Andhra Pradesh High Court - Amravati
T.Gunasekhar vs State Of Andhra Pradesh, on 7 May, 2020
Author: Ninala Jayasurya
Bench: Ninala Jayasurya
THE HON'BLE SRI JUSTICE NINALA JAYASURYA
WRIT PETITION No.8473 of 2020
ORDER:(Heard and pronounced through Blue Jeans App(virtual) mode, since this mode is adopted on account of prevalence of COVID-19 Pandemic).
The Writ Petition is filed seeking to declare the order of the 3rd respondent issued in R.C.No.189/A/2020 dated 22.04.2020 as illegal, arbitrary, violative of principles of natural justice, without jurisdiction and consequently direct the 3rd respondent to permit the petitioner to conduct the business and pass such other orders as deemed fit.
The facts relevant for disposal of the present case in brief, are as follows;
The petitioner is a Form 2B license holder to run a Bar and Restaurant as per the provisions of the A.P. Excise (Grant of License of Selling by Bar and Conditions of License) Rules, 2017 and he is conducting the business in the name and style of M/s.Eden Park Restaurant and Bar at Tirupathi, Chittoor District.
On the basis of a report of the Prohibition and Excise Superintendent dated 11.04.2020 that a physical verification of liquor stocks in the bar premises was conducted on 10.04.2020 and the ground stock was verified with reference to closing balance as on 21.03.2020 and that there are manipulations and over-writings in the figures in closing stock, a case was registered against the petitioner under Section 36 (b) and (c) of the A.P.Excise Act. Subsequently, the 3rd respondent issued a show cause notice dated 11.04.2020 to show cause as to why license granted to the petitioner shall not be suspended and seven days time from the date of receipt of the notice was granted for submitting the explanation. The petitioner submitted his explanation dated 19.04.2020 inter alia contending that issuance of show cause notice, giving seven days time for submission of explanation is contrary to law laid down in N.Mallareddy v. State of 2 Andhra Pradesh1, wherein the Hon'ble Court categorically held that a minimum period of 15 days time has to be granted to the licensee for submitting explanation and that in view of the same, the show cause notice dated 11.04.2020 granting seven days time itself is illegal. In the explanation, it is further stated that the power to register a case under Section 36(b) and (c) of the A.P.Excise Act would arise only if there is any willful omission or breach of any of the conditions of license or contravention of any rule under the Act and that in the show cause notice, contravention of any of the provisions of the Act or rules was alleged and that the notice was vague. In the explanation, it is stated that the bar premises was sealed by the Excise Department on 22.03.2020 and the same was opened on 14.04.2020 by the Excise Department and when the seals were intact and there is no allegation of tampering of any seals, merely because there was good business on 21.03.2020 itself cannot be a ground for issuance of show cause notice and that increase in the sales on the particular day is due to various factors and one of the factor being that the closure of the bar on the next day. It is further stated that increase in sales of liquor on a particular day compared to the earlier days cannot by itself be a ground to presume that there is violation or infraction of the provisions of the Act and the Rules made there-under. The petitioner while denying that they did not abide by the orders of the Collector, further stated that Excise Act does not empower the invocation of powers under Section 31 of A.P.Excise Act on assumptions. The petitioner also sought for personal hearing before passing any order.
The 3rd respondent on receipt of the said explanation passed the order dated 22.04.2020 impugned in the present Writ Petition suspending the license of the petitioner pending enquiry, holding that the Bar licensee and his nowkarnama holder(s) have sold away most of the stocks of liquor 1 2004 (4) ALD 681 3 that were available in the Bar at the time of closure i.e., during Janatha Curfew and followed by continuous lockdown period and have acted in a manner prejudicial to the public health, violated the orders of the Collector and District Magistrate, Chittoor and also violated the A.P.Excise Rules and License conditions.
Aggrieved by the same, the present Writ Petition is filed. Heard Sri O.Manohar Reddy, the learned counsel for the petitioner and learned Government Pleader for Prohibition and Excise appearing for the respondents.
