.81-7/35, dated 29/01/1935 framed the rules called the Bombay Prohibition (Privileges Fees) Rules, 1954. Rule 6 of the said Rule 1954 reads as under:“6. Fees for admission in or withdrawal from the business of a partner. ___ The fee payable by any licensee for the privilege of allowing the admission of a partner in or the withdrawal of a partner from, the business under his license shall, in respect of each partner admitted in, or withdrawn from, such business, be fifty percent of the fee chargeable for grant or renewal or continuance of the license whichever is higher:

Provided that such fee shall in no case be less than Re.1”

A plain reading of the said rule 6 clearly shows that the fee payable by the licensee for the privilege of allowing the admission of a partner in or the withdrawal of a partner from the business under the license shall in respect of each partner admitted or withdrawn from such business, be at 50% of the fee chargeable for grant or renewal or continuance of the license whichever is higher. Therefore, in accordance with rule 6, the petitioner- firm is required to pay the privilege fee for admission or withdrawal of each partner at the rate of 50% of the fee for admission or withdrawal of each partner at the rate of 50% of the fee chargeable for grant or renewal or continuance of the license as on 17-4-1993, the date on which the permission was granted by the State Government for withdrawal of two erstwhile partners and addition of four new partners. Yet again there is no dispute by the learned counsel for the petitioner- firm that in the communication dated 2-6-1993 the petitioner has been asked to pay the deficient fee on the basis of the fee computed under rule 6.  

8.                  Mr. Jagtap learned counsel for the petitioner, submits that since the petitioner was required to deposit the requisite special fee in advance at the time of making the application, the relevant date for computation of said special fee for withdrawal of the two erstwhile partners or admission of four new partners, should be in accordance with the fee prevalent on the date of the application. The argument raised by the learned counsel for the petitioner is devoid of any merit. Merely because at the time of making the application, the applicant is required to deposit the special fee for withdrawal of partner or admission of new partner, the relevant date for deposit of such fee would not be the date of application but rather the date on which the permission was granted, and since the permission was granted on 17-4-1993, and by that time the Maharashtra Country Liquor Rules, 1973 were amended by Maharashtra Country Liquor (Amendment) Rules, 1993, the claim of the respondents for deposit of the fee in accordance with the amended rules cannot be said to be unjustified.

9.                  In the premises aforesaid, the writ petition is without any substance and is accordingly dismissed. Rule is discharged. No costs.

 

Petition dismissed

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IN THE HIGH COURT  OF   JUDICATURE AT BOMBAY

ORDINARY ORIGINAL CIVIL JURISDICTION

 

 

WRIT  PETITION  NO. 518 OF 2001

 

India  International Co. Pvt. Ltd              ……………    Petitioner

Versus

The State of Maharashtra and Ors.        …………..      Respondents

 

Mr. Rajiv J. Deokar for petitioner

Mr. K.R. Belosey for respondents.

 

                                                CORAM         :           P.V.  KAKADE, J

                                                DATE             :           13th DECEMBER, 2005.

 

 

1.         The petitioner has preferred this petition seeking to quash the impugned demand of Rs.7,50,000/- by Order bearing No: FLR 1199/5207/B-1 dated : 19/09/2000, FLR 192000/ 423/1 dated :  20/01/2001 and FLR 1199/5207/B-1 dated : 10/02/2001 passed by respondents, including respondent nos: 2 and 3 , who are the Commissioner of State Excise and Collector of Mumbai ( City) State Excise Department.

