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H.P. Ramakrishna Rao Vs. the Assistant Collector and Licensing Authority, Hosur and ors. - Court Judgment

LegalCrystal Citation
SubjectConstitution
CourtChennai High Court
Decided On
Case NumberW.P. No. 7446 of 1982
Judge
Reported inAIR1983Mad361
ActsConstitution of India - Article 226; Tamil Nadu Prohibition Act, 1937 - Sections 23(4)
AppellantH.P. Ramakrishna Rao
RespondentThe Assistant Collector and Licensing Authority, Hosur and ors.
Appellant AdvocateT. Chengalvarayan, Adv. for ;S.R. Vijendra Rao, Adv.
Respondent AdvocateThe Advocate-General Assisted by M.A. Sadanand, Adv.
Cases ReferredKuppuswami v. State of Tamil Nadu
Excerpt:
.....natural justice. - - ' a reading of the above rule will clearly indicate that it relates to a final order of suspension as substantive punishment and not an interim order of suspension pending enquiry for contravention of any of the provisions of the act and the rules. it is well established that normally the rules are made to provide for matters which are not covered by the main act. ' based on the said statement of objects and reasons the petitioner's learned counsel contends that the reason given there in will clearly indicate the legislative intention in adding sub-section (4) to section 23. a perusal of the said provision contained in the statement of objects and reasons will indicate the legislative intention in adding sub-section (4) to section 23. a perusal of the said..........any of the provisions of the act or the rules, made thereunder or the conditions of the licence. the licence shall not be entitled to a compensation on account of suspension or cancellation; provided that, before proceeding under this rule the commissioner shall give the licensee a notice in writing stating grounds on which it is proposed to take action and requiring him to show cause against it within such time not exceeding 14 days as may be prescribed in the notice.'a reading of the above rule will clearly indicate that it relates to a final order of suspension as substantive punishment and not an interim order of suspension pending enquiry for contravention of any of the provisions of the act and the rules. the learned government pleader would contend that under section.....
Judgment:
ORDER

1. The petitioner has filed this writ petition for the issue of a writ of certiorari to quash the proceedings of the first respondent dt. 10-9-1982 suspending the petitioner's licence to vend arrack for the excise year 1982-83.

2. The sixth respondent herein made a surprise inspection of arrack shop No.11 of Hosur Town in Dharmapuri district on 20-8-1982 at about 10 a.m. along with the third and fifth respondents. At the time of the inspection one Raja was found selling arrack in the above arrack shop of which the petitioner is the licencee for the year 1982-83 and six plastic cans of 50 litres capacity each fitted with taps were found in the adjoining room within the licenced premises. Of them three cans were found to contain illicit arrack of 10, 5 and 12 litres. As the arrack is to be sold in bottles as bottled by the blending unit and no arrack shall be sold loose, the petitioner was found to have contravened R.12 of the Tamil Nadu Arrack (Retail Shop) Rules 1981, hereinafter referred to as the Rules. Immediately the cans were entrusted to the Inspector of Police Prohibition Enforcement Wing, Hosur for registering a case and the third respondent was asked to initiate action against the petitioner for contravention of the rules through the licencing authority, viz. the first respondent. Accordingly the first respondent ordered suspension of the licence in his proceedings dated 10-9-1982, after issuing a show cause notice to the petitioner and after persuing his explanation. According to the petitioner, Raja who is found to have sold arrack within the premises was not under his employment, that he is not connected with the six cans said to have been found by the inspecting staff that he is not selling any loose arrack in his shop and that he is selling bottled arrack as supplied by the wholesale arrack vendor. Aggrieved by the said said suspension, the present writ petition has been filed.

3. Though in the writ petition the petitioner has denied that the cans containing illicit arrack were found in his shop and that the man who was found selling illicit arrack was not under his employ, it is not possible for this court to go into the truth or otherwise of the allegations set out in the show cause notice in these proceedings as grounds for suspension of the licence. Further, since the matter is pending consideration by the authorities, this court cannot investigate that question of fact at this stage.

