S. Ramar vs The Assistant Commissioner (Excise) and Licensing Officer, Tuticorin

S.S. Subramani, J.—Petitioner seeks issuance of writ of certiorari or any other appropriate writ or order or direction, calling for the records

of the respondent relating to the order passed in I.A.2/68808/98 dated 8.10.98 and quash the same and pass such further order. Petitioner, who is

a IMFL dealer, has come to this Court challenging the order dated 8.10.98 passed by the respondent.

By virtue of the order, the licence given, to the petitioner has been suspended. The same is challenged by the writ petitioner as one without

jurisdiction.

As against the said contention of the petitioner, learned Additional Government Pleader who argued on instructions, submitted that the petitioner

cannot come directly to this Court against the order of the Licensing Authority, but he has to move the statutory authority if he wants any other

relief. He also contended that against the impugned order, a statutory appeal is maintainable and no reason has been stated in the writ petition why

the statutory remedy is not effective.

I heard the Senior Counsel for the petitioner and also the Additional Government Pleader. In this case it is noted that the Government has not

filed counter affidavit though the Additional Government Pleader expressed his willingness to argue the matter on instructions. The Additional

Government Pleader also placed before me the file regarding the case.

Learned Senior Counsel for the petitioner submitted that the impugned order violates the statutory conditions under Rule 19 of the Tamil Nadu

Liquor (Retail Vending) Rules, 1989. According to the counsel, suspension imposed on him by virtue of the impugned decision is not valid and one

against the legislative intent of the Tamil Nadu Prohibition Act.

It is also contended by the learned Senior Counsel that before passing the impugned order, he is entitled to be heard and in case of temporary

suspension, the order cannot be for more than a period of three months or 90 days. By the impugned order, the liquor vending licence has been

suspended till the end of the criminal case is over. This, according to the petitioner, is violative of all the licensing conditions. Senior Counsel,

himself, further submitted that before passing an order of suspension, even if it is for a limited period, reasons will have to be stated which is absent

in this case. Certain admitted facts are as follows:- On 8.10.98, the impugned order was passed whereby the petitioner''s licence to run the liquor

shop has been suspended with retrospective effect i.e., from 13.9.98. In that order, except the statement that an F.I.R, has been filed, no other

reason has been given for suspension. In the order, it is also said that the suspension will be in force till the criminal investigation is over. This,

according to the counsel, is against the provisions of the Act and also his licence to do business.

As against the said contention, learned Additional Government Pleader submitted that even though it is only an order of suspension and even if

there is any irregularity in the order, the same cannot be challenged in the writ petition when the statutory remedy is available to the petitioner. On

investigation it is found that the petitioner has been dealing with adulterated liquor which endangers the entire humanity. Various articles are seized

from his shop, and after preparing the mahazar, it was found at that time that the petitioner will stoop to any level Taking into consideration the

benefit of the public interest, necessary precautions were always to be taken and he prayed for dismissal of the writ petition.

I heard the counsel in detail. Licence can be suspended under Rule 19 of the Tamil Nadu Liquor (Retail Vending) Rules, 1989, which reads

thus:-

Cancellation or suspension of licence:

(1) The licensing authority may cancel a licence or suspend the licence for a period to be specified, for violations of the provisions of the act, the

rules or the conditions of the licence, after giving a reasonable opportunity to the licensee against the proposed cancellation or suspension.

(2) Notwithstanding anything contained in this rule, the licensing authority may temporarily suspend the licence for a period not exceeding ninety

days, pending disposal of charges for violations or irregularities noticed. In such a case, the reason for suspension shall be communicated to the

licensee within five days from the date of suspension.

It is admitted that as against the impugned order, statutory appeal is maintainable under Rule 31.

Learned senior counsel submitted that when the question of jurisdiction is involved, the availability of alternative remedy will not be a bar

invoking the extraordinary jurisdiction of this Court. According to the counsel, the licence has been suspended till the entire criminal case is over.

Instead of suspending it for a period not exceeding 90 days, there must be a reason for suspension. The filing of the F.I.R. is only a fact and the

pendency of the criminal proceedings cannot be a ground for suspending the licence and no other reasons are given. The impugned order is against

Rule 19 and therefore, issued without jurisdiction. It is further stated that even though the order is dated 8.10.98. suspension was effected

retrospectively from 13.9.98. It is unheard of in any proceedings. It was further argued that from the impugned order it is clear that closure or

locking of the business on 13.9.98 was without any order and the closure is justified by issuing an order dated 8.10.1998. When a patent illegality

has been committed by the licensing authority, the argument that there is an alternative remedy under Rule 31 is not to be countenanced.

Learned senior counsel also placed reliance on the decision reported in 1982 (II) M.LJ.278 (V. Kuppusamy v. State of Tamil Nadu, and

others).