 

2.         I have heard the learned counsel for both the parties. Perused the record.

 

3.         The Petitioner  is a Private Limited Company incorporated under the companies Act on 21/02/1955 with  there Directors. On 28/05/1999, three new additional Directors share transfer, deeds were executed in favour of the incoming Directors and subsequently  on 01/06/1999 the existing  Directors  resigned  from the Company. The company  therefore stood in the name of the new Directors.  Transferor and transferees are not the  members of the same family. It was the case of  the petitioner  before the appellate authority  that it was a registered company under the companies Act and is a body  incorporated having perpetual succession and a common seal. In law, a company is equal  to a  natural person and is a legal entity of its own. The  identity of the  company is entirely separate  from that of its shareholders. The act of members or shareholders do not alter the constitution of the company and legally  the company never dies and remains in existence even after the change of its Directors till it is dissolved  or liquidated in the manner specified in the act. it is to be noted that the Superintendent of  State Excise Mumbai  consequent upon the changes invoked the Circular of the State Government dated: 20/08/1996 holding that the licence is transferred to another person, them five time of the licence fee should be charged since the said person is not from the family  members of the licencee. The notice further mentions that the share holders purchased the shares from previous shareholders and since these shares are transferred from one name to another and therefore, as per the direction of the State the transfer fee to the extent of Rs. 7,50,000/- was payable to the Government Treasury by the Petitioner.After the demand  was  made the petitioner moved the Commissioner  of State Excise, State of Maharashtra,  who after hearing both the parties came to the conclusion that the licence held by the company  virtually  stood  transferred  in the name of new dispensation wherein holders of the original licence are totally excluded. It is further  held that it is  established position of law that to deal in liquor is  the exclusive privilege of the Government which has been prated in favour of a person selected to the exclusive  of all others and conferred the demand made by the concerned authority was justified and as such it was held that the collector was right in directing the appellant to pay a privilege  fee for transfer of licence and other was upheld. Hence the present Petition.

 

4.         In this regard it is to be noted that the concerned authorities appears  to have relied upon the so called Circular dated : 20/08/1996. Clause 4 of the said Circular stipulate that on every occasion of admission of partner in the licence, five times of the licence fee shall be paid as privilege fees and therefore, demand came to be made. In this regard my attention was invited to the provisions of the Bombay Prohibition ( Privileges Fees) Rules, 1954 which set of Rules- are  applicable to the present dispute. Rule 5 deals with  fees for transfer of a licence from one name to another and stipulates that the fee payable by any licensee for the privilege of having the transfer of his licence from one name to another  shall be the same as the fee chargeable for  the grant or renewal or continuance of the licence, whichever is higher.Rule 8  thereof deals with  provision of assessment of fees for amendment of a licence, permit pass or authorization, which stipulates  that the fee for the privilege of having an amendment made in the particulars entered in any licence, permit , pass or authorization granted under the Act on payment  of a fee shall be Rs.10/- per amendment.

 

5.         It was urged on behalf of the petitioner that the proper rule applicable to the present dispute is  Rule 8 and not Rule 5 or Rule 6 which deals with exclusively with the partnership business. It is not disputed that the petitioner company  is a legal entity and has remained the same, though the names of the shareholders are sough to be changed under Rule 8 of  the said Rule and therefore, it is submitted on behalf of the petitioner that the change which were made was amounts to amendment as contemplated under Rule 8 of the said Rules  and not a transfer as contemplated by Rule 5  or Rule 6 of the said Rules. In this connection, it is pertinent to note that Rule 6 deals with fees for admission in or withdrawal from the business of a partner and therefore, it is clear  that it deals exclusively with the partnership business. The learned  counsel for the State -  respondent submitted that Rules 5 and 6 would be applicable to the present case because the change in fact about rules transferred and therefore the order passed by the concerned authority  appears to be legal  and proper. However,  in this regard when it is clear that the rules exclusively meant for partnership and does not mention the business of the company, it would not be legal and proper to apply the said rule also to the business of the company. If it all Legislature intended to make Rule 6 by pervasive to include the business of the company then there was no difficulty to mention the word “ company” along with partnership business itself. Therefore,  in my  considered view, the Rule 6 does not cover the present dispute nor Rule 5 would be applicable to hold that it is a transfer of business from one name to another. It is especially so when admitted that there is no change in the business of the company and what is changed is the  name of the share holders, who have come in the place of old shareholders and therefore, the amendment or correction was sought for in the relevant record.

