IN THE SUPREME COURT OF INDIA
CIVIL APPELLATE JURISDICTION
CIVIL APPEAL NO. 615 OF 2013
(Arising out of S.L.P. (C) No. 34902 of 2009)
Ropan Sahoo & another ... Appellants
Versus
Ananda Kumar Sharma & others ...Respondents
WITH
CIVIL APPEAL NO. 616 OF 2013
(Arising out of S.L.P. (C) No. 35166 of 2009)
State of Orissa & others ....Appellants
Versus
Ananda Kumar Sharma & others ....Respondents
J U D G M E N T
Dipak Misra, J.
Leave granted in both the special leave petitions.
2. Questioning the legal acceptability of the order dated 16.9.2009
passed by the Division Bench of the High Court Orissa at Cuttack in
WP(C) No. 3913 of 2009 whereby the High Court entertained the writ
petition preferred by the first respondent herein and quashed the
grant of exclusive privilege and the licence granted in favour of
Ropan Sahoo and Mukesh Kumar, the respondent Nos. 5 and 6 in the writ
petition, the present appeals have been preferred by the grieved
persons as well as by the State.
3. Shorn of unnecessary details the facts which are requisite to be
stated are that Mukesh Kumar, the respondent No. 6 before the High
Court, had submitted
an application for grant of licence to open an
IMFL “Off” shop in Ward No. 16, Bargarh Town for the year 2007-08 on
28.1.2008. As a report was submitted that the proposed site was
violative of sub-rule 1(c) of Rule 34 of Orissa Excise Rules, 1965
(for short “the Rules”), the said respondent chose to withdraw the
application for the aforesaid year by indicating personal reasons.
In
respect of the next financial year he again submitted an application
for grant of licence at the same place. The Collector, Bargarh,
invited objections and pursuant to the same the writ petitioner filed
his objection on 18.10.2008.
The Inspector of Excise submitted a
report on 2.2.2009 stating about the existence of a bathing ghat,
Vishnu temple, bus stand and petrol pump within the prohibited
distance, but recommended for relaxation of restrictions.
The
Collector, Bargarh, recommended for opening of the shop for remaining
part of the year 2008-09 in relaxation of the restrictions and the
Excise Commissioner also recommended to the Government on 19.2.2009
for sanction by relaxing of the restrictions.
As the factual matrix
would reveal, the State Government on the basis of the recommendations
invoked the power of relaxation under Rule 34 of the Rules and granted
licence in favour of the said respondent for the remaining period of
2008-09.
Be it noted, in a similar manner relaxation was granted for
opening of the IMFL/Beer (‘ON’ shop) at Hotel Sawadia for the period
from 2.3.2009 to 31.3.2009.
4. Being grieved by the grant of said licences, the first respondent
invoked the jurisdiction of the High Court under Article 226 of the
Constitution principally contending that the report submitted by the
Excise Inspector with regard to certain aspects, namely, location of
the bathing ghat, etc. were not factually correct; that the
recommendations made by the authorities were highly improper and
unwarranted; and that the relaxation had been granted in an extremely
arbitrary manner and, therefore, the grant of exclusive privilege and
the licence deserved to be axed. The High Court perused the documents
brought on record, called for the record to satisfy itself in what
manner the power of relaxation was exercised, and after perusal of the
record and on consideration of to various recommendations, came to
hold that as far as the respondent No. 5 was concerned for sanction of
a beer parlour ‘ON’ shop licence for the remaining period of 2008-09,
no order was passed relaxing the Rules before the grant of exclusive
privilege. As far as the sanction of IMFL Restaurant licence in
respect of 6th respondent was concerned, the High Court expressed the
similar view.
We think it apt to reproduce the ultimate conclusion
recorded by the High Court: -
“13. Proviso to Rule 34 specifically prescribes that
restriction on the minimum distance as mentioned in Clause (d)
and (e) may be relaxed by the State Government in special
circumstances. There being no order by the State Government
relaxing the aforesaid two Clauses in relation to the minimum
distance between the proposed shops and the place of worship
i.e. the Vishnu Temple, petrol pump and bus stand, the order of
the State Government approving the sanction/grant of exclusive
privilege in favour of opposite parties 5 and 6 cannot be
sustained in law.”
