Bombay High Court
Shrichand Kishanchand Fulwani vs The Collctor Of Nasik And Ors on 18 December, 2024
Author: Sharmila U. Deshmukh
Bench: Sharmila U. Deshmukh
2024:BHC-AS:49663
wp74-2022 (J)
IN THE HIGH COURT OF JUDICATURE AT BOMBAY
CIVIL APPELLATE JURISDICTION
WRIT PETITION NO. 74 OF 2022
Shrichand Kishanchand Fulwani }
of Nasik, aged 66 years, Indian inhabitant, }
Occupation-Business, residing at Shivaji }
Nagar No.1, Block No.360, Manmad, }
District-423 104 and carryiing on business of }
retail sale of country liquor as a Joint Licence }
Holder at Manmad, Taluka Nandgaon, }
District-Nasik on the strength of CL III }
Licence No.203. } ... Petitioner.
Versus
1) The Collector of Nasik and Ors. }
State Excise Department }
District - Nasik }
2) The Commissioner State Excise, }
Maharashtra State, }
Old Customs House, Fort, }
Mumbai - 400 023. }
3) The Principal Secretary, }
State Excise, Home Department, }
Mantralaya Mumbai. }
4) Ishwaribai Tahelram Fulwani }
Joint Licence Holder of a CL III Licence }
at Manmad, Taluka-Nandgaon, }
District-Nasik } ... Respondents.
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Ms. Veena Thadhani a/w. Mr.Bharati Nyaynirgune and Rutuja Gaikwad,
for the Petitioner.
Mr. Abhijeet Rane a/w Mr.Arvind Tiwari, Ms.Shraddha Kadam and
Ms.Swarta Suryawanshi i/by Mr.Santosh L. Patil, for Respondent No.4.
Mr.S.D.Rayrikar, AGP for the Respondent-State.
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sa_mandawgad 1 of 29
wp74-2022 (J)
Coram : Sharmila U. Deshmukh, J.
Reserved On : October 24, 2024
Pronounced On : December 18, 2024
JUDGMENT :
1. Rule. With Consent, Rule made returnable forthwith and taken up for final hearing.
THE CHALLENGE:
2. Exception is taken to the order dated 23 rd August, 2021 passed by the Principal Secretary, State Excise, Home Department, Mumbai, which allows the CL-III license to be renewed till the partnership dispute between the Petitioner and Respondent No 4 is adjudicated by the Civil Court by following the Government Circular dated 19th March, 1985.
THE ISSUE:
3. The issue arising for consideration is whether the CL-III license was required to remain suspended in backdrop of rival claims of the parties. As a prelude, it will have to be determined whether the the Petitioner was a joint license holder or partner with the original license holder and subsequently with the Respondent No 4.
2 of 29 wp74-2022 (J) FACTS OF THE CASE:
4. The undisputed facts are that one Tahelram Lokchand Fulwani i.e. the husband of Respondent No.4 was granted CL-III No.203 in the year 1973. On 9th June, 1975, the Petitioner's name was included in the CL-III license. On 30th April, 1993, Tahelram Fulwani expired and by order of 3rd January, 1994 with consent of legal heirs of Tahelram Fulwani and Petitioner, the name of the Respondent No.4 was entered in the license with the Petitioner.
On 17th January, 2018 an application was made by the Petitioner to the Superintendent of State Excise seeking suspension of CL-III license and to close down the business as Respondent No.4 and her sons were not permitting the Petitioner to participate in the business and not giving him his lawful share.
5. The Collector after hearing the parties vide order dated 2 nd May, 2018, followed the Circular dated 19 th March, 1985, issued by the Commissioner of State Excise and directed the Petitioner and Respondent No 4 to resolve the dispute in the Civil Court and permitted renewal of the license. In the meantime, on 8th August, 2018, the Respondent No.4 filed an Application before the Collector for deletion of Petitioner's name from CL-III license.
6. The Petitioner approached the Appellate Authority against the decision of Collector dated 2nd May, 2018 and by order dated 3 of 29 wp74-2022 (J) 27th September, 2019, the Commissioner observed that the Respondent No.4 has not filed any application for removal of Petitioner's name from CL-III license and the dispute between the parties is not partnership dispute, and, thus the Circular dated 19 th March, 1985 is inapplicable as the Petitioner is joint license holder.