 

6.         In view  of this position, I have no doubt  whatsoever that the  order passed by the concerned authorities including the Commissioner of State Excise of the State appears to be erroneous and cannot be upheld in law. The observation made in the impugned order to the effect that the licence held by the company  “virtually stands”  transferred  in the name of new dispension,  appears to be farfetched especially when it is admitted position that the company  has remained the same and therefore, the company  which is a single  entity is entitled  to get names of new share holders  entered  into the record by virtue of Rule 8 of the said Rules, and therefore, the impugned order cannot be stand in  law.

 

7.         The learned  counsel for the respondent further  made a submission that alternative remedy was available for the petitioner to seek revision before the Government of Maharashtra, however, this aspect cannot be considered at the time of final hearing of the petition, especially when  that aspect was found to be considered at the time of admission of the petition when it was admitted and is pending for final hearing for more than four years. for the  reasons recorded above the rule  is  made absolute. The petition is allowed in terms of prayer clauses ( a) and ( b) and stand disposed  of with no order to  costs.

 

8.         The amount which is deposited by the Petitioner at the time of admission to the extent of Rs. 1,50,000/- to be adjusted towards subsequent liabilities of the petitioner company.

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1992(0) BCI 180 : 1991(1) Mh.L.J. 770

 

Before :

 

Daud S.M., J.

 

Nilesh alias Narayan Y. Jadhav           ....  Petitioner.

 

Versus

 

State of Maharashtra & others        ....  Respondents.

 

Writ Petition No. 1916 of 1986, decided on 7-2-1991.

 

            Bombay Prohibition Act, 1949, Sec. 53—Maharashtra Country Liquor Rules, 1973, R. 28—Transfer of liquor licence—One "More" was licensed to sell country liquor and he expresses desire to respondent No. 2 to take petitioner as partner—Allowed by respondent No. 2 and original licence was amended to show the petitioner as partner in business covered by licence—Subsequently More expressed desire to respondent No. 2 to withdraw from partnership leaving petitioner wholly owner and conductor of country liquor shop—No reply from respondent No. 2 and death of More informed to respondent No. 2 and licence continued as before showing More to be licensee with petitioner occupying status of partner—Show cause notice by respondent No. 2 for suspension/cancellation of said licence—Challenged—Held, despite the intimation of More's death the petitioner was allowed to carry on business for 5 to 6 years after More's passing away. Nothing had been done by petitioner to suddenly sway Collector's mind into giving of show cause notice and proceeding to decide that it was contrary to Government's policy to transfer any excise licence to name of person who was not member of original licensee's family. (Para 6)

 

Advocates appeared :

Nari H. Gursahani with S.H. Gursahani & A.A. Irani, for petitioner.

A.R. Shinde, for respondents.

DAUD S.M., J.:---This petition Article 226 of the Constitution takes exception to Exh. A being an order dated 28th July, 1986 passed by the 2nd respondent, the Collector of Bombay, Prohibition and Excise Department.

