Bajrang Prasad vs State of M.P. and others

Bishambhar Dayal, C.J.—This writ petition is by the holder of a liquor licence who had taken by auction a contract for sale of country made liquor for the year 1968-69. The petitioner failed to pay instalments as agreed with the result that his licence was cancelled and the contract was given to another person. The petitioner could work in the liquor shops only from 1st April 1968 to 29th October 1968. He was served with a notice for recovery of Rs.,24,922,23 as difference between the auction price which was offered by him and which was realised from the subsequent purchaser and also the amount of arrears of instalments, making a total of Rs. 4,58,831. This demand is being challenged by the petitioner on several grounds. We will take up the grounds one by one.

The first contention of Learned Counsel for the petitioner is that the State is not entitled to charge such a large amount as licence fee for giving permission to the petitioner to sell liquor at a particular shop. The excise contractors pay separately price of the liquor which they purchase and also pay excise tax on the same. The shops in which sale of liquor takes place do not belong to the Government and, consequently, the Government is only entitled to charge a nominal amount by way of licence fee to cover the expenses which the Government may incur in the administration of the shops according the rules prescribed by the Government. This fee can only be equivalent to the administration charges and cannot be charged as a tax for augmenting the revenue of the State. We have heard Learned Counsel at length on this point, but we see no force in this argument. The matter was considered in great detail by a Division Bench of this Court in Nanhibai v. Excise Commis-sioner M.P. 1953 JLJ 377: ILR 1964 MP 858: 1963 MPLJ 526 the learned Chief Justice, who delivered the judgment after an eleborate consideration of the relevant sections and the rules under the Madhya Pradesh Excise Act; came to the following conclusion:

"The principle that the State Government has exclusive right of manufacturing, selling, or possessing intoxicants or any country liquor intoxicating drug runs through sections 13 to 18 of the Act.........The important condition mat must be satisfied before any licence can be granted to a person for manufacture or sale of any country liquor intoxicating drug is that the person must first obtain the privilege or the right of manufacturing or selling the intoxicating drug. This is clear from section 18, which embodies the principle that the supreme authority in relation to the manufacture or sale of an intoxicating drug is the State itself, and on its basis provides that the State Government may lease to any person on such conditions and for such period as it may think fit the right of manufacturing or of selling any country liquor intoxicating drug within any specified area. Sub-section (2) of section 18, which lays down that a licensing authority may grant to a lessee under sub-section (1) a licence in terms of the lease only emphasizes the position that a person cannot manufacture or sell any intoxicating drug by merely obtaining the right from the Government or manufacturing or selling that drug. He must, in addition, obtain a licence in that behalf."

Thus it is quite clear that the amount paid by the petitioner for obtaining the privilege of selling liquor at a particular shop is the lease amount which the petitioner had agreed to pay for obtaining that privilege. It is not merely a fee for obtaining the licence u/s 28 of the Excise Act. The contention of Learned Counsel for the petitioner that he has a fundamental right to sell country liquor is clearly negatived by the provisions of the Act as discussed in the above mentioned case by placing reasonable restriction on the same. In this State, the privilege of selling liquor is entirely that of the Government. We respectfully agree with this decision and see no force in the contention of Learned Counsel appearing for the petitioner.

The next contention of Learned Counsel for the petitioner was that he had not entered into a contract for paying the amount of lease money within the meaning of Article 299 of the Constitution with the State and, consequently, there could be no breach of the contract on the basis of which the difference between the auction price and the resale price could be realised from him. This contention is entirely wrong on facts. The respondents have filed Annexure R-1 which is the contract entered into by the Authorised Officer on behalf of the Governor of the State of Madhya Pradesh with the petitioner in which it is clearly provided that the petitioner agreed to abide by all the conditions mentioned in the licence given to him. This agreement, therefore, negatived the contention of Learned Counsel and we see no force in this contention also.

Learned Counsel also stated that no notice was served on the petitioner before re-auctioning the shops. This is also factually wrong. The respondents have filed Annexure R-2 which is a notice served on the petitioner clearly indicating that he was given an opportunity of showing cause why, on account of the defaults in payment of instalments, action for re-sale could not be taken.

Another contention of Learned Counsel was that this balance of bid-money cannot be realised by way of arrears of land revenue. We see no force in this contention. This amount is also excise revenue as defined in section 2(8) of the Excise Act, the relevant part of which may be reproduced as follows :

" ''Excise revenue'' means revenue derived or derivable from any.........payment.... ordered under the provisions of this Act..."

and, by section 64(1)(3), all excise revenue is recoverable as arrears of land revenue.

We, therefore, see no force in this petition and dismiss it with costs. We estimate the hearing fee at Rs. 200 which will be paid out of che security amount. The remaining amount of security deposit after deduction of costs shall be refunded to the petitioner.