7. The Respondent No 4 filed Revision Application before the State Government against the order of 27 th September, 2019, and also instituted Writ Petition No.10989 of 2019 before this Court, in which an interim order came to be passed on 14 th October, 2019, directing the license to be operated jointly by the Petitioner and the Respondent No.4. Vide order dated 12 th February, 2020, the Writ Petition came to be disposed of with direction to the parties to appear before the Revisional Authority. The Revisional Authority by the impugned order dated 23rd August, 2021 allowed the Revision Application confirming the order of the Collector dated 2nd May, 2018 leading to filing of the present Petition. PLEADINGS:
8. As the controversy revolves around the question whether the Petitioner was joint license holder or his name was included as partner in CL-III license, it would be apposite to refer to the pleadings to understand the stand taken by the parties. The relevant pleadings in the Petition are as under:
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(a) Paragraph 3 pleads that the Petitioner is joint license holder.
(b) Paragraph 4(ii) pleads that Petitioner's name was included as a partner and joint license holder on 9 th June, 1975 and after death of Tahelram Fulwani, the Respondent No 4's name was included in place of her husband as joint license holder.
(c) Paragraph 4(iv) pleads that as the Petitioner's name was on the license as partner, the VAT registration certificate was granted in 2006 as a partnership, Income Tax Return was filed as partnership firm and the FSSI Registration was also in the name of the partnership firm. Bank Account was also opened in 2007 in joint names and was operated by the Petitioner alone.
(d) Ground (b) of the Petition pleads that the Petitioner has always been joint license holder and no partnership deed was executed between Tahelram Fulwani and the Petitioner or between the Respondent No.4 and the Petitioner.
(e) Ground (c) of the Petition pleads that after death of Tahelram Fulwani, the Partnership firm (as stated by the Respondent No 4) dissolved and hence name of deceased license holder ought to have been deleted but due to his consent, the name of 4th Respondent was included as joint license holder and partner.
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(f) Ground (e) of the Petition pleads that the partnership firm between the husband of the Respondent No.4 and the Petitioner dissolved on his death and a new partnership firm comprising of Petitioner and the Respondent No.4 came into existence on the inclusion of the Respondent No.4 on the license held and 100% of the license fees was recovered from the Respondent No.4 as privilege fees.
(g) Ground (j) of the Petition pleads that the 3 rd Respondent failed to appreciate that the report of State Excise Inspector categorically states that the license was held by the 4 th Respondent's husband and the Petitioner in partnership, since the name of Petitioner appears on the license as a Partner.
(h) Ground (k) of the Petition pleads that according to Rule 28 of the Maharashtra Country Liquor Rules, 1973 the name of the Petitioner was included on the license as a partner albeit without any formal partnership deed and as the name of the Petitioner appears on the license as a partner, applications were made to the State Excise Department and other Government Departments as partners.
(i) Ground (l) of the Petition, the Petitioner pleads that although there was no partnership on record between the Petitioner and the Respondent No.4 or her husband they have being sharing the profits of the business of an oral arrangement 6 of 29 wp74-2022 (J) and several registration certificates, bank account etc. are in the name of the partnership firm.
(j) Ground (n) of the Petition pleads that the Petitioner is carrying on business as joint license holder of license alongwith the 4th Respondent.
9. The Affidavit in reply dated 22nd March, 2022 filed by Dr.Manohar Manikrao Anchule, Superintendent of State Excise, Nasik avers as under:
(a) Petitioner was never granted any CL-III license but was an added partner with the deceased-Tahelram Fulwani and not joint license holder.
(b) Upon death of Tahelram Fulwani on 30 th April, 1993, the transfer of license in favour of Respondent No.4 was allowed on 3rd January, 1994 and the same was allowed by the Respondent No.1 on payment of requisite privilege fees however, the name of the Petitioner remained in the license.
(c) Upon death of Tahelram Fulwani, the partnership between the Petitioner and Tahelram Fulwani came to an end and the license was transferred to the Respondent No.4, however the name of the Petitioner remained and there is no partnership between the Petitioner and Respondent No.4 as the same was never approved by Collector under rule 28 of the Maharashtra 7 of 29 wp74-2022 (J) Country Liquor Rules.
