(1)The only grievance of the petitioner in this petition under Article 226 of the constitution of India is that the liquor at Pathankot has been granted to respondent 7 Maghar Mal and not to the Deputy Commissioner to the Collector, the petitioner was placed at No. 1.
(2) On the surface the grievance is innocuous because out of the two rival applicants only one has to be chosen for the grant of licence. If the choice was according to rules, no grievance could be made by the petitioner. In a petition under Article 226 of the Constitution, this Court is required to see whether the grant of the license is in accordance with law. If it is not this Court will certainly step in and direct the authorities to give effect to the rule of law. In the return filed by the State, it has been maintained all through that the grant of the licence was in accordance with the rules. On the other hand, the contention of the petitioner before us was that the rules have been given a go-by. It is also maintained that the rules were altered for an ulterior purpose.
(3) This Court directed the Department a number of times to produce the records and if the records had not been produced, things which have now come to light would have remained in obscurity and the course of justice would have been defeated. It is in this background that the order of this Bench dated the 21st July, 1964, assumes significance. As the records were not forthcoming, this Bench on the 28th July, 1964, passed the following order:
'It is alleged that the whole of the record had not been produced. The required affidavit as ordered by this Bench on 21st July, 1964, is also not forthcoming. We are not satisfied with the explanation given at the bar that because of the learned Commissioner being on tour the needful could not be done during all these days Orders of this Court have to be obeyed and they should not be treated with indifference. This case has to be adjourned because of the non-compliance of this Court's order be respondents 1 to 6. We adjourn this case to 3-8-1964 on payment of RS. 100/- as costs by the State to the petitioner. On 3-8-1964 the Excise and Taxation commissioner should appear in this Court in person to explain the position regarding the non-production of the files and other relevant question which the Court may have to ask. He must be here at 10 O'clock.'
On the 3rd August 1964 the Excise and Taxation Commissioner appeared along with a number of officers and the records; and a number of affidavits were also filed on that date. The following order was passed on that date:
It is in these circumstances that today we have before us a number of affidavits and also a statement from the bar by Shri Soni, the learned counsel for the State that all the relevant records have now been produces in this Court. The records will have to be seen by Shri Tirath Singh Munjral and after he has done so this Court would advert to their contents.
We have an affidavit by the learned Excise Commissioner Punjab swearing that order of this Court dated 21-7-1964 were not placed before him upon 28-7-1964 and that there was no desire to disobey this court's directions. It is unfortunate that the orders of this Court extremely urgent as they were not brought to this notice for seven days and the staff in his department should have failed to attach to these orders the importance they deserve; it betrays a lack of realisation of the urgent nature of ht orders and absence of the requisite genuine anxiety to comply with them promptly. Without repeating what the learned Chief Justice of India observed in M/s Ghiano Mal and Sons v. State of Delhi, AIR 1959 SC 65 we would only record that this Court is not impressed by the efficiency of this department in dealing with the production of the record in the case in hand. The full record should have been produced or made available to the Court initially with the return or at least on subsequent dates of hearing they were however not produced in spite of specific orders till today. We have also before us affidavits from the Deputy Excise and Taxation Commissioner the Assistant District Attorney Excise had Taxation Commissioner's office Gurdaspur. Almost all of them so far as relevant to the non-production of the record betray an attitude on the part of the officers which this Court is unable to appreciate it is an attitude of indifference of requisite anxiety to comply with them with due promptitude and sense of responsibility. It may be recalled that on 21-7-1964 this Court has expressly suggested that if necessary a special messenger be sent to get the relevant records. Why this was not done is not explained.
Without saying anything more on this occasion we do hope and trust that in future the department would pay due regard to the orders of this Court and see that they are complied with effectively and not adopt casual attitude of leaving the matter of routine particularly when they relate to adjudication of serious allegations against the department itself.
We are informed by Shri Soni that all the officer who have filed affidavits are present in Court so also is the learned Excise and taxation commissioner who was holding the office at there relevant time of granting the impugned licence resemble suggesting thereby that the department is fully alive to the seriousness of the situation which has arisen. This awareness is gratifying.'
(4) This case has some very unusual features and therefore, it will be property to deal with the matter in some detail.