2.         Laxman Shankar More was licensed to sell country liquor in the country liquor shop situated at Dhavda Chawl, Hingwala Lane, Ghatkopar, Bombay-75. The licence bore the Registration No. CL. III/206. More addressed a letter to the 2nd respondent on 29th December, 1975 expressing a desire to take the petitioner as a partner in the country liquor shop aforementioned. He as also the petitioner addressed communications to the 2nd respondent which are at Exhs. C and D. As required by the authorities, petitioner submitted an affidavit at Exh. E and the deed of partnership which is at Exh. G. The proposal made by More and the petitioner was accepted and the original licence Exh. H, which formerly stood in the sole name of More, was amended to show the petitioner as a partner in the business covered by the licence. More was ailing and seriously at that. For this reason, on 4th April, 1977, he addressed Exh. I to the 2nd respondent expressing a desire to withdraw from the partnership leaving the petitioner wholly the owner and conductor of the country liquor shop. Before the Government could reply or took it upon itself to reply, More passed away on 14th February, 1980. The death of More was intimated to the 2nd respondent by Exh. K. The licence continued as before showing More to be the licensee with petitioner occupying the status of a partner. Suddenly on 17th April, 1986, the 2nd respondent addressed Exh. L to the petitioner calling upon him to disprove the belief entertained by the authoro i.e. the 2nd respondent, that the original licensee was not conducting the business himself but had passed on the benefit/privilege unto the petitioner for which reason the said licence had become ripe for suspension or cancellation. Petitioner made a representation informing the 2nd respondent of all that had transpired and seeking that the licence be transferred to his name. This was not acceptable to the 2nd respondent who justified the refusal on the ground "It is the Government's policy not to transfer any excise licence to the name of a person who is not a member of the original licensee's family". Petitioner was called upon to close down the business and hand over the entire unsold stock to the 3rd respondent. Impugning that order passed on 28th July 1986, the petitioner came to Court and obtained interim relief in terms of prayer (a) of the petition.

3.         The contention taken by the petitioner is that the impugned order is arbitrary and without the force of law. Respondents have not filed a return and the only four contentions raised by Counsel representing them are (i) that the grant or refusal of a licence to vend liquor is entirely within the discretion of the Government; (ii) if the Government refused to grant a licence or renewal thereof to a licensee, the aggrieved person has no cause of action to approach a Court for redress; (iii) the petitioner is already holding a foreign liquor licence (FL) albeit one standing in the name of his father, who has died and from whose name, it is proposed to be transferred to the names of the petitioner, his mother and brother; and (iv) that the petitioner has come to this Court without exhausting the statutory remedy provided under section 137 of the Bombay Prohibition Act, 1949 (Act).

 

4.         To take up the last point first, section 137 provides the remedy of an appeal to a person aggrieved by orders passed by any Prohibition Officer, Collector or Commissioner. In the present case, against the order of the 2nd respondent, the petitioner could have gone in appeal to the State Government. However, Exh. A which is the impugned order, gives the impression of the 2nd respondent acting in consonance with the policy formulated by the State Government. If that be correct, and, on that subject there is no dissenting voice from the respondents, the remedy of preferring an appeal against the impugned order to the State Government would be something in the nature of an appeal from Caesar to Caesar. When the authorities speak of a person taking recourse to Article 226 only after exhausting other remedies, what they contemplate on the subject of other remedies, are remedies which are meaningful and capable of rendering relief unto him. In the present case the 2nd respondent purports to speak the mind of the State Government and therefore, driving the petitioner to approach the State Government against the impugned order, would be of no assistance. Consequently, this point raised on behalf of the respondents has to be negatived.

5.         The second plea advanced by the respondent is one resting upon facts. There is no return and no documents have been tendered to establish even a foundation for the alleged ineligibility of the petitioner to a country liquor licence because he either holds or is a beneficiary direct or indirect of an FL licence which also is in the process of being transferred. In the absence of proper material no countenance can be given to the plea raised.

