1. Application for liquor license — Dispute over grant of license to another party — Challenge to the competence of the authority passing the order. (Para 1 , 2 )
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1958 Supreme(SC) 120
SUPREME COURT OF INDIA
30th September, 1958.
S.R. DAS, C.J.I., N.H. BHAGWATI, B.P. SINHA, K. SUBBA RAO AND K.N. WANCHOO, JJ.
Messrs. Ghaio Mal and Sons, Appellants
Versus
State of Delhi and others, Respondents.
Civil Appeal No. 481 of 1957.
Advocates Appeared
Mr. Gurbachan Singh, Senior Advocate (Mr. R. S. Narula, Advocate, with him), for Appellants; Mr. C. K. Daphtary, Solicitor-General of India (M/s. H. J. Umrigar & T. M. Sen, Advocates, with him), (for Nos. 1 to 4) and Dr. J. N. Banerjee, Senior Advocate (Mr. P. C. Agarwala, Advocate, with him) (for No. 5), for Respondents.
Advocates:
C.K.DAFTARY, GURCHARAN SINGH, H.J.Umrigar, J.N.BANERJI, P.C.AGRAWAL, R.S.NARULA, T.M.SEN
C.K.DAFTARY, GURCHARAN SINGH, H.J.Umrigar, J.N.BANERJI, P.C.AGRAWAL, R.S.NARULA, T.M.SEN
A communication conveying the sanction of a competent authority is not the sanction itself. Without a properly authenticated order or evidence that the competent authority actually exercised its mind, an inter-departmental letter cannot be treated as a valid legal order.
Headnote:(A) Liquor License Rules, 1935 - Rule 1 of Ch. 5; Excise Act - Section 59; Government of Part C States Act, 1951 - Sections 36 and 38(3); Constitution of India - Article 166.
(B) A document that merely conveys the sanction of a competent authority is not equivalent to the sanction itself. An inter-departmental communication stating that an authority is "pleased to approve" does not constitute a validly authenticated order if the actual order is missing from the record and the communication lacks the necessary authentication (Paras 9, 11).
(C) When a writ of certiorari is issued, the quasi-judicial body must produce the entire record to ensure the authority has not exceeded its jurisdiction. Non-production of records defeats the purpose of such writs (Para 6).
Facts of the case:
Appellants applied for a foreign liquor license following a vacancy. The license was granted to another party. The appellants challenged this, alleging that the competent authority empowered to grant the license never actually passed an order. The respondents relied on a letter from an Under Secretary to the Excise Commissioner stating the competent authority had approved the grant, although no signed order existed in the files.
Findings of Court:
The court found that the records did not show the applications were ever placed before the competent authority. The letter produced was an inter-departmental communication and not the order itself. It did not purport to be authenticated as an order of the competent authority.
Issues: Whether a letter from an Under Secretary conveying the approval of the competent authority constitutes a valid order granting a license when no actual order signed by the competent authority exists on record.
Ratio Decidendi: A communication conveying a sanction is distinct from the sanction itself. For an order to be valid and attract the presumption of official acts under Article 166 of the Constitution, it must be properly authenticated. An inter-departmental letter lacking specific authentication and merely reporting a decision cannot be treated as the order of the competent authority (Paras 9, 11).
Result: Appeal allowed.
Legal Category Hierarchy
Table of Contents
2. Whether the license was granted by the competent authority — Validity of a communication conveying sanction as the order itself. (Para 3 , 4 , 8 )
3. Absence of record showing the competent authority's application of mind — Inter-departmental communication conveying sanction is not the sanction itself. (Para 5 , 6 , 7 , 8 , 9 )
4. A document conveying a sanction cannot be equated with the sanction itself; orders must be issued by the legally competent authority. (Para 9 )
5. Order granting license quashed — Mandamus issued to fill vacancy by inviting fresh applications from suitable parties. (Para 11 )
6. What is the legal distinction between a document conveying a sanction and the sanction itself?
A document that conveys a sanction is merely an inter-departmental communication. It cannot be equated with the sanction itself, as it only purports to communicate an order rather than being the order of the competent authority. (Para 9 )
7. Does authentication by a competent official validate an order if the competent authority never actually made the decision?