(5) The dispute in this petition relates to the license for the vend of country liquor. This licence is known as L-14. The procedure according to the rules before the 20th March 1964 was that such licence were offered for sale at an open auction. The highest bidder who had good financial position and was otherwise suitable the grant in accordance with re rules was granted the licence. the relevant rules are known as the Punjab Liquor Licence Rules--hereinafter referred to as the rules. These rules were published under Financial Commissioner's notification No, 5586-R and S, dated the 21st September 1932 and have been modified from time to time. These rules were framed under Section 59 of the Act. It is common ground that under these rules licence L-14 (country liquor and licence was to be issued by auction. (See Rules 5. 37 and 5. 38). The issuing authority under the Act is the Collector whose present designation is District Excise and Taxation Officer.
(6) For what reason the procedure of auctioning L-14 licenses was departed from its hard to find. The allegation of the counsel for the petitioner is that a go-by was given to this mode of licensing with a view to exercise more patronage and show favour to people whom the authorities wanted to favour. It is also alleged that there has been a considerable loss of revenue to the State exchequer but the departure form the mode of action and by switching over to the mode of allotment. However it is not for this Court to go into the motives of the authorities unless the motives are mala fides to judge the switching over from one method of grand to another so long as that method of grant of licence is in accordance with law. It is well known that licencing and controls not only avoid healthy competition but also lead to favouritism nepotism and corruption but again that is a matter which relates to the administrative and the legislative field. So far the Courts are concerned they are merely to see that the law of the land is carried out and that rule of law is not given a go-by by the executive.
(7) The Punjab Government had taken a decision that L-14 licences were not to be auctioned in future but were to be allotted. A notice was published on the 21st February, 1964, by the District Excise and Taxation Officer inviting application for retail vend of country spirit in the district with a direction that such application should reach with Deputy Commissioner of the district by the 24th February, 1964. It may be pertinently pointed out that no change in the rules had been brought about by this date or by the extended date. It will be proper at this stage to notice the allegations of the petitioner in paragraph 7 and the State's reply to the paragraph. For facility of reference paragraph 7 of the petition and State's reply thereto are set out below side by side:
'7. That afterwards respondent 2 to 5 constituted committees consisting of Deputy Excise and Taxation Commissioner (Collector under the extinct rules), District Excise and Taxation Officer and Deputy Commissioner of the District for the purpose of scrutinising such applications and secret instructions were circularised to them to make their recommendation to respondent No. 2 in the light of these instructions. At the same time similar secret instructions were sent to D. I. G. (C. I. D). Pun-jab to report on such application after making verifications of the antecedents etc. of the applicants.' '7. Admitted to the extend that the applications were received by the Deputy Com-missioners who made the re-commendations, keeping in view the particulars of the applicant.'
(8) The petitioners made his application for the grant of L-14 license in pursuance of the notice issued in the press. In the meantime Labh Singh and Ujagar Singh filed Civil Writs Nos. 97 and 98 of 1964 against the change in the procedure of grant of L-14 licences. These petitions came up for hearing before me and on the statement of the Additional Advocate-General I passed the following order:
'The learned Additional Advocate-General has stated that the practice of registering contractors is being given up and the country liquor licences will be sold in open auction and the petitioners can make a bid at the open auction. In this view of the matter these petitions have become infructuos and are accordingly dismissed.
Mr. H. S. Gujral learned counsel for the petitioners in Civil Writ Petitioners Nos. 97 and 98 of 1964 however contended that he petitioners names have been brought on register No. 10 maintained by the police and this action on the part of the police should also be quashed. This matter was raised incidentally. The only grievance in the petition was that the petitioners were not being registered as country liquor contractors. As the system of registration is being abolished and will not stand in the way of the petitioners at the time of the auction of the licenses it hardly matters if they are on register No.. 10 In any case there is no prayer in the petitions that it be directed that their names concerned was not therefore required to meet this case. With regard to the grievance that their names should be removed from register No. 10 the petitioners can file a separate petition. if so advised. They cannot ventilate their grievance in that connection when the grievance for the redress of which they came to this Court has disappeared.'
It appears that the Additional Advocate-General made this concession because on the date when I entertain these petitions the rules had not been amended so as to provide for allotment instead of auction with regard to L-14 licences.