4. The petitioner in this writ petition has made two legal submissions and they are : (1) that in the show cause notice proceeding the suspension of the licence, the petitioner has been given only six hours' notice and that in gross violation of the rules and that such a short notice, as six hours is no notice in law and therefore, any action taken for suspension of the licence is void for violation of the principles of natural justice. (2) That the Tamil Nadu Arrack (Retail Shop) Rules 1981, do not enable the first respondent to pass an order of interim suspension of the licence pending enquiry and tht R.20 contemplates only a final order of suspension and not an interim order and, therefore, the impugned order should be taken to have been passed without any authority by the first respondent.

5. As far as the first question is concerned, it is no doubt true that the show cause notice dt. 9-9-1982, directs the licence to show cause within six hours from receipt of that notice as to why action should not be taken to suspend the licence for the irregularity referred to therein. But the fact remains that even within the short period of six hours given in the show cause notice the petitioner was able to file an explanation on the same day i.e., on 9-9-1982 and that explanation has been considered by the first respondent before the impugned order of suspension was passed as is seen from the order itself. Having regard to the fact that the petitioner has in fact filed an explanation and that was considered by the first respondent before passing the impugned order, the fact that the notice does not give a reasonable time cannot vitiate the impugned order for violation of the principles of natural justice. To find out whether the principles of natural justice have been duly followed one has to see whether the affected party has the opportunity to put forward his objections and the objections were considered. In this case, though the show cause notice give six hours time for filing the objections, the petitioner has in fact filed his objections and that had been considered before the impugned order was passed. Therefore, the impugned order cannot be said to have violated the principles of natural justice.

6. The second contention raised by the petitioner involves the scope of R. 20 of the rules. According to the learned counsel for the petitioner R. 20 of the rules contemplates only final order of a suspension being passed as a substantive punishment for violation of the rules and it does not contemplate an interim order of suspension pending enquiry. The said rule is as follows-

'20. Suspension or cancellation of licence : (1) The Commissioner or any such officer authorised by him in this behalf may without prejudice to any other proceedings which may be taken against the licencee, by an order in writing, suspend or cancel the licence or forfeit the deposit made under these rules, if the licencee or any person in his employment contravences any of the provisions of the Act or the Rules, made thereunder or the conditions of the licence. The licence shall not be entitled to a compensation on account of suspension or cancellation; Provided that, before proceeding under this rule the Commissioner shall give the licensee a notice in writing stating grounds on which it is proposed to take action and requiring him to show cause against it within such time not exceeding 14 days as may be prescribed in the notice.'

A reading of the above rule will clearly indicate that it relates to a final order of suspension as substantive punishment and not an interim order of suspension pending enquiry for contravention of any of the provisions of the Act and the Rules. The learned Government Pleader would contend that under Section 23(4) of the Prohibition Act, the licensing authority has the power to pass an order of interim suspension pending enquiry and the fact that the first respondent has referred to in the impugned order Rule 20 of the Rules instead of Section 23(4) of the Prohibition Act will not invalidate the order so as long as the authority has the power to pass the impugned order under some statutory provision.

7. The learned counsel for the petitioner would contend that the Rules under which the arrack shop was auctioned and the licence was granted to the petitioner for selling arrack and therefore the right of the authority to cancel or suspend the licence have to be decided with reference to the provisions in the Rules and not with reference to the provisions in the Prohibition Act. It is not possible for me to agree with the learned counsel for the petitioner when he says that the Rules are self-contained Rules and, therefore, the authorities cannot travel beyond those rules. As a matter of fact, the Rules have been framed by the Government in exercise of the powers conferred by Sections 17-B, 17-C and 18-C read with Section 54 of the Tamil Nadu Prohibition Act, 1947. Therefore, we cannot disassociate the rules from the Act under which they have been made. It is well established that normally the rules are made to provide for matters which are not covered by the main Act. Therefore in respect of matters covered by the Act, normally the rules are silent. Naturally if the rules have not provided for interim suspension of a licence, one has to see whether the main Act under which the Rules are made has provided for such an action.

8. Section 23 (1) and (2) enables the State Government or the Collector or the prescribed authority as the case may be, to cancel or suspend a licence in certain contingencies, Section 23 (3) provides that before any licence or permit is cancelled or suspended under sub-sections (1) or (2), the holder of the licence or permit shall be given an oppurtunity to state his objection within a reasonable time not ordinarily exceeding 14 days, and any representation made by him in this behalf shall be duly taken into consideration before final orders are passed. Sub-section (4) of S. 23 which is material in this case is set out below:-

'Notwithstanding anything contained in sub-section (3) so far as it relates to suspension of any such licence or permit, where a prime facie case has been made out the State Government or the Collector or the prescribed authority, as the case may be, may, at any time and for reasons to be recorded in writing, suspend any such licence or permit and in such a case, it shall not be necessary to give an oppurtunity to the holder of the licence to permit to state his objections.'