10. The affidavit-in-reply dated 11th December, 2023 filed by Respondent No 4 avers as under:
(a) The Petitioner was added as a partner in the year 1975 and there is no partnership deed between the Petitioner and Tahelram Fulwani and after the death of Tahelram Fulwani, partnership came to an end under Section 42 of the Indian Partnership Act, 1932.
(b) There is proprietorship firm in the name of Ishwaribai Tahelram Fulwani and on 6th October, 2016 the proprietorship was converted into partnership and in the partnership deed it is mentioned that the firm's transaction will be done with Petitioner's signature only and Clause 22 of the deed mentions that the Petitioner has no rights in the license and he will not claim any sort of demand on liquor license and therefore the Petitioner was partner only for handling transactions of bank account and not in liquor license.
11. The Additional Affidavit in rejoinder of the Constituted Attorney of Petitioner dated 12th September, 2024 pleads as under:
(a) There is no formal partnership deed between Petitioner and Tahelram Fulwani and they were equally sharing the profits of the partnership firm and running the business as a joint license 8 of 29 wp74-2022 (J) holder and after his death the partnership would be dissolved and the Petitioner would be entitled to carry on the business as sole proprietor.
(b) Since in the records of the State Excise Department, the license and the business were in partnership and on the death of one partner the partnership dissolved and hence, for transfer of license from older partnership to new partnership, 100% of the license fees were recovered.
(c) The Income Tax and other records clearly prove that the business was partnership business between the Respondent No.4 and the Petitioner.
SUBMISSIONS:
12. Ms. Thadhani, learned counsel appearing for the Petitioner would submit that the Petitioner is not a partner in the CL-III license therefore the Circular dated 19th March, 1985 is inapplicable. She She submits that in any event the Circular of 24 th October, 2018 superseded the Circular of 1985 and would apply. She submits that the Petitioner's name was added as partner and joint license holder with Respondent No 4's husband and there was no formal partnership deed. She submits that though the Petitioner was entitled to the license in his sole name after death of Respondent No 4's husband, the Petitioner consented to include 9 of 29 wp74-2022 (J) Respondent No 4's name in the license and the business continued as before. She submits that since inception, the registration certificate, the Income Tax Returns, bank account were opened in the year 2007 as partnership firm of Petitioner and Respondent No.4 but was operated by Petitioner.
13. She submits that the business was carried out from 1994 till 2024 jointly by the Petitioner and the Respondent No.4 though Condition of 7(4) of Rules of 1973 that women cannot sit in the country liquor bar came to be deleted in the year 2009. Pointing out to the Partnership Deed dated 4th August, 2016, between the Petitioner and the Respondent No.4, she submits that it is evident that the deed has been tampered by inserting additional pages incorporating additional Clause 22 and 23 that the Respondent No.4 is the ultimate authority in respect of the liquor license and except for transfer of liquor license, the Petitioner will be the signing authority. She submits that the Petitioner's signatures were taken on blank documents. She submits that though the document is stated to be executed at Nasik it has been notarised at Aurangabad.
14. She would submit that under the Privilege Fees Rules as well as the Rules of 1973, the expression "licensee" has been defined as a person holding a license. She submits that as per the procedure followed, the draft partnership deed is submitted to the Collector 10 of 29 wp74-2022 (J) and after his approval, the name is included.
15. She submits that the decision of Collector of Bombay v. Meena Narayan Idnani (1994 SCC Online Bom 329) permits the surviving partner to carry on business as sole proprietor however, the Petitioner continued the business with the widow of deceased partner and her name was inserted. She submits that as there was change in the constitution of partnership, Rule 5 of the Privilege Fees Rules is applied.
16. Pointing out to the decision in the case of Shripat C. Mahajan v. Sanjay Radheshyam Jaiswal [AIR 2002 Bom 211], she submits that it is the Civil Court which will have the jurisdiction as regards the dissolution of partnership.
17. She would further submit that the Apex Court in the case of Addanki Narayanappa v. Bhaskara Krishtappa [AIR 1966 SC 1300] has held that when the partnership is formed whatever may be the character of the property which is brought in by the partners it becomes the property of the firm. She therefore, submits that CL- III is an asset of the partnership belonging to the Petitioner and the Respondent No.4 and therefore, the Respondent No.4 cannot claim any exclusive right to the same.