5. After so stating the High Court referred to Section 41 of the Bihar
and Orissa Excise Act, 1915 (for brevity “the Act”) and observed as
follows: -
“Rule 34 of the Rules castes a statutory duty on the Department
to pass order with reasons relaxing the restrictions. When
there has been infraction of such statutory duty, the same
cannot be covered under Section 41 of the Act.”
6. Being of the aforesaid view, the High Court quashed the privileges and
the licences granted in favour of the private respondents therein.
7. We have heard Mr. Bhaskar P. Gupta, learned senior counsel for the
beneficiaries of the grant, Mrs. Kirti Renu Mishra, learned counsel
for the State and Mr. G. Ramakrishna Prasad, learned counsel appearing
for the respondent No. 1 in both the appeals.
8. At the very outset we may note that it is the admitted position that
both the proposed sites come within the prohibited area as envisaged
under Rule 34(1)(d) and (e) of the Rules. Rule 34 of the Rules
stipulates that the places in respect of which licences for
consumption of liquor on vendor’s premises should not be granted. The
said Rule reads as follows: -
“34. Licences for shops for consumption of liquor on vendor’s
premises not to be granted at certain places : (1) No new shop
shall be licensed for the consumption of liquor on the vender,
premises –
a) in a marketplace, or
b) at the entrance to market place, or
c) in close proximity to a bathing-ghat, or
d) within at least five hundred meters from a place of
worship, recognized educational institution, established
habitant especially of persons belonging to scheduled
castes and labour colony, mills and factories, petrol
pumps, railway stations/yard, bus stands, agricultural
farms or other places of public resort, or
e) within at least one kilometer from industrial, irrigation
and other development projects areas, or
f) in the congested portion of a village :
Provided that the restriction on the minimum distance as
mentioned under clauses (d) and (e) may be relaxed by the State
Government in special circumstances.
(2) So far as practicable, an established liquor shop
licensed for the consumption of liquor on the premises shall not
be allowed to remain on a site which would not under sub-rule
(1) be permissible for the location of a new shop.
(3) In areas inhabited by Scheduled Tribes, country spirit
shops shall not be licensed to be placed immediately on the side
of a main road or in any other prominent position that is likely
to place temptation in their way.”
9. On a perusal of the aforesaid Rule, it is crystal clear that the State
Government has been conferred with the power to relax the restriction
on the minimum distance as mentioned in clauses (d) and (e) pertaining
to the minimum distance. As has already been indicated hereinbefore
there is no cavil that the material on record pertained to the
relaxation of the restriction as prescribed under clauses (d) and (e)
of sub-rule (1) of Rule 34 of the Rules. The High Court, as the
impugned order would reflect, has quashed the order of
approval/sanction and the consequent grant of licences on the
foundation that there has been no order relaxing the restrictions on
the minimum distance as mentioned in Clauses (d) and (e) relating to
the proposed shops in exercise of powers of the said Rule by the State
Government and, in any case, no reasons have been ascribed. Thus, the
question that emanates for consideration is whether the High Court has
appositely appreciated the note sheet in the file and arrived at the
correct conclusion or not.
10. The High Court, as demonstrable, has reproduced the communications
made by the Joint Secretary to the Government by fax vide memo No.
1159/Ex. dt. 2.3.2009 addressed to the Excise Commissioner about the
Restaurant “ON” shop licence in favour of Mukesh Kumar at “RASSOI
RESTAURANT” in the premises of Hotel ‘Sawadia Palace’, Ward No. 11,
Bargarh Municipality over Plot No. 1622, Khata No. 2542/362, in the
district of Bargarh for the remaining period of 2008-09 and also the
memo No. 1161/Ex. dated 2.3.2009 in respect of Beer Parlour “ON” shop
licence in favour of Ropan Sahoo over Plot No. 1391/2260, Khata No.