(9) Resuming the story of the present allotments the position was that the petitioners was placed at No. 1 by the Deputy Commissioner and respondent No. 7 at No. 4 in the recommendations that were made for the grant of licence. The relevant notes against each of the applicants--and here we are only concerned with Nos. 1 and 4--is as follows:
'1. Shri Kans Raj son of Shri Nathu Ram of Dala Chak, Tehsil Batala.' '4. Shri Maghar Mal, son of Nihal Chand of mukerian.' 'He is in the trade for the last 10 years and is also a sitting licence at Pathankot. He has no interest in excise vends (L-2) for the year 'He is not a sitting licence for the year 1963-64, He held the country 1964-65. His financial position is sound as reported by the Excise Sub-Inspector. Nothing against him in the police record.' liquor vend, Pathankot, in the partnership of Shri Jagan Nath for years 1960-61 and 1961-62. His financial position is sound as reported by the Excise Sub-Inspector. Nothing against him in the police record.'
These recommendation of the Deputy Commissioner have some additions in ink. They are set out below. Against there commendation of the Deputy Commissioner with regard to Kans Raj in remarks columns it is stated:
'He is father of Tilak Raj and Father-in-law of Roop Lal.'
Below his name, in brackets which are prefixed with 'px' are the words '(his son and son-in-law are undesirable).' This provisions forma is initialled by Daljeet Singh, the Excise and Taxation Commissioner and the signature of the Collector, whose present designation is District Excise and Taxation Officer, appear against the name of the person to whom the allotment has been made. There is not order with regard to each of the allotted why that allottee has been preferred vis-a-vis his co-applicants. The suggestions has by the learned counsel for the petitioners is that the granting authority did not bring its mind to bear upon the matter of allotment of licences. A decision re allotments was conveyed to it from the high authorities and it merely gave effect to that decision. It is in this context that I have set out the allegations in para 9 of the petition and the reply to it by the State:
'9. That the petitioners thus felt assured that no action would be taken on his application or/and the application of the rival applicants. However in spite of this statement made in that behalf by the learned Advocate-General the respondents went on pushing and pursuing their original plain for granting these licenses at their sweet will and pleasure to their own favourites and in pursuance of this plan sent further confidential instructions to all the Deputy Commissioner in the state and to the D. I. G. (C. I. D) Punjab for taking action on the applications submitted in response to notices referred above. After the receipt of recommendations from the committees constituted for each District which as already state included the Deputy Excise and Taxation Court (collector under the rule) the Commissioner made his won recommendation, The Committee assigned the petitioners first place whereas the partner of the petitioners Shri Chaman Lal who as mentioned above held with him the license in question for the previous financial year (1-3-1963 to 31-3-1964) was placed at No. 2. The other applicants including respondent No. 7 were not assigned any place whatsoever and were thus placed below. It may be mentioned that Shri Harbans Singh who was also the partner of the pet in this all the District were discussed by respondent 2 to 4 with the advise of D. I. G. (C. I. D) after the conclusion of the cautions of foreign liquor shops in the State which auctions as stated above wen on until the 16th March 1964. Event all when the whole picture recommendations of the committees referred to above the successful bidders in the foreign basis for the grant of country liquor shops. A notification was then published in Punjab Government Gazette dated the 20th March 1964, Where by the Punjab Liquor Licence referred to in the foregoing paragraphs were amended. The amendment goes even beyond material particulars so as to benefit and give facilities to the favorite applicants. This notification is No. G. S. R. 87/ P. A. I/ 14/S 59/ Amd (2) / 64 and is dated 7th March 1964, Presumably it has been so dated for the purpose of validating the action already taken or the consequences of a decisions of this Hon'ble Court and this amendment not only violates for collateral and extraneous considerations. Apart from this notification some confidential instructions were circulated to the competent authorities in the state which have neither been notified nor announced in any other manner.' '9. the allotments has been made under the rules as amended vide, Notification No. G. S. R. 78/P. A. 1/14/S-59/Amd (2)/64, dated the 7th March 1964, and published in the Gazette of March 20 1964, and are thus in accordance with the rules. the petitioner was not given licence as he was found not suitable. the licences were to start functioning from 1st April 1964, and the rules governing their grant were notified well before that date. Other allegations are denied.'