18. She submits that the non-licensee cannot carry on the business as per the terms and conditions of license and in the 11 of 29 wp74-2022 (J) present case, the present Petitioner has not signed the Nokar-nama and therefore there is breach of conditions for which the license is required to be cancelled. She submits that the sons of the Respondent No.4 have usurped the business as the Respondent No.4 is old and bedridden.
19. She would further point out the report of the Superintendent of State Excise dated 30th January, 2018 sent to the Commissioner of State Excise that there is no partnership deed submitted while admitting the Petitioner as partner and similarly after the death of Tahelram Fulwani while including the name of the Respondent No.4 as partner and that as there is no partnership firm has recommended the closure of business. She submits that a statement was given by the Petitioner to the Superintendent of State Excise on 29th January, 2018 stating that the signature was taken of the Petitioner on blank pages which are used for interpolation of the partnership deed.
20. Per contra, Mr. Rane, learned counsel appearing for the Respondent No.4 would submit that in the year 1975, the Petitioner came in as partner and in 1994, the Respondent No.4 became a license holder and being a lady in view of Condition 7(4) of the Rules of 1973, Nokar-nama has been given to the grandsons, which has been approved by the Collector. He submits that as regards the alleged interpolation in the partnership deed there is 12 of 29 wp74-2022 (J) no First Information Report lodged. He submits that in the affidavit- in-reply, the specific pleading is that the Bank Account was opened in the name of proprietorship firm of Respondent No.4 in the year 2007 and only on 6th October, 2016, the Petitioner became partner in the Bank Account, which has not been dealt with in the Affidavit in rejoinder. He would point out that the certificate had been obtained from the Bank certifying that in the year 2007, the firm was the proprietorship firm. He would further point out that the Shop and Establishment License is in the name of the Respondent No.4 and the Bank opening forms are also in the name of Respondent No.4. He submits that the deed of partnership executed in the year 2016 was submitted to the bank which provides for arbitration and in case of any dispute, the Petitioner is free to invoke arbitration. He submits that in the Register the Petitioner is shown as a partner and not as a joint license holder. He point out that the IT returns also shows the Petitioner as a partner for the firm 2017-2018 which is after the execution of partnership agreement in the year 2016 between the Petitioner and the Respondent No.4. He submits that by order dated 8th November, 1993, the license was transferred with the consent of the Petitioner in the name of the Respondent No.4 and at the time of transfer, the Petitioner's name remained on the license.
21. He submits the Circular of 19 th March, 1985 partially 13 of 29 wp74-2022 (J) modified the Circular dated 26rd March, 1984 and it was clarified that in case involving disputes between partners on the CL-III licenses, existing license should be renewed or re-granted, even if Applications are made on behalf of one of the partners subject to the contrary orders issued by the Competent Court, if any, in order to safeguard the Government revenue. He submits that the Circular dated 24th October, 2018 is inapplicable as it was issued, as it was found that third persons were carrying on business instead of the licensee.
22. He draws support from the decision of the learned Single Judge of this Court in Aruna Mohanbabu Jaiswal v. The Collector [2022 SCC OnLine Bom 2976] which dealt with the contention raised in that case that the suspension of CL-III license was necessary till the inter se dispute between the parties is settled by Civil Court and the Court has held that the license under the provisions of the Act can be suspended only in specified contingency as contemplated under Section 54 of the Act. He submits that he is running the business and therefore is not required to go to the Court for adjudicating any dispute.
23. In rejoinder Ms. Thadhani would submit that the Books of Accounts and the IT Returns would show that the business is being run by the Petitioner. She submits that the dispute arose in the year 2018.
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24. Learned AGP would submit that the name of the Petitioner was included in the license in the year 1975 as added partner and not as a joint license holder and upon the death of one of the partners, the license was transferred on the Application of the Respondent No.4 in her name however, the name of the Petitioner remained in the license and there is no material on record to show that there is any partnership between Respondent No.4 and the Petitioner and the same was never approved by the Collector as required under the Rule 28 of the Maharashtra Country Liquor Rules, 1973.