393 in Ward No. 16 of Bargarh Municipality, in the district of Bargarh
for the remaining period of 2008-09. The communication that has been
made in favour of Mukesh Kumar reads as follows: -
“In inviting a reference to your letter No. 1214 dt. 19.2.09 on
the subject cited above, I am directed to say that Govt. after
careful consideration have been pleased to grant IMFL Restaurant
“ON” shop Licence in favour of Sri Mukesh Kumar at “RASSOI
RESTAURANT” in the premises of Hotel “Sawadia Palace”, Ward No.
11, Baragarh Municipality over Plot No. 1622, Khata No.
2542/362, in the district of Baragarh for the remaining period
of 2008-09 by relaxing rule 34 of the Orissa Excise Rules, 1965
and fixation of MGQ as per Excise Duty, Fee Structure and
Guidelines for 2008-09. The Excise Administration may be held
responsible if the existing nearby excise shops are affected by
the new “ON” shop.”
As far as grant of beer parlour “ON” shop in favour of Ropan Sahoo is
concerned, the communication vide memo No. 1161/Ex. dated 2.3.2009 is as
follows: -
“In inviting a reference to your letter No. 1380 dt. 25.02.09 on
the subject cited above, I am directed to say that Govt. after
careful consideration have been pleased to sanction Beer Parlour
“ON” shop Licence in favour of Sri Ropna Sahoo over Plot No.
1391/2260, Khata No. 393/330 in Ward No. 16 of Bargarh
Municipality, in the district of Bargarh for the remaining
period of 2008-09 subject to condition that the district excise
officials will be held responsible if the nearby existing excise
shops are affected by opening of the new shop.”
11. As no reasons were assigned, the High Court called for the file. On a
perusal of the file the High Court referred to the recommendations
and, eventually, opined that no order had been passed relaxing the
Rule in respect of the said shops by the Commissioner-cum-Secretary to
Government, Department of Excise. The thrust of the matter is whether
any order has been passed relaxing the restrictions imposed by the
Rules and does it contain reasons. As the first communication would
reveal, it is clearly mentioned therein that the Government has
relaxed the restrictions under Rule 34 and as far as the second
communication is concerned, it has been stated that the Government has
sanctioned grant of licence. The learned counsel for the State has
referred to the note sheet to highlight that the orders had been
passed in consonance with the proviso to Rule 34(1) of the Rules and
on that basis the communications were issued.
12. We have bestowed our anxious consideration and carefully perused the
note-sheet. On a studied scrutiny of the same it is luculent that the
Excise Commissioner, Orissa, Cuttack, had recommended the proposals
and in support of the same had furnished seventeen documents. The
note sheet has referred to the report which states that the proposed
site exist at 350 meters from Vishnu Temple, 250 meters from the
petrol pump, 200 meters from the private bus stand and 50 meters from
the irrigation canal. The recommendation which forms part of the note
sheet reads as follows: -
“The Collector, Bargarh, in his report at P-84/C has stated that
the local consumers demand for consumption of liquor within the
hotel premises. Illegal liquor cases have been booked in the
nearby area and hence, there is demand for the “ON” shop. The
apprehension that the existing IMFL “OFF” shop will be affected
after opening of the proposed “ON” shop is ruled out, because
the consumers of “OFF” shop are different from “ON” shop. The
customers of “ON” shop has to consume liquor inside the Hotel
premises with peg system and pay service charge, whereas such a
facility is not available with “OFF” shops. Besides, the
bathing ghat is not nearby as objected. But only one irrigation
canal is flowing at a distance of about 50 meters. Therefore,
Collector has recommended for relaxation of rule 34 of Orissa
Excise Rules, 1965 for sanction of the proposal in the interest
of Govt. revenue and to check illegal liquor trade.”
