Andhra HC (Pre-Telangana)
Toddy Tappers Co-Operative Society vs Deputy Commissioner Of Prohibition And ... on 5 November, 2002
Equivalent citations: 2003(1)ALD311, 2003(2)ALT747, 2003 A I H C 515, (2003) 1 ANDHLD 311 (2003) 2 ANDH LT 747, (2003) 2 ANDH LT 747
ORDER T. Meena Kumari, J.
1. The issue involved in all the writ petitions is one and the same hence they are heard together and disposed of by a common order.
2. In all the writ petitions the action of the 3rd respondent in his proceedings dated 2-3-2002 suspending the licences in respect of the toddy shops belonging to the petitioner society on the ground that the petitioner society has violated the provisions of Section 36(c) of A.P. Excise Act, 1968 read with Sub-rule (2) of Rule 14 of Excise (Tapping of Trees and Toddy Shops Special Conditions of Licences) Rules, 1969, is assailed.
3. The facts that, led to the filing of these writ petitions in brief are that the petitioner society, consisting of 43 members, is a registered society and the society has been granted separate licences on 19.2.1999 by the Excise Department for establishing toddy depot and also group of shops numbering 8 for retail sale of toddy at Gadwal Town. The members of the petitioner society are eking out their livelihood by running the toddy shops. It is alleged by the petitioner that C. Surya Goud, Praveen Goud, Shankar Goud and Raghuraj Goud and their henchmen belonging to the rival group of the petitioner society ransacked all the toddy shops of the petitioner society on 2.3.2002 and snatched away the sale proceeds of all the of shops of that day, amounting to Rs. 73,166/- highhandedly creating a horror among the customers of the petitioner society and other residents of the locality. This was complained of by the petitioner- society to the Sub-Inspector of Police, Gadwal who in turn registered a case in Cr.No. 15/2002 under Sections 448 and 379 of IPC against the above mentioned persons. It is alleged by the petitioner that the police except registering the case, did not move further in the matter. It appears that the petitioner society made an application on 16.3.2002 to the Sub-Divisional Prohibition and Excise Officer, Gadwal seeking protection in the light of the alleged incident by the rival party who in turn addressed a letter dated 16.3.2002 to the Sub-Inspector of Police, Gadwal (Rural) requesting him to provide protection to the petitioner society. Having found no progress in the situation, the petitioner-society has approached this Court by way of W.P.No. 4639/2002 wherein this Court while disposing of the same directed the respondents-police officers therein to consider the application of the petitioner society for police protection. In spite of the Court order, it is alleged by the petitioner-society, the rival groups once again attempted to disturb the vending operations of the shops belonging to it and thereby they have created law and order problem. In the circumstances, the petitioner appears to have closed down the business.
4. According to the petitioner, while the matter stood thus, the 1st and 2nd respondents herein, namely the Dy.
Commissioner of Prohibition and Excise (Enforcement) and Dy. Commissioner of Prohibition and Excise, Mahaboobnagar Division have surprise raid the toddy shop of the petitioner on 21.3.2002 and conducted a panchanama and registered a case vide PCR No. 2845/2002, dated 22.3.2002 under Sections 31(1)(b) and 36(c) of A.P. Excise Act, 1968 read with Sub-rule (2) of Rule 14 of Excise (Tapping of Trees and Toddy Shops Special Conditions of Licences) Rules, 1969 and issued the impugned proceedings suspending the licence on the ground that the petitioner failed to appear before the Dy. Commissioner and the shop was found closed during the raid which act of the petitioner shows that he is indulging in sales of adulterated toddy and wilfully avoiding to appear before the officers and therefore in the interest of public health it is expedient on the part of the respondent to issue the impugned proceedings. It is further alleged in the impugned order that having obtained the licence, the petitioner shall make available the toddy for sale everyday and by closing the shops the society violated the provisions of Rule 14(2) of Excise (Tapping of Trees and Toddy Shops Special Conditions of Licences) Rules, 1969. The petitioner society refuted the allegations made by the respondent and submitted that the respondents are acting at the instance of the rival party of the petitioner society and the respondents passed the impugned order on presumptions and assumptions and mere closing of shop does not entitle the respondents to draw an inference that the petitioner society is indulging in selling of adulterated toddy. According to the petitioner there is a procedure to be followed to come to this conclusion namely drawing of toddy samples and getting the same tested etc., and not by presumptions and assumptions. According to the petitioner, the 3rd respondent has issued the impugned proceedings at the behest of the superior officers who raided the shop without applying his mind and without acting independently. The petitioner further stated that before issuing the impugned proceedings, the respondents did not afford any opportunity of hearing, which is in gross violation of principles of natural justice. The petitioner further stated that since the appellate authority himself has surprised the raid, they could not avail the remedy of appeal.