REASONS AND ANALYSIS:
25. The answer to the core issue depends on the question whether the Petitioner's name was included in the CL-III license in the year 1975 as joint license holder or as partner. It is difficult to comprehend the stand taken by the Petitioner as well as the Respondent No 4 as both take varying stands. I have segregated the discussion under various sub-topics as per the developments which had taken place subsequent to grant of license to the original licensee in the year 1973.
(A) WHETHER THE PETITIONER WAS JOINT LICENSE HOLDER WITH THE RESPONDENT NO 4'S HUSBAND?
26. Perusal of the CL-III License shows the name of Petitioner added as "Part", an acronym for partner, in the original license 15 of 29 wp74-2022 (J) issued in sole name of the Respondent No 4's husband. There is no clarity in the stand taken by the Petitioner. At some places the Petition pleads that the Petitioner was joint license holder with the original license holder and at some places it is pleaded that the partnership firm between the Respondent No 4's husband and Petitioner dissolved on his death. Pertinent to note Ground (j) and
(l) of the Petition,which reads thus:
"(j) the 3rd Respondent has failed to appreciate that the report of Inspector State Excise categorically states that the license was held by the 4th Respondent's husband and the Petitioner in partnership, since the name of the Petitioner appears on the license as a Partner.....
(l) the 3rd Respondent has failed to appreciate that although there was no partnership on record between the Petitioner and the 4 th Respondent or her husband they have been sharing the profits of the business on an oral arrangement and several Registration Certificates the bank account etc are in the name of the Partnership Firm."
The Petitioner himself seeks to rely on the report of State Excise Inspector that the license was held by the Petitioner and 4 th Respondent's husband as partner. The Respondent No 4 pleads in her Affidavit in reply that the Petitioner was added as partner and after death of the original license holder, the partnership came to an end. Admittedly there is no written partnership deed between 16 of 29 wp74-2022 (J) the Petitioner and Respondent No 4's husband but the concept of oral partnership is well recognized in law.
27. In light of the varying stands taken by the Petitioner, recourse will have to be taken to the relevant statutory provision under which the name of the Petitioner was added to the original license. The relevant Rule governing the transfer of license is Rule 28 of Maharashtra Country Liquor Rules, 1973 (Rules of 1973) which empowers the Collector to permit the transfer of license from one name to another or admit or delete the name of any partner after the license is granted. The Rule makes it clear that either there is complete transfer of license from one name to another or addition or deletion of name of any partner after license is granted. Thus it is only a partner, whose name could be added in the license subsequently. Ms. Thadani has not been able to point out any provision governing the concept of joint license holder as is sought to be propounded by her. It would have been different position if the original license was itself in the names of the Respondent No 4's husband and the Petitioner but admittedly it is no so. The transfer can only be under Rule 28 of Rules of 1973, which when perused makes it clear that the Petitioner's name was added as partner. It can thus safely be concluded that the Petitioner and the original licenseholder were carrying on business in partnership.
17 of 29 wp74-2022 (J) (B) WHETHER THERE WAS TRANSFER OF LICENSE IN FAVOUR OF RESPONDENT NO 4 OR ADDITION OF HER NAME AS PARTNER?
28. As the Petitioner's name was added with the original licensee as partner in the year 1973, upon the death of the original licensee in the year 1993, by virtue of Section 42 of Indian Partnership Act, 1932, the partnership came to an end. The course which was open for the Petitioner was to carry on business as sole proprietor and to seek transfer of license in his own name as sole proprietor. As held in Collector of Bombay v. Meena Narayan Idnani (supra), in case the sole proprietor desires to hold license by deletion of the deceased partner then such request amounts to transfer of the license. However, the Petitioner did not apply for transfer of license in his name as sole proprietor, instead he consented to the application filed by the Respondent No 4 for transfer of license.
29. The CL-III License shows an endorsement of the Collector's order dated 3rd January, 1994 that upon the death of Tahelram, the license has been transferred in the name of his widow Ishwaribai Phulwani on payment of special privilege fees. Thereafter the license shows regular renewals from time to time. Qua the Respondent No 4, the stand taken by the Petitioner is that upon death of original license holder, the Respondent No 4's name was included in place of her husband as joint license holder while at the 18 of 29 wp74-2022 (J) same time pleading that new partnership firm comprising of Petitioner and Respondent No 4 came into existence on inclusion of Respondent No 4 on the license upon payment of 100% license fees.
