Aji Kumar vs The Asst. Excise Commissioner and Another

K.S. Radhakrishnan, J.—Petitioner is the registered owner of an auto rikshaw It was involved in Crime No. 21 of 1998 Vehicle was seized by the Excise Preventive Officer on 20th April 1998 after having found that the said vehicle was used for transport of illicit spirit. Driver and two other persons were arrested, and the vehicle was taken into custody. Crime was registered against the passengers and the driver for offences punishable u/s 55(a) of the Act.

Petitioner submitted an application for release of the vehicle. Since no action has been taken, he filed O.P. No. 10178 of 1998 which was disposed of by this Court directing the excise authorities to take a decision on the Petitioner''s application. Accordingly, the excise authorities assessed the value of the vehicle through a Mechanical Engineer (Excise) and value was fixed at Rs. 34,500. Petitioner was directed to deposit the said amount for release of the vehicle. Petitioner is aggrieved by the said order, and has approached this Court.

Main contention raised by counsel for the Petitioner is that the Excise Department ought to have released the vehicle, without insisting on cash deposit. Counsel submitted that Petitioner is willing to furnish security by way of immovable property. According to counsel insistence of cash deposit is illegal and irregular. Counsel submitted that the vehicle is under hypothecation. The income derived from the auto rikshaw is his sole livelihood. Therefore if the vehicle is not released, he will be put to considerable prejudice. He has got a further contention that the owner of the vehicle is in no way involved in the offence, and no charge has been laid against him u/s 55 of the Kerala Abkari Act.

Learned Government Pleader opposed the request for release of the vehicle by accepting security by way of immovable property. Considering the fact that large number of cases are coming before the excise authorities, it will not be possible to release the vehicle accepting security by way of immovable property. It was pointed out that Department by past experience found that if vehicle is released on furnishing security by way of immovable property, it will be difficult to realise the amount, if the vehicle is ultimately confiscated. It is also his contention that even if the vehicle is repossessed, the same will be valueless, and the State''s interest would be adversely affected. It is also stated that the recovery of the amount by proceeding against the property is cumbersome, and time-consuming and in very many cases, it may not be possible to release the amount. It is under the above mentioned circumstances that the rule making authority introduced Rule 4(2)(a) under the Kerala Abkari (Disposal of Confiscated Articles) Rules, 1996, insisting cash deposit.

In order to examine the rival contentions, it is necessary to refer to some of the provisions of the Abkari Act. Section 67B of the Abkari Act enables the authorised officer to seize a vehicle after having found the same used for abkari offences. On seizure of the vehicle and before finalisation of confiscation proceedings, the authorised officer has to issue a show cause notice u/s 67C of the Act to the person concerned and also to give a reasonable opportunity of being heard to that person. Pending finalisation of the proceedings, the authorised officer could release the vehicle, if an application is made to that effect. There is no specific provision in the Act to make an application for release of the vehicle temporarily. Since the authorities have got power to confiscate the vehicles, they have also got power to release the vehicles temporarily, after imposing various conditions.

State Government in exercise of powers conferred under Sub-section (1) and Clause (q) of Sub-section (2) of Section 29 of the Abkari Act enacted the Kerala Abkari (Disposal of Confiscated Articles) Rules, 1996. A contention has been raised that the said Rules are only applicable after confiscation proceedings are over, therefore before final orders are issued confiscating the vehicle, the same could be released temporarily accepting adequate security. Counsel submitted that Rule 4(2)(a) is applicable only after finalisation of the entire proceedings, and not before that.

It is difficult to accept the said contention. It is pertinent to note that Kerala Abkari (Disposal of Confiscated Articles) Rules, 1996 were framed in exercise of the powers conferred under Sub-section (1) and Clause (q) of Sub-section (2) of Section 29 of the Act. In this connection, it is relevant to refer to Section 29, the relevant portion of which is extracted below:

Power to frame rules.-(1) The Government may make rules for the purpose of carrying out the provisions of this Act.

(2) In particular an without prejudice to the generality of the for going provision, the Government may make rules-

* * * * (q) for the disposal of articles confiscated and of the proceeds thereof;

* * * *

The Kerala Abkari (Disposal of Confiscated) Rules 1996 were framed by the Government in exercise of its power under sub-section (1) and under clause (q) of sub section (2) of section 29 of the Act. Section 29(1) of the Act enables the Government to make rules for the purpose of carrying out the provisions of the Act. Therefore we have to understand the meaning of rule, 4(1)(a) as well as rule 4(2)(a) in the light of various provisions contained in the Kerala Abkari Act, especially section. 29(1) and (q) Act.

Rule 4 of the Rules, 1996 deals with a case after finalisation of the confiscation proceedings. Rule 4(1)(a) is extracted below for easy reference:

4(sic) Carts, vessels or other conveyance.-(1)(a) When an authorised officer adjudging a confiscation of cart, vessel or other conveyance u/s 67E or 67F of the Act offers the owner of such property the option of paying in lieu of confiscation, a fine equivalent to the market value of the cart, vessel or other conveyance as fixed by the Mechanical Engineer of the Excise Department or any Mechanical Engineer of and above the rank of an Assistant Executive Engineer of the Public Works Department of the State, and if the owner of such property agrees to accept such option he shall be required to pay forthwith such sum as may already have been spent towards the safe custody and upkeep of such property, and to deposit such further sum as may appear likely to be required for such purposes until the payment, of the fine.