Learned counsel for the petitioner inter alia contends that the very order of the suspension impugned in the present Writ Petition is vitiated as the petitioner was granted only seven days time to submit the explanation contrary to the Judgment of this Court in N.Mallareddy's case (referred to supra), wherein a Learned Single Judge held that 15 days time is reasonable time for submitting an explanation and that the 3rd respondent being a quasi judicial authority is bound by the said Judgment and therefore the suspension order passed pursuant to the notice granting 7 days time is liable to be set aside. The learned counsel for the petitioner further while placing reliance on Full Bench judgment in Tappers Co-operative Society, Maddur v. Superintendent of Excise, Mahaboobnagar2, contends that the licensing authority is duty bound to exercise the discretion reasonably and required to pass orders by assigning the reasons for suspension after due consideration of the explanation submitted by the petitioner. The learned counsel submits that the 3rd respondent passed the impugned order without considering the contentions raised by the petitioner and the reason assigned is illegal. He further submits that absence of the valid reasons vitiates the order of suspension under challenge. The learned counsel for 2 1984 (2) APLJ (1) 4 the petitioner with reference to Section 31 of A.P.Excise Act contends that the said Section confers power on the licensing authority either to suspend or cancel the license in the event of contravention or violation of any of the contingencies set out in sub clauses (a) to (e) of Section 31 of A.P.Excise Act and that in the present case, no such contingencies exist warranting invocation of powers under Section 31 of A.P.Excise Act and in the absence of the same, the impugned order of suspension under Section 31(1)(b) of Excise Act is without jurisdiction. The learned counsel for the petitioner while contending that giving an opportunity to make representation against the action proposed is not an empty formality, also submits that adequate opportunity should be afforded as valuable right accrues to the licensee on grant of license. The learned counsel further placed reliance on the judgment of Hon'ble Division Bench of this Court in Kode Ravindra Babu v. State of A.P. and others3, wherein the Hon'ble Court had an occasion to deal with the orders of the suspension vis-à-vis, the provisions of Excise Act i.e., Section 31(1)(b). The learned counsel also relied on the judgments of a learned Single Judge in V.Nageswara Rao v. State of Andhra Pradesh4 and R.Venkateswarlu v. State of Andhra Pradesh5 in support of his contentions that the impugned order of suspension is liable to be set aside.
The learned Government Pleader for Prohibition and Excise on the other hand submits that the order under challenge has been passed after giving opportunity to the petitioner, that there is no illegality or arbitrariness and the order of the 3rd respondent is well within his jurisdiction. The learned Government Pleader further submits that issuance of notice granting 7 days time cannot be found fault with and further that the order passed by 3 Writ Appeal No.413 of 2019 & batch dated 20.11.2019 4 Writ Petition No.5833 of 2020 dated 10.03.2020 5 Writ Petition No.2259 of 2020 dated 11.03.2020 5 the 3rd respondent contains cogent reasons, justified in the facts and circumstances of the case and warrants no interference by this Court. However, the learned Government Pleader has not disputed the legal position stated by the learned counsel for the petitioner, except contending that the petitioner has an effective remedy of appeal against the order passed by the licensing authority.
Having heard the learned counsel for the petitioner and learned Government Pleader for Prohibition and Excise for considerable time, this Court is inclined to dispose off the main Writ Petition itself, in view of the legal position governing the facts of the present case. Though the learned counsel for the petitioner made several submissions, this Court deems it appropriate to confine itself to the principal contentions raised with regard to issuance of show cause notice granting 7 days time only for submission of explanation/passing an order without affording reasonable opportunity and non-consideration of the explanation in a proper perspective and passing order without assigning valid reasons.
To adjudicate the correctness or otherwise of the impugned order, the contentions advanced on behalf of the petitioner needs to be examined in the light of the decisions of this Court, relied on by the learned counsel for the petitioner.