5. A counter has been filed by the respondents denying the allegations made by the petitioner. It is stated in the counter that on receiving of complaints of selling of adulterated toddy in Gadwal Town and surrounding village, the Excise Officials organised raids and in course of such action the toddy shops of petitioner society were surprised and found closed. A panchanama was conducted and a case was registered. According to the respondents, though the President of the petitioner society was asked to appear before the Dy. Commissioner, he did not choose to appear and therefore this act of the petitioner clearly speaks that it is indulging in selling of adulterated toddy and it is trying to escape from being booked by the department. It is further stated in the counter that as per Sub-rule (2) of Rule 14 of A.P. Excise (Tapping of Trees and Toddy Shops Special Conditions of Licences) Rules, 1969, the licensee shall ensure that toddy is available in the shop every day for sale and if he fails to do so the licence shall be liable for cancellation. Since the petitioner society closed its shops it has violated the provisions of Section 36(c) of the Act. Further act of the president of the petitioner society in avoiding to appear before the officers and keeping the shop closed during the period of raids would go to show that he was indulging in sales of adulterated toddy and he wilfully kept the shop closed. Thus, the petitioner has rendered himself liable for action under Section 31 of the A.P. Excise Act, 1968. Hence in the interest of public health the licence of the petitioner shop has been suspended. According to the respondents, against the impugned order, an appeal under Section 63 (1) of A.P. Excise Act, 1968 is provided and the petitioner without availing the remedy has approached this Court and, therefore, the writ petition itself is not maintainable.
6. In the light of the rival contentions it has to be seen that, that whether the impugned order is sustainable under law and whether the respondents have got power to suspend the licence of the toddy shops of the petitioner society by invoking the provisions of Section 31(1) of the A.P. Excise Act.
7. The main grounds alleged in the impugned order for suspending the licence is that the shops in question were closed down by the petitioner society which is contrary to the provisions of Sections 31(1)(b) and 36 (c) of A.P. Excise Act, 1968 read with Sub-rule (2) of Rule 14 of Excise (Tapping of Trees and Toddy Shops Special Conditions of Licences) Rules, 1969 and the licensee of the shop has failed to appear before the Dy. Commissioner of Prohibition and Excise, Mahaboobnagar and the licensee is indulging in sales of adulterated toddy.