Sections 67E and 67F deal with appeal and revision. Appeal and revision can be preferred only after finalisation of the confiscation proceedings.

Rule 4(2)(a) and (b) are extracted below for easy reference:

4(2)(a) The cart, vessel or other conveyance liable to be confiscated under the Act. may be released temporarily by the authorised officer to it''s owner on depositing an amount equivalent to the market value of the cart, vessel or other conveyance, fixed by the Mechanical Engineer of the Excise Department or any Mechanical Engineer of and above the rank of an Assistant Executive Engineer of the Public Works Department of the State in the Treasury Savings Account in favour of the Commissioner of Excise.

(b) The cart vessel or other conveyance so released (temporarily) shall be produced before the Authorised Officer when final order of confiscation is passed by the competent Authority and communicated to the owner of such property by registered post.

(emphasis supplied)

We have to understand Rule 4(2)(a) read with Section 29(1) of the Act and also Section 67B of the Act. u/s 67B of the Act, as soon as a vehicle is seized, after having found that the same was involved in an abkari offence, the same could be produced before an Authorised Officer. If it is proved that the said vehicle is liable to confiscation under the Act, the same could be confiscated, after following the procedure u/s 67C of the Act. Therefore a vehicle which is liable to be confiscated u/s 67B of the Act, could be released temporarily under Rule 4(2)(a) of the Kerala Abkari (Disposal of Confiscated Articles) Rules, 1996, if the owner deposits the amount equivalent to the market value of the vehicle fixed by the Mechanical Engineer of the Excise Department in the Treasury Savings Account in favour of the Commissioner of Excise. Rule 4(2)(b) also says that such a vehicle which has already been released temporarily shall be produced before the Authorised Officer when final order of confiscation is passed by the competent Authority and communicated to the owner of such property by registered post.

A learned Judge of this Court in Niketa Kishorekumar v. State of Kerala (1998) 1 KLT 50 has held as follows:

The release of vehicle on exercising option to pay the fine in lieu of confiscation and the temporary release of vehicle on deposit of market value of the vehicle liable to be confiscated by the Government u/s 67B or 67F of the Act are intended to case down the rigour of law relating to confiscation and to preserve the confiscated properties from being wasted and damaged during the pendency of the adjudication of the dispute. It is a well-known fact that large number of cases of this type are pending adjudication before different authorities. In all such cases, the procedure prescribed under Rule 4 will apply in so far as the permanent and temporary release of confiscated properties on payment of fine equivalent to the market value of the property or on deposits of the market value, as the case may be.

We have to consider the scope of Rule 4(2)(a) considering the nature of the enactment and the purpose for which it is enacted and the evil sought to be remedied by such legislation. Trade in liquor has historically stood on a different footing from other trades. Restrictions which are not permissible with other trades are lawful and reasonable so far as trade in liquor is concerned. The Supreme Court in Razakbhai Issakbhai Mansuri and Others Vs. State of Gujarat and Others, held as follows:

In order that this policy may succeed, it is not sufficient to merely ban manufacture and consumption of alcoholic drinks. To render it really effective further measures became essential in order to defeat the illegal activities of the anti-social elements engaged in illicit manufacture and illegal distribution of the liquor in the market. It, therefore, became obligatory for the State to take all such steps as found necessary for implementing the prohibition policy, by not only placing restrictions on the manufacture, sale and consumption of liquors but also by adopting such other regulatory measures, essential to achieve the objective.

The Kerala Abkari Act is enacted so as to consolidate and amend the law relating to the import, export, transport, manufacture, sale and possession of intoxicating liquor and of intoxicating drugs in the State. When an offence is seen to have been committed, and if the vehicle is released and ultimately the vehicle could not be traced and the value of the vehicle could not be recovered from the offender that will defeat the purpose of the Act. In many cases when immovable properties are offered as security and if ultimately it is found that the vehicle is liable to be confiscated, there will be difficulty in recovering the amount and procedure for recovery will also be cumbersome and also will cause delay. Under such circumstances, even if the vehicle is subsequently seized and sold, no value could be realised by the department, since the vehicle would have got damaged and therefore value would be less. In order to safeguard the interests of the State and to see that the offender, shall not get away and to recover the amount adopting effective measures the Legislature in its wisdom thought that for temporary release of the vehicle, if a person puts an application, he should deposit the amount m. Treasury Savings Account, after the vehicle is valued by the Mechanical Engineer concerned, and should produce a certificate after depositing the amount in Treasury Savings Account. I do not find any illegality in the said provision which is enacted to achieve the purpose which I have already mentioned. The contention of counsel for the Petitioner that Petitioner is financial unsound, and the vehicle is purchased on hire purchase agreement and that if the vehicle is not released that will cause prejudice to the Petitioner cannot appeal to a Court in view of the specific statutory provision. The submission of the Petitioner that he was not made a party to the criminal case, or that he is not an accused person, is not of much consequence since Petitioner is the owner of the vehicle and he has to prove that the vehicle was used without his knowledge or connivance. So I have no hesitation to say that; Rule 4(2)(a) was framed by the rule-making authority to safeguard the interests of the State for speedy recovery of the amount on confiscation , of the vehicle.

I therefore find no reason to interfere with the order passed by the Department directing the Petitioner to deposit the amount in cash. However, considering the fact that execution of bank guarantee will also safeguard the interests of the State, I am inclined to give a direction to the first Respondent to release the vehicle on the Petitioner executing a bank guarantee to the satisfaction of department after valuing the vehicle.

Original Petition is disposed of as above.