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Bar licence holder cannot claim proportionate fee refund for NOC default:
A Division Bench of the has ruled that a bar licence holder is not entitled to a refund of for the period his licence remained suspended due to his failure to produce a from the local authority. The court set aside a Single Judge’s order that had directed the refund, holding the licensee solely responsible for the suspension.
The Facts: A Promise Unfulfilled
The case involves M. Ramasubba Reddy, a licence holder in Form-2B for running a restaurant and bar in Proddatur. His licence was renewed on after he deposited the first instalment of ₹9,27,000 and furnished a for the remaining amount. However, the renewal was conditional upon submission of an NOC from the within seven days, as per a circular dated .
Mr. Reddy submitted an on stamp paper declaring that he possessed a valid NOC, , and food licence, and undertook to produce the valid documents within a week. He later requested a month’s extension, citing political pressure for the delay. Before the authorities could act further, the High Court, in a separate writ petition filed by one B. Venkata Subba Reddy, found a violation of , and directed suspension of the licence. The Excise Superintendent, Proddatur, suspended the licence on , explicitly recording that it was for “contravention of specific provisions of Rule 6(V) of the Rules, 2005.”
Mr. Reddy did not challenge either the suspension or the High Court’s order. Subsequently, the State amended the Rules via dated , substituting the NOC requirement with a from the local authority. Mr. Reddy then obtained a and got his suspension revoked on . He later sought a refund of the for the suspension period ( to ), which the authorities rejected.
The Legal Battle Before the Single Bench
Mr. Reddy approached the High Court in W.P. No.15409 of 2011. A learned Single Judge allowed the petition, directing the State to refund the . The State’s objections—citing , , and the judgments in and —were held to be untenable. Aggrieved, the State filed the present writ appeal.
The Division Bench’s Analysis: Licensee’s Own Fault
The State, represented by Additional Advocate General , argued that the refund was unjustified because the suspension was a direct result of the licensee’s failure to produce the NOC, not merely because of the court order. They relied on a Division Bench decision in Commissioner, Prohibition and Excise v. T. Narsimha Goud (W.A. No.1137 of 2016), which had been upheld by the .
The Division Bench agreed. It noted that Mr. Reddy had submitted an promising to produce the NOC within seven days, later sought an extension, but never actually produced it. The suspension order specifically referenced both the court order and the contravention of Rule 6(V). The bench observed:
“In our considered opinion, writ petitioner is not entitled to refund of amount in question. This is so for the reason that submission of NOC was required to be submitted along with application seeking renewal in terms of applicable rule. Needful was admittedly not done despite an being submitted by writ petitioner besides submitting application seeking extension for the period for deposit of same.”
The court emphasized that Mr. Reddy had ample time to produce the NOC before the suspension was ordered on . It was only after the Rules changed in February 2009 that he obtained a and sought revocation. The bench concluded:
“In the given facts and circumstances, it is apparent that it is writ petitioner himself, who was responsible for turn of events. In case NOC had been deposited within stipulated period or even period till which order dated 31.07.2008 was passed, it would have been able to carry on its trade.”
Precedents Distinguished
The Single Judge had relied on , , and . The Division Bench found these authorities inapplicable, noting that the present case turned on the licensee’s own default rather than any fault of the department.
The Final Verdict: State’s Appeal Allowed
The Division Bench set aside the Single Judge’s order dated and dismissed Mr. Reddy’s writ petition. The appeal was allowed with no order as to costs.
Key Observations from the Judgment: - “Writ petitioner is not entitled to refund of amount in question.” - “It is apparent that it is writ petitioner himself, who was responsible for turn of events.” - “If NOC had been deposited within stipulated period… it would have been able to carry on its trade.” - “Decision… in Commissioner, Prohibition and Excise v. T. Narsimha Goud… is clearly relevant and applicable.”
The ruling clarifies that a licence holder cannot shift the burden of a suspension caused by his own non-compliance onto the State exchequer. The case serves as a reminder that undertaking to produce required documents carries legal consequences, and failure to do so—even when a court order triggers suspension—does not entitle the licensee to financial relief.