6.         The only point of substance left is that the petitioner does not have any legal right to the relief claimed by him. Now no authorities are necessary for the proposition that trade in liquor is the prerogative of the Government and that it is not subject to any curbs in the matter of regulating or restricting this trade. Nonetheless, it is not immune from the responsibility to act with fairness and rationality. In the instant case there was nothing surreptitious or secretive about More taking petitioner into partnership with him for the conducting of the business covered by the CL licence granted to him. Both the partners complied with the conditions imposed upon them by the authorities and succeeded in getting the petitioner's name incorporated in the licence as a partner of More. For quite sometime the two of them were allowed to carry on the business without any restriction. Suddenly came notice at Exh. L accusing the deceased licensee of having passed on the benefit/privilege to a person other than the one entitled to vend liquor under the licence granted by the 2nd respondent. By this time More had died and this fact had been intimated to the 2nd respondent. In spite of this knowledge of the passing away of More, the 2nd respondent addressed the notice to the said dead person. Be that as it may, petitioner gave a reply and pointed out the true position. This was that he had come on the scene with the knowledge and consent of the 2nd respondent, that More had expired and that the death of More had been duly intimated to the authorities. The policy refers to in Exh. A has no statutory force. All that could be referred to in remote support of the so-called policy was Rule 28 of the Maharashtra Country Liquor Rules, 1973, and a term of the licence under which More was doing business. Rule 28 speaks of the Collector permitting the transfer of a licence from one name to another or admitting or deleting the name of any partner after the licence has been granted. According to the learned Counsel for the respondents, the rule speaks of may which implies that the Collector has the discretion to either permit or refuse to permit the transfers contemplated by the rule. But may does not mean that Collector can do what he wants and that too without any rhyme or reason. The authorities have to act reasonably. Here, the petitioner was permitted to join More in the running of the business for which a licence had been issued in the name of running of the business for which a licence had been issued in the name of More alone. More's death was intimated and More himself wanted to retire from the business because of the failing health. His death was duly intimated to the authorities and the petitioner was allowed to carry on the business for 5 to 6 years after More's passing away. Until then the Collector saw no reason to prohibit the carrying on of the business covered by the licence standing in More's name. Nothing had been done by the petitioner to suddenly sway the Collector's mind into the giving of the show cause notice and proceeding to decide that it was contrary to Government's policy to transfer any excise licence to the name of a person  who was not a member of the original licensee's family. Words used in Exh. A if they correctly reflect the Government's policy give room to believe that the Government wants to perpetrate dynasties in the liquor trade. That, I hope, is not the intention of the Government for if any such idea is being entertained by it, it would be a gross violation of a basic principle for which the Indian Constitution stands. But apart from that the policy has not been reduced to anything acceptable in law and cannot therefore be given countenance to. Next is the reliance placed upon the term of the licence granted to More which contains the usual permissibility to the authority granting the licence to renew or not to renew the same and cancel it as and when considered necessary. But these are standard clauses and do not confer upon the authorities and unrestricted power which respondent No. 2 believes he possess. All that the permissibility clause implies, is, that discretion is given to the authorities, but on the understanding that the discretion will be exercised in consonance with reasonableness and fair play. None of the reasons given by the respondents in justification of Exh. A can be accepted. Petition succeeds and Exh. A is hereby quashed. Respondent No. 2 is directed to renew the CL licence, if applied for, by the petitioner as and when the occasion arises provided, however, the said petitioner is not in any way disentitled to the renewal thereof. Rule in these terms is made absolute with parties being left to bear their own costs.

 

Petition allowed.

 

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IN THE HIGH COURT OF JUDICATURE AT BOMBAY

CIVIL APPELLATE JURISDICTION

WRIT PETITION  NO.147 OF 2005

 

Ms. Pamela P. Braganca                                         …. Petitioner

                Vs

Mr. Finlay Braganca                                                 …. Respondents

 

Mr. A.K. Abhyankar with

       P.S. Dani for petitioner

Mr. R.V. Bansode for respondent No.1

Mr. C.S. Balsara with H.N. Vakil i/by

            M/s. Mulla & Mulla & C.B.C

            For respondent No.2

Mr. C.R. Sonawane, AGP.. for R. Nos.3 to 5.

 

                                    CORAM         : S.U. KAMDAR. J

                                    DATE             : 9th December, 2005.

 

ORAL ORDER :

 

1.                  The present writ petition was on Board before me on 28.11.2005 and 29.11.2005 when the matter was heard at length. After hearing the matter at length it was proposed that the matter can be settled and draft consent terms were prepared. However on 30.11.2005 when the matter was called out, the respondent No. I has changed the advocate and now the advocate seeks to reargue the matter. In view of the fact that the matter was fully heard, I have declined to give him permission to reargue the matter. It is because merely by change of advocates the party cannot have a fresh round of arguments in the matter. It is also because it is not desirable to encourage such a kind of practice by which after the hearing of the matter the lawyers are changed for the purpose of arguments. In view thereof, I proceed with the passing of the order as under.