At this stage, it will be also be instructive to set out the allegations of the petitioner in paragraphs 10 and 11 of the petition and the reply of the State thereto:--
'10. That in accordance with the policy and rule as modified and referred to above, the Excise and Taxation Commissioner (Respondent No. 2) has been going round the State and making the Deputy Excise and taxation Court (competent authorities) to pass orders in respect of these liquor licences in accordance with either the aforesaid confidential instruction and/or his own or his superiors' sweet with the pleasure even though some of these orders are directly opposed to the views previously expressed by the competent authorities in their recommendations to him while sitting with the Deputy Commissioner and the District Excise and Taxation Officer of the District concerned. This has also happened in the present case, for although the name of the petitioner has been placed by the committees consisting of the Deputy Excise and Taxation Commissioner (Respondent No., 1) Deputy Court (Respondent No. 6) and Excise and Maghar Mal respondent No. 7 at the lowest position yet Respondent no. 1 on the 27th March 1964 is said to have announced at Amritsar (where Respondent No. 2 had called him and also the Excise and Taxation Officer Gurdaspur) that the licence in question is granted to the said Shri Maghar Mal Respondent No. 7.' '10. It is denied. Allotment of liquor vends has been made according to the rules on the subject. Other allegations have been replied to above.'
'11. That the reason attributed for the grant or allotment of the country liquor shop in question to respondent No. 7 contrary to the previous orders of the competent authority embodied in his recommendation to Respondent No. 2 is that he is not only a partner and person interested in the foreign liquor shop of Pathankot auctioned in the name of Ram, Lal s/o Ghansham Das but also the father-in-law of Ved Kumar who is a partner of Nath it may be mentioned has obtained these licences in this manner in almost all the districts of this State.' '11. It is denied.'
(10) According to the petitioners he came to know that he had been passed over in the mater of grant of licence in form L-14 on the 31st March 1964 when he was asked by the inspectorate staff of the Excise Department to hand over the balance stock of liquor in the shop. if any to the new allottee. It may be mentioned that the petitioners was a licence for the country liquor vend of the year 1963-64 in partnership with Sarvshri Chaman Lal and Harbans Singh. It is in these Circumstances that the present petitioner has been filed.
(11) In paragraph 16 of the petition the following 11 grounds of attack are set out against the grant of licence to respondent No. 7.
'1. Because the new rules have been made for collateral and extraneous considerations;
2. Because new rules have been made with a view to stultifying and evading the consequences of decision of this Hon'ble Court;
3. Because the new rules are in excess of the rule-making power of respondent No. 2;
4. Because the new rules are illegal and unconstitutional by reason and of excessive delegation and vesting the licensing authority with naked arbitrary and capricious discretion without any sound guides criteria or principles;
5. Because the rules have been published after the date fixed for inviting applications for allotment and after a solemn assurance had been given before this Hon'ble Court that the licences in question would be auctioned and not allotted thereby leaving many a large number of persons under the impression that the new system had been abandoned for good;
6. Because the new rule had been framed mala fide and at a time when the entire picture of the applicants and their particulars was before Respondents Nos. 1 to 5 and thus a policy which benefited their favorites was devised:
7. Because besides the above rule secret and confidential instructions (both written and oral) were given to the competent authorities which instructions had no legal authority or force;
8. Because the new rules do not provide for any redress or remedy against the illegal or unjust allotments;
9. Because the petitioner has decidedly superior claim to allotment of the licence in question and the discretion property exercised by the competent authority could not be interfered with in the circumstances of this case;
10 Because Respondent No. 1 had exercised his power of allotment in favour of the petitioner had could not review his own order under the law so as to allot the licence to an absolute outsider with no merits and claim;
11. Because under the Act and the rules respondent No. 1 is the only authority empowered to grant licences and as such his subsequent decision being not independent and having been taken under the directions and influence of his superior s could not be sustained in law.'
(12) The learned counsel for the petitioner has not urged all of them before us but has only raised the following contentions:--
1) That Rules 36-A and 36-B are ultra vires the Act;
2) That the allotment could only be made by the District Excise and Taxation Officer who is the competent authority under the Act, but in the present case the competent authority has not exercised it independent mind in the matter but has made the allotment sin accordance with the direction issued to it by the higher authorities and therefore the grant is not in accordance with the law;
3) That the order of grant is not a speaking order and therefore also is not in accordance with the rules;
4) That the recommendations on the basis of which grants were made were not made under the new Rules 36-A and 36-B because the recommendations were made on the 14th of March, 1964, whereas rules were published on the 20th of March, 1964, and thus there has been no compliance with the rules;
5) That the rules are made under Section 50 of the Act whereas they could only be made under Section 58 of the Act; and
6) That the grant has been made to person who are disqualified under Rule 14 on the very basis which is hit by Rule 14 and is therefore illegal.
