Babu M.V vs State Of Kerala And Ors

The privilege of vending toddy in the State of Kerala is granted to successful bidders by public sale on group basis as per the provisions of the

Abkari Act (Act 1 of 1077) and the Kerala Abkari Shops Disposal Rules, 2002. The petitioner took part and became the successful bidder of toddy

shops in Group No.1 of Aluva Excise Range. In Group No. 1, there are six toddy shops which have been numbered as Toddy Shop No. 1, Toddy Shop

No. 9, Toddy Shop No.10, Toddy Shop No.11, Toddy Shop No. 14 and Toddy Shop No. 34. The privilege was granted to him for the period 2020-

2023. The auction was confirmed in the name of the petitioner on 6.4.2020.

Rule 5(6) of the Rules 2002 states that the purchaser, on whose name, the sale is confirmed shall execute an agreement in Form No. III and take

out necessary licence and install the group. Before installing the group, the purchaser is required to execute the agreement and take out the required

licence. The provision states that if the purchaser fails to comply with the requirements within a reasonable time as fixed by the Deputy Commissioner

of Excise of the Division concerned, the annual rental paid by him towards the group is liable to be forfeited to Government and the group will be

resold or otherwise disposed off. Rule 7(15) of the Rules, 2002 states that if the shops are not opened within one month from the date of receipt of the

confirmation of sale of shop of privileges or in cases where the shops once opened but sale has been discontinued for more than 30 days

consecutively, the shops shall be liable to be resold or disposed off otherwise at the risk and loss of the licensees.

Though the sale was confirmed in favour of the petitioner, he was able to commence only Toddy Shop Nos. 9 and 14. The Trade Unions submitted

a complaint before the Commissioner of Excise stating that the petitioner has refused to commence the shop in spite of the privilege having been

granted to him and that the wages to the toddy shop employees were not being paid. Taking note of the non functioning of the shops for more than a

month, the Excise Commissioner by order dated 8.8.2020 suspended the privilege granted to the petitioner. The said order was challenged by the

petitioner before this Court contending that due to interference by neighbouring residents in running the toddy shops and the difficulty in obtaining

consent from owners of buildings, the petitioner was unable to start the functioning of the toddy shops. He also pointed out in the writ petition that the

petitioner has found out two shops for operating Toddy Shop Nos. 11 and 10 and his licence application was pending before the Deputy Excise

Commissioner. The prayer of the petitioner was for a direction to the Excise Commissioner to consider his representation for not commencing the

shops within the period mentioned in the Rules and for a further direction to the Deputy Excise Commissioner to consider his application for licence in

respect of T.S.Nos. 11 and 10 without being persuaded by the suspension order passed by the Excise Commissioner. After considering the

submissions, this Court was inclined to grant some indulgence to the petitioner. By judgment dated 17.8.2020, in W.P.(C) No.16774/2020, this Court

disposed of the writ petition directing the Excise Commissioner to consider Ext.P9 explanation offered by the petitioner for non functioning of the

shops and take a decision after hearing the petitioner. The Deputy Commissioner was directed to consider his application for licence in respect of

T.S.Nos. 10 and 11 without being influenced by the suspension notice.

In terms of the directions issued by this Court, the petitioner was heard by the Excise Commissioner. The order of suspension was revoked and the

petitioner was granted a further time of 30 days to commence the functioning of the toddy shops.

The Deputy Excise Commissioner considered his application for licensing T.S.Nos. 10 and 11 and a report was called for from the Circle Inspector

of Excise, Aluva. The Circle Inspector inspected the premises and found that the building proposed for licensing T.S.No. 10 was outside the notified

limits. The building proposed for licensing T.S.No. 11 was a residential building wherein people were residing in one part of the house. By order dated

29.10.2020, the application for licence for T.S.Nos. 10 and 11 was rejected by Ext.P6 order by the Deputy Excise Commissioner.

When the petitioner failed to find out suitable premises for housing the toddy shops within the period granted by the Excise Commissioner, Ext.P7

order was passed on 2.12.2020.

Under challenge in this writ petition are Exts.P6 and P7 orders.

Sri. K.P.Satheesan, the learned senior counsel appearing for the petitioner submitted that there was no justification on the part of the respondents in

cancelling the privilege granted to the petitioner. According to the learned counsel, pursuant to the earlier order passed by this Court, the order of

suspension was revoked and the petitioner was granted a period of 30 days for finding suitable buildings to house the four toddy shops. It is stated that

the petitioner found out two shops and separate applications for licenses were submitted before the Deputy Excise Commissioner. However, on

extraneous reasons, the application for licence was rejected. The learned senior counsel would contend that the reasons given for rejecting his

application is merely a ruse to cancel the privilege granted to the petitioner. He would further contend that no proper opportunity was granted to the

petitioner before venturing to cancel the privilege. It is further submitted that though more than 6000 toddy shops are there in the State only about 4000

are functioning at the moment. He would further state that in the adjoining Njarakkal range, licensees such as the petitioner are permitted to operate

with only one or two shops though the group consists of six toddy shops.