In Kode Ravindra Babu's case (referred to supra), a Division Bench of this Court while considering the matter in the light of the Full Bench judgment in Tappers Co-operative society's case (referred to supra), inter alia, opined that "the licensing authority while exercising the discretion is bound to exercise it reasonably, bonafide and without negligence. Considering the circumstances of the case, when such interim suspension is necessary and in case the opportunity may be possibly given to the licensee prior to taking such drastic steps, the said authority is bound to afford an 6 opportunity and further that the power of suspension pending enquiry should not be exercised as an invariable rule or made for making enquiry".
In the light of the above said view of the Division Bench, the opportunity with reference to action of suspension must be adequate and reasonable. It should not be a mere empty formality or an eye wash.
Further in N.Mallareddy's case (referred to supra), a Learned Single Judge while interpreting the relevant provisions of A.P. Excise Act, A.P. (Grant of License of Selling by Bar and Conditions of License) Rules and A.P. Excise (Compounding of Offences) Rules, set aside the order of cancellation by taking a view that minimum period of 15 days notice should be given to the license holder to show cause against the proposed action and as the same was not complied with.
In Para 24 of the said Judgment, the Learned Single Judge while referring to proviso to Section 31 of the A.P.Excise Act and A.P.Excise (Grant of License of Selling by Shop and Conditions of License) Rules, opined to the effect that neither the proviso to Sec.31 of the Act nor the shop rules, prescribed a time frame for a notice to be given to the licensee to show cause why his license should not be cancelled and for him to reply thereto. Further the Learned Single Judge opined that where the relevant portion of the Act is ambiguous, recourse may be had to rules made under the Act and if in the rules any particular construction has been put on the Act, it is the duty of the Court to adopt and follow that construction. The Learned Single Judge, thus referring to Rule 5(1) of the Compounding Rules which confers a right on a person accused of a compoundable offence 15 days for applying the same, set aside the cancellation order passed after 11 days after the date of show cause notice which is less than 15 days, a period stipulated in Rule 5 (1) of the Compounding Rules, meaning thereby the licensees should be granted 15 days time before passing order of cancellation. 7
In the explanation dated 19.04.2020, to the show cause notice, it was specifically mentioned that granting of 7 days is illegal in view of the judgment in N.Mallareddy's case (referred to supra). The licensing authority/3rd respondent being a quasi judicial authority is bound by the judgment of High Court and other higher Forums. When once the lacuna in the notice is pointed out, the concerned officer is duty bound to consider and rectify the same and issue a fresh notice. However, in the present case, the 3rd respondent chose to pass the impugned order despite the binding precedents and the order impugned in the considered view of this Court, is liable to be set aside on this ground.
Further, in R.Venkateswarlu's case (referred to supra), considering the similar legal contention of issuance of show cause notice granting only 7 days time for submitting explanation, a learned Single Judge by order dated 11.03.2020 allowed the Writ Petition by setting aside the order of suspension. The Learned Single Judge looking to the facts of the case and granting only 7 days time for submission of explanation, inter alia formulated points for consideration and answered Point No.1 in the following terms:
"When once seven days notice was given to the petitioners, contrary to the Judgment in N.Mallareddy v. State of Andhra Pradesh, it is an irregularity committed by the respondents in suspending Form 2-B license of the petitioners by exercising power under Section 31(1) of the Act."
Even as per the above latest Judgment of the Learned Single Judge dated 11.03.2020, the authorities of the Excise Department are required to grant 15 days time for submitting explanation before restoring to the proposed action of suspension of license.
8
This Court having gone through the Judgments referred to supra, see no reason to take a different view. Further, the learned Government Pleader has not disputed the legal position with reference to the Judgments referred to supra.
With reference to the other contentions advanced by the learned counsel for the petitioner that the impugned order came to be passed without considering the explanation/contentions of the petitioner in a proper perspective and therefore the same deserves to be set aside, this Court has gone through the explanation dated 19.04.2020 submitted by the petitioner. As pointed by the learned counsel for the petitioner, specific contentions have been raised with reference to increase in sales on 21.03.2020, position of the seals as sealed by the Excise Department on 22.03.2020 and opening of the same by them on 14.04.2020 etc. However, the said aspects have not been considered in a proper perspective, except mere reference to one of the same.