 

2.                  The facts in the present case are not in dispute and for the purpose of the present writ petition they are briefly enumerated as under:-

 

3.                  A partnership firm, M/s. Rustom wines is holder of FL-II license issued under the Bombay prohibition Act, 1949. the said firm was a partnership firm and had two partners one Mr. Peter Braganca and the daughter Pamela Peter Braganca. Both the partners, namely Peter Braganca had 60% share and Pamela Branganca had 40% share in the said partnership. However, the Liquor License issued by the authority under the Bombay Prohibition Act was not in the name of the partners but in the name of the partnership firm. There is also no dispute that the said Peter Branganca expired on 09.05.2002. The said Peter Braganca on his death left behind a will confirmed.

 

4.                  it is this order passed in revision which is the subject matter of challenge in the present writ petition.

 

5.                  In my opinion, admittedly there were two partners of M/s. Rustom wines. On the death of Mr. Peter Braganca on 09.05.2002 the partnership firm has stood dissolved and the firm of M/s. Rustom Wines became the sole proprietary concern by the sole surviving partner Ms. Pamela Peter Braganca. It is now well settled that partnership is an agreement between the parties to carry on business jointly and no party can impose on another party a partner to run a business. The contention which has been advanced before me by the respondent no. I that the respondent No.1 is entitled to be a partner in the partnership firm of M/s. Rustom Wines on the basis of the will which has been executed in favour of the petitioner, cannot be accepted because the partner cannot devolve a partnership in  a firm on the basis of a will. What can be devolved by the deceased partner by the will is his share in the partnership firm. Thus unless the surviving partner or partners agree to accept the legal heirs to whom the share has been bequeathed either on testate or intestate succession of the deceased partner as a partner in the firm or dated 29.04.2002 under which he bequeathed his share in the partnership of 60% by conferring the same in such a manner that on his death the second respondent would have 40% share. The petitioner will have 30% share and the respondent No.1 will have 30% share in the said partnership firm. After the death of Peter Braganca the said respondent No.1 applied to the authorities for inclusion of his name in the said liquor license. He has contended before the authority that he has share in the said license and therefore, the License must be rectified. On the said application the authority i.e. the Collector at the  first instance passed an order on 17.7.2003 that till and until the disputes are resolved by an appropriate Court of competent jurisdiction the said license to remain suspended against which an appeal was preferred before the commissioner of State Excise and in the appeal by an order dated 28.07.2003 the said appeal was allowed inter alia holding that the Collector could not have suspended the License but parties must resolve their dispute in a court of competent jurisdiction and a legal heir is not entitled to stop the business of the firm M/s. Rustom Wines. However, the respondent No.1 thereafter preferred a revision before the Minister and the Minister by a revisional order once again suspended the license and set aside the order of the appellate court and the order of the collector suspending the license has been the partnership agreement during the life time of the deceased partner provides that on his death his particular legal heir will be added as a partner in the partnership firm, a person merely succeeding to the estate of the deceased cannot force the other partner to be joined in a partnership firm. A deceased’s legal heir is entitles to his share by claiming dissolution of his share as on the date of the death of the partner and entitled to his right, title and interest in the said partnership firm by claiming the  amount and seeking account of the said firm. However, the learned counsel appearing for respondent No.1has contended that he should be made a partner in the partnership firm of M/s. Rustom Wines and thus his name should be added in the liquor license which has been issued to the firm under the provisions of the Bombay Prohibition Act, 1949. In my opinion, no such order can be passed. The collector’s order suspending the license merely because one of the legal heirs of the deceased partner has raised dispute pertaining to the estate of the deceased is per se not valid and the same is perverse. The order passed by the Revisional authority upholding the order of the collector is also bad in law. In my opinion, the remedy of the respondent No.1 is not to move the authority for suspension of the license but it is open to him to adopt appropriate proceedings before the competent court demanding his share by virtue of the will in the said partnership firm. In my opinion, it is not permissible to suspend the business of any person merely on the issue that some person is entitled to the estate of the said deceased unless a suit for dissolution of accounts and claiming the interest and share in the estate of the deceased is filed and appropriate order is passed by the court of competent jurisdiction. Thus, in my opinion, the order under challenge is unsustainable in law and is required to be quashed and set aside. However, I direct the parties to maintain status quo for a period of four weeks from today so as to enable the respondent No. 1 if he so desires, to adopt any legal proceedings in the matter as he may be advised. The petition disposed of accordingly. However, there shall be no order as to costs.