8. For better appreciation the relevant portion of the impugned order is extracted hereunder:
"On complaints of selling of adulterated toddy in Gadwal Town and surrounding villages surprise raids were organised by the Special Party under the supervision of Dy. Commissioner of Prohibition and Excise, Mahaboobnagar Division. On 21.3.2002 during the surprise raid at the toddy shop Gadwal No. 1 located in Harijanwada in Gadwal Town having boundaries:- East: Road, West: Agriculture land of Venkateshwarlu, North: Land, South: Land of Venkateshwarlu and the shops was found closed. As such basing on the panchanama conducted by the raid party in the reference 1st cited a case has been registered vide PCR No. 284/2001-02 dated 22.3.2002 under Sections 31(1)(b) and 36(c) of A.P. Excise Act, 1968 read with Sub-rule (2) of Rule 14 of the A.P. Excise (Tapping of Trees and Toddy Shops Special Conditions of Licences) Rules, 1969. The Licensees of TCS Group Gadwal when called (i.e., the President of TCS Gadwal) has failed to appear before the Dy. Commissioner of Prohibition and Excise, Mahaboobnagar and Dy, Commissioner of Prohibition and Excise Enforcement, A.P., Hyderabad. None were present at the shops and there were no records relating to the shop in the shop premises. Thus it clearly speaks that the licensee was indulging in sales of adulterated toddy and intentionally kept the shop closed to escape from being booked by the department. As per Sub-rule (2) of Rule 14 of A.P. Excise (Tapping of Trees and Toddy Shops Special Conditions of Licences) Rules, 1969 the licensee shall ensure that toddy is available in the shop every day for sale. If he fails to do so the licence shall be liable for cancellation. Thus it is established that Sri B. Sudhakar Good S/o Parameswar Goud, President of TCS Gadwal has contravened the provisions of Section 36(c) of A.P. Excise Act 1968 read with Rule 14(2) of A.P. Excise (Tapping of Trees and Toddy Shops Special Conditions of Licences) Rules, 1969. His avoiding to appear before the officers and keeping the shop closed during the period of raids is a clear proof that he was indulging in sales of adulterated toddy and wilfully avoiding to appear before the officers. Thus the licensee of TCS Group Gadwal has rendered himself liable for action under Section 31 of the A.P. Excise Act, 1968. Since the consumption of adulterated toddy is injurious and endangers to public health, it is felt expedient to suspend the licence of the toddy shop in question immediately to refrain the licensee from indulging further sales of adulterated toddy in the interest of public health.
In view of the above and in the interest ofpublic health the licence of toddy shop TCS Gadwal No. 1 bearing No. 32 dated 19-2-1999 which is in the name of Sri B. Sudhakar Goud, President, TCS Group Gadwal is hereby suspended pending enquiry under Section 31(1) of the A.P. Excise Act, 1968."
9. Mr. Ravi Kiran Rao, learned Counsel appearing for the petitioner-society explained the circumstances under which the shops were closed down. According to him on 2-3-2002 all the toddy shops belonging to the petitioner-society were highhandedly ransacked by Surya Goud,Praveen Goud, Shankar Goud and Raghuraj Goud who belong to the rival group of the petitioner-society and thereby created horror among the customers and the residents of the locality. Thereupon the petitioner-society gave a complaint to the Gadwal P.S. and the police registered a case in Cr.No. 15/ 2002 and since no action was taken by the police the petitioner made a representation to the Sub-Division Prohibition and Excise Officer, Mahaboobnagar seeking protection so as to enable the petitioner society to run the shops and the said Excise Officer wrote a letter to the Gadwal PS on 16.3.2002 requesting to provide police protection. Since the efforts of the petitioner society yielded no results they filed W.P.No. 4639/ 2002 and got a direction from this Court to the police officials to the effect to consider the request of the petitioner-society for protection. Even this effort also ended in futile. Therefore, after failing in all its efforts, the petitioner-society having left with no other alternative has closed down the toddy shops in order to avoid any law and order problem and in the interest of public but not to escape from being booked as alleged by the respondents.
10. The learned Counsel contends that the respondents cannot invoke the provisions under Section 31(1)(b) read with Sub-rule (2) of Rule 14 of Excise (Tapping of Trees and Toddy Shops Special Conditions of Licences) Rules, 1969. According to the learned Counsel the said provision does not contemplate suspension pending enquiry but it only speaks of final order which cannot be made without affording an opportunity of being heard to the petitioner. The learned Counsel for the petitioner further contends that the method adopted by the respondents for arriving at the conclusion that the petitioner society is indulging in sales of adulterated toddy is contrary to Rule 24 of A.P. Excise (Arrack and Toddy Licences General Conditions) Rules, 1969. According to the learned Counsel to say that toddy is adulterated, a separate procedure is contemplated under the above rule, viz., drawing of samples of toddy and getting the same tested etc. When this is not followed, the respondents cannot be allowed to contend that the petitioner society is indulging in sale of adulterated toddy. The learned Counsel further contended that even Section 31(1) contemplates that an opportunity to make representation before cancelling the licence be given and in the instant case of no such opportunity is given to the petitioner before passing the impugned order. It is further contended that Section 31(1)(b) does not contemplate suspension pending enquiry but it only speaks of passing of final order which cannot made without affording an opportunity of being heard to the affected party.