A perusal of the impugned order would further clearly show that no reasons were assigned as to why the explanation/contentions of the petitioner cannot be considered. As contended by the learned counsel for the petitioner, assigning reasons for passing an order of suspension is one of the facets of principles of natural justice. Further, non consideration of the pleas/contentions or absence of reasons for rejection of the same, vitiates the whole proceedings. The order impugned in the Writ Petition suffers from the above mentioned legal infirmities and deserves to be set aside.
In this regard it is apposite to refer to the relevant portion from the Judgment of Learned Single Judge in Ch.Jayasri v. State of Andhra Pradesh6, which reads as follows:-
6
Writ Petition No.7720 of 2020 dated 20.03.2020 9 "........Even otherwise, it is the duty of Quasi Judicial Authority to state its reasons on each issue by due application of mind, clarity of reasoning and focused consideration; a slipshod consideration or cryptic order without due reflection on issues raised in the matter may render such decree unsustainable and therefore, hasty adjudication must be avoided and each and every matter that comes to the Quasi Judicial Authority must be examined with seriousness it deserves as held by the Supreme Court in Board of Trustees of Matyr Memorial Trust and another v. Union of India and another [2012(10) SCC 734]." (Para 10) With regard to the submissions of the learned Government Pleader for Excise that the petitioner has an effective alternative remedy, the same deserves to be rejected in view of the settled law that availability of remedy of appeal is not a bar for entertaining the matter under Article 226 of Constitution of India, where the order passed is contrary to the principles of natural justice. Further in the absence of recording reasons neither the aggrieved party is expected to formulate the grounds of challenge nor the appellate authority, to appreciate the correctness or otherwise of the order under appeal. A Learned Single Judge of this Court while discussing the legal obligation on the part of the administrative and quasi judicial authorities of passing reasoned orders held in a Judgment in V.Nageswara Rao's case (referred to supra), as follows:
"........Recording of reasons in administrative or quasi judicial order which attracts penal consequences is imperative. Non- consideration of explanation by Administrative or Quasi Judicial Authority is nothing but disowning the obligation as public officer. The Apex Court time and again in catena of perspective pronouncements candidly held that consideration of explanation and recording of reasons is to afford guide to Appellate Authority. In exercise of power of judicial review, the Apex Court in Assistant Commissioner, Commercial Tax Department, works contract and Leasing, Kota v. Shukla and brothers 10 had an occasion to deal with an unreasoned order and made certain observations. In exercise of power of judicial review, the concept of reasoned orders/actions has been enforced equally by foreign courts as by the courts in India. The administrative authority and tribunals are obliged to give reasons, absence whereof could render the order liable to judicial chastise......
.........It is the reasoning alone, that can enable a higher or an appellate court to appreciate the controversy in issue in its correct perspective and to hold whether the reasoning recorded by the Court whose order is impugned, is sustainable in law and whether it has adopted the correct legal approach........"
In present case, there is no proper examination of the explanation submitted by the petitioner, nor recording of reasons as to why the same cannot be considered. In view of the afore going discussion, the order of 3rd respondent, in the opinion of this Court is contrary to law and in violation of principles of natural justice and not sustainable.
Accordingly, following the Judgments referred to supra, the impugned order of suspension is set aside and the Writ Petition is allowed. However, the authorities are at liberty to issue show cause notice afresh to the petitioner granting 15 days to reply and take appropriate action thereafter, in accordance with Law. There shall be no order as to costs of the Writ Petition.
Consequently, Miscellaneous Petitions pending, if any, in the Writ Petition shall stand closed.
_____________________ NINALA JAYASURYA, J 07.05.2020 BLV 11 THE HON'BLE SRI JUSTICE NINALA JAYASURYA WRIT PETITION No.8473 of 2020 07.05.2020 BLV