30. The contention of Petitioner that Respondent No 4 was included in the license as joint license holder cannot be accepted as Rule 28 of Rules of 1973 does not provide for such a course. As far as the stand taken that new partnership firm between the Petitioner and Respondent No 4 came into existence, the license could either be transferred or name of Respondent No 4 could be added as partner. The legal position upon death of one partner out of two partners is that the partnership comes to an end and there was no firm in existence for inducting the Respondent No 4.(See Commissioner of Income-Tax, M.P., v. Seth Govindram Sugar Mills [AIR 1966 SC 24]), It thus cannot be agitated that the Petitioner had inducted the Respondent No 4 as partner in place of her husband. Equally unsustainable is the contention that the Petitioner and the Respondent No 4 were joint license holders.
31. By order of 3rd January, 1994, the license came to be transferred in name of Respondent No 4, however, the error committed was that the name of the Petitioner remained on the license. There is no document to show that at the time of transfer of license in favour of Respondent No 4, there was any partnership 19 of 29 wp74-2022 (J) between the Petitioner and the Respondent No 4.
32. Another fact that supports the view that there was transfer of license in favour of Respondent no 4 is the imposition of fees under Rule 5 of Privilege Fees Rules, which governs the fees for transfer of license from one name to another. Rule 5 is distinct and separate from Rule 6 which governs the fees for admission or withdrawal of partner. It is not disputed that the privilege fees were charged under Rule 5 and not under Rule 6. Neither the order of 3rd January, 1994 was opposed by the Petitioner nor the imposition of fees under Rule 5. It is thus clear that upon death of the original license holder there was transfer of license in favour of the Respondent No 4.
DISPUTE ABOUT PARTNERSHIP:
33. Though the license came to be transferred in name of Respondent No 4 in the year 1994, the name of the Petitioner remained in the license. The proceedings emanated from the Petitioner's application dated 17th January, 2018 raising a grievance of being prohibited from participating in the business under CL-III license issued in the partnership of Petitioner and Respondent No.4. The application itself refers to the Respondent No 4 as partner and the business as partnership. The Petitioner seeks to rely on Income Tax Return for the year 2016-2017 and 2017-2018 20 of 29 wp74-2022 (J) showing the returns being signed by the Petitioner in the capacity as partner. The certificate of registration for the purpose of VAT refers to the business as partnership firm which has been issued in the year 2006 whereas the Bank Accounts in the year 2007 were opened in the name of the Respondent No.4 as the Proprietor of the firm and it is in the year 2016 that the same was converted into an account of partnership. The documents relied upon by the Petitioner reveals partnership from the year 2016 atleast in the records. Although it is sought to be contended by Respondent No.4 that there was transfer of license in the exclusive name of the Respondent No.4 in the year 1994 after the death of the original license holder, at the same time, in paragraph No.22 of the affidavit-in-reply, the Respondent No.4 avers that on the basis of the partnership executed in the year 2016, the Petitioner cannot take advantage that he was carrying on business and has annexed the copy of the partnership deed alleged to have been executed on 4th August, 2016 which is alleged by the Petitioner to have been tampered by insertion of additional pages.
34. The conclusion which can be arrived at based on the discussion above that upon transfer of license in Respondent No 4's name, the name of Petitioner ought to have been deleted but was not done. The parties conducted themselves as partners and both 21 of 29 wp74-2022 (J) parties relies on documents to demonstrate partnership between the Respondent No 4 and the Petitioner. The sum and substance of the pleadings and documents is that at the time when the dispute arose, there was partnership between the Respondent No 4 and Petitioner.
APPLICABILITY OF CIRCULAR DATED 19TH MARCH, 1985:
35. Having pleaded participation in the business as partner with Respondent no 4, the Petitioner would dispute the applicability of Circular of 1985 and would claim that the license should be suspended. One of the grounds for seeking suspension of license is that no Nokarnama was signed by the Petitioner and the business is being run by unauthorised person cannot be accepted as the Collector is stated to have approved the Nokarnama. The suspension of the license was not sought on ground of breach of conditions of license but for the reason that the Petitioner is not permitted to participate in the business. Suspension of license can only be in the contingencies referred to in Section 54 of Prohibition Act and dispute between the partners is not one of the specified contingencies. (See Vidarbha Bottlers Private Limited vs Hon'ble Minister of State [(2020) 2 Bom CR 326]).
