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1997 Supreme(Bom) 229
IN THE HIGH COURT OF BOMBAY
(AURANGABAD BENCH)
R.G. Deshpande, J.
Uttam s/o Shamlal Jaiswal ..... Petitioner.
Versus
The State of Maharashtra others ..... Respondents.
Writ Petition No. 291 of 1994, decided on 6-5-1997.
Advocates appeared :
R.N. Dhorde, for the petitioner.
D.A. Gursahani, for respondent No. 2.
P.G. Godhamgaonkar, A.G.P., for respondent Nos. 1, 3 4.
Headnote:Sections 53 and 137-Evidence Act, 1872-Section 115-Right in liquor licence-Transferred to partners from individual name-Condition that-Original licensee to remain major beneficiary-Second partner not to claim any right on death or retirement of original licensee-After dissolving of partnership claim by second partner over right-Held-Second partner estopped from claiming illegal right.-Respondent No. 2 was estopped from contending that the conditions were illegal and were beyond the authority of the respondent Nos. 3 and 4, of the proper books of this petition, the respondent No.2 in an unambiguous terms stated that, I shall not have any claim to the license in the event of death of retirement of the original licensee. All these points if considered with proper perspective, would lead to an irresistible conclusion that the moment the petitioner withdraws from the partnership or the moment the partnership is dissolved, the respondent No.2 does not have any claim on the license in any manner. On the point of estoppel. Shri D, rightly relied on the decision reported in AIR 1993 SC 1596, in the matter of G. T.N. Textiles Ltd. v. Assistant Directors, ROT Commissioner and others, it is the case under the provisions of Essential Commodities Act. In this case, it is held that the conditions imposed by the authority having been accepted at the time of grant of licence and the authority having issued concerned notification under Section 3 of the said Act of 1955 read with Textile Control order 1986 Clause 16, well within his powers and competence could not be held to be violative of Article 19(1)(g) or Article 14 of the Constitution of India, more so when it was in the public interest.
Sections 53 and 137-Maharashtra Country Liquor Rules, 1973-Rule 28- Transfer of licence-From original to second partner-Collector seeking advice from higher authorities-Contention-When matter is within scope of collector, Governments involvement not warranted-Held-Higher authorities can always release directions in public interest.- The learned counsel appearing on behalf of the respondent No.2 strenuously argued that all the administrative powers in accordance with Rule 28 of the Rules, are vested in the Collector as regards transfer of license from one name to another or admit or delete the name of partner after the license is granted. It was not open for the Government to give suggestions or import certain conditions as regards, as is done in the present case. Court is afraid, this argument of the counsel cannot be accepted at all. If the powers are vested in her Collector, Excise and if the higher authorities give certain directions which are administrative powers vested in the higher authorities including the State, it is not incompetent for that higher authority to put certain relevant conditions in the interest of the State revenue while issuing the relevant licence to the applicant. Respondents counsel argued that if anything is done by the State against the statute cannot be said to be binding on the party agreeing to the same. He has also tried to argue that a party agreeing to any illegal terms or condition cannot be prevented from raising an objection to the same subsequently on that count. In short, he wanted to suggest that the conditions to which the respondent No.2 had agreed while getting his name inserted in the license CL III, were illegal and imposing of those conditions was beyond the authority of the State, the respondent No.2 could not be bound by the same. According to him, neither could it be binding on the respondent No.2 nor could he be estopped from contending that they were not binding on him. This argument cannot be entertained at this stage, much less when he has failed to show that there was no authority either in the State or in the Commissioner to impose reasonable conditions, which were for the effective implementation of the law and the Rules.