13. The objections of A.K. Sharma and that of the Secretary, Human
Society, Bargarh have also been considered. Thereafter, the Joint
Secretary has recommended thus: -
“In the above circumstances and in view of recommendation of the
Excise Commissioner, Orissa, Cuttack, it may kindly be
considered to grant IMFL Restaurant “ON” shop licence in favour
of Sri Mukesh Kumar at “Rasooi Restaurant” in the premises of
Hotel “Sawadia Palace” Ward No. 11, Bargarh Municipality over
Plot No. 1622, Khata No. 2542/362, in the district of Bargarh,
for the remaining period of the year 2008-09 by relaxing rule 34
of Orissa Excise Rules, 1965 and MGQ fixed as per the Excise
Duty, Fee Structure and Guidelines for 2008-09. The District
Excise Administration may be held responsible if the existing
nearby excise shops are affected by the new “ON” shop.”
14. The Commissioner-cum-Secretary to Government, Excise Department, has
endorsed the same in the following terms: -
“Notes from P.10/N explain. We had received a representation
from Shri A.K. Sharma, Exclusive Privilege Holder of IMFL ‘Off
Shop’ No. 4 of Bargarh (P.23-22/C) against the proposal received
from Collector, Bargarh and endorsed by the Excise Commissioner,
Orissa for opening of IMFL ‘On Shop’ at Rasoi Restaurant in the
premises of Hotel Sawadia Palace, Ward No. 11 of Bargarh. The
objections raised by Shri Sharma have been enquired into by the
District Administration. In this regard, the letter received
from Collector, Bargarh at P.34-32/C may please be glanced
through. The objections of Shri Sharma are found to be devoid
of merit. The report received from the Excise Commissioner,
placed below, may also be perused. The Excise Commissioner had
recommended to consider the sanction of IMFL ‘On Shop’ at Rasoi
Restaurant in favour of Shri Mukesh Kumar situated in the
premises of Hotel Sawadia Palace, Ward No. 11 of Bargarh. The
proposal may kindly be considered and approved.”
15. The same has been signed by the Minister of Excise and Tourism,
Orissa. As far as the second shop is concerned, the note sheet
referred to the recommendations of the Collector, which reads as
follows: -
“...the Collector, Bargarh has reported that both the petrol
pumps are situated in such a manner that the shops will have no
effect at all on the proposed Bar and hence he has suggested for
relaxation of restrictive provisions of rule-34 of Orissa Excise
Rules, 1965.
The Collector, Bargarh has also reported that the proposed
Beer Parlour shall cater to the needs of the consuming people of
the locality besides fetching Govt. revenue and checking illicit
sale of Beer, since the population of the area is increasing.
Only 3 (three) IMFL “OFF’ shops, one IMFL ‘ON’ and one Beer
Parlour are functioning in the entire town area having
population of more than one lakh. There is feasibility and
potentiality for opening of the Beer Parlour ‘ON’ shop, since
illegal sale of liquor has been detected in the area. The
proposed shop will check illicit trade of liquor. He has also
stated that the opening of new Beer Parlour will not affect the
nearby IMFL shops in the Municipality.”
16. The Joint Secretary after referring to the objections and the
recommendations of the Excise Commissioner has passed the following
order in the note sheet: -
“In the above circumstances and in view of recommendation of the
Excise Commissioner, Orissa, Cuttack, it may kindly be
considered to sanction Beer Parlour ‘ON’ shop licence in favour
of Sri Ropna Sahu over plot No. 1391/2260, Khata No. 393/330 in
Ward No.16 of Bargarh Municipality in the district of Bargarh
for the remaining period of 2008-09 subject to condition that
the district excise officials will be held responsible if the
nearby existing shops are affected by opening of the new shop.
Government orders may kindly be obtained in the matter.”
17. Thereafter, the Commissioner-cum-Secretary to Government in the
Department of Excise has endorsed the same and the Minister, Excise
and Tourism has signed in approval thereof and thereafter the movement
of the file took place. On the basis of the aforesaid orders the
communications have been sent.