36. The Circular of 19th March, 1985 particularly deals with the eventuality of partnership dispute and clarifies that in cases
22 of 29 wp74-2022 (J) involving dispute between the partners holding CL-III license, existing license should be renewed or re-granted even if the application after due compliance of the requirement is made on behalf of the partnership by any one of the partner subject to the contrary orders issued by the Competent Civil Court, if any.
37. The Circular dated 19th March, 1985 clarified the Circular of 26th March, 1984. The Circular of 26 th March, 1984 issued by the Commissioner of Prohibition and Excise provided that in cases of clear dispute between the parties contending renewal or non renewal of license, the renewing authority may refuse to renew the license unless and until the partners settled the dispute and may even cancel the license and the license may not be renewed in favour of one partner who was the original licensee.
38. By the clarificatory Circular dated 19th March, 1985, it was clarified that in case of dispute between the partners holding CL-III licenses, existing licenses should be renewed or re-granted even if the renewal Application is made by one of the partner subject to the contrary orders issued by the Competent Court if any.
39. The Collector therefore rightly applied the Circular of 19 th March, 1985. The Commissioner of State Excise by very cryptic order of 27th September, 2019 quashed the order of the Collector on untenable ground that name of Petitioner is reflected in CL-III license ignoring the Petitioner's own contention and records 23 of 29 wp74-2022 (J) claiming to be in partnership with the Respondent No 4. The Commissioner ought to have examined the records pertaining to the transfer of license in name of Respondent No 4 and in particular the transfer of the license by levying fees under Rule 5 of Privilege Fees Rules.
40. The Co-ordinate Bench in Aruna Mohanbabu Jaiswal vs The Collector (supra) has held that the thrust of the State Policy appears to be safeguarding government revenue and permitting business to run, even during pendency of such dispute pertaining to liquor licenses.
41. The Revisional Authority by the impugned order dated 23rd August, 2021 has considered that the transfer of Respondent No 4 by levying privilege fees under Rule 5 with consent of Petitioner, that under Section 42 of Partnership Act the partnership came to an end upon death of the original license holder, that concept of joint license holder would be applied only in the year 1973 at the time of grant of the license if the application was made in the joint names and not thereafter. Considering the dispute between the parties, the Circular of 19th March, 1985 was rightly applied and direction was given to get the dispute resolved by the Civil Court and the order of Collector has upheld.
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42. The contention of Petitioner is that the Circular of 24 th October, 2018 supersedes the Circular of 1985 and the same is applicable. The Circular of 24th October, 2018 came to be issued as it was noticed that the original license holder was not running the license and unauthorised third party were running the business and renewing the license. The Circular provided for the checklist to ascertain whether the license holders are available, whether the renewal application is signed by the license holder etc and providing for personal presence of all partners for renewal and in cases where the original license holder/partner is not available then for taking appropriate action the matter has to be referred to the Collector.
43. Perusal of the Circular of 2018 indicates that the same was not issued in supersession of Circular of 19th March, 1985 but is intended to secure the presence of all the partners at the time of renewal to ensure that no unauthorised third party are running the business. In the present case, I have already held that the license was transferred in name of the Respondent No 4, however, the Petitioner's name remained to be deleted. It is only subsequently in the year 2016 that there appears to be partnership deed executed. The question is yet to be determined by the Civil Court. In the peculiar facts of the present case, the Circular of 24 th October, 2018 is clearly inapplicable.
25 of 29 wp74-2022 (J) DECISIONS CITED:
44. As regards the decision in the case of Collector of Bombay v. Meena Idnani (supra), in the facts of that case, Rule 21 of the Bombay Foreign Liquor Rules, 1953, was considered which provided that when the license is sought by more than one person then the partnership is required to be declared by the Collector before license is granted and the name of the partners entered jointly in the license. There is no pari materia Rule under the Maharashtra Country Liquor Rules, 1973 which are applicable in the present case. However, there is no quarrel with the proposition laid down in the said decision that in case the sole proprietor desires to hold the license by deletion of the name of the deceased partner then such request amounts to transfer of license.
