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2003(7) Supreme 397
SUPREME COURT OF INDIA
(From Allahabad High Court)
V.N. Khare, CJI., Brijesh Kumar and Arun Kumar, JJ.
State of U.P. & Ors. -Appellants
versus
Jagjeet Singh & Ors. -Respondents
Civil Appeal No. 4673 of 1997
With
Civil Appeal No. 5024 of 1999
And
Civil Appeal No. 5828/1999
Decided on 16-10-2003
Counsel for the Parties :
For the Appearing Parties : Anoop G. Chaudhary, Rakesh Dwivedi, M.L. Varma, Sr. Advocates, Ashok K. Srivastava, R.C. Verma, Mukesh Verma, Manish Shanker, Ms. Shalini Kumar, Abhishek Chaudhary, Ms. V. Mohana, Mukesh Prasad, Arvind Kumar Shukla, Shahid Anwar, Ms. Archana Singh, Prashant Kumar, Yatish Mohan, E.C. Vidya Sagar, Advocates.
Held : Section 59 empowers the District Magistrate to close any liquor shop at such time or for such period which he may consider necessary for preservation of peace. In cases where some riot or unlawful assembly is apprehended in vicinity of such a shop a Magistrate or any police officer above the rank of constable, who is present may order for closure of the shop. The proviso to Section 59 casts a duty on the licensee to close the shop without any order by any authority, where a riot or unlawful assembly occurs at the place where the shop is situated. Apart from providing for closure of the shop to maintain peace, Section 59 does not provide for anything either way for awarding compensation or remission on account of such a closure. We then find that licence is issued under Section 24 of the Act subject to the provisions of Section 31. Section 31 under "clause (b)" provides that the licence would be subject to such restrictions and on such conditions as the Excise Commissioner may direct generally or in particular. Condition No.27 of the licence, quoted above, prescribes the days on which the shop would remain closed, i.e. first of every month, the Independence Day, the Republic Day, on birthday of Mahatma Gandhi and apart from such days on any three days during the excise year which would be declared by the licencing authority to be the close days. Then in negative form it provides that no compensation will be given for closure of shop on the aforesaid days. The rest, it leaves to inference. There is no provision in same terms for no compensation for closure on such days other than indicated in Condition No.27 of the licence. We may then consider Rule 34 of the U.P. Excise (Tender-cum-Auction) Rules, 1991 (as amended in 1992) which also deals with the subject of remission and compensation. Clause (i) deals with cases of delayed supply of the intoxicant in which case no remission/damages of bid money is allowable. Clause (ii) however, as indicated earlier, says that there would be no claim in case of a shop or some shops auctioned in a group is closed for any reason nor in case of curtailment at any time in the hours of sale. It is to be noted that Rule 34 does not contain any blanket bar against any claim of damages or remission on account of closure. The heading of Rule 34 no doubt mentions about no claim for delay in supply or closure or not opening of shop but its contents in clauses (i) and (ii) do not provide plainly that no remission or damages would be payable for closure or non-opening of a shop. The manner in which clause (ii) is worded, it appears that it governs the shops auctioned in a group. It restricts the scope of claim of remission or damages in a case a shop or some shops auctioned in a group, remain closed for any reason. A group of shops is one whole and in case such group of shops is only effected partially no remission or refund of bid money can be claimed. (Para 12)
The position which finally emerges out is that an application for remission/damages for closure of shops in entirety auctioned in a group as is the case in the appeals in hand would be maintainable. But it is for the authorities concerned to consider the merit of the claim for remission/damages and pass any appropriate order looking to the facts and circumstances of the case in accordance with law. It would be the position as it relates to cases prior to the amendment of Rule 34 in 1998. (Para 17)
JUDGMENT
Brijesh Kumar, J.-The common question involved in all the above noted three appeals is as to whether the contractors running the liquor shops under licence, issued by the State, in Uttar Pradesh are entitled to remission of licence fee for the period during which the liquor shops were ordered to be closed under Section 59 of the U.P. Excise Act, 1910 (for short the Act ). The licensees in all the three cases, being the highest bidders for the group of shops in question, their bids were accepted and thus they were running the shops in the concerned areas. In the month of December, 1992, the structure in Ayodhya was demolished. As a sequel thereof disturbances and tension prevailed at several places in the State and the shops involved in the first two appeals noted above, were ordered to be closed during the period curfew was imposed in the areas concerned. In so far it relates to the group of shops involved in the third appeal, they were ordered to be closed during the period of imposition of curfew due to communal disturbances between November, 1991 January, 1992, in Aligarh.
2. In the above noted Civil Appeal No. 4673 of 1997, the High Court by means of the impugned judgment, quashed the order, rejecting the request of the respondent to allow remission and to pay compensation and remanded the matter to the authorities to reconsider their applications under paragraphs 179 and 190 of the Excise Manual and it was also directed that the amount as may be found liable for remission shall be paid to the licensees with interest @ 18 p.a. In the other appeal No. 5024 of 1997, the High Court, while quashing the order refusing to give remission, directed the State and its authorities to adjust the licence fee for the given period with interest @ 12 p.a. In the third appeal, namely, civil appeal No. 5828 of 1999, the court found that the contractor was allowed remission partially, which is in the discretion of the Government and as to in what proportion the remission is liable to be allowed would not be a matter to be decided in writ proceedings and for that purpose licensee may seek his remedy elsewhere.
3. The relevant facts for the purposes of this case, which admit of no dispute, are that in the State of Uttar Pradesh grant of exclusive privilege to manufacture or sale of liquor, at the relevant time was being given under a licence by auction system. The highest bidder would be issued licence to run the liquor shops. The auction would be held of one shop or group of shops in a particular area. The licensees in the above noted appeals had made bid for group of shops which were accepted by the authorities and the licences were issued to them for sale of liquor on the basis whereof they have been running the shops but the difficulty arose when curfew was imposed during certain periods due to disturbances and communal tensions.
4. Before entering into the merits of the matter, it may be appropriate to peruse some of the relevant provisions of the U.P. Excise Act, 1910 and the U.P. Excise Manual.
5. Section 24 of the U.P. Excise Act provides for grant of exclusive privilege of manufacture and sale of liquor and it reads as under:
"24 Grant of exclusive privilege of manufacture, etc.-
Subject to the provisions of Section 31, the Excise Commissioner may grant to any person a license for the exclusive privilege:
(1) of manufacturing or of supplying by wholesale, or of both; or
(2) of selling by wholesale or by retail, or
(3) of manufacturing or of supplying by wholesale, or of both, and of selling by retail.
any country liquor or intoxicating drug within any local area."
Section 31 provides for issue of license subject to certain conditions and restrictions. The provision reads as under :
"31. Form and conditions of licences, etc.-Every licence, permit or pass granted under this Act shall be granted-
(a) on payment of such fees (if any),
(b) subject t
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