Besides the aforesaid contentions no other contention has been raised before us. We however propose to deal with the first two contentions only because in our view both these contentions have merit and their decisions would set at rest the present controversy.
(13) In order t appreciate the first contention it will be proper to set out the various provisions of the statute and the rules. Section 3 of the Punjab Excise Act 1913 (Punjab Act 1 of 1913) defines 'Collector ' and the 'Financial Commissioner ' as follows:
'3(3) 'Collector' includes any revenue officer in independent charge of a district and any official appointed by the State Government to a discharge throughout out any specified local area the functions of a collector under this Act.
3(11) 'Financial Commissioner ' shall when there are more Financial Commissioner than one be constructed as meaning one or more of the Financial Commissioners.'
Chapter VI deals with Licences, Permit sand Passes the Section 35 in this Chapter deals with grant of licenses for sale of liquor and is in these terms:
'35 (1) Grant of licenses for sale-Subject to the rules made by the Financial Commissioner under the powers conferred by this Act the Collector may grant licenses for the sale of any intoxicant within his district.
(2) Ascertainment of public opinion-Before any licence is granted in any year for the retail sale of liquor for consumption on any premises which have not been so licensed in the preceding year, the Collector shall take such measures in accordance with rules to be made by the State Government in this behalf as may best enable him to ascertain local public opinion in regard to the licensing of such premises.
(3) A license for sale in more than one district of the Punjab shall be granted by the Financial Commissioner only.'
Section 58 deals with powers of the State Government to make rules whereas Section 59 deals with the powers of Financial Commissioner to make rules. At one time the learned counsel for the petitioner sought to contend that Rules 36-A and 36-B--the impugned rules--were framed by the State Government under Section 58 of the Act but later on this position was given up and it was accepted that the impugned rules could not only be made by the Financial Commissioner under Section 59 of the Act. It is also apparent from the opening words of the notification wherein it is clearly specified that the amended rules have been framed under S. 59 of the Act. Therefore it is not necessary to further dilate on this matter. Rule s36-A and 36-B which were added by a notification published on the 20th of March, 1964, are in these terms:
'36-A. The following licence are granted by allotment:
(i) A license in form L. 14-A for the retail vend of country spirit for consumption 'on' and 'off' the premises.
(ii) A license in form L. 14-A for the retail vend of country spirit for consumption 'off' the premises.
(iii) A license in form L. 14-B for the retail vend of country spirit on special occasions.
36-B The following procedure is prescribed for the grant of licenses for allotment:
(1) Applications for the grant of licenses specified in Rule 36-A shall be sent to the Deputy Commissioner of the district concerned.
(2) The applicant shall indicate in the application his complete address and the name or names of the vends which he desires to be allotted to him. He shall also give the details of his total experience in the liquor trade showing the date or month and year of joining the trade.
(3) The application shall be accompanied by an affidavit of the applicant to the effect that he is not a black-listed person and a convict of any non-bailable offence by a Criminal Court or of any offence under the following acts:
(i) The Punjab Excise Act, 1914 (1 of 1913) of the Opium Act (1 of 1878).
(ii) The East Punjab Opium Smoking Act, 1948
(iii) The Pepsu Opium Smoking Act, 1954
(iv) The East Punjab Molasses (Control) Act, 1948.
(v) The Power Alcohol Act, 1948.
(vi) The Dangerous Drugs Act, 1930.
(4) No application from any person whose name is no the list of persons debarred from holding licenses in Punjab shall be considered.
(5) The applicants received in respect of all vends in a district shall forward them to Government with his recommendation keeping in view the past experience reputation and suitability of the applicant.
(6)The allotment of vends to the various applicants shall be made by the Collector.
