Surendra Mohan, J.

The State is in appeal against the judgment of the learned Single Judge dated 3.6.2016 in W.P.(C) No. 21351 of 2005 allowing the writ petition. The writ petitioner is the respondent herein.

2. The respondent is conducting a distillery manufacturing Indian made foreign liquor. The distillery has been granted necessary licenses under the Abkari Act and the Rules thereunder. It is stated that the distillery has been conducting its operations from 1973 onwards. The present dispute arose when the Managing Partner of the partnership firm that is conducting the distillery expired and an application was made for substituting the new Managing Partner who had taken charge after reconstitution of the firm. Thereupon, the Excise Commissioner insisted on payment of additional security under Rule 27 of the Kerala Distillery and Warehouse Rules, 1968 (hereinafter referred to as 'the Rules' for short) as per Ext. P10 order. Accordingly, the security amount was fixed at Rs. 20,00,000/-. According to the counsel for the respondent, the security already furnished by the firm is Rs. 50,000/-.

3. Ext.P10 was the subject matter of challenge before this Court in W.P.(C) No. 10232 of 2005 at the instance of the respondent. As per Ext.P16 judgment, the writ petition was allowed and the Excise Commissioner was given the liberty of passing fresh orders in the matter. Pursuant to Ext.P16, the respondent was heard. Ext.P18 argument note was submitted. Thereafter, Ext.P19 order dated 11.5.2005 was passed finding that the security amount of Rs. 20,00,000/- that was demanded was reasonable. On the question of waiver of security deposit, as per Ext.P19, the matter was referred to the Government for appropriate orders. As per Ext.P20, the request to waive the additional security amount of Rs. 20,00,000/- was rejected by the Government. Exts. P19 and P20 were the subject matter of challenge in W.P. (C) No. 21351 of 2005. The learned Single Judge has set aside both the orders.

4. According to Sri. V. Manu, the learned Senior Government Pleader, the learned Single Judge has seriously erred in holding that no security under Rule 27 of the Rules could be insisted upon, since the distillery building, stock, stills etc., have already been hypothecated to the Government under Rule 28. It is contended that, the said interpretation would render Rule 27 nugatory. It is pointed out by the learned Senior Government Pleader that, Rules 27 and 28 operate in different fields. Under Rule 27, the security that is insisted upon is for the due observance of the conditions of licence. Whereas under Rule 28, the security is for payment of all sums which may become due to the Government. Since both Rule 27 and Rule 28 are part of the statute book, it is contended that, security under both the Rules could be insisted upon by the authorities. However, the above vital distinction has been missed by the learned Single Judge.

5. Adv. M.G. Karthikeyan, who appears for the respondent, on the other hand contends that, the security that is contemplated by Rule 28 is intended both for securing due observance of the terms of licence as well as for payment of all dues to the Government. In view of the above, there is no scope for insisting on a further security, in addition to what is contemplated by Rule 28. Our attention is drawn to Ext. P19 to point out that, the additional security has been demanded on the basis of the production capacity of the distillery, for which there is no power available to the appellants. It is in the said context that, the learned Single Judge has interfered with the impugned orders and set them aside. Therefore, there are absolutely no grounds for interference with the judgment of the learned Single Judge, it is contended.

6. Heard. The question that is involved, is dependent entirely on the interpretation of Rules 27 and 28 of the Rules. The said Rules are extracted hereunder for convenience of reference :

"27. Distillers and warehouse keepe