11. On the other hand, the learned Government Pleader for the respondents contended that since there are complaints of selling adulterated toddy in Gadwal Town and surrounding villages, the excise officials have organised raids and during the course of such action, they have raided the shops of the petitioner-society. The learned Counsel further contends that though the petitioner was asked to appear before the Dy. Commissioner he did not appear. The learned Government Pleader further contended that by closing down the shops the petitioner-society violated the Excise (Tapping of Trees and Toddy Shops Special Conditions of Licences) Rules, 1969. According to him, under Sub-rule (2) of Rule 14 of Excise (Tapping of Trees and Toddy Shops Special conditions of Licences) Rules, the licensee shall ensure that toddy is available in the shop every day for sale and if he fails to do so the licence shall be liable for cancellation. Therefore, the petitioner is bound to keep the shop open under any circumstances and when the shops are closed down without making available the toddy for consumption, the necessary inference that could be drawn is that the petitioner-society has wilfully contravened the rules. Further the raid was organised on the complaints that adulterated toddy is being sold and the petitioner-society anticipating the raid closed down all its shops intentionally so as to escape from being booked and therefore the necessary inference is that it is indulging in sales of adulterated toddy. Therefore the respondents are right in passing the impugned order. The learned Government Pleader further contends that against the impugned order, an appeal lies under Section 63(1) of the A.P. Excise Act to the Dy. Commissioner of Excise. The learned Government Pleader, however, contends that since the raid was conducted in the presence of the Dy. Commissioner, the petitioner can file an appeal before the Commissioner and as the petitioner did not avail that remedy, the writ petition is not maintainable.
12. A reading of the impugned order shows that on 21.3.2002 a raid was organised in the presence of the Dy. Commissioner of Prohibition and Excise, Mahaboobnagar on the shops belonging to the petitioner-society and found the shops closed. Accordingly they registered a case on 22.3.2002 under Sections 31(1)(b) and 36(c) of A.P. Excise Act, 1968 read with Sub-rule (2) of Excise (Tapping of Trees and Toddy Shops Special Conditions of Licences) Rules, 1969. It is observed in the impugned order, that as per Sub-rule (2) of Rule 14 of Excise (Tapping of Trees and Toddy Shops Special Conditions of Licences) Rules, 1969 the licensee shall ensure that toddy is available in the shop every day for sale and, therefore, by closing the shops, the petitioner-society has violated the rule. Another observation is that since the petitioner-society has closed down the shops in question it is a clear proof that the petitioner-society is indulging in sale of adulterated toddy. It also observed in the impugned order that the licensee of the shops in question rendered himself liable for action under Section 31 of the A.P. Excise Act.
13. All the facts narrated above, viz., attacking of the toddy shops by the rival group of the petitioner-society, giving complaint by the petitioner, registering a criminal case, petitioner making a representation to the sub-Divisional Excise and Prohibition Officer and addressing a letter by the said officer to the Sub-Inspector concerned and the petitioner filing WP No. 4639/2000 before this Court would go to prove the apprehension said to have been experienced by the licensee of petitioner-society as regard to breach of peace and with regard to the above facts remained uncontroverted by the respondents.
14. Now what is to be seen is that whether the impugned order suffers from any legal infirmity. According to the learned Counsel for the petitioner, respondents have no authority to invoke the provisions under Section 31(1)(b) read with Sub-rule (2) of Rule 14 and the said provision does not contemplate suspension pending enquiry but it only speaks of passing of final order, which cannot be made without affording an opportunity of being heard to the aggrieved party. The learned Counsel for the petitioner further contends that in order to come to a conclusion that the toddy is adulterated, a separate procedure is contemplated under the above Rule 24 of A.P. Excise (Arrack and Toddy Licences General Conditions) Rules, 1969, viz., drawing of samples of toddy and getting the same tested etc., and in the instant case no toddy is found nor any sample is drawn or was it sent to chemical analysis. According to the learned Counsel, the presumption drawn by the respondents that since the shops were found closed the petitioner-society is indulging in selling of adulterated toddy is without any basis and it is nothing but an arbitrary action. On the other hand, the learned Government Pleader opposed the contentions of the petitioner and supported the action of the respondents.
