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2015 Supreme(Ker) 1660

IN THE HIGH COURT OF KERALA
DAMA SESHADRI NAIDU, J.
George Joseph – Petitioner
v.
Commissioner of Excise – Respondent
W.P.(C) Nos.19121 and 30282 of 2015
Decided On : 09-10-2015

Advocates:
Advocate Appeared:
For the Petitioner:K. Ramakumar (Sr. Advocate), S.M. Prasanth, C. Dinesh & G. Renjith
For the Respondents:C.C. Thomas (Sr. Advocate), M.G. Karthikeyan & K.C. Vincent (Sr. Government Pleader)

The main legal point established in the judgment is that the licence is granted to the partnership firm, and the managing partner represents the firm's interest. The court emphasized that private disputes among the partners should be resolved through appropriate legal remedial steps and not through public law remedies.

Headnote:

partnership firm - Excise Licence - Rule 13(11), Rule 19 - The court discussed the issuance of the FL-11 licence to a partnership firm and the dispute regarding the managing partner's authority to apply for the renewal of the licence. The court examined the legal provisions under Rule 13(11) and Rule 19, emphasizing that the licence is granted to the firm and the managing partner represents the firm's interest. The court set aside the order recalling the provisional licence and restored the original licence.

Fact of the Case:

The partnership firm had a hotel and was granted a provisional FL-11 licence for a Beer & Wine Parlour. The managing partner's authority to apply for the renewal of the licence was contested, leading to a dispute between the partners. The court disposed of two writ petitions raising the same issue involving the same parties on either side.

Finding of the Court:

The court found that the licence is granted to the firm, and the managing partner represents the firm's interest. The court set aside the order recalling the provisional licence and restored the original licence. The court emphasized that private disputes among the partners should be resolved through appropriate legal remedial steps and not through public law remedies.

Issues: 1. Whether the licence was initially issued in the name of the 4th respondent or the name of the petitioner firm, represented by the 4th respondent? 2. Whether the order recalling the provisional licence can be sustained based on the reconstitution of the partnership firm or the transfer of the licence?

Ratio Decidendi: The court held that the licence is granted to the partnership firm, and the managing partner represents the firm's interest. The court emphasized that private disputes among the partners should be resolved through appropriate legal remedial steps and not through public law remedies.

Final Decision: The court set aside the order recalling the provisional licence and restored the original licence. The court emphasized that private disputes among the partners should be resolved through appropriate legal remedial steps and not through public law remedies.

JUDGMENT :

1. A partnership firm, having a hotel, was given Ext.P5 provisional FL-11 licence to have a Beer & Wine Parlour. One of the partners, whose claim to be the Managing Partner is contested, filed W.P. (C) No.19121 of 2015 assailing Ext.P5 provisional licence. He obtained an order of status quo. The Commissioner of Excise, pending the said writ petition, in compliance with the direction of this Court in a writ appeal arising out of another writ petition, heard the rival claimants and recalled Ext.P5 provisional licence through Ext.P8.

2. Impugning Ext.P8 order of the Excise Commissioner, the partnership firm, represented by another Managing Partner, filed W.P. (C) No.30282 of 2015 arraying the petitioner in W.P. (C) No.19121 of 2014 as the 4th respondent. Since both the writ petitions raise the same issue involving the same parties on either side, this Court-disposes of both the writ petitions through a common judgment. For the narrative purpose, the facts and the documents from W.P. (C) No.30282 of 2015 are taken as the basis.

3. Briefly stated, as pleaded in W.P.(C) No. 30282 of 2015, the petitioner firm initially had a bar licence beginning from 1986 under Rule 13(3) of the Foreign Liquor Rules (‘the Rules’ for brevity). Until 2006, the firm was headed by one Mr K. A. George, the managing partner, in whose name ostensibly the licence stood. When the said managing partner took ill in 2006, the firm comprising six partners nominated the 4th respondent, holding 30% share, to be the managing partner. In 2010, as Mr K.A. George, the then managing partner, had died, the remaining partners reconstituted the partnership firm.

4. Under the stewardship of the 4th respondent, the petitioner firm continued to have FL-3 licence until 31.03.2014, when the Government had a change of policy leading to the non-renewal of all FL-3 licences for all establishments other than five star hotels.

5. In the light of the incorporation of sub-Rule 11(b) under Rule13A of the Rules with effect from 30.12.214, all hotels which had been denied FL-3 licences were given FL-11 licences to have Beer & Wine Parlours. Taking advantage of the said provision, the petitioner firm as well, through the 4th respondent, applied and obtained Ext.P1 licence on 02.01.2015, with its validity up to 31.03.2015.

6. Once Ext.P1 licence came to an end, the 4th respondent did not show any inclination to have it renewed. In the meanwhile, the Kerala Financial Corporation (KFC) also issued Ext.P7 notice initiating revenue recovery proceedings against the defaulting petitioner firm to recover an amount of Rs.2.46 crores.

7. In the light of the 4th respondent’s disinclination to apply for the renewal of the licence, the remaining five partners, having 70% stake, came together and passed Ext.P2 resolution on 21.04.2015 nominating Mr. Jacob Joseph, one of the partners, to be the Managing Partner in the place of the 4th respondent. It seems that through the same resolution the partners authorised the newly nominated Managing Partner to apply for the renewal of the FL-11 licence, which he did through Ext.P3.

8. Soon after submitting the Ext.P3 application, as the record reveals, the petitioner approached this Court questioning what is said to be the delay on the part of the Commissioner of Excise in considering its Ext.P3 application. This Court, in turn, through Ext.P4 judgment directed the Excise Commissioner to take an expeditious decision. Aggrieved, the 4th respondent, not originally being a party to W.P.(C) No. 13720 of 2015, took the matter in appeal in W.A. No. 1206 of 2015; resultantly, a learned Division Bench through its judgment dated 11.06.2015 directed the Excise Commissioner to hear the 4th respondent as well before taking any decision on the petitioner’s Ext.P3 application.

9. Chronologically viewed, before the directive in writ appeal could be communicated, the Excise Commissioner issued Ext.P5 proceedings granting an FL-11 licence to the petitioner provisionally, howe
















































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