Punjab-Haryana High Court
Satya Pal And Ors. vs State Of Punjab And Ors. on 5 May, 1999
Equivalent citations: (2000)124PLR559
Author: Amar Dutt
Bench: Amar Dutt
JUDGMENT G.S. Singhvi, J.
1. The framers of the Constitution considered intoxicating and drugs as injurious to health and impeding the raising of the level of nutrition and the standard of living of the people and improvement of the public health and, therefore, they incorporated Article 47 in the Directive Principles requiring the State to bring about prohibition of the consumption of intoxicating drinks which obviously include liquor, except for medicinal purposes. However, in the last 50 years most of the governments have made no effort to prohibit the manufacture, sale and consumption of intoxicating drinks. Rather, it has registered manifold increase in the last two decades and the governments consider it to be their proud privilege to announce that they have earned more revenue by sale of liquor for funding health and education programmes meant for poor.
2. The multi-fold increase in the manufacture and sale of intoxicants has also led to tremendous increase in the litigation in the matters relating to grant of licence etc. Hundreds of cases are filed every year in different Courts challenging the actions of the State to grant licenses/privilege for manufacture and sale of liquor on the ground of fundamental and constitutional rights even though in the last five decades the Courts have repeatedly rejected the plea that the citizens have the fundamental right to carry on trade or business in intoxicants and as on date, it must be treated as a settled proposition of law that the right guaranteed under Article 19(1)(g) of the Constitution to practice any profession or to carry on any occupation, trade or business does not extend to practising a profession or carrying on an occupation, trade or business which is inherently vicious and pernicious and it does not entitle the citizen to carry on trade or business in articles or goods which are obnoxious and injurious to health, safety and welfare of general public. The Courts have also held that potable liquor as a beverage is an intoxicating and depressant drink which is widely recognised as dangerous and injurious to health and, therefore, it is an article which is res extra commercium being inherently harmful. It must, therefore, be treated as a settled proposition of law that a citizen does not have the fundamental right to do trade or business in liquor and the State can completely prohibit the same - Cooverjee B. Bharucha v. The Excise Commissioner and the Chief Commissioner, Ajmer and Ors., 1954 S.C.R. 873; Har Shankar and Ors. v. The Dy. Excise and Taxation Commissioner and Ors., 1975(3) S.C.R. 254; Lathanlal etc. v. State of Orissa and Ors., 1977(1) S.C.R. 811; Sat Pal and Company v. Lt. Governor of Delhi, 1979(3) S.C.R. 6515; Southern Petroleum and Chemicals, Trichur and Ors. v. State of Kerala and Ors., 1981(4) S.C.C. 391; State of M.P. and Ors. v. Nandlal Jaiswal and Ors., 1986(4) S.C.C. 566; Doongaji & Co. v. State of Madhya Pradesh and Ors., A.I.R. 1991 S.C. 1947 and M/s Khoday Distilleries Ltd. etc. v. State of Karnataka and Ors., J.T. 1994(6) S.C. 588.
3. Notwithstanding, the aforementioned clear enunciation of law, the grant of licenses whether by auction or otherwise are challenged in the Courts on the ground of violation of fundamental, constitutional and legal rights. The present one is also a case which falls in that category. The petitioners-Satya Pal son of Shri Jagan Nath and M/s Satya Pal & Company have challenged the award of contract of liquor vends of group Nos. 113 to 117 of, Excise Circle, Ludhiana to respondent No. 4 for a licence fee of Rs. 32.70 crores by alleging that the authorities of the Excise & Taxation Department have manipulated the award of liquor vends to respondent No. 4 at the instance of the Chief Minister of Punjab because the main partner of respondent No. 4 is the brother of Shri Jagdish Singh Garcha (MLA of Akali Dal), who is very close to the Chief Minister. The petitioners have pleaded that the decision of the official respondents to accept the bid given on behalf of respondent No. 4 ignoring the higher bid of Rs. 33 crores given by them should be declared illegal because the official of the department did not act in accordance with the directions given by this Court in C.W.P. No. 4781 of 1995 against the clubbing of different groups.
4. Respondent Nos. 1 to 3 have contested the allegations made by the petitioners about the so-called manipulation made by the officials of the department to help respondent No. 4 at the instance of the Chief Minister. Their case is that the clubbing of the groups was proposed by respondent No. 3 and was approved by respondent No. 2 in the interest of the revenue of the State. Respondent No. 4 has defended the action of the official respondents to accept the bid given on its behalf. It has alleged that Shri Amrik Singh Dhillon (Member legislative Assembly - Congress party ) has instigated the filing of the writ petition because he failed to secure the contract in the auction held on 10.3.1999.
