B. K. SOMASEKHARA, J.

( 1 ) THE petitioner held IMFL-24 licence of M/s. Goutam Wines at Yallur, kumool district bearing licence No. 21/1990-91 for the period from 1-10-1993 to 30-9-194. He had paid Rs. 18,750/- towards first instalment and for the balance of the licence fee of Rs. 56,250/- he had given the bank guarantee no. 1/93 dated 8-10-1993. In the meanwhile, the Excise authorities seized the shop and the licence inspection book etc. , regarding the petitioner on the allegation that he had violated the terms of the licence and a crime was registered in Crime Number 22/93-94 for an offence punishable under section 34 (a) read with Section 45 (i) and (ii) of the Andhra Pradesh Excise act and consequently his licence came to be cancelled under Rc. No. C2. 4317/3 dated 27-1-1994. The petitioner, thus prevented from continuing with the business under the licence, sought for return of the bank guarantee. The respondent No. 1, namely, the Prohibition and Excise superintendent, Kumool District refused to return the bank guarantee which was taken with Respondent No. 2 on the ground that the Commissioner of prohibition and Excise, Andhra Pradesh had issued instructions in Cr. Number 39115/95/8/ex/g2 dated 19-5-1995 not to return the bank guarantee where there were cases pending against the licensees and since the petitioner was involved in another crime, i. e. , Cr. No. 22/93-94 for an offence punishable under Section 34 (a) read with Section 45 (i) and (ii) of the A. P. Excise Act pending against him for the year 1994 the bank guarantee could not be returned to him. That is the stand taken by the respondents in the counter also.

( 2 ) MR. W. B. Srinivas, the learned Advocate of the petitioner has contended that there was no justification for the respondents to withhold the bank guarantee when the petitioner s licence was cancelled preventing him from pursuing the business under the terms of the licence and secondly, according to him, as per the settled law, merely on the ground that some other case was pending, such a bank guarantee which was given for the performance of the terms of the licence could not be withheld as has been done in the present case.

( 3 ) THE learned Government Pleader contends that in law, the petitioner is not entitled to the return of the bank guarantee which amounts to refund of licence fee which was payable in advance and further, the authority is entitled to forfeit such amount both under Rule 25 (4) and 25 (5-A) of the indian Liquor and Foreign Liquor Rules, 1970 (for short the Rules ). He has also placed reliance on Section 31 (3) of the A. P. Excise Act, 1968 to contend that the holder of a licence or permit shall not be entitled to any compensation for its cancellation or suspension nor to the refund of any fee paid or deposit made in respect thereof and particularly, in this case, the petitioner, having paid the licence fee in advance and when his licence was cancelled as stated above, is not entitled for the refund and return of the bank guarantee means that the licence fee paid in advance would be refunded and therefore, the petition has no merit.

( 4 ) THE simple question involved in this writ petition as on the admitted facts supra, are nothing more than to consider whether the respondents or the concerned authority can refuse to return the bank guarantee to the petitioner in view of the cancellation of the licence and in view of the pendency of another case against him. The second ground has no merit in view of an unreported decision of this Court in W. P. No. 27294 of 1996 dated 20-12-1996 wherein it is declared that the mere pendency of criminal proceedings against the licensee whose licence is cancelled is no bar for the respondents to refund the licence fee to the petitioner/licensee. Regarding the first contention some examination of the law may be necessary.

( 5 ) MR. D. Vijaykumar, the learned Government Pleader for Prohibition and excise is right in pointing out that by virtue of the

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