IMPORTANT POINT
Relation of partners arises for contract, not from statute. Firm’s debt can be realised from the partners.

JUDGMENT :

SHIVA KIRTI SINGH, J.

1. The appellant is a partnership firm and is aggrieved by dismissal of its Writ Appeal No.1055 of 2002 by an order dated 9th January 2008 wherein the Division Bench has chosen to place complete reliance on an earlier Division Bench judgment dated 24th June 2005 in W.A.No.1151 of 2005 (M/s. Hotel Highway & Anr. v. N.K. Subhin & Ors.).

2. The issue falling for consideration is mainly one of law relating to scope and interpretation of a proviso to Rule 13A(5) of the Foreign Liquor Rules as in force at the relevant time in the State of Kerala. Subsequently it appears that Rule 13A, dealing with grant of different kinds of excise licence, along with proviso has been renumbered as Rule 13B w.e.f. 1.4.2003. The relevant proviso needs to be noticed :

“Provided further that no defaulter of abkari arrears due to the Government shall be permitted to renew the licence unless he produces from the Excise Department a certificate to the effect that he has cleared 50% of the abkari arrears pending at the time of renewal of the licence.”

3. The facts of the case need not detain us for long except noting that the appellant firm was having a FL-3 licence to run a bar attached to a hotel at Kundara in Kollam District. The partnership firm was re-constituted on 01.10.1995 and one Shri J. Sasikumar was admitted as one of the partners. On 11.05.2001 the request of the appellant firm for renewal of its FL-3 licence was rejected by the Excise Commissioner on the ground that one of the partners had conducted abkari business in the year 1981-1982 and had incurred dues to the Government of Rs. 70 Lacs which had further grown on account of interest and until 50% of the abkari arrears pending at the time of renewal of the licence was cleared, the licence of the appellant could not be renewed. Appellant preferred writ petition in the High Court of Kerala wherein by an interim order the respondent authorities were directed to grant renewal for the year 2001-2002 on the condition of payment of Rs.20 Lacs towards the arrears in addition to the licence fee. On such payment the licence was renewed for that year. But the writ petition came to be dismissed on 02.04.2002 on a finding that a partnership firm could not claim a separate juristic identity as it is only a totality of every partner and so long one or more partner suffers from liability or disqualification, the licence could not be renewed till the statutory requirement of the relevant rule was satisfied. The appellant filed appeal bearing W.A.No.1055 of 2002 before the Division Bench. By an interim order dated 15.04.2002 appellant’s licence was ordered to be renewed for the year 2002-2003 on similar condition requiring payment of additional amount of Rs.20 Lacs over and above the licence fee. On compliance, the licence was renewed accordingly. On account of another interim order dated 13.05.2003 appellant’s licence was renewed for the year 2003-2004 also on its paying Rs.10 Lacs in addition to the licence fee. The appellant’s licence got further renewal upto the year 2007-2008 only on the strength of earlier additional deposits of Rs.50 Lacs in total. The writ appeal itself was heard on merits and dismissed by the impugned judgment dated 09.01.2008 following earlier Division Bench judgment dated 24.06.2005.

4. On behalf of appellant our attention was drawn to a subsequent development mentioned in I.A.No.1 of 2009 filed in this appeal. Paragraphs 9, 10 and 11 of the I.A. disclose that the Government of Kerala declared an Amnesty Scheme (One Time Settlement Scheme) on 26.05.2008 wherein, if the other conditions were satisfied, a lump sum payment of 75% of the principal dues could be sufficient to waive the remaining principal as well as all the penalty and interest. Taking advantage of that scheme the defaulting partner Mr. J. Sasikumar along with his partners of the other partnership paid 75% of the principal amount, i.e., Rs.53,09,440/- and as a result the Excise Depart