Smt. Mable C. Kurian, the learned Government Pleader, has stoutly opposed the prayer. It is pointed out that the auction was confirmed in favour

of the petitioner on 16.4.2020, and even as on date, though more than 10 months have elapsed, the petitioner has not been able to commence the

functioning of four toddy shops. It is stated that Rule 5(16) and Rule 7(15) of the Kerala Abkari Shops Disposal Rules, 2002 clearly stipulates that if

the purchaser fails to take out licence for the entire shops or if he fails to function for a consecutive period of 30 days, the privilege can be cancelled

and the group can be resold or otherwise disposed of. It is pointed out that it is pursuant to directions issued by this Court that the earlier suspension

order was revoked and the petitioner was granted 30 days time to find out a suitable building to house the four toddy shops which remained closed. In

spite of grant of several opportunities, the petitioner failed to commence and function the toddy shops and in view of the above, the respondents have

acted in terms of the provisions of Act and Rules and have withdrawn the privilege. It is further pointed out that Section 26 of the Act enables the

Commissioner to cancel licence or permit for violation of the terms and conditions.

I have anxiously considered the submissions advanced and have perused the records.

Admittedly, the auction was confirmed in favour of the petitioner on 6.4.2020. There is no dispute with regard to the fact that even as on

13.1.2021, the petitioner has been able to operate only toddy shop Nos. 9 and 14. The other shops still remain closed.

Rule 5 of the Abkari Shops Disposal Rules, 2002 deals with the grant of privilege of vending toddy shops. Rule 5(16) reads thus:

(16) The purchaser, on whose name the sale is confirmed, shall execute an agreement in Form III appended to these rules and shall take out

necessary licence and install the group, range. No group, range shall be installed without executing the agreement and taking out the required licence.

If the purchaser fails to comply with these requirements within a reasonable time as fixed by the Deputy Commissioner of Excise of the division

concerned, the annual rental paid by him towards the group, range shall be forfeited to Government and the group, range re-sold or otherwise disposed

of.

Chapter VI of the Rules deals with the General conditions applicable to the licensees of Toddy or FL-1 Shops. Rule 7(15) reads thus:

(15) Subject to the above provisions every shop shall be kept open as prescribed in sub-rule (10) unless it's temporary or permanent closure is

authorized or ordered by the commissioner of Excise. In every shop such supply of toddy or foreign liquor, as the Commissioner of Excise or the Joint

Commissioner of Excise, Deputy Commissioner of Excise may consider sufficient to meet the local requirement, shall be maintained. Shops not

opened within one month from the date of receipt of the confirmation of sale of shop of privilege and shops once opened but in which the sales have

been discontinued for more than 30 days consecutively, shall be liable to be re-sold or disposed otherwise at the risk and loss of the licensees.

In other words, if the purchaser fails to execute the agreement and take out the required licence within a reasonable time as fixed the annual rental

paid by the purchaser towards the group is liable to be forfeited to the Government and the group is liable to be resold or otherwise disposed of. Under

Rule 7(15), to open the shop for a continuous period of more than 30 days is prohibited and that is yet another reason for proceeding against the

licensee.

From the order passed by the Excise Commissioner, it is evident that running a few shops in a group would result in loss of work to the toddy shop

workers. Though the petitioner had found two shops for the purpose of opening T.S.Nos. 10 and 11, the report of the Circle Inspector shows that

those buildings are unsuitable as one was situated outside the notified limits and the other was a residential building. This Court on an earlier occasion

had granted indulgence to the petitioner in order to enable him to make a last ditch effort to procure shop rooms to enable the shops to function. Based

on the orders issued by this court, the Excise Commissioner granted the petitioner further time to sort out the issue. However, the records reveal that

enough opportunities were granted to the petitioner to save the privilege. The contention of the petitioner that other licensees who are similarly placed

are permitted to operate their toddy shops and the petitioner has been discriminated against cannot be accepted. There are no materials to substantiate

the said fact. On the other hand, the materials before this Court reveal that the respondents have acted in accordance with the statutory provisions.

Having considered all the relevant aspects, I find no reason to interfere with the order passed by the respondents in exercise of the discretionary

jurisdiction under Article 226 of the Constitution of India.

This writ petition will stand dismissed. There will be no order as to costs.