18. On a keen scrutiny of the entire note sheet we have no hesitation in
our mind that the Commissioner-cum-Secretary had accepted the
recommendations of the Collector and the Excise Commissioner, and upon
perusal of the note sheet of the Joint Secretary had recommended for
consideration and approval by the Minister of Excise and Tourism. The
Minister, as stated earlier, has signed and thereafter, the file had
travelled back for communication. We really fail to fathom the
reasons ascribed by the High Court that there is no order whatsoever
relaxing the Rules before the order of grant of exclusive privilege
was passed. After the Minister had signed on the file on the basis of
the recommendations sent by the Commissioner-cum-Secretary which was
founded on the recommendations of the Joint Secretary who had
concurred with the recommendations of the Collector and the Excise
Commissioner, communications were made by the Joint Secretary. The
note sheet clearly indicates application of mind to the relevant facts
which pertain to the restrictions on the distance from the proposed
site and the endorsement by the Minister. In this context, we may
refer with profit to the decision in Tafcon Projects (I) (P) Ltd. v.
Union of India and others[1], wherein the High Court, after taking
note of the order passed by the Secretary who, in anticipation of the
formal approval by the Minister concerned, had allowed the party to go
ahead for appointing the appellant therein as “Event Manager”. This
Court referred to the earlier order passed by the Secretary granting
permission and the latter order in which he had mentioned that the
party may be allowed to go ahead with the proposal for making the
preliminary arrangement in anticipation of the formal approval of the
Minister and expressed the view that the High Court had erred in
coming to hold that the Secretary had not taken any final decision
with regard to the appellant therein as the Event Manager.
Thereafter, the Court adverting to the justification of the conclusion
of the High Court that no final decision had been taken by the
Minister expressed thus :-
“12. It appears also from the record as noted by the High
Court, that the file had been pending with the Minister for some
time and despite expressions of urgency, the Minister did not
sign the file since he was busy with “elections and other
important matters”. What the High Court has overlooked is that
the relevant file was again placed before the Minister on
30.8.1999 by JS&FA with a note which stated that Tafcon had been
appointed as the “Event Manager” for three years. This was
signed by the Minister with the endorsement “file returned”.
13. The High Court deduced from this signature of the Minister
that no approval was in fact granted by him to the appointment
of M/s. Tafcon either expressly or impliedly. We are unable to
agree. Where the Minister has signed the various notes put up
before him seeking his approval, his signature, without more,
must mean that he has approved the steps taken by the
Department.”
19. Be it noted, in the said case, the Court referred to Rule 3 of the
Transaction of Business Rules, 1961 which provided for all business to
be conducted on general or special directions of the Minister-in-
charge.
20. In the case at hand, Rule 7 of the Orissa Government Rules of Business
made under Article 166 of the Constitution confers the power on the
Minister to pass an order in respect of a matter pertaining to his
portfolio. The effect of such a delegation has been dealt with by a
three-Judge Bench in Narmada Bachao Andolan v. State of Madhya
Pradesh[2] wherein it has been held that: -
“The decision of any Minister or Officer under the Rules of
Business made under Articles 77(3) and 166(3) of the Constitution
is the decision of the President or the Governor respectively and
these Articles do not provide for `delegation’. That is to say,
that decisions made and actions taken by the Minister or Officer
under the Rules of Business cannot be treated as exercise of
delegated power in real sense, but are deemed to be the actions of
the President or Governor, as the case may be, that are taken or
done by them on the aid and advice of the Council of Ministers.”
21. The Bench to fructify its opinion has placed reliance on State of U.P.
& Ors. v. Pradhan Sangh Kshettra Samiti & Ors.[3] and pronouncement by
the seven-Judge Bench in Shamsher Singh v. State of Punjab & Anr.[4]
For the sake of completeness, we may note with profit what has been
stated in paragraph 27 of the aforesaid decision: -
“27. In Dattatraya Moreshwar v. The State of Bombay & Ors.[5],
a Constitution Bench of this Court held that an omission to make
and authenticate an executive decision in the form mentioned in
Article 166 does not make the decision itself illegal, on the
basis that its provisions were directory and not mandatory.”