(7)(i)The successful allottee shall pay by way of security an amount equal to one-sixth of the minimum annual quota fixed for the vend within seven days of the allotment of the vend within seven days of the allotment of the vend(s) of him. This amount shall be refundable at the end of the year unless it is forfeited lapsed or adjusted against any dues earlier. If any person whom a licence /licenses has /have been allotted fails to make to the deposit of the amount of security equal to one-sixth of the still head duty on the annual minimum quota fixed for the vend or vends allotted to him or if h refuses to accept the licence or in the event of cancellation /suspension of licence subsequently the Collector may allot the vend or vends in question to any one and any deficiency in the still head duty and all expenses shall be recoverable from the defaulting allottee in the manner laid down the section 60 of the Punjab Excise act 1914 (1 of 1914)
(ii) The Collector may for any violation of the rules or conditions of the license particularly about the sale price and the deposit of the security or monthly lifting of quota or payment of till head duty thereon forfeit the security or any part of it.
(8) The licensee shall lift each month the proportionate quote for the month fixed for his vend (s) or deposit still head duty realizable thereon. In the even to any deficiency in the amount of still head duty realizable form the lifting of the full amount of still head duty the said deficiency may be realization from the amount of security shall be made good by the licensee within 7 days of such realization. In case the short lifting of proportionate for two consecutive months or the license falls to make up the deficiency in the amount of security within a period of seven days his license may be cancelled.'
The contention of the learned counsel for the petitioner is that both these rules are ultra vires section 35 of the Act. Section 35 has already been set out above and its language indicates that the grant has to be made by the Collector subject to rules can only regulate the manner in which and the circumstances under which it can be exercised. The rules cannot in any way whittle down or take away that it provides for the making of an application for grant to the Deputy Commissioner who nowhere figures as an authority under the Excise Act. Not only that the applications have to be scrutinized by the Deputy Commissioner of the district who has to forward them to the Government with his recommendations keeping in view the past experience reputation and suitability of the applicants. It appears that the rule-making authority was not oblivious to the provisions of section 35 it is provided that he allotment of vends has to be made by the Collector. The sum total of rule 36-B is that the discretion vested in the collector by the statute in the matter of grant has been virtually put at naught. This is obvious form the provisions of rule 36-B (1) and (5). Otherwise sending of the applications to the Deputy Commissioner of the district concerned their scrutiny by him and their transmission to Government by him with his recommendation have no meaning. The matter of grant thought technically left with the Collector is in fact and in substance taken away from him and he is left to the position of a rubber stamp. In this situation the learned counsel for the State frankly conceded that he could not with any justification argue that rule 36-B is intra vires section 35 of the Act. He further conceded that if rule 36-B is not intra vires rule 36-A will also go along with. it because both the rules are an integral part of each other. In this view of the matter it is not necessary to deal with the matter any further, particularly when this concession has been made after instructions from the State. Therefore it is held that rules 36-A and 36-B are ultra vires section 35 of the Act.
(14) This brings me to the considerations of the second contention which is more or less allied in some manner with the first contention. Before dealing with this contention it will be proper to set out how the allotment has been made of the country liquor vends in the instant case. Applications were invited by the District Excise and Taxation Officer by a notice published on the 21st of February, 1964. The applicants were to be forwarded to the Deputy Commissioner. At the time this notice was published licenses for the vend of country liquor could only be sold by auction. No amendment in the rules had been made whereby instead of auctioning the licences a provision had been made for their allotment. In the Government file on the subject of 'Allotment of country liquor vend for 1964-65' there is a letter dated on the 20th of February, 1964, from Shri M. M. Sahai Srivastava I. A. S. Deputy Secretary to Government Punjab Excise and Taxation Department to Shri Daljeet Singh I. A. S. Excise and Taxation Commissioner of the Division concerned. Then after the Deputy Commissioner and the Deputy Excise and Taxation Commissioner were to jointly made their recommendations to the Government on merits keeping in view the reliability financial suitability and experience in this trade of the applicants. These recommdatations were required to reach the Government by the middle of March 1964 at the latest for final approval. A copy of this letter was forwarded to all Deputy Commissioners in the State. It is provided in this letter that the Deputy Commissioners in the State. It is provided in this letter that the Deputy Commissioners recommendations about the country liquor vends should be made immediately without waiting for verification from the D. I. G, (CID) and that the verifications would be done at the Government level. The follow the joint recommendations of the Deputy Commissioner Jullundur Division, vide letter dated 21st of March, 1964, page 107 of this very file which have already been set out in an earlier part of this argument. At page 89 of the file there is a letter dated the 14th of March, 1964, form Shri Ajaib Singh, Deputy Inspector-General of Police C. I. D. to the Deputy Commissioner of Gurdaspur wherein with regard to the applicants of Gurdaspur District it is stated--
'Nothing has been found on the local police record or the C. I. D. record against the person mentioned in the list sent vide your letter under the reference except the following 16 persons who are considered undesirable for the grant of excise licenses for the resins as noted against their names.
