1. These are two writ petitions which may be conveniently disposed of under a single order since they raise an identical question.
2. The petitioners were given the lease of the Sendhi group of shops for the excise year 1969-70. Alleging that the area was hit by severe cyclonic storms on four occasions for 34 days spreading over from 16-10-1969 to 19-12-1969, they applied to the Government under Rule 129 of the Excise (Arrack and Toddy Licensee General conditions) Rules for remission of the monthly rentals. The Government after calling for reports from the local officers, rejected their applications by its orders dated 28th and 29th of September, 1970. It is to quash these orders the present Writ Petitions have been filed.
3. It is argued for the petitioners that the orders of the Government are highly arbitrary, based on irrelevant considerations and should, therefore, be set aside. On the other hand, the Government contends that the power under Rule 29 is purely a discretionary one and when the Government refused to comply with the petitioner's request for remission, this Court cannot interfere in the matter.
4. To adjudicate upon this dispute, it is a necessary to read the said Rule 29. It is as follows:
'29. POWER OF GOVERNMENT TO POSTPONE OR DEFER PAYMENT OF RENTAL: The Government may, by order, postpone the payment of rental or defer its collection, or reduce or remit the rental for any period for all or any of the following reasons, namely;
(a) natural calamities, like floods, cyclones, fire famine, failure of seasonal conditions and like damages leading to loss of income to the shop;
(b) wide-spread disturbed conditions irrespective of the cause for the disturbance resulting in loss of income o a shop and
(c) non-availability of arrack or toddy, for reasons which in the opinion of the Commissioner, are completely beyond the control of the licensee'.
5. It is seen that the Government is conferred with the power either to postpone the payment or defer the collection of rental or to reduce or remit the rental for any period of the lease. It will have to do so by an order. Even this power cannot be exercised indiscriminately. It can be done only if one or more of the three circumstances mentioned in the rules exist. Clause (a) enumerates one set of circumstances such as natural calamities like floods, cyclones, fire etc. clause (b) states the second set of reasons like wide-spread disturbed conditions; and Clause (c) refers to another set of circumstances like non-availability of arrack or today, for reasons beyond the control of the licensee. The Government will have to exercise the power in accordance with the provisions of this rule and only if one r more of the circumstances mentioned therein exist.
6. It is the case of the petitioners than in Khammam area where their shops are situate. there were severe cyclonic storms on as many as four occasions, spread over 34 days from 16-10-1969 to 19-12-1969. It is stated that in consequence of these cyclones, the business of the petitioners was interrupted. Further, the cyclones severally damaged the trees allotted to the petitioners. A large number of trees were uprooted or otherwise completely damaged. In the case of trees on which incisions had been made, the rain water seeped in and destroyed the soft fibres inside. As a direct consequence worms set in. In that manner, a large number of trees were rendered unfit for tapping. As a consequence of all this, the petitioners have suffered heavy monetary loss.
7. In their counter, the respondents admitted that there wee rains from 16-0-1969 to 19-10-1969 and 22-11-1969 to 23-11-1969. It was also agreed that there were strong winds on 7-11q-1969 to 14-12-1969 and thereafter continuous rain again from 12-12-1969 to 17-12-1969. It is in the light of these averments in the counter, the impugned order will have to be read and understood. It is in the following terms:
'In the Petition cited Shri R. Ramayya and others (petitioners in W. P. No. 4901/70), contractors of Khammam Sendhi shops for 1969-70 have requested the Government that remission be granted as they suffered on account of cyclone during 1969. The Government have carefully examined the request of the petitioners after obtaining a report from the Board of Revenue (Excise). They consider that the rules in force at the relevant time under which the shops were auctioned do not provide for grant of remission. Further the cyclone effect must have been felt in the district as a whole and not in the area covered by Khammam Group of shops alone. Government therefore, consider that there is no justification to concede the request of the contractor. The petition, is, therefore rejected.'
In identical terms, the Government passed an order in the case of Writ Petition No. 4902/70, also.
8. I have already red Rule 29. It uses the word 'may thus conferring power on the Government to pass an order under this rule. It is no doubt not a mandatory provision in the sense that the Government is not bound to accede to the request of the petitioners. If it is satisfied that any one of the conditions mentioned in the rule existed, then it might grant relief accordingly; otherwise it need not. But, it must consider the petition filed before it, and has to dispose it of by an order. Since it is not bound to grant the petition, the power conferred on the Government is discretionary. But that discretionary power is conditioned by the provisions of the rule, namely that it can direct only one of the things mentioned therein like postponing the payment of rental etc. Further, that power can be exercised only if one or more of the circumstances mentioned in the rule existed. And the Government has to convey its decision by an order. Thus, it is seen that though it has a discretionary power, the Government will have to follow certain rules while exercising that discretionary power.
This power conferred on the Government under the rule is coupled with a duty to perform it under certain circumstances and in accordance with certain principles. Simply because it has a discretionary power. it does not exonerate the Government from discharging the duty of considering the petition. If the power conferred under the Act is exercised arbitrarily, capriciously or unreasonably or by taking into account extraneous or irrelevant matters, the Government must be deemed not to have exercised this discretion at all. That is to say that it has not discharged it duty. It the Court is satisfied that the Government has not exercised its power or discharged the duty cast on it under the rule for the one or other of the foregoing reasons, it can compel the Government to is charge that duty and to exercise its discretion objectively and fairly.
