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IN THE HIGH COURT OF BOMBAY
M.L. Pendse and N.D. Vyas, JJ.
The Collector of Bombay and others .... Appellants.
Versus
Meena Narayan Idnani of Bombay .... Respondent.
Appeal No. 211 in Writ Petition No. 391 of 1993, decided on 1-8-1994.
Advocates appeared :
C.J. Sawant with L.V. Kapse, for the appellants.
Smt. V.B. Thadani, for the respondent.
Section 49-See Bombay Prohibition (Privilage Fees) Rules, 1954, R. 5.
Rule 5-Bombay Prohibition Act, 1949-Section 49-Liquor-Selling of. State Government empowered for granting of licence for a contract not for any service rendered.
The plain reading of the section makes it clear that the State Government has exclusive right or privilege of selling the liquor and the fees charged is to be considered inclusive of rent or consideration for transfer or grant of such a right or privilege. It is therefore obvious that the Government enters into a contract with the holder of the licence for carrying out the trade or privilege which exclusively vests in the State Government and while conferring the right or the priviledge, the amount charged is not for any service rendered and consequently the concept of requirement to render service for charging fees does not arise.
The first question which requires determination is whether the death of one of the partners out of the two results into dissolution of the firm and whether the surviving partner can carryon the business as sole proprietor without seeking transfer of licence. In court judgment, the answer to the question is obvious. As mentioned hereinabove, Rule 21 demands that when the licence is sought by more than one person who are carrying on business in partnership then the partnership is required to be declared to the Collector before the licence is granted and the names of the partners are entered jointly in the licence. It is obvious that the licence is secured by the respondent and her husband in the capacity as partners of the flrm and not in their individual capacity on the death of one of the partners out of the two the partnership automatically stands dissolved and it is not open for the surviving partner to carrying on business in the character of a partner Of a dissolved arm. It is always open for surviving partner to carryon business as a sale proprietor but the capacity as the sale proprietor is different and distinct from the capacity of partner in dissolved firm. In case the sole proprietor desires to hold licence by deletion of the name of the deceased partner, then such request amounts to transfer of the licence. It is not in dispute that the present policy of the State Government is not to issue fresh licences and for transfer of licence as prescribed by Rule 5, the fees chargeable shall be the same as for grant of renewal or continuance of the licence, Rule 6 of the Bombay Prohibition (Privilege Fees) Rules, 1954 also lays down the same principle. The contention of Smt. T that the appellants permitted the respondent to carryon business till the end of March 31 should he construed as accepting the claim that there is no transfer of the licence, cannot be accepted. The rules permit the Collector to allow the surviving partner to continue the business till the end of the year, obviously with a view to prevent immediate closure of the business. The enabling provision is to minimise the hardship due to death and the facility granted by the Collector cannot be construed as accepting the claim that on the death of one of the partners out of two the licence is not required to be transferred. In our judgment, the objection raised by the Government Auditor was absolutely correct and in accordance with law and the Single Judge with respect, was in error in assuming that the appellants were recovering large amounts from innocent citizens. The learned Single Judge was also in error in observing that view taken by the Commissioner of Excise and Prohibition by order dated September 26, 1988 in appeal preferred by M/s. Ruby Wines was correct. The observation of the Commissioner that in case the partner expires, the change required to be effected is natural one and the licence is not transferred from one name to another by deleting the name of the deceased partner is entirely incorrect and unsustainable in law. The learned Single Judge was in error in holding that the observations of the Commissioner were accurate.
The respondent alongwith her husband was carrying on business in the name and style of M/s. J. Vikram Sales (India) at Shop No. 4, Laxmi Ratan Bldg., L.H. Road, Matunga Road (West), Mahim, Bombay-400016. The business of the firm was sale of Indian made foreign Liquor. The Government of Maharashtra has framed rules known as the Bombay Foreign Liquor Rules, 1953 and Rule 4 inter alia provides that any person desiring to import and sell foreign liquor by wholesale shall apply to the Collector in Form F.L./A-IA. Rule 5 prescribes that the Collector may make inquiries for verification of the details stated in the application and grant the licence in form F.L.I. on payment of fee. The licence granted under Rule 5 shall not be beyond March 31 next following the date of the commencement of the licence. Rule 21 provides that no person shall be recognised as partner of the trade and import licence for the purpose of licence unless the partnership has been declared to the Collector before the licence is granted and the names of the partners entered into jointly in the licence. It is not in dispute that the licence in form F.L.I. was initially granted in the joint names of the respondent and her husband in year 1975 and the respondent and her husband carried their business in partnership.
2. The husband of the respondent expired some time in year 1987 and thereupon the respondent approached the appellants requesting that their children were minor and their names should be entered alongwith the respondent in the licence. The respondent was informed by letter dated July 7, 1987 that the names of the minor children cannot be added as partners and the licence could be only transferred in the name of the respondent as a sole proprietor. The respondent was informed that the partnership between the respondent and her husband had come to an end on the death of the respondents husband.
The respondent was desirous of deleting the name of her late husband and continuing the business of sale of liquor in her own name. The request for deletion of the name of the respondents husband was granted on the respondent making payment of Rs. 10/-. The licence was renewed on April 1, 1989 in the sole name of the respondent.
3. On August 30, 1989 the appellants addressed letter to the respondent that the State Government has issued instructions and the respondent will have to pay full fees for the deleting of the name of the deceased partner. The respondent was called upon to pay a sum of Rs. 30,000/- to the State Government within 15 days. On behalf of the Government, Commissioner of State Excise, Maharashtra State, Bombay had issued circular on November 18, 1992 inter alia claiming that the Accountant General, Maharashtra State has raised objection in recovery of fees under Rule 6 of the Bombay Prohibition (Privilege Fees) Rules, 1954. The circular recites that the Accountant General has pointed out that when there are two partners in the business and one of them expires or withdraws, the entity of the firm is changed from partnership to proprietory and in such case provisions of Rule 5 would apply i.e. fee equal to the licence fee shall be recovered. It is necessary at this juncture to make reference to the Bombay Prohibition (Privilege Fees) Rules, 1954. The rules are framed in exercise of powers conferred by section 143 of the Bombay Prohibition Act,. 1949 and Rule 5 inter alia provides that the fee payable by any licensee for the privilege of having transferred of his licence from one name to another
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