It is also submitted by the senior counsel that after suspending the licence under Rule 19(2), the reason for suspension shall be communicated

to the licensee within a period of five days from the date of suspension has not been complied with and therefore, the entire procedure has become

illegal.

Learned Additional Government Pleader disputed the above factual points on the ground that when the mahazar was prepared, the petitioner

has absconded and even now, his whereabouts are not known. Learned Additional Government Pleader also submitted that how an absconding

accused can file a writ petition is also a matter to be investigated. According to him, on 12.10.98, the reason for suspending the licence was

despatched to the petitioner, but since he was not available and was absconding, the same was received by his wife by name R. Saraswathi, long

before the present writ petition was filed. Non-disclosure of the same also shows the lack of good faith in filing the writ petition. Even the

suspension order could be tendered only to her, since the petitioner was absconding.

After hearing the counsel on both sides, I feel that the impugned order is passed without jurisdiction. Under Rule 19(2), the authority can

suspend the licence only subject to maximum of 90 days, pending disposal of the charges. In the impugned order, the suspension is till the disposal

of the entire criminal case, which is a patent illegality.

Unless there is an order of suspension, no shop could be closed by the authorities. In this case, an order is passed on 8.10.98 admitting that

the shop has been closed on 13.9.98. Under what circumstances the shop was closed on 13.9.98 without an order is a matter the respondent is

bound to explain. Absolutely, no material has been placed except to state that the'' petitioner has indulged in the sale of spurious liquor. According

to me, the very reason also is necessary to suspend the licence and order could be made immediately after seizing of the same. But, the authorities

have not passed any order for nearly a month from 13.9.98 till 8.10.98 and the suspension, has been made with retrospective effect.

When this fact was submitted by the senior counsel, learned Additional Government Pleader argued, that u/s 23 of the Tamil Nadu. Prohibition

Act, the authorities have a right to suspend the licence and that power has been exercised in this case. I do not think that I should go into the

arguments when the impugned order itself says that the suspension order is made only under Rule 19(2).

Even though the file has been placed before me, I do not find any material to show that the reason for suspension was communicated to the

licensee within five days from the date of suspension. If the suspension is to take place retrospectively from 13.9.98, the reason for the same ought

to have been communicated by 18.9.98. The argument of the licensee was not available and he was absconding and could be communicated to

him, cannot hold when the respondent himself has attempted to serve the reasons for suspension on the wife of the licensee which was on 17.11.98

i.e., more than a month of impugned order. It is only stated that the criminal cases are pending and F.I.R. has been registered and he has also

violated the licensing conditions. Since the FIR has been registered on 13.9.98, and the licence has also been suspended with effect from that date

it violates the principles of natural justice and therefore, the impugned order is one without jurisdiction. In case where the order is one without

jurisdiction, can the writ petition be dismissed on the ground that alternate remedy is available? This question came-up for consideration in a very

recent decision reported in AIR S.C.W. 1998, 3345 (Whirlpool corporation v. Registrar of Trade Marks, Mumbai). That is a case where show

cause notice was impeached on the ground that the person who issued the same was having no jurisdiction. The Bombay High Court dismissed the

writ petition at the admission stage itself. Paragraphs 15 to 20 of the judgment of the Supreme Court are relevant for our purpose and they read

thus:-

Under Article 226 of the Constitution the High Court, having regard to the facts of the case, has a discretion to entertain or not to entertain a

writ petition. But, the High Court has imposed upon itself certain restrictions one of which is that if an effective and efficacious remedy is available,

the High Court would not normally exercise its jurisdiction. But the alternative remedy has been consistently held by this Court not to operate as a

bar in at least three contingencies, namely, where the writ petition has been filed for the enforcement of any of the fundamental rights or where there

has been a violation of the principle of natural justice or where the order of proceedings are wholly without jurisdiction or the vires of an Act is

challenged. There is a plethora of case law on this point put to cut down this circle of forensic Whirlpool, we would rely on some old decisions of

the evolutionary era of the constitutional law as they still hold the filed.

Rashid Ahmed Vs. The Municipal Board, Kairana, , laid down that existence of an adequate legal remedy was a factor to be taken into

consideration in the matter of granting writs. This was followed by another Rahid case; namely K.S. Rashid and Son Vs. The Income Tax

Investigation Commission etc., , which reiterated the above proposition and held that where alternative remedy existed, it should be a sound

exercise of discretion to refuse to interfere in a petition under Article 226. This proposition was, however, qualified by the significant words, ""unless

there are good grounds therefore"", which indicated that alternative remedy would not operate as an absolute bar and that writ petition under Article

226 could still be entertained in exceptional circumstances.

