K. Balakrishnan Nair, J.

These appeals are filed by the writ petitioners, feeling aggrieved by the omission of the learned Single Judge, to declare that Sub-rule (ii) and the second proviso to Sub-rule (iv) of Rule 19 of the Foreign Liquor Rules, are ultra vires and unauthorized. By the Judgment under appeal, certain directions were issued in favour of the writ petitioners. The State has filed Writ Appeals against those directions. But, in these appeals, we are concerned, only with the correctness of the Judgment, to the extent, it is impugned by the appellants.

WA No.1637/09

2. This Writ Appeal is treated as the main case for the purpose of referring to the parties and exhibits. The brief facts of the case are the following:

The appellant is a partnership firm, which is having an FL-3 licence. One of the partners of the firm Shri. A.V. Paul wanted to retire from the partnership firm. So, the partnership firm decided to modify the partnership deed, to give effect to his retirement. Before implementing that decision, permission was sought under Rule 19(i) of the Foreign Liquor Rules, from the Commissioner of Excise, by submitting Ext.P2 application on 31.01.2007. In fact, during the pendency of Ext.P2 application, the partnership was already reconstituted as proposed, on 16.08.2007. Therefore, before the Commissioner, apart from making the prayer to sanction Ext.P2, it was also prayed to condone their misconduct in reconstituting the partnership, without permission, by invoking the power for compounding offences, conferred under S.67(2) of the Abkari Act. According to the appellant, S.67(2) enables the Commissioner to regularize the action taken by it. But, the Commissioner of Excise, as per Ext.P10 order dated 05.01.2008, dismissed Ext.P2, for the reason that the hotel run by the appellant does not have Two-star classification. The motion for regularization of the unauthorized reconstitution, made on, 16.08.2007 was also rejected, holding that the same is not permissible under the Foreign Liquor Rules. So, the Writ Petition was filed, challenging Ext.P10 and also seeking consequential reliefs. Incidentally, the writ petitioner also prayed for a declaration that Rule 19(ii) and the second proviso to Rule 19(iv) of the Foreign Liquor Rules (hereinafter referred to as “the Rules”), introduced by SRO No.227/07 dated 13.03.2007 w.e.f. 01.04.2007, were ultra vires and unauthorized by the provisions of the Abkari Act. The learned Single Judge upheld the validity of the above mentioned Rules. Therefore, this Writ Appeal is filed, challenging the said view taken by the learned Single Judge. Certain reliefs were granted to the writ petitioners, with which, we are not concerned in this appeal and as mentioned earlier, they are under challenge in the appeal filed by the State.

3. Shri. C.C. Thomas, learned Senior Counsel, who appeared for the appellant submitted that S.29 of the Abkari Act, which enables the Government to make Rules, does not authorize framing of Rules, in the nature of the Rules impugned in this case. Special reference was made to Clause (r) of Sub-section (2) of S.29 of the Abkari Act, which enables the Government to frame Rules, concerning forfeiture, notwithstanding any contrary provisions contained in the Indian Contract Act 1872 or in any other law, of the whole or any portion of the kist amount deposited by the licensee, for breach of conditions of sale. The learned Senior Counsel pointed out that Sub-rule (ii) of Rule 19 of the Rules has the effect of modifying or varying the provisions of the Indian Partnership Act and the Companies Act. In the absence of any specific authorization, as found in S.29(2)(r) of the Abkari Act, the State cannot frame any rule, which will have the effect of modifying the provisions of the aforementioned Acts. Regarding the second proviso to Sub-rule (iv) of Rule 19, it is pointed out by the learned Senior Counsel that the retirement of a partner or the induction of a partner