9. This sub-section was added by Section 7 of the Tamil Nadu Prohibition (Second Amendment) Act 1981. According to the learner counsel for the petitioner, even sub-section 4) of Section 23 cannot be constructed as conferring a power to pass an interim suspension order pending enquiry and that it merely provides for a final order of suspension being passed as a substantive punishment without giving an oppurtunity to the concerned person. According to him sub-section (3) and sub-section (4) serve the same purpose of conferring a power on the authorities to suspend the licence by way of substantive punishment and the only difference between the two is while under sub-section (3) an opportunity to the holder of the licence is necessary, under sub-section (4) no such oppurtunity to the holder of the licence is necessary if a prima facie case has been made out. In support of this contention the learned counsel refers to the objects and reasons for bringing in sub-section (4). In the statement of objects and reasons for the Tamil Nadu Prohibition Amendment Act of 1981 (T. N. Act 51 or 1981) it has been stated as follows:-

'The Government have also decided that the authorities granting licence under the Act shall be empowered to suspend them without giving the holder thereof any oppurtunity to state his objections, where a prima facie case has been made out and that where illicit arrack is seized, such arrack may be destroyed after taking samples for production before court.'

Based on the said Statement of Objects and Reasons the petitioner's learned counsel contends that the reason given there in will clearly indicate the legislative intention in adding sub-section (4) to Section 23. A perusal of the said provision contained in the Statement of Objects and Reasons will indicate the legislative intention in adding sub-section (4) to Section 23. A perusal of the said provision contained in the Statement of Objects and Reasons will indicate that the legislative intention is far from clear and definite. Though it refers to the decision taken that the authorities should be empowered to suspend the licence without giving the holder thereof any opportunity to state his objections, it seems to suggest that the oppurtunity to the holder of the licence which is required under sub section (3) should be dispensed with and the latter clause which refers to the provision being applied only if a prima facie case has been made out, would in a way, indicate that the power under sub-section (4) should be used only when a prima facie case has been made out, would in a way, indicate that the power under sub-section (4) should be used only when a prima facie case is made out pending final decision in the matter. The use of the expression 'prima facie case' in sub-section (4) in a way indicates that the said provision is intended to apply only at an intermediary stage when the final decision has not been taken. Thus, when the Statement of Objects and Reasons is not clear and is ambiguous as to whether the order thereunder is to be passed as a interim measure or as a substantive punishment, we have to construe the said sub-section (4) in conjunction with sub-section (3). If so done, it will be clear that sub-section (3) applies to a final order of suspension as a substantive punishment, while sub-section (4) is to be applied only when a prima facie case is made out for passing an interim suspension pending final orders for the alleged violation of the Act and the Rules by the holder of the licence. Nainar Sundaram, J. in Kuppuswami v. State of Tamil Nadu, : AIR1983Mad222 has held that the power under Section 23 (4) is not intended to be exercised for imposing a substantive punishment apart from the power under Section 23 (3), that the power under Section 23 (4) is intended to be exercised pending enquiry under Section 23 (3), that it contemplates the exercise of power where a prima facie case has been made out, that the prima facie case could have relevance only to the contingencies contemplated under Section 23 (1) and that if a prima facie case has been made out under any of the clauses (a) to (e) under Section 23 (4) can be invoked. The learned Judge also categorically ruled that Section 23 (4) is not and could not be constructed as a substantive provision for punishment in addition to Section 23 (3) and that it is meant to serve a different purpose namely to exercise the power of suspending pending enquiry. With respect, I am inclined to agree with the view taken by Nainar Sundaram, J. in that case.

10. Thus both the contentions raised by the petitioner fail and the writ petition is, therefore, dismissed. There will however be no order as to costs.

11. However, having regard to the long delay that has occurred in the passing if final order in respect of the alleged violation said to have been committed by the licencee, there will be a direction to the first respondent to pass final orders in relation thereto within two weeks from this date.

12. Petition dismissed.


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