Andhra HC (Pre-Telangana)
P. Balakrishna Rao Licencee Of Harsha ... vs Prohibition And Excise Superintendent ... on 6 June, 2001
Equivalent citations: 2001(4)ALD576
Author: S.B. Sinha
Bench: S.B. Sinha
JUDGMENT S.B. Sinha, C.J.
1. Applicability of Rule 29(2) of the A.P. Indian Liquor and Foreign Liquor Rules, 1970 as amended by G.O.Ms.No.197 Revenue (Excise-II) Department, dated 10.4.2000 is in question in this writ application. Two separate licences in IL 24 form were granted to the petitioner in terms of the provisions of the A.P. Excise (Indian and Foreign Liquor Retail Sale Conditions of Licences) Rules, 1993 (for short 'the 1993 Rules'). The said licences were renewed up to 31.3.2001. On 14.6.2000 a notice was issued by the 1st respondent directing:
In view of the policy on issue for the year 2000-2001 and amendment to sub-rule (2) of Rule 29 of A.P. IL and FL Rules, 1970 and as per the instructions of the Commissioner of Prohibition and Excise, Andhra Pradesh, Hyderabad contained in the references 1st to 4th cited "a person will be allowed to have only one retail licence in his name.
Hence, Sri P. Balakrishna Rao s/o Kondaiah, r/o Ongole is informed that he will have option either to retain the licence which is in his name or to continue his partnership in one of the IL 24 shops in which he is having partnership. He should intimate about has option of retaining any of the above licences or partnership on his favour within 30 days from the date of receipt of this notice, failing which it will be presumed that he has no option and one licence partnership will be retained in his favour and the rest of the licence partnerships will be withdrawn u/s 32 of A.P. Excise Act and Rules 38 and 39 of A.P. IL and FL Rules, 1970.
2. The petitioner's licence with respect to M/s Harsha Wines, Ongole had been withdrawn by the 1st respondent in terms of proceedings Rc.No.589/2000/C3, dated 26.8.2000.
3. The State of Andhra Pradesh declared its excise policy under G.O.Ms.No.234, dated 22.3.1999 in terms whereof licence is to be granted to one person only. However, by reason of Rule 38 of the 1970 Rules introduced in terms of the impugned excise policy decision a licensee holding more than one licence can transfer his excess licence to any other person with the sanction of the Commissioner.
The contention of the petitioner is that having regard to the fact that he was partner of two firms constituted and registered in terms of Indian Partnership Act, 1932, the aforementioned amendment is not applicable in this case.
4. Rule 29 (2) of the 1970 Rules as amended by G.O.Ms.No.197, dated 10.4.2000 reads thus:
No licence shall be granted:
(a) ....
(b) in Form IL 20, unless the applicant is a registered club with bona fide membership and functioned as a club for at least one year.
(c) ....
(d) in Form IL 22 unless the Collector or/and District Magistrate has accorded approval in consultation with the police and the health authorities. (dd) in Form IL 24
(i) within 50 meters of a high way.
(ii) to a person who is already a holder of a lincence in Form IL 24.
(e) ....
(f) ....
5. The contention of the petitioner is that the aforementioned amended Rule is not applicable in case of a partnership firm having regard to the fact that the petitioner being holder of joint licence and the licensees having been carrying on the business in partnership.
6. Partnership in terms of Section 4 of the Indian Partnership Act, 1932 signifies the relation between the partners who have agreed to share the profits of a business carried on by all or any of them acting for all.
To constitute a partnership there must be (i) a business; (ii) an agreement to share profits of the business; and (iii) the business must be carried on by all or any of the partners acting for all. Actual existence of a business therefore is a sine qua non for constitution of a partnership.
7. A partnership firm is not a juristic person. It can neither sue and nor can be sued. Relationship of partners in terms of Section 5 of the Partnership Act arises from a contract and no status is created thereby. The mutual rights and obligations of the partners arise out of contract and in absence of a contract, in terms of the provisions of Section 13 of the Act. The licences in terms of the said Rules had been granted in favour of the partners and not in the name of the firm.
8. Having regard to the fact that a partnership is not a separate legal entity, the question of having privilege of carrying on any liquor business in favour of a partnership firm does not arise inasmuch as the legal liabilities there under would be upon both the licencees jointly and severally.
9. For the reasons aforementioned, there is no merit in this application which is accordingly dismissed.