5. Before dealing with the all important issue, namely, whether the acceptance of the bid of Rs. 32.70 crores given on behalf of respondent No. 4 for group Nos. 113 to 117 is contrary to the Punjab Excise Act, 1914 (hereinafter described as 'the Act') read with Punjab Liquor Licence Rules, 1956 (hereinafter referred to as 'the Rules') or it is arbitrary and tainted with mala fides, we deem it appropriate to mention that on March 12, 1999 a Division Bench had stayed the finalisation of the bids for group Nos. 113 to 117 for Excise Circle, Ludhiana as well as other auctions. That order was challenged by the State of Punjab as well as respondent No. 4 in SLP Nos. 4047 and 4048 of 1999. On March 16, 1999, the Apex Court stayed the order of this Court dated 12.3.1999 by making the following observations :-
"There is nothing other than his assertion to indicate that the original petitioner had made a bid of Rs. 33 crores or, for that matter, any bid whatever. There are video cameras positioned at the auction site, but the original petitioner's bare allegation is that they were so slanted that they could not have recorded whether he had made a bid or not. As the order records, the matter was taken up by the High Court before lunch and the Court had then directed the copy of the petition to be served upon the Advocate General. Pursuant to this the Advocate General appeared after lunch. He sought time to consult the Department as to whether or not a large bid made on behalf of the original petitioner in Court could be accepted. Without responding to that application, the Court proceeded to pass the order that pertains not only to the particular vends in petition but also to others of which auction was yet to be held. On the oral submissions of learned counsel for the original petitioner, reliefs were granted which are not sought in the petition; among them, permitting the original petitioner to take a person with a video camera with him to the auction site to record the proceedings of subsequent auctions. Also, directing that these auctions would not be confirmed by the Department until after 22nd March, 1999.
We find no warrant for the order relating to Group Nos. 113 to 117 for Excise Circle, Ludhiana, which was properly the subject matter of the petition, because there is nothing to indicate that the original petitioner had made a bid as he alleged. For more so, there is no justification for the order that has been passed in regard to the auctions which are yet to be held. Suspicion cannot take place of proof to warrant the passing of such orders."
The SLPs filed by the State Government and respondent No. 4 were allowed by the Apex Court on 19.3.1999 in view of the consent statement made by the learned counsel for the parties.
Contentions:
The first contention urged by Shri Mohan Jain, learned counsel for the petitioners is that the decision of respondent Nos. 2 and 3 to accept the bid given on behalf of respondent No. 4 should be declared as vitiated by mala fides because the authorities of the department had, under the influence of the Chief Minister, ignored the highest bid of Rs. 33 crores given by the petitioners. Shri Jain reiterated the allegations made in the petition and the replication and urged that the acceptance of bid by respondent No. 3 ignoring the higher bid of the petitioners should be declared as violative of Article 14 of the Constitution.
6. Shri H.S. Mattewal, learned Advocate General and Shri Rajiv Atma Ram, learned counsel for respondent No. 4 argued that the Chief Minister has been dragged in the litigation without any rhyme or reason and the vague and wild assertion made by the petitioner regarding the use of influence by the Chief Minister should be ignored. Shri Rajiv Atma Ram also made a counter allegation that Shri Amrik Singh Dhillon, Member of the legislative Assembly belonging to the Congress party is at the back of the petitioners and it is he who has concocted the story of the higher bid allegedly given by the petitioners.
7. We have given serious thought to the respective submissions and are of the opinion that the allegation of exercise of influence by the Chief Minister for grant of licence to respondent No. 4 cannot be made basis for granting relief to the petitioners because they have not impleaded the Chief Minister of Punjab as party respondent and we cannot record any adverse finding against him without giving notice and opportunity of hearing to the Chief Minister. It is a settled principle of law that no Court will record a finding of malice in fact against a person who is not party to the proceedings and who does not get an opportunity to rebut the charge of malice. The rule that no person can be condemned unheard is applicable to the Court proceedings with the same rigour as it is applicable to the proceedings conducted by the administrative authorities which may lead to the passing of orders affecting the rights or status of the citizens. Therefore, we cannot grant a declaration that the bid given on behalf of respondent No. 4 has been accepted by the official respondents under the influence of the Chief Minister of the State.