15. To appreciate the rival contentions on the point of law, it is appropriate to refer to the relevant provisions:
16. Section 31 of the A.P. Excise Act deals with the power to cancel or suspend licence, etc., which reads as under:
31. Power to cancel or suspend licence, etc:--(1) Subject to such restrictions as may be prescribed, the authority granting any licence or permit under this Act may cancel or suspend it irrespective of the period to which the licence or permit relates.
(a)................
(b) in the event of any breach by the holder thereof or by any of his servants or by any one acting on his behalf with his express or implied permission, of any of the terms and conditions thereof; or
(c)......................
(d)......................
(e).......................
Provided that no licence or permit shall be cancelled or suspended unless the holder thereof is given an opportunity of making his representation against the action proposed."
Section 36 of A.P. Excise Act speaks of penalty for misconduct of licensees which is as follows:
"3(5. Penalty for misconduct of licensees, etc:--(1) Whoever being the holder of a licence or permit granted or issued under this Act or being in the employ of such holder and acting on his behalf,
(a)..........(b)............
(c) wilfully contravenes any rule made under this Act; or
(d)......(e)......(f)......(g).........
(h).................shall on conviction, be punished--
(i) in the case of an offence falling under Clause (a), Clause (b) or Clause (c), with imprisonment for a term which shall not be less than six months but which shall not exceed two years and with fine which may extend to one thousand rupees, or with both.
Sub-rule (2) of Rule 14 the A.P. Excise (Tapping of Trees and Toddy Shops Special Conditions of Licences) Rules, 1969 deals with allotment and tapping of trees which reads as under:--
"14. Allotment of Excise trees-
(1)..,......................
(2) The licensee shall tap not less than 75% of the trees allotted for the shop regularly and pay the tree tax and tree owner's rent thereof. He shall ensure that toddy is available in the shop every day for sale. If he fails to do so the licence shall be liable for cancellation."
17. Rule 5 of the Excise (Tapping of Trees and Toddy Shops Special Conditions of Licences) Rules, 1969 deals with prohibition of adulteration of toddy according to which the licensee shall not mix in toddy Chloral Hydrate or any other article in the shop or depot or outside, except sugar, nor shall he sell or offer for sale adulterated toddy in any shop. The licensee shall not keep within the premises of the shop Chloral Hydrate or any other article injurious to health, which may be used for adulteration of toddy.
18. The A.P. Excise (Arrack and Toddy Licences General Conditions) Rules, 1969 governs the field of sale of arrack and toddy subject to the general conditions to which the licence shall be granted. Rule 24 of the said Rules deals withdrawal of samples which reads as follows:-
"Any Excise Officer, not below the rank of the Sub-Inspector of Excise or Food Inspector appointed under the Prevention of Food Adulteration Act, 1954, shall be competent, at any time, to take samples of arrack or toddy, in the possession of the licensee or any other person storing arrack or toddy, for the purpose of analysis. Such officer shall take three samples in the presence of the licensee or his agent or other person in-charge of the licensed premises or who is found selling toddy in the said premises, after conducting a panchanama. The samples shall be sent to the Court with a requisition to send, one of the samples expeditiously to the Chemical Examiner of the Excise Department having jurisdiction in the region, in which licensed premises are situated, for chemical examination. If the sample sent to the Chemical Examiner is damaged, in transit or otherwise before the completion of the analysis, the Court may be requested by the concerned officer to send a second sample to the Chemical Examiner. If the licensee desires that the sample should be sent for analysis to an independent laboratory, he may apply to the Excise Superintendent within three days of the drawal of the sample..............."