Specific and clear rule was laid down in The State of Uttar Pradesh Vs. Mohammad Nooh,

But this rule requiring the exhaustion of statutory remedies before the writ will be granted is a rule of policy, convenience and discretion rather than

a rule of law and instances are numerous where a writ of certiorari has been issued in spite of the fact that the aggrieved party had other adequate

legal remedies.

This proposition was considered by a Constitution Bench of this Court in A.V. Venkateswaran, Collector of Customs, Bombay Vs.

Ramchand Sobhraj Wadhwani and Another, and was affirmed and followed in the following words (para. 10):

The passages in the judgments of this Court we have extracted would indicate (1) that the two exceptions which the learned Solicitor General

formulated to the normal rule as to the effect of the existence of an adequate alternative remedy were by no means exhaustive, and (2) that even

beyond them a discretion vested in the High Court to have entertained the petition and granted the petitioner relief notwithstanding the existence of

an alternative remedy. We need only add that the broad lines of the general principles on which the Court should act having been clearly laid down,

their application to the facts of each particular case must necessarily be dependent on a variety of individual facts which must govern the proper

exercise of the discretion of the Court, and that in a matter which is thus preeminently one of discretion, it is not possible or even if it were, it would

not be desirable to lay down inflexible rules which should be applied with rigidity in every case which come up before the Court.

Another Constitution Bench decision in Calcutta Discount Company Limited Vs. Income Tax Officer, Companies District, I and Another, laid

down:

Though the writ of prohibition or certiorari will not issue against an executive authority, the High Courts have power to issue in a fit case an order

prohibiting an Executive authority from acting without jurisdiction where such action of an Executive authority acting without jurisdiction subjects or

is likely, to subject a person to lengthy proceedings and unnecessary harassment. The High Court will issue appropriate orders or directions to

prevent such consequences. Writ of certiorari and prohibition can issue against Income tax Officer acting without jurisdiction under Sec. 34 I.T.

Act.

Much water has (sic) flown beneath the bridge, but there has been no corrosive effect on these decisions, which though old, continue to hold

the field with the result that law as to the jurisdiction of the High Court in'' entertaining a writ petition under Article 226 of the Constitution, in spite

of the alternative statutory remedies, is not affected, specially in a case where the authority against whom the writ is filed is shown to have had no

jurisdiction or had purported to usurp jurisdiction without any legal foundation.

The order of suspension has taken effect from 13.9.98 and as per Rule 19(2), it has to expire by 90 days i.e., by 12.12.98 Even after the

conditions are fulfilled, suspension cannot go beyond 12.12.98. Naturally, from this date, there is no suspension and the petitioner is entitled to

open the shop. By giving such a direction, it should not mean that the impugned order is valid.

At this juncture, senior counsel also wanted that some compensation also be given to the petitioner for the illegality committed by the

respondent which is one without jurisdiction. When this argument is put forward, learned Additional Government Pleader relied on Rule 24 to

contend that the licensee shall not be entitled to claim any compensation on account of cancellation or suspension of licence under Rule 19 or

closure of the shop under Rule 23. I do not think that Rule 24 will have any application in this case. Rule 24 contemplates the case of valid order of

suspension or valid order of closure. When the authorities have acted without jurisdiction and the licensee has been prevented from doing business

by closing the shop forcibly and at the same time without passing any order of suspension, it cannot be said that the respondent can claim

protection under Rule 24. In fact from 13.9.98 to 8.10.98, there was suspension without an order. In such cases, I can only conclude that the

petitioner''s shop has been forcibly closed down without any order of suspension. What was the reason for the delay in issuing the impugned order

is nowhere explained. The petitioner has bid the shop for an amount of Rs. 5,31,000/- expecting that he can do business for twelve months. Now,

by the illegal act of the respondent, at least from 13.9.98 till 8.10.98, he has been asked to close down the shop, when there was no order of

suspension issued.

Under the above circumstances, I feel that this is a fit case where the respondent must be'' directed to pay compensation. The pendency of the

criminal charge will not be a ground for suspension.

In this case, there is no evidence regarding the quantum of loss sustained by the petitioner. That is a matter which requires detailed evidence. I

hold that the petitioner is entitled to compensation since his shop was forcibly closed by the respondent and the same was without authority. I give

liberty to the petitioner to file a suit before the appropriate Court claiming compensation for the loss sustained by him.

In the result, the impugned order is quashed and I also declare that the petitioner is entitled to open the shop and conduct the business. This

order will not prevent the respondent from taking legal action and also from proceeding with the criminal case that is now pending. The respondent

is also not prevented, from suspending the licence if grounds are made out under law. The writ petition is allowed with costs as indicated above.

Advocate''s fee Rs. 5000/- (Rupees five thousand only). Consequently, WMP. No. 28182 of 1998 is dismissed.