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Renewal of licenses for trade in liquor is not matter of right: J&K High Court

New Excise Policy-The Dispatch

Jammu:  A Division Bench of Jammu & Kashmir High Court Comprising Chief Justice (A) Rajesh Bindal and Justice Sanjay Dhar observed that Renewal of licenses for trade in liquor is not matter of right, which can be enforced and for the purpose of renewal of licenses for trade in liquor, if permissible in law, all the conditions applicable for grant of a new license shall also be applicable.

DB also Strucked down Clause 3.2.7 and Clause 11 in the Excise Policy for the year 2017-18, Clause 3.2.4 and Clause 11 in the Excise Policy for the year 2018-19 and Clause 3.2.7 and Clause 10 in the Excise Policy for the year 2019-20, are being contrary to the provisions of Clause 3.2.1 of the Excise Policies for the years 2017-18, 2018-19 and 2019-20, and Rules 26, 27 of the Rules.

Division Bench ordered that the show cause notices issued to the appellants for cancellation of their temporary licenses granted on 20.08.2005, which were valid up to 19.12.2005, are upheld.

DB further observed that as submitted by the counsel for the Government, the official respondents shall be at liberty to frame new olicy for the coming year namely, 2021-22 in accordance with the provisions of the Act and the Rules, and the law laid down by the Supreme Court on the subject.

DB further ordered that the Liquor Vends already operating shall be allowed to continue till 31.03.2021 and thereafter the licenses for liquor vends shall be allotted in terms of the Excise Policy to be notified by the Government for the year 2021-22 and the government shall be at liberty to take appropriate steps in view of striking down of the provisions of the Excise Policies, which envisage grant and automatic renewal of licenses for a period of five years.

With these observations Division Bench allowed the petition and dismissed the appeals with cost of ₹10,000/- on each of the appellants. The cost be deposited with the Excise Commissioner, Department of Excise and Taxation within one month from the receipt of the copy of the judgment.

 While hearing bunch of peititons, Division Bench observed that this Court has once again being called upon to clear the skeletons from the cup-board in Union Territory of Jammu and Kashmir. The case in hand is not in isolation where rule of law has been kept aside and there is total arbitrary exercise of power. Earlier many glaring issues came before the court. The same were, challenge to the Jammu and Kashmir State Land (Vesting of Ownership to Occupants) Act, 2001, popularly known as Roshni Act, grant of licenses for extraction of minor minerals, rampant encroachment of public/forest land, adhocism in government service, keeping investigation of criminal cases against senior officers and politicians under the Prevention of Corruption Act pending for decades and occupation of government accommodation by private persons, ex-politicians, retired employees, political workers, whereas the government employees are waiting for allotment.

 DB observed that this time it is in liquor trade, which had always remained lucrative. Before the issues are taken up after noticing the arguments raised by the counsels for the parties, it would be apt to notice certain glaring facts.

DB observed that as per the information furnished by the government counsel, at present there are 223 functional liquor vends in Jammu and Kashmir. A perusal of the chart will show that these are continuing with the same persons or their successors in interest for decades as the process of renewal of licenses was being followed, where admittedly the allotments had not been made in a transparent manner. The same were only on the recommendation of the Finance Minister concerned. Without there being any advertisement issued, on an application filed by a favorite, the Finance Minister would order allotment of a vend and the allottee will continue for all times to come.

A bunch of intra-court appeals and a writ petition, bearing LPAOW Nos.11,20-23 & 44/2017 and OWP No. 486/2017 are being taken up together. In the appeals, challenge has been made to a common judgment of Single Judge. The only difference in LPAOW No. 20/2017 is that in the aforesaid appeal, order passed in OWP No. 1796/2016 is under challenge.

The relief prayed for in the aforesaid petition was that the successful allottees in the draw of lots held in the year 2004 should be allotted the licenses. In OWP No. 486/2017, challenge has been made to the Excise Policies for the years 2017-18, 2018-19 and 2019-20.

As far as the dispute in the present bunch of cases is concerned, he submitted that public notice was issued inviting applications for allotment of 90 liquor vends. The appellants also applied. Draw of Lots was held on  09.08.2005. Against each vend, three persons were identified in the order of priority. In terms of Rule 30(8) of the Jammu and Kashmir Liquor License and Sales Rules, 1984 (for short ‗the Rules‘), the competent authority could even grant temporary license for a period of four months with a view to safeguard the revenue. The allottee was to complete the formalities during the interregnum. Thereafter either regular license was to be granted or temporary license will expire. 67 allotments were made for a period of 4 months. 57 of these completed the formalities within the time permitted. Before expiry of the period of four months, notices were issued to the aforesaid allotees to show cause as to why the licenses granted to them be not cancelled. The genesis thereof was a complaint made by some private person to the Government stating that the entire process of draw of lots had been manipulated. The matter was referred to State Vigilance Organisation, who referred the matter to CBI for testing of the device on which draw of lots was held. The report was sent to the Government on which it was decided to cancel the temporary licenses granted to 57 allottees. Direction was issued to the Excise Commissioner for the purpose. It was on the basis thereof that show-cause notices were issued to the appellants.

While impugning the judgment of the Single Judge, Sr. Adv Shah, argued that the show-cause notice was merely an eye-wash, as para 12 thereof clearly mentioned that the same had been issued on the direction of the Government to cancel the licenses. Hearing was merely an empty formality as the Commissioner was bound by the direction of the government. Hence, going to the Commissioner by filing response to the showcause notice was totally meaningless. Licenses had been granted to the appellants, which were valid upto 19.12.2005. Otherwise, as per Rule 27 of the 6 Rules, the validity of a license granted to an applicant is up to 31st March of the succeeding year. Challenge has also been made to the reference of dispute to Vigilance Organisation and thereafter CBI and receipt of report therefrom. It was submitted that the entire exercise was at the back of the appellants. They were never associated in the process. Even the report also suggested that the same was not conclusive but still the licenses granted to the appellants were sought to be cancelled without there being any fault on their part. There are no allegations against the appellants that they were party to any of the allegations regarding tampering of the device. Referring to the impugned judgment of learned Single Judge, it was submitted that the issue regarding validity of the show-cause notice has not been dealt with at all. In fact none of the arguments raised by the appellants has been touched. The writ petitions have been disposed of merely be giving liberty to the government to frame policy. As a result, valuable rights of the appellants have been affected. In support of the arguments, reliance was placed on the judgment of Hon‘ble the Supreme Court in M/s Siemens Ltd. Vs. State of Maharashtra & Ors.

DB after hearing both the sides observed that the conduct of the officers at the helm of affairs who had issued the aforesaid Excise Policy for the year 2017-18 till 2019-20 and acted totally contrary to the provisions of the Act and the Rules and interim order dated 23.03.2017 passed in these appeals needs to be examined by the competent authority. As to whether in future they can be entrusted with any responsible position. Their mindset of violating the law and court orders, is another factor which is required to be taken care of as they are capable of tinkering with provisions of law and violate the mandate contained therein or rewrite the same.


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