19. Rule 24 of A.P. Excise (Arrack and Toddy Licences General Conditions) Rules, 1969 envisages the manner of disapatching the samples according to which the sample should be forwarded to the Court as specified in Rule 24 immediately after the drawal but not later than the succeeding day by any suitable means. Rule 34 of A.P. Excise (Arrack and Toddy Licences General Conditions) Rules, 1969 envisages inspection. According to this rule any Excise Officer or Police Officer not below the rank of Sub-Inspector shall be competent to enter and inspect the shop and examine licence or test or measure the arrack or toddy therein. Sub-rule (2) of Rule 34 deals with furnishing of necessary receptacles at the time of inspection for the measurement of arrack or toddy and shall afford all facilities for such inspection. Rule 36 speaks of seizure of arrack or toddy unfit for human consumption according to which any officer of the excise and police departments who is competent to inspect shall also be competent to seize or prohibit arrack or toddy from being sold when he finds the same unfit for human consumption or to have been adulterated or diluted in any manner. Rule 31 deals with suspension of licence on account of default in payment of any dues payable by the holder thereof. Rule 38 speaks of cancellation of licence and also conducting of auction in pursuance of cancellation if there is any default of dues.
20. In the case on hand, the impugned order shows that the excise authorities having found the shops of the petitioner-society closed, conducted a panchanama and registered a case on 22-3-2002 under Sections 31(1)(b) and 36(c) of A.P. Excise Act 1968 read with Sub-rule (2) of Rule 14 of the A.P. Excise (Tapping of Trees and Toddy Shops Special Conditions of Licences) Rules, 1969. In this cases the petitioner was continuously bringing to the notice of the authorities that their shops have been snatched away by the rival group and there is law and order problem and seeking protection by the authorities which is evident from the representation made to the Sub-Divisional Prohibition and Excise Officer by the petitioner in their letter dated 16-3-2000 and who in turn addressed a letter on the same day to the Sub-Inspector of Police, Gadwal (Rural) requesting the police officials to provide protection to the petitioner-society.
21. Sub-clause (b) of Section 31(1) speaks of breach of any of the conditions of the licence by the holder of licence. Section 31(1) speaks of suspension or cancellation of licence in the event of such breach etc. However proviso to the said Section stipulates that no licence or permit shall be cancelled or suspended unless the holder thereof is given an opportunity of making his representation against the action proposed.
22. Section 31(1)(b) does not contemplate any power for cancellation or suspension pending enquiry but it speaks of final orders to be passed either cancelling or suspending the licence that too after giving an opportunity to the affected party of making a representation against the proposed action. As regards the allegation of selling of adulterated toddy, the respondents neither entered the premises nor seized the toddy or drawn any sample for chemical analysis.
23. The learned Government Pleader placed reliance in support of their contention in a decision rendered by the Full Bench of this Court in "Tappers Co-operative Society, Maddur v. Superintendent of Excise, Mahaboobnagar, 1984 (2) APLJ 1, wherein the view of the Majority is that the authorities may suspend the licence if circumstances warrant in cases of urgency. In this case the excise officials have taken the samples of toddy sold in the toddy shops of the said society from time to time as contemplated under Rule 24 of A.P. Excise (Arrack and Toddy Licences General Conditions) Rules, 1969 for analysis and ultimately found that the toddy is adultered and thus, the excise officers have cancelled the licence of the petitioners therein. But in the case on hand, no sample was drawn nor was it sent for chemical analysis. Therefore the said decision has no application to the case on hand.
24. The learned Counsel for the petitioner also placed reliance on para 45 of the above judgment and contends that there must be incidental and ancillary powers to be exercised and the incidental or ancillary powers cannot be exercised in a routine way or as a matter of course. The licensing authority is bound to exercise the discretion reasonably, bona fide and without negligence considering the circumstances of the case when such interim suspension is necessary. The learned Counsel further argued that if it is possible to give- an opportunity to the petitioner and the circumstances do not warrant such drastic step, the licensing authority is bound to afford an opportunity and the power of suspension pending enquiry should not be exercised as an invariable rule or mode of making an enquiry.