 

 

HIGH COURT, BOMBAY

 

IN THE HIGH COURT OF JUDICATURE AT BOMBAY

CIVIL APPELLATE  SIDE JURISDICTION

Writ Petition  No.4518  Of 2004

 

Krishnanunni S. Nair                                     …. Petitioners

                Vs

The Collector of Mumbai & Ors                               …. Respondents

 

Ms. V B Thadani for Petitioners

Mr. P.J. Khemani for respondent Nos. 1 and 2

Mr. B.M. Menezes for respondent No. 3

Mr. C.S. Balsara i/b Mull and Mula for respondent  No.4

 

CORAM: S.U. KAMDAR. J

Dated    : 16.12.2005

P.C:

By Consent of the parties the following order is passed:

 

a)                       That respondent No.4 who is holding premises under conducting agreement and the said conducting agreement is expiring on 31/08/2006, will not seek continuation of the said conducting agreement on the same terms and conditions.

 

b)                       Till date of  31.08.2006 out of the compensation of Rs.50,000/- towards conducting charges the respondent No 4 will pay a sum of Rs.30,000/- to the petitioner and respondent No.3A in proportionate of 75% and 25% i.e. Rs.22,500/- to respondent 3A and Rs.7,500/- to the petitioner herein.

c)                        On the expiry of the period of conducting agreement on 31.08.2006 the Court Receiver High Court Bombay is directed to invite fresh bids for the purpose of giving premises on conducting basis. On such bids being invited, the Court Receiver will grant bid to the highest bidet. That no arrangement will be made for agent of the Court Receiver as Receiver is not appointed by this order and Receiver is merely directed to conduct bids.

 

d)                       The Court Receiver will give opportunity to the respondent No.4 to bid in the said bidding and further opportunity to match the bid of the highest bidder and if he does so he will be given first preference to the conducting agreement for the next period of 3 years. The said arrangement will continue till further orders which may be passed in Civil proceedings which will be initiated by the petitioner ans respondent No.3A, if they so desire.

 

e)                       The respondent No.4 claims that he has spent large amount of money and there is monitory claim as against petitioner and respondent No.3A. He is at liberty to take appropriate proceedings for recovery of such dues. It is made clear that he will not claim right in respect of the premises and/ or claim continuation of the conducting agreement contrary to the present order. It is further made clear that the rights and disputes between the petitioner and respondent No 3A pertaining to the entitlement of the legal heirs of deceased partner are required to be determined in a civil suit. The respondent No.3A will be entitled to file suit and apply for appropriate reliefs. This order will be subject to orders to be passed in the suit to be filed by respondent No. 3A or the petitioner as the case may be. 

f)                    In the event if the respondent No.4 succeeds as highest bidder then in the next compensation fixed for the purpose of next period of 3 years will be paid over by the respondent No.4 to the extent of 60% to the petitioner and respondent No.3A in proportionate of 75% and 25% and he will be entitled to adjust the balance amount of Rs.40,000/- towards his claim. It is made clear that if the respondent No.4 does not succeed in getting conducting agreement, then the court Receiver will invite bid and will fix amount of security deposit paid by the respondent No,4 will be refunded.

 

g)                       The 1st respondent is directed to renew the license and permit the business in accordance with the present order passed by this court.

 

h)                        Petition is disposed of accordingly with no order as to costs.