8. We are further of the view that on the basis of extremely cryptic, vague and bald allegation made in paragraph 12 of the writ petition and paragraph 6 of the, replication suggesting that the Chief Minister of the State used his position to secure the grant of licence of respondent No. 4, no reasonable person can record a finding that the Chief Minister of the State was biased in favour of respondent No. 4. The petitioners, in our opinion, were not only under an obligation to implead that Chief Minister as party in person so as to enable the Court to give him notice and opportunity of hearing but they were also required to produce direct or strong circumstantial evidence to prima facie prove the allegations of misuse of power by him. That they have miserably failed to do. Therefore, keeping in view the principle enunciated by the Supreme Court in E.P. Royappa v. State of Tamil Nadu, A.I.R. 1974 S.C. 555, namely, that the burden to prove the charge of mala fide exercise of power is always on the petitioner and the Court will insist on stricter compliance of this rule in the cases in which allegations of mala fides are levelled against high ranking public figures, we decline to nullify the decision of the official respondents on the ground that they have acted under the dictates of the Chief Minister and have accepted the bid given on behalf of respondent No. 4 due to extraneous reasons.
9. The second contention of Shri Jain is that the failure of the respondents to recognise and accept the bid of Rs. 33 crores given by the petitioner and their decision to accept the bid of Rs. 32.70 crores given on behalf of respondent No. 4 should be declared arbitrary and violative of the petitioner's fundamental right to equality guaranteed under Article 14 of the Constitution. The learned Advocate General and the counsel representing respondent No. 4 controverted the argument of Shri Jain and submitted that the petitioners should not be heard to make a grievance against the acceptance of the bid of respondent No. 4 because they did not bid in the auction held on 10.3.1999. Shri Rajiv Atma Ram strongly urged that the petitioners should be non-suited because they were not the bidders at the auction held on 10.3.1999.
10. Before delving on the rival submissions. We deem it appropriate to mention that after the arguments were partly heard to April 26, 1999, the learned Deputy Advocate General produced the video tape of the proceedings of auction held on 10.3.1999. The same was displayed in the chamber in the presence of the counsel for the petitioners-Shri Mohan Jain and Shri Rakesh Aggarwal, the learned Advocate General and the Deputy Advocate General and Shri Rajiv Atma Ram. In the course of display of the video tape, the learned Advocate General pointed out that petitioner No. 1 was not in picture and in fact, Shri Amrik Singh Dhillon was present at the place where auction was being conducted. Shri Mohan Jain admitted that Shri Amrik Singh Dhillon was present and stated that he was taking part in the auction on behalf of his son Kanwaljit Singh, who is a partner of petitioner No. 2 and was present at the site. Shri Jain also produced a photostat copy of the partnership deed of petitioner No. 2 to show that son of Shri Amrik Singh Dhillon is one of the partners.
11. In our opinion, the presence and participation of Shri Amrik Singh Dhillon in the auction clearly belies the statement made in paragraphs 5 and 11 of the replication filed by the petitioners to the written statement of respondent No. 4 that Shri Amrik Singh Dhillon has no concern with the petitioners and his name has been introduced by the respondents with a view to prejudice the mind of the Court.
12. For deciding the question whether the petitioners deserve to be non - suited on the ground that they had not participated in the auction held on 10.3.1999, we may advert to the averments made in the writ petition, the written statements and the replications. In paragraphs 7, 10, 12, 13, 18, 19, 20, 21, 22, 23, 25 of the writ petition and paragraphs 13 and 19 of the replication filed by the petitioners to the written statement of respondent Nos 1 to 3, it has been repeatedly stated that the petitioner gave bid in the auction held on 10.3.1999. In the entire gamut of pleadings an attempt has been made to show that the petitioner-Satya Pal had given bid of Rs. 33 crores in the auction held on 10.3.1999 but the same was overlooked. Although in some paragraphs of the replications the word "petitioners" has been mentioned but a comprehensive reading of the averments made in the petition and Annexures P.4 to P.6 sent by the petitioner-Satya Pal to the various functionaries of the government and even the Chief Justice of the High Court clearly gives an indication that even though the writ petition has been jointly filed by Shri Satya Pal and M/s Satya Pal and Company through its partner Shri Satya Pal, an attempt has been made to establish that in fact petitioner No. 1 had given the bid of Rs. 33 crores on 10.3.1999. When the respondents challenged the locus standi of the petitioners, by means of replications the petitioners have tried to give a twist to the case by stating that the petitioners had given bid in the auction. However, we are unable to approve the attempt made by the petitioners. To us, it is clear that they have done so in view of the observations made by the Apex Court in the order dated 16.3.1999 that there is nothing on record to show that the original petitioner had made a bid as alleged by him. The petitioners must have realised that the observations made by the Apex Court will demolish their case of discrimination and violation of Article 14 of the Constitution and, therefore, in the replication they have tried to show that bid had in fact been given by the petitioners. In our considered view, the petitioners cannot be allowed to take advantage of the improvements made in their case by introducing a new story of bid having been given by them. On his part, petitioner-Satya pal has failed to adduce any evidence to show that he had given bid of Rs. 33 crores but the same was not accepted. Therefore, we cannot invalidate the decision of official respondents to accept the bid of respondent No. 4 on the ground of arbitrariness and the violation of the doctrine of equality or on the ground that it is contrary to public interest.