No. Authentication by a competent official does not validate an order if the legally competent authority never actually made the decision or concurred in it; the order remains a nullity. (Para 9 , 10 )
8. What is the procedural requirement for a quasi-judicial body upon the issuance of a writ of certiorari?
The quasi-judicial body must produce the entire record before the superior court so the court can verify that the body exercised its jurisdiction within the limits fixed by law. (Para 6 )
Judgement
S.R. DAS, CJI. : The facts material for the purpose of disposing of this appeal by Special Leave are shortly as follows : The appellants before us claim to have been dealers in foreign liquor since 1922 and to have, before the partition of the country, held licenses in Forms L-1, L-2, L-10 and L-11 at Amritsar, Sialkot and Multan. The appellants allege that in 1945 they had also secured a license in Form L-2 in respect of some premises in Chawri Bazar, Delhi but that the operation of the said license had to be suspended on account of the unsuitability of the Chawri Bazar premises. Then came the communal riots in the wake of the partition of the country and that license could not be renewed. In 1951 the appellants applied to the Chief Commissioner, Delhi (Ex. 1) for licenses both in Forms L-1 and L-2 in respect of Karolbagh or at any place in Delhi. On May 17, 1951 the Home Secretary to the Chief Commissioner by letter (Ex. 2) conveyed to the appellants the sanction of the Chief Commissioner to the grant to them of a license in Form L-2 in respect of Karolbagh, Delhi. This license has ever since then been renewed from year to year. In 1954 a vacancy arose in respect of a license in Form L-2 on account of the closure of the business of Messrs. Army and Navy Stores of Regal Buildings, New Delhi, which held such a license. Accordingly on January 21, 1954 the appellants submitted an application (Ex. 4) to the Deputy Commissioner for the grant of a foreign liquor license in Form L-2 in the aforesaid vacancy. In that application the appellants stated, inter alia, that they were prepared to operate it in such a part of Delhi as may be determined by the authorities." Not having received any reply for nearly 3 months and apprehending that interested persons were endeavouring to cause hindrance in the matter of the granting of the license to them on the plea that the appellants had no premises in Connaught Place the appellants on March 11, 1954, wrote a letter (Ex. 5) to the chief Commissioner in which, after pointing out that Karolbagh where they had their L-1 license was in New Delhi, the appellants stated : "In any case, we have already made it clear in our application which we made to the Deputy Commissioner, Delhi on the 21st January 1954 that we are prepared to operate this license in any locality which the authorities might deem proper". This letter was acknowledged by the Personal Assistant to the Chief Commissioner who, on March 15, 1954, stated (Ex. 6) that the "application No. nil dated 18-3-1954 on the subject of grant of foreign liquor license in Form L-2" had been forwarded to the Home Secretary, Delhi State for disposal. Exhibit 7 to the petition is in important document. It is a letter dated May 2 , 1954, addressed by the appellants to the Excise and Taxation Commissioner stating that "with a view to avoiding any possible objection as to locality etc. we have secured suitable premises also in the Connaught Place area, New Delhi in which area has occurred a vacancy on account of the surrender of this license by Messrs. Army and Navy Stores". The letter concluded with the request that early orders be passed on their application. On July 30, 1954, the appellants wrote a long letter (Ex. 8) to the Chief Commissioner claiming justice in the matter of their application for the L-2 license. In the second paragraph of that letter it was stated :
"It is now being acclaimed by the party concerned and their friends that they have succeeded in removing the only obstacle that stood in the way of their getting the said L-2 license by so arranging matters that our application has been kept back by the Excise Commissioner and that only five or six other applications of firms without much merit in them have been forwarded to you in order that they might have a smooth sailing as against those applicants."
The appellants prayed that the Excise Commissioner might be directed to forward all records concerning the case to the Chief Co