9. This is a well-established proposition. Subba Rao, C. J. (as he then was) and Viswanatha Sastri, J. in two but concurrent Judgments expressed similar views in Sreerama Murthi v. Income tax Officer. Vizianagaram, 1956 Andh LT 565 = (AIR 1957 Andh Pra 114). At page 661 of the Report (Andh LT) = (at p. 117 of AIR), Subbarao, C. J., observed thus:
'The discretionary statutory power conferred upon an authority for the public good is coupled with a duty to per- ( . . . . . ) The fact that the exercise of the power is left to the discretion of the authorised person does not exonerate him from discharging his duty. If the discretionary power so conferred is exercised arbitrarily. capriciously or unreasonably or by taking into consideration extraneous and irrelevant considerations. In the eye of law, the authority concerned must be deemed not to have exercised the discretion at all, that is, he has not is charged his duty. If the court on the facts placed before it comes to a conclusion that a particular authority has not exercised his duty for one or other of the aforesaid reasons. it will come, the authority to discharge his duty, or, to put it differently, to exercise his discretion honestly and objectively.'?
Viswanatha Sastry. J., at page 669 of the Report also stated the law in regard to the discretionary power in the following terms:
'Where a court is invested with a discretionary power, as for instance to award costs, grant time, condone or excuse delay, stay execution of a decree or order, amend pleadings and so on it is open to a suitor to call upon the court to do so and in a fit case, the Court would make an order for that purpose ex debito justitiae. discretion, when applied to a Court of justice, means sound discretion guided by law and in accordance with precedents.'
As Lord Mansfield stated in R. v. Wilkes, (1770) 4 Burr 2527, 2529 the exercise of discretion 'must be governed by rule, not by honour, it must not be arbitrary, vague and fanciful, but legal and regular.' It is thus clear that though what is conferred on the Government under Rule 29 is a discretionary power. It has to be exercised respectively and objectively and it should not be arbitrary. vague and fanciful, but should be in accordance with law and the rules made therefore.
10. Further, this power is conferred on the Government for the purpose of creating a benefit on the licensee. If he has suffered any loss, it is open to him to approach the Government for remission or postponement of the payment of rentals. Lord Blackburn observed in Julius v. Lord Bishop of Oxford, (1880) 5 AC 214 thus:
'If the object for which the power is conferred is for the purpose of enforcing a right, there may be a duty cast on the donee of the power, to exercise it for the benefit of those who have that right, when required on their behalf. Where there is such a duty, it is not in-accurate to say that the words conferring the power are equivalent to saying (. . . . . )
11. From the above consideration, it follows that the Government is bound to consider the application when once it has been brought before it on its merits and in accordance with the provisions of Rule 29. It can give some relief if the circumstances mentioned in the rule existed. Likewise, it can reject an application only if the requirements of the rule were not satisfied.
12. Judging in the light of these principles. I have no hesitation to hold that the Government's order is highly arbitrary. The grounds on which the applications of the petitioners were rejected are wholly irrelevant, immaterial and non-existent. The first reason assigned is that the rules in force at the relevant time under which the shops were auctioned, did not provide for grant of remission. This is a total misconception of the scope of the Andhra Pradesh Excise (Arrack and Toddy Licenses General Conditions) Rules, 1969 which were promulgated on 7th November, 1969. It is well-known that the exemption granted during the assessment year will be available for the entire year, vide Mathra Parshad and Sons v. State of Punjab, : AIR1962SC745 . In any case the rules were made on 7th November, 1969 and even according to the averments in the counter affidavit, heavy rains, cold winds and other natural calamities visited the place even thereafter. To simply say that the provisions similar to Rule 29 did not exist when the auction took place is merely ignoring the correct principles of law and also the fact that even after the rule were made the were heavy rains in the area. So this ground is a non-existent one.
13. The second ground is that the cyclone effect must have been felt in the entire district as a whole and not in the area covered by the Khammam Group of shops all one. If there were cyclone or heavy rains throughout the Khammam District, it does not follow that the petitioners' shops, which were in Khammam area were not affected, nor does it follow that if relief is granted to the shops of the petitioners, it should not be granted to the other shops provided the requirements of Rule 29 are satisfied. It is a wholly irrelevant consideration. No other reason a assigned for rejecting the applications of the petitioners. It, therefore, follows that the rejection of the petitioner's applications was on irrelevant and non-existent grounds and is highly arbitrary and unreasonable. The orders cannot be allowed to stand.
14. They are accordingly quashed and set aside are the applications are remitted back to the Govt. for consideration on merits in accordance with servants made above, and in the light of the reports which the Government has received from the Board of Revenue and other lower authorities and officers.
15. The writ petitions are accordingly allowed with costs in W. P. No. 4901 or 1970 only Advocate's fee Rs. 100/-.
16. Petitions allowed.