It is significant that the petitioner is not one of these 16 persons. At page 109 of the file is a memorandum dated the 3rd of April, 1964, form the Deputy Excise and Taxation Commissioner Jullundar Division to all the Deputy Commissioner in Jullundar Division wherein it is stated--
'In the meeting convened for the purpose (allotment of country liquor vends for the year 1964-65), the C. M., Excise, Taxation and Capital Minister and Financial Commissioner (Taxation decided inter alia that where
(a) no applications have been received;
(b) all the applicants have been disqualified;
(c) the security is not deposited by the person who is offered the licence; or
(d) for any reason the licence is cancelled the Excise and Taxation Officer will invite the applications and the Deputy Excise and Taxation Commissioner and the Deputy Commissioner of the district will make the allotments in such cases. It was also decided by them that where there is a recommended person on the existing list and the person offered them licence does not deposit the security the licence should go to the second acceptable man or the existing list.'
(15) As I have already mentioned there is no order by the District Excise and Taxation Officer deciding the respective merits of the applicants regarding each licence. The applications were proceeded as already set out and a decision was taken by the Excise and Taxation Commissioner in constitution with the C. M. and the Minister concerned. That the decision was conveyed to the District Excise and Taxation Officer who merely gave effective to it by signing his name against the applicants name to whom it had been decided to allot the license. It is significant that the District Excise and Taxation under section 35 but merely carries out the decision arrived at by the higher authorities. It is settled law that if any authority has been vested with the power to grant a licence it is that if power is exercised by some other authority the exercise of that power will be wholly void. In this connection reference may be made to the decision of the Supreme Court in Commissioner of Police v Gordhandas Bhanji AIR 1952 SC 16. In the case the authority to grant and cancel a license for the erection of a building to a used for purpose of public amusement vested in the Commissioner of Police under the rules. The power did not vest to the State Government. The Commissioner of Police granted the licence for the erection of a cinema house. This sanction was later cancelled by the Commissioner of Police at the instance of the State Government. The cancellation was questioned by a person who had been permitted to construct this cinema hall. His petition was allowed by the Bombay High Court and the appeal by the Commissioner of Police to the Supreme Court failed. While dealing with the matter the Supreme Court observed as follows:--
'(26) We have held that the Commissioner did not in fact exercise his discretion in this case and did not cancel the license he granted. He merely forwarded to the respondent an order of concellations which another authority had purported Commissioner had before him objections which called for the exercise of the discretion regarding cancellation specifically vested in him by Rule 250. He was therefore bound to exercise it and bring to bear on the matter his own independent and unfettered judgment and decided for himself whether to cancel the license or reject the objections. That duty he can now be ordered to perform under section 45 (of Specific Relief Act).
* * * * * *
(28) The discretion vested in the Commissioner of Police under Rule 250 has been conferred upon him for public reasons involving the convenience safety morality and welfare of the public at large,. An enabling power of this kind conferred for public reasons and for the public benefit is in our opinion circumstances so demand. It is a duty which cannot be shirked or shelved nor it be evaded; performance of it can be compelled under section 45.'
Reference may also be made in this connection to Chanan Singh v. State of Punjab, 1963 Cur LJ 248, at p. 250. Hari Kishan Sharma v. Punjab State, ILR (1961) 2 Punj 831, at p. 845, Novelty Talkies Bhatinda v. Punjab State ILR (1960) 2 Punj 276 and Punjab State v. Mehr Chand, AIR 1959 Punj 222.
(16) In view of what has been stated above it cannot but he held that there was no valid allotment of the country liquor vends in this case. The learned counsel for the State frankly conceded so. It was admitted by him that the District Excise and Taxation Officer, who was the granting authority, had not exercised his independent judgment in the matter of allotment and therefore he was not in a position to defend the impugned allotment.
(17) For the reasons given above we allow this petition quash the impugned allotment and direct that the matter of grant of country liquor licence should be decided afresh in accordance with the law. The petitioner would be entitled to his costs which are assessed at Rs. 250/-
(18) Petition allowed.