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Judgment
S.P. Goyal, J.—This second appeal by the Plaintiffs against the judgment and decree of learned Additional District Judge, Jind, dated January 14, 1980 was admitted to the Division Bench by me as I doubted the correctness of decision in Gram Panchayat Oon v. Excise and Taxation Commissioner Haryana and Ors. 1974 P.L.J. 360.
An auction was held on February 26, 1976 for the grant of licence for the year, April 1976 to March, 1977, of a courtly liquor vend to be opened at village Kharag Ramji, district Jind. They Plaintiff gave the highest bid of Rs. 55,000/- which was accepted. The however, failed to deposit one-tenth of the auction money within seven days of the auction and the department re-auctioned the vend fer the highest bid of Rs. 32,000/- and created a demand of Rs. 23,000/- against the Plaintiffs on account of the loss suffered thereby. The Plaintiffs filed this suit for a declaration that the contract between the parties had become void and for injunction that the Dafendants be restrained from recovering any amount by way of damages on account thereof. The precise plea put forward by the Plaintiffs was that the contract between the parties had become unlawful and impossible and therefore, void because of the passing of the resolution dated March 6, 1976 u/s 26 of the Punjab Gram Panchayat Act, 1952 (hereinafter called the Act) to the effect that intoxicating liquor would not be sold at any licensed shop within its local limits. This plea was rejected by the trial as well as the first appellate Court on the ground that the resolution of the Panchayat was to take effect from April 1, 1977 and therefore, had no effect on the contract between the parties which related to the financial year 1976-77. The correctness of this view is under challenge in this appeal.
In Gram Panchayat Oon''s case (supra), Tewatia, J. held that the word "year" has not been defined in the Act, but if Sub-section (2) is read in conjunction with the other provisions of Section 26 of the said Act including the proviso, then no doubt is left that the Legislature in using the word "year" had the financial year in view and not the English of calendar year. Before appreciating the ratio of the judgment, it is necessary to notice the provisions of Section 26 of the Act which read as under:
(1) A Gram Panchayat may, by vote of at least two-thirds majority of the Panches, direct that intoxicating liquor may not be sold at any licensed shop within the local area of the Gram Panchayat.
(2) When a resolution has been passed u/s (1) above, it shall take effect from the first day of April of the year next after such resolution.
(3) Notwithstanding anything contained in the Punjab Excise Act, 1914 or any other Act for the time being in force and the rules made thereunder with regard to the powers and functions of the Collector under the said Act, such a resolution will be binding upon the Excise and Taxation Commissioner:
Provided that if the Excise and Taxation Commissioner is of the opinion for reasons to be recorded in writing that within such local area illicit distillation or smuggling of alcohol has been carried on or connived at, within two years preceding the date of the passing of such resolution, in such local area such resolution shall not be binding upon him, unless the Government orders that it shall be so binding.
The learned Judge though took notice of the definition of the word "year" in the General Clauses At 1897, but held that this word used in Sub-section (2) refers to the financial year and not the calendar year on the following reasons:
Proviso to Sub-section (3) of Section 26 of the Panchayat Act authorises the Excise and Taxation Commissioner to ignore the resolution of the Panchayat referred to in Sub-section (1) of Section 26 if he forms an opinion (for reasons to be recorded in Writing) that within such local area illicit distillation or smuggling of alcohol had been carried on or connived at within two years preceding the date of the passing of such resolution in such local area. In the present case the Excise and Taxation Commissioner has ignored the resolution in question merely on the ground that two cases of possession of illicit liquor one involving one bottle and the other involving five bottles on 1-9-73 had been detected. If per chance neither any such case of illicit distillation or smuggling had been detected or carries on in the two years preceding the date of the resolution, then despite, large number of cases of illicit distillation and smuggling having been detected between the date on which the resolutions had been passed and the first of April of the next calender year on which date, according to the learned Counsel for the Respondents such resolutions should become effective by virtue of the provisions of Sub-section (2) of Section 26 of the Panchayat Act, Excise and Taxation Commissioner in law would have no power to ignore the said resolutions. That would be rather fantastic proposition and in my opinion the Legislature cannot be held to have intended such a consequence In view of the above, I have no hesitation to hold that the Legislature in using the word, ''year'' had the financial year in view and not the English calender year and therefore, the resolutions in question became effective, from 1-4-1974 and were to remain so unless ignored by the Excise and Taxation Commissioner for valid reasons.
The supposed fantastic proposition which the learned Judge tried to avoid by interpreting the word, "year" as the financial year, in fact, could not be avoided thereby and would still be there if the month in which the resolution is passed, is changed from February to April. Suppose, the resolution was passed on April 7, 1976 which could take effect only from April 1, 1977 even though a large number of cases of illicit distillation and smugglng might have taken place during this interval, yet the Commissioner could not have been able to take them into consideration. So this anomaly which is in the very provision of the statute, could not be avoided by interpreting the word "year" as the financial year.
Barring the morally poiated out above, we do not find anything in the other provisions of the section including the proviso which could compel us to interpret the word "year" as the financial year instead of the English calendar year as defined in the General Clauses Act. On-the other hand, if the Legislature had intended the word "year" to mean as the financial year, there was no need to use the word, "1st day of April" and it would have been sufficient to say that the resolution shall take effect from the year next after such resolution which would have necessarily meant from 1st of April if he word, "year" was to be understood as the financial year.
Again, the resolution passed by the Panchayat is to be binding on the Excise and Taxation Commissioner by virtue of the provisions of Sub-section (3) but under the proviso if the Commissioner is of the opinion, for the reasons to be recorded in writing, that within such local area illicit distillation or smuggling of alcohol has been carried on or connived at within two years preceding the date of the passing of such resolution in such local area, such resolution shall not be binding upon him unless the Government orders that it shall be so binding. Obviously, the Commissioner would require some time before he can record such opinion. The auction, as is well known, for the annual licence generally takes place in the end of February or beginning of March of the preceding financial year. If the Panchayat passes a resolution as was done in the present case after the holding of the auction but prior to March 31 and it is to become effective from 1st of April, that is within a few days of its passing then the Commissioner would get hardly any opportunity of recording his opinion to avoid the effect of such a resolution. On the other hand, if the word, "year" is taken to mean the English calender year the Commissioner would always get at least three months to form that opinion because for making the resolution effective from 1st of April the resolution has to be passed by December 31 of the preceding calender year. It was obviously for this reason that it has been provided, in Sub-section (2) that the resolution would be effective from 1st of April of the year next to the date of the resolution. Our view is also supported by Sub-section (1) of Section 26 which was substituted in place of the previous two sections by the Punjab Legislature which provides that the Panchayat may pass a resolution at any time on or after the first day of April and on or before the 30 day of September in any year and such resolution shall be effective fram the 1st day of April of the year following the date when it was so passed. This provision was introduced in the year 1975, in all probability, because of the view expressed in Gram Panchayat Oon''s case (supra) and the consequent practical difficulty created in the working of the proviso to Sub-section (3). Consequently with utmost respect to the learned Judge we are unable to subscribe to the view expressed by Tewatia, J. in Gram Panchayat Oon''s case (supra) and the same is hereby over-ruled.
In the result we find no merit in this appeal which is accordingly dismissed but without any order as to costs.