25. Para 45 of the above judgment reads as under:
"However, we must make it clear that this incidental or ancillary powers cannot be exercised in a routine way or as a matter of course. The licensing authority is bound to exercise the discretion reasonably, bona fide and without negligence considering the circumstances of the case when such interim suspension is necessary. If it is possible to give an opportunity to the petitioner and the circumstances do not warrant such a drastic step, the licensing authority is bound to afford an opportunity and the power of suspension pending enquiry should not be exercised as an" invariable rule or mode of making an enquiry. Further the suspension pending the enquiry should not be allowed to continue for an unduly long period. The authorities are bound to complete the enquiry as early as possible and any undue delay when it constitutes abuse of power makes the order liable to be set aside. Whether the suspension of licence must be proceeded by notice or opportunity must depend upon various factors such as degree of urgency involved, the duration of suspension, the nature of the breach, public danger to be avoided, and other similar circumstances which warrant an immediate action where it is not feasible or possible or even advisable to give an opportunity to the holders of the licences before passing interim orders of suspension."
26. It has to be observed that the Full Bench relying on Rule 18 the A.P. Rectified Spirit Rules, 1971 came to the conclusion that the authorities have got ancillary and incidental power for suspending the licence. It has to be observed that rules envisaged under A.P. Rectified Rules have no application to the case on hand as the circumstances in this case are controlled by the A.P. Excise (Arrack and Toddy Licences General Conditions) Rules, 1969 and Excise (Tapping of Trees and Toddy Shops Special Conditions of Licences) Rules, 1969. However under Section 31 of A.P. Excise Act or under Rule 14(2) no ancillary or incidental power of suspending the licence is given. Further the said Rules deal with only granting of licence with regard to rectified spirit alone but they do not deal with the licence conditions of A.P. Excise (Arrack and Toddy Licences General Conditions) Rules, 1969. In view of the above facts, it has to be held that the authorities while invoking the powers under A.P. Excise (Arrack and Toddy Licenses General Conditions) Rules, 1969 which are applicable to the licence conditions, they should have a specific power either to suspend the licence pending enquiry or to cancel the licence. The power could be derived only from the Excise Act or under the A.P. Excise (Arrack and Toddy Licences General Conditions) Rules, 1969. Admittedly Section 31(1)(b) speaks of suspension or cancellation in case of breach of the terms and conditions of the licence. Rule 38 (1) of A.P. Excise (Arrack and Toddy Licences General Conditions) Rules, 1969 deals with cancellation of licence to the effect that the licence may be cancelled if the contents of affidavit submitted under Rule 5(ii) of A.P. Excise (Lease of Rights to Sell Liquor in Retail) Rules, 1969 is false or the value of the assets declared in the affidavit is less than an amount equal to one month's rental. Sub-rule (2) of Rule 38 deals with recovery of dues by way of A.P. Revenue Recovery Act.