22. In this regard we may quote a passage from Sethi Auto Service Station
and another v. Delhi Development Authority and others[6] : -
“14. It is trite to state that notings in a departmental file
do not have the sanction of law to be an effective order. A
noting by an officer is an expression of his viewpoint on the
subject. It is no more than an opinion by an officer for
internal use and consideration of the other officials of the
department and for the benefit of the final decision-making
authority. Needless to add that internal notings are not meant
for outside exposure. Notings in the file culminate into an
executable order, affecting the rights of the parties, only when
it reaches the final decision-making authority in the
department, gets his approval and the final order is
communicated to the person concerned.”
23. In State of West Bengal v. M. R. Mondal and another[7] it has also
been held that an order passed on the file and not communicated is non-
existent in the eye of law.
24. In the present case it is luminous that the file had travelled to the
concerned Joint Secretary of department who had communicated the
order.
The High Court has opined that there is no order by the State
Government relaxing the restrictions enshrined in clauses (d) and (e)
of Rule 34(1) of the Rules in relation to the minimum distance between
the proposed shops and the Vishnu Temple, petrol pump and bus stand
and at a latter part of the judgment has expressed the opinion that
there has been infraction of statutory Rule, namely, Rule 34 which
casts a statutory duty on the department to pass on order with reasons
relaxing the restrictions.
We are disposed to think that the High
Court, as far as the first part of the opinion is concerned, has been
guided by the factum that the Commissioner-cum-Secretary in his
recommendation to the Minister of Excise and Tourism had not
specifically referred to clauses (d) and (e) of Rule 34(1) of the
Rules.
It is pertinent to state here that it is perceptible from the
note sheet that the Secretary had referred to the proposal received
from the Collector, endorsement made by the Excise Commissioner, the
objections raised by the objectors and also expressed the view that
the said objections were devoid of merit and, accordingly, recommended
for approval.
The cumulative effect of the note sheet goes a long way
to show that
every authority was aware of the distance and recommended
for relaxation of clauses (d) and (e) of sub-rule (1) of Rule 34 and
the concerned Minister had endorsed the same.
Non-mentioning of the
Rule or sub-rule, in our considered opinion, does not tantamount to
non-passing of an order. The dominant test has to be the application
of mind to the relevant facts. The second part of the order, if
properly appreciated, conveys that no reasons have been ascribed.
The
proviso to Rule 34(1) lays a postulate that the distance as mentioned
under clauses (d) and (e) may be relaxed by the State Government in
special circumstances.
The recommendations made by the Collector
refers to the circumstances, namely, that there is a demand for
consumption of liquor within the hotel premises; that illegal liquor
cases have been booked in the nearby area; and that the proposal is in
the interest of the Government revenue.
The said recommendations, as
is reflectible, have been concurred with by the higher authorities
and, hence, there can be no trace of doubt that they constitute the
special circumstances.
25. In view of our aforesaid analysis, the appeals are allowed and the
order passed by the High Court is set aside. It is further clarified
that if the Government, if so advised, can invoke the power under the
proviso to Rule 34(1) of the Rules for the purpose of relaxation for
grant of exclusive privilege and licence pertaining to the said shops
in respect of current and subsequent financial years. In the facts
and circumstances of the case, the parties shall bear their respective
costs.
……………………………….J.
[K. S. Radhakrishnan]
……………………………….J.
[Dipak Misra]
New Delhi;
January 22, 2013
-----------------------
[1] (2004) 13 SCC 788
[2] AIR 2011 SC 3199
[3] AIR 1995 SC 1512
[4] AIR 1974 SC 2192
[5] AIR 1952 SC 181
[6] (2009) 1 SCC 180
[7] AIR 2001 SC 3471
-----------------------
21