45. As regards the decision in the case of Shripat C. Mahajan v.
Sanjay Radheshyam Jaiswal (supra), this Court had held that in view of the controversy over the dissolution of the partnership, the Collector could not have decided either granting of license or deleting the name from the license unless this controversy as to the dissolution of the partnership firm was resolved. In that case, the issue for consideration was regarding the jurisdiction of the Civil Court to try the issues involved in a case seeking declaration about a dissolution of the partnership and the right of the Respondent No.1 therein to have a sole name and 26 of 29 wp74-2022 (J) incorporate in the license and for injunction. The decision is clearly distinguishable on facts.
46. In Addanki Narayanppa v. Bhaskara Krishtappa (supra), the Apex Court has held that the property brought in the partnership would cease to be exclusive property and the person who brings the property would not be able to claim exclusive right over the said property. The reliance on the said decision is an indicator that Petitioner himself claims to be a partner and that being so, in view of Circular of 1985, the license cannot be suspended and dispute will have to be resolved in Civil Court.
CONCLUSION:
47. The conspectus of the above discussion is that the original license was obtained by Tahelram Fulwani, who was the Respondent No 4's husband, and the Petitioner's name was included in the license under Rule 28 of Rules of 1973 which either permits transfer of license from one name to another or admission as partner after license is granted. The inclusion of Petitioner's name in the license was as partner and not as joint license holder. Upon the death of Respondent No 4's husband in the year 1993, the partnership between the Petitioner and Respondent No 4's husband came to an end and there was no partnership in existence to induct the Respondent No 4.
27 of 29 wp74-2022 (J)
48. In the absence of an application for transfer the license in sole name of the Petitioner, the transfer application of Respondent No 4 was allowed by order of 3 rd January, 1994 by payment of privilege fees for transfer of license under Rule 5 of Privilege Fees Rules and the name of the Petitioner remained to be deleted.
49. The documents and pleadings would indicate a partnership between the Petitioner and Respondent No 4 from the year 2016 and participation of Petitioner in the business. As there is dispute of partnership, the same is required to be adjudicated by the Civil Court as per the Circular dated 19 th March, 1985. However the dispute cannot be to the detriment of the Government Revenue and the license cannot remain suspended. It is for the Petitioner to approach the Civil Court for adjudication of the partnership dispute. Till such adjudication, the Respondent No 4 is entitled to renewal of CL-III license.
50. Resultantly, there is no warrant for interference with the impugned order dated 23rd August, 2021.
51. As the Circular of 19 th March, 1985 provides for the partnership dispute to be resolved by the Civil Court, and pending the same the existing license can be renewed, the directions given by the Co-ordinate Bench in Aruna Mohanbabu Jaiswal v. The Collector (supra) can be given in the present case to protect the interest of the Petitioner and to safeguard the State Revenue by 28 of 29 wp74-2022 (J) permitting the business to run pending the adjudication. Hence the following order is passed:
: ORDER :
(a) The Petitioner is at liberty to institute civil proceedings for adjudication of the partnership dispute.
(b) In light of the Circular dated 19 th March, 1985, the license is permitted to be renewed in accordance with law pending the adjudication of civil dispute.
(c) Respondent No 4 shall strictly comply with Rule 33 of the Rules of 1973 pertaining to maintaining daily accounts and registers of the quantity of country liquor sold and shall also maintain register and submit returns as per Rule 42 of Rules of 1973.
(d) The subsequent renewal of CL-III license shall be subject to the Respondent No 4 complying strictly with the Rules, till the adjudication of dispute by the Civil Court, if filed.
52. Petition is dismissed with above directions. Rule stands discharged in above terms.
[Sharmila U. Deshmukh, J.]
53. At this stage, request is made for stay of the judgment for a period of four weeks. The judgment is stayed for a period of four weeks.
[Sharmila U. Deshmukh, J.] Signed by: Sanjay A. Mandawgad Designation: PA To Honourable Judge 29 of 29 Date: 18/12/2024 17:20:53