1. Second respondent, the Circle Inspector of Excise, Adoor conducted search in Hotel Shine at Pandalam on 9.8.2010 and seized 44 bottles of 750ml., 2 bottles of 500 ml., 865 bottles of 375 ml. of Indian made foreign liquor and a cash of Rs.14,430/-. In addition 97 bottles having 375 ml. each of admire rum and 18 bottles of 1.5 lites of marker XXX rum were also seized. Crime 99/2010 of Adoor Excise Range was registered under Annexure C crime and occurrence report against the petitioners for the offence under section 55(i) and 56(b) of Kerala Abkari Act. Later by Annexure E report the offence under section 55(i) was deleted. The case was registered on the allegation that in violation of the Conditions of Licence of Foreign Liquor Rules bottles of liquor were seen stored in the cash counter for sale to outside and thereby petitioners the licensee and the manager violated the conditions of the license and committed the offence under section 56(b) of the Kerala Abkari Act. Petition is filed under section 482 of Code of Criminal Procedure to quash Annexure C Crime and Occurrence report in Crime 99/2010 contending that no offence as alleged was committed and to direct Judicial First Class Magistrate Adoor to release the liquor seized and produced under Annexure B mahazar before the Magistrate.

2. Learned senior counsel appearing for the petitioners and learned Public Prosecutor were heard.

3. Learned senior counsel pointed out that under Annexure A, FL-3 license, first petitioner was permittd to conduct bar, in hotel Shine at Pandalam and conditions of the license does not prohibit storing of bottles of Indian made foreign liquor within the licensed premises and the only allegation is that bottles of Indian made foreign liquor were found stored in the cash counter, in the bar room, to be sold to the customers which could be removed outside. There is no allegation that any of the bottles of liquor was found being removed out of the licensed premises and therefore there is no violation of the Conditions of the Licence or the Abkari Act or Foreign Liquor Rules and therefore the crime registered only is an abuse of the process of law and it is to be quashed.

4. Learned senior counsel argued that in any case the bottles of liquor which were found in the cash counter could not have been seized or confiscated as no offence was committed in respect of those liquors. It is also argued that in any case when there is no provision for confiscation of the sale proceeds of a liquor in violation of the Conditions of License or Rules identical to Section 121 of the Customs Act, Excise authorities cannot seize the cash from the cash counter and therefore a direction is to be issued to the Magistrate to release them. It was argued that even if confiscation is permissible, confiscated articles are to be produced before the Deputy Commissioner as provided under section 67B of the Kerala Abkari Act and when bottles of liquor are produced before the Magistrate, no confiscation proceedings can be initiated.

5. Learned Public Prosecutor submitted that under the Conditions of the License liquor could be supplied and sold only within the specified licensed premises in accordance with the condition of the license and while granting licence a plan was submitted wherein the cash counter the bar counter and the bar room were separately marked and when petitioners stored liquor in the cash counter for the purpose of sale to be removed outside, those articles are liable to be confiscated and therefore they cannot be released. Learned Public Prosecutor also argued that as there was a violation of Conditions of Licence attracting an offence under section 56(b) of Abkari Act Annexure C crime and occurrence report cannot be quashed as sought for.

6. It is not disputed that there is a subsisting valid FL-3 licence permitting sale of foreign liquor in Hotel Shine when the search was conducted and the liquor was seized and the crime was registered. The condi