Andhra Pradesh High Court - Amravati
M/S Amaravathi Restaurant And Bar 5Th ... vs The State Of Andhra Pradesh, on 7 May, 2020
Author: Ninala Jayasurya
Bench: Ninala Jayasurya
THE HON'BLE SRI JUSTICE NINALA JAYASURYA
WRIT PETITION No.8470 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.188/2020/B dated 23.04.2020 as illegal, arbitrary, against law and consequently set aside the same and pass such other orders as deemed fit.
The contentions raised in the present writ petition are similar to those in W.P.No.8473 of 2020 and in such view of the matter, this Court is inclined to dispose of the present writ petition.
The matters as set out in the petitioner's affidavit relevant for the purpose of consideration of the issues involved, in brief, are as follows:
The petitioner is a Bar and Restaurant running since 2007 after obtaining license. Due to outbreak of COVID-19, the District Collector, Chittoor, issued notifications dated 20.03.2020, 22.03.2020 and 28.03.2020, inter alia, directing closure of all excise related depots, outlets, shops, bars and restaurants in Chittoor District. The direction for closure was issued up to 14.04.2020 and later it was extended to 03.05.2020. Pursuant to the said directions, the petitioner-Bar remained closed from 22.03.2020.
While so, the petitioner's bar premises was inspected by the respondents 4 and 5 on 10.04.2020 for noting physical availability of liquor stock on the alleged complaint that the petitioner Bar was selling liquor out side the licensed premises. After opening the Bar premises which is under lock, they verified the account registers, licenses and stock. After preparing list pertaining to physical stock of liquor comparing with stocks shown in the accounts register, submitted a report to respondent No.3, on the basis of the said report, the 3rd respondent issued a show cause notice dated 2 13.04.2020 to show cause as to why the license issued to the petitioner shall not be suspended and granted seven (7) days time for submission of explanation. The petitioner submitted its explanation on 20.04.2020, inter alia, regarding the alleged difference of 85 bottles observed after comparing the physical stock and account register that there is a breakage of 19 bottles and the remaining bottles were shown due to clerical mistake. Further, with regard to enhancement of sales from 17.03.2020 till 21.03.2020 that the consumers consumed more during those days with an apprehension that there is likelihood of closure of Bars and liquor shops any time due to COVID-19 effects and furnished the stock details. Thereafter, the impugned order is passed on 23.04.2020 without considering the explanation given by the petitioner and the same is illegal, arbitrary, against law and as such the same is liable to be set aside.
Learned counsel for the petitioner submits that the matter is covered in the light of the Judgment in N.Mallareddy v. State of Andhra Pradesh1, and the other Judgments relied on by the learned counsel for the petitioner in the connected Writ Petition. Learned Government Pleader for Prohibition and Excise has not disputed the legal position. Therefore, it would be appropriate to refer to the Judgments having a bearing on the contentions in the Writ Petition.
In Kode Ravindra Babu v. State of A.P. and others2, a Division Bench of this Court while considering the matter in the light of the Full Bench judgment in Tappers Co-operative Society, Maddur v. Superintendent of Excise, Mahaboobnagar3, inter alia, opined that;
"the licensing authority while exercising the discretion is bound to exercise it reasonably, bonafide and without negligence. 1 2004 (4) ALD 681 2 Writ Appeal No.413 of 2019 and batch dated 20.11.2019 3 1984 (2) APLJ (1) 3 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 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.
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 fifteen (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 fifteen (15) days for 4 applying the same, set aside the cancellation order passed after eleven (11) days after the date of show cause notice which is less than fifteen (15) days, a period stipulated in Rule 5 (1) of the Compounding Rules, meaning thereby the licensees should be granted fifteen (15) days time before passing order of cancellation.
Further, in R.Venkateswarlu v. State of Andhra Pradesh4, considering the similar legal contention of issuance of show cause notice granting only seven (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 seven (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."
Thus, as per the above Judgments, the authorities of the Excise Department are required to grant fifteen (15) days time for submitting explanation before restoring to the proposed action of suspension of license. The licensing authority/3rd respondent being a quasi judicial authority is bound by the judgments of High Court and other higher Forums. However, in the present case, the 3rd respondent chose to issue show cause notice granting seven (7) days time for submission of explanation despite the binding precedents and proceeded to pass order impugned in the writ 4 W.P.No.2259 of 2020 dated 11.03.2020 5 petition. Since the show cause notice itself is contrary to law, the order pursuant to such an illegal notice is not sustainable in law.
With reference to the other contentions 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 submitted by the petitioner on 20.04.2020. Though it was specifically pointed out that the seals affixed to the lock were found intact and it has not been tampered and figures of sales from 17.03.2020 to 21.03.2020 were furnished stating that expecting curfew in view of prevention of spread of Corona Virus, there is heavy flow of customers from 17.03.2020 and further that the overwritings in the registers are due to clerical errors which are simple in nature, etc., the same 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. Assigning reasons for passing an order of suspension/cancellation 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 Pradesh5, which reads as follows:-
"........Even otherwise, it is the duty of Quasi Judicial Authority to state its reasons on each issue by due application of mind, clarity 5 Writ Petition No.7720 of 2020 dated 20.03.2020 6 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 availability of an effective alternative remedy, in view of the settled law alternative 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 v. State of A.P.6 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 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 6 Writ Petition No.5833 of 2020, dated 06.03.2020 7 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 fifteen (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 8 THE HON'BLE SRI JUSTICE NINALA JAYASURYA WRIT PETITION No.8470 of 2020 07.05.2020 BLV