27. But, however, it has to be observed that the respondents herein have not followed the procedure laid down either under Rule 24, i.e., by drawing of toddy samples, or under Rule 34 by entering into the premises and examine the toddy. The respondents alleged that the petitioner is selling adulterated toddy. If that is the case they have to seize the toddy which is found unfit for human consumption under Section 36. This is not followed. It has to be observed that even though a power of cancellation is conferred under Rule 14 (2) of Excise Tapping of Tress and Toddy Shops Special Conditions of Licences Rules, 1969 if the licensee fails to tap 75% of the trees allotted and make the toddy available in the shop every day for sale, such power shall be exercised by following the procedure under the Principle of Natural Justice. It is contended by the learned Government Pleader that by closing the toddy shops in question, the petitioner has not made the toddy available for sale and thus he has committed breach of licence conditions and, therefore, the respondents are right in suspending the licence by invoking Section 31(1)(b). It has to be observed that the respondents did not conduct any enquiry to "see whether the petitioner has not tapped the required trees, i.e., not less than 75% of the allotted trees, and he failed to make available the toddy for sale so as to invoke Rule 14(2) of Excise (Tapping of Tress and Toddy Shops Special Conditions of Licences) Rules, 1969. Even for the part of the alleged violation i.e., the non-availability of toddy for sale, unless the respondents enter the premises and examine whether there is any toddy available in the premises or not, it cannot be said that the petitioner did not make available toddy for sale and thereby committed breach of licence conditions. As stated supra, the reasons assigned by the petitioner for closing the shops on the date of raid would go to support the stand taken by the petitioner. However, nothing would prevent the respondents to break open the shops with the aid of police and inspect the premises if the petitioner is purposely and intentionally keeping shops closed and they should have summoned the petitioner to open shops. Further the proviso to Section 31(1) provides that an opportunity of making representation must be afforded to the licensee before his licence is suspended or cancelled. In this case the respondents without giving any such opportunity to the licensee straight away passed the impugned order which is contrary to the said provision and, therefore, the impugned order is liable to be set aside. A Division Bench of this Court consisting of Hon'ble the Chief Justice Dr. AR. Laxmanan and Sri Justice I.V. Narayana had an occasion to consider similar situation in "Smt. Goka Bujjamma v. Prohibition and Excise Superintendent, Srikakulam, 2002 (1) LS 325 (DB), wherein their Lordships observed as follows:
"A.P. Excise Act, 1968, Section 31(1)(b) Proviso - Superintendent of Prohibition and Excise suspending licence of wine shop after issuing show-cause notice for cancellation, pending enquiry - Order of suspension without affording opportunity of making representation is illegal and without jurisdiction - Order set aside".
28. The learned Counsel further argued that though the interim suspension granted by this Court was vacated on 3-7-2002 the authorities have not taken any action till today and the petitioner filed an affidavit dated 11-10-2002 to that effect. It is further stated in the affidavit that no prior notice is given to the petitioner.
29. Rule 14(2) under which the respondents have invoked the powers says that the licenses shall tap not less than 75% of the trees allotted for the shop regularly and pay the tree tax and tree owner's rent thereof. He shall ensure that toddy is available in the shop every day for sale. The said section also speaks that if the licensee fails to do so his licence shall be liable for cancellation. However, the petitioner categorically stated the reasons that forced the society to keep the shops closed apprehending threat from the rival party. The petitioner also disclosed the efforts made by it for running the business by making representation to the Sub-Divisional Prohibition and Excise Officer who in turn wrote a letter to the Sub-Inspector of Police, Gadwal (Rural) requesting to provide protection to the petitioner-society and also filing of the writ petition seeking a direction to the police to provide protection to run the business. The absence of any rebuttal contentions on the facts by the respondents would go to show that there was threat from the opposite party and the petitioner tried to seek protection but in vain. Under the above circumstances the petitioner-society was forced to close down its shops.
30. It is also to be further noted that no material is placed before this Court by the respondents that they have followed Rule 24, Sub-rule (2) of Rule 34, Rule 36 of the A.P. Excise Arrack and Licence General Conditions Rules, 1969. The action of the respondents in not following the rules as stated above and also the subsequent action of the respondents in suspending the licence without affording any opportunity invoking the provisions under Section 31(1)(b) of the A.P. Excise Act is held to be contrary to law and hence liable to be set aside.
31. The learned Government Pleader contends that an appeal under Section 63(1) lies against the impugned order of the Dy. Commissioner and the petitioner without availing the said remedy has approached this Court. Section 63(1) says that any person aggrieved by an order passed by any officer, other than the Commissioner or Collector, under this Act, may, within forty-five days from the date of communication of such order, appeal to the Deputy Commissioner. However, the learned Counsel for the petitioner contends that since the appellate authority, i.e., the Dy. Commissioner, himself participated in the raid, no useful purpose would be served and it is not an efficacious remedy and, therefore, the petitioner cannot be compelled to file and appeal before the Deputy Commissioner. I find some force in the contention of the learned Counsel for the petitioner, as the Deputy Commissioner cannot be a Judge of his own case.
32. For the foregoing reasons, the writ petition is, accordingly, allowed. However, this order does not preclude the authorities from taking any action in accordance with law.