13. The third contention urged by Shri Jain is that the action of the respondents to club the groups Nos. 113 to 117 is contrary to the order passed by this Court in C.W.P. No. 4781 of 1995 and the provisions of the Act and the Rules framed there under. In our opinion, this contention of the learned counsel cannot be accepted because :-
(a) the order dated 10.3.1999 (Annexure-R.1) vide which respondent No. 2 granted approval to the proposal submitted by respondent No. 3 to hold auction by clubbing the groups has not been challenged by the petitioners and without declaring that order to be illegal, we cannot declare that the decision of the official respondents to club the groups is contrary to the order passed by this Court or it is otherwise arbitrary;
(b) in the order Annexure- R.l, which was approved by respondent No. 2, respondent No. 3 has recorded the following statement:-
"During my campy at Ludhiana on 8 and 9.3.1999 and even today i.e. 10.3.1999 I have met the prospective bidders of Ludhiana City vends to know the prospects of auction for all the 17 groups of city. Due to problem of shops in the interior part of the city offers for some of the group are as low as 5%. My over all assessment is that the total increase in revenue in the City Ludhiana may not cross 12A13%. Higher offers have been made for the bigger groups by some of the bidders, if we auction the vends of the City the revenue increase may cross 17%. Keeping revenue interest of the State in view approval may kindly be accorded to auction all the vends of the city in 4 groups by clubbing all the 17 groups approved earlier."
In our opinion, the reasons recorded by respondent No. 3 can neither be termed as extraneous nor untenable. Rather, the hope expressed by respondent No. 3 that there is likelihood of increase in the revenue has become a reality, inasmuch as, the revenue has registered an increase of 18.03% as compared to the previous year. Therefore, the decision of the official respondents to club the groups for the purpose of auction of liquor vends cannot be termed as arbitrary or unconstitutional;
(c) The argument of Shri Jain that the clubbing of the groups is violative of the directions given by the High Court in C.W.P. No. 4781 of 1995 may now be examined. The directions given by this court (as reproduced in the writ petition) read as under :-
"(i) The official respondents will give clear publicity of the circles and the manner in which circles, liquor vends and retail out-lets are to be auctioned by them in the newspapers as per their practice;
(ii) Proper minutes of the auction should be maintained and duly signed by the officer who is recording the same at the time of auction.
(iii) The official respondents may, for appropriate reasons, as postulated under the scheme of the Act decide to club and auction different circles by one lot within the restrictions imposed upon them under the Exercise Rules and Clauses 4 and 11 (i) of the Terms and Conditions of the Auction;
(iv) The official respondents cannot give a licence on a fixed licence fee contrary to the Excise Rules and can provide minimum licence fee from where the auction would commence. The official respondents must not fix licence fee on which they would give a circle if the same is not permitted under the Rules;
(v) The order for clubbing should be a reasoned order and it must state me grounds on which the clubbing is called for and the fact that it is in the interest of State revenue;
(vi) The persons who wish to participate and who have paid a sum of Rs. 500/- as participation fee as required under the Rules, should be duly recorded before commencement of auction;
(vii) The appropriate date must be placed before the competent Authority before any decision is taken by such Authority in regard to terms and conditions of auction. This would benefit not only State Revenue, it would also bear satisfactory explanation for passing such order."
A bare reading of direction Nos. (iii) and (v) makes it clear that the Court did not impose a complete ban of clubbing of groups. Rather, the clubbing has been accepted as a ground reality. However, in order to obviate the possibility of misuse of clubbing of groups, the Court directed that the clubbing could be done only after a reasoned order is made. In our opinion, this requirement has been fully complied with by respondent Nos. 2 and 3. Therefore, we cannot invalidate the action of the official respondents to accept the bid given on behalf of respondent No. 4.
14. Before concluding, we deem it appropriate to mention that during the display of video tape learned counsel for the petitioners had made strenuous efforts to convince us that there had been some foul play in the recording of the proceedings of the auction but, in our opinion, it is not possible to adjudicate upon an issue of this nature which would require recording of evidence of the person who video taped the auction proceedings and persons present at the site.
15. No others point has been argued.
For the reasons mentioned above, the writ petition is dismissed. The petitioners shall pay costs of Rs. 5,000/- which shall be deposited with the Legal Aid Board, Punjab.