Sections 53 and 137-Partners rights-Partners name allowed on licence-Original holder to remain major beneficiary-After dissolution of partnership-Claim by second partner to have his name on licence. The secretary allowed-Held-Considering irrelevant factors secretary did wrong.-Secretary to the Government, Home Department by his order dated 23rd July, 1993. The learned Secretary, however, on the basis of some irrelevant facts, observed that there should be no trade in licences and after having obtained a licence to sell the country liquor, the licensee could not bring in and remove partners at will to suit his own convenience. In fact, these observations in the background of the present facts are absolutely irrelevant. Once having proceeded on the basis of valid licence granted in favour of the petitioner and further that after introduction of respondent No. 2 in the business and also insertion of his name in the licence on certain conditions, it was neither open for any of the parties to retreat therefrom nor was it open for the learned Secretary of the State to observe that the same was done as per the will of one particular party. If the partnership was at will then the question does not arise, if one of the partners wishes to dissolve the partner~ ship firm and also acts in furtherance thereof by giving necessary notice. The moment the said notice is issued and the moment the notice is received by the other party, the partnership which is at will, stands dissolved and for this proposition there need not be any counter opinion thereon as it is strictly in accordance with the provisions of Sections 41 and 43 of the Indian Partnership Act. It appears that the learned secretary-The respondent No. 1 has been swayed by some other irrelevant factors in the matter, such as, whether the petitioner had premises to run the business or that whether he had any knowledge to run the business, or that there was some other understanding between the parties than the terms of partnership. In view of the legal position these aspects were totally irrelevant as the matter was supposed to be looked at from the stage of grant of licence initially in the name of the petitioner and, then, after introduction of respondent No.2 in the business in the name of two. Whether the petitioner had knowledge or not, whether the petitioner had finances or not, were not the questions to be gone into by the learned Secretary nor were those points for decision before him. The learned Secretary was only supposed to give his finding as to whether in view of the terms and conditions of the licence and in view of the terms and conditions of the partnership whether the name of the respondent No.2 could be deleted or not from CL III licence.
Sections 137 and 138-Licence-Where the partnership dissolved on notice, then there was no right could be created in respondent No.2 to get the licence continued in his name and as such the name of respondent No. 2 was. liable to be deleted from licence.
Section 115-See Bombay prohibition Act, 1949, Sections 53 and 137.
Maharashtra Country Liquor Rules, 1973
Rule 28--See Bombay Prohibition Act, 1949, Sections 53 and 137.
2.The facts of the present case, in brief, are :
That the present petitioner - Uttam holds a licence of retail business in country liquor under Form No. C.L. III since 26th April, 1974, which was renewed from time to time. Petitioner -Uttam continued the said business till 1978 in the same style and capacity under the name and title "Madira Sagar".
3.In the year 1978 and, to be precise, on 21st November, 1978, the petitioner entered into an agreement with the respondent No. 2 - Pradeep for doing the business in partnership. This deed of partnership is dated 21st November, 1978, a copy of which is on the record of this petition at Annexure 'B'. Amongst other clauses of the partnership, there was a clause to the effect that the partnership was at will. It was vide Clause 6. Amongst other clauses, another relevant Clause was 15, as it originally stood, provided that upon the inclusion of the name of the respondent No. 2 - Pradeep in the licence i.e. C.L. III, the party No. 1 of the said agreement i.e. present petitioner - Uttam to retire from the partnership and in case the respondent No. 2 was desirous of petitioner's continuation in the partnership, the petitioner might continue in the same. It is also clear from the contents of the partnership deed that the petitioner had agreed to continue and remain in partnership so long as and till the excise licence stood in his name and the name of the party No. 2 - Pradeep was not incorporated in the licence. It would be relevant at this stage to refer to Clause 16, which is as under :
"The party No. 1 has agreed that upon his retirement from the partnership, the party No. 2 may continue the business under the name and style "M/s Madira Sagar", at the same terms and without any objection and dispute."
4.It was the contention of the respondent No. 2 that right from the beginning, the business in question belonged to him i.e. the respondent No. 2 and that the excise license was obtained in the name of the petitioner i.e. Uttam, only for some other purposes. In fact, for the purposes of the present petition, that question need not be gone into nor could that question be adjudicated in the present writ petition.
5.As observed above, in pursuance of the partnership deed, the partnership came to be registered with the Registrar of Firms on 3rd February, 1979 at Sr. No. 40/79. On 1st September, 1979, the petitioner applied to the Collector for inclusion of the name of the respondent No. 2 - Pradeep in the excise licence which, however, came to be rejected by the Collector on 6th February, 1982. In those proceedings of inclusion of name, the respondent No. 2 did file an affidavit dated 23rd March, 1981, wherein the respondent No. 2 stated that if the Government or any authority did not agree to the partnership, the respondent No. 2 would get himself deleted from the partnership and would be held responsible for the consequences thereof. No doubt, the usual undertaking as regards abiding by the rules and regulations of the Prohibition Act, orders and conditions of the license was also given by said Pradeep - the respondent No. 2.
6.After rejection by the Collector by order dated 6th February, 1982, the petitioner filed an appeal before the Commissioner of State Excise, Maharashtra State, Bombay, challenging the order of the Collector. It appears that during the pendency of the appeal before the Commissioner of State Excise, the said authority sought certain guidance from the State Government as regards inclusion of the partners in the busi
