Article 166 in The Constitution Of
India 1949
Dattatraya vs State Of Maharashtra And
Ors. on 22 August, 1996
Shamsher Singh & Anr vs State Of
Punjab on 23 August, 1974
P.Rathinam vs Union Of India on 26
April, 1994
State Of West Bengal Etc. vs M.R.
Mondal And Anr. on 3 September, 2001
Supreme Court of India
Ropan Sahoo & Anr. vs Ananda Kumar
Sharma & Ors. on 22 January, 2013
Author: D Misra
Bench: K.S. Radhakrishnan, Dipak Misra
, , , ,
IN THE SUPREME COURT OF INDIA
CIVIL APPELLATE JURISDICTION
CIVIL APPEAL NO. 615 OF 2013
(Arising out of S.L.P. (C) No. 34902 of
2009)
Ropan Sahoo & another ...
Appellants
Versus
Ananda Kumar Sharma & others
...Respondents
WITH
CIVIL APPEAL NO. 616 OF 2013
(Arising out of S.L.P. (C) No. 35166 of
2009)
State of Orissa & others
....Appellants
Versus
Ananda Kumar Sharma & others
....Respondents
J U D G M E N T
Dipak Misra, J.
Leave granted in both the special leave
petitions.
2. Questioning the legal acceptability
of the order dated 16.9.2009 passed by the Division Bench of the High
Court Orissa at Cuttack in WP(C) No. 3913 of 2009 whereby the High
Court entertained the writ petition preferred by the first respondent
herein and quashed the grant of exclusive privilege and the licence
granted in favour of Ropan Sahoo and Mukesh Kumar, the respondent
Nos. 5 and 6 in the writ petition, the present appeals have been
preferred by the grieved persons as well as by the State.
3. Shorn of unnecessary details the
facts which are requisite to be stated are that Mukesh Kumar, the
respondent No. 6 before the High Court, had submitted an application
for grant of licence to open an IMFL “Off” shop in Ward No. 16,
Bargarh Town for the year 2007-08 on 28.1.2008. As a report was
submitted that the proposed site was violative of sub-rule 1(c) of
Rule 34 of Orissa Excise Rules, 1965 (for short “the Rules”), the
said respondent chose to withdraw the application for the aforesaid
year by indicating personal reasons. In respect of the next financial
year he again submitted an application for grant of licence at the
same place. The Collector, Bargarh, invited objections and pursuant
to the same the writ petitioner filed his objection on 18.10.2008.
The Inspector of Excise submitted a report on 2.2.2009 stating about
the existence of a bathing ghat, Vishnu temple, bus stand and petrol
pump within the prohibited distance, but recommended for relaxation
of restrictions. The Collector, Bargarh, recommended for opening of
the shop for remaining part of the year 2008-09 in relaxation of the
restrictions and the Excise Commissioner also recommended to the
Government on 19.2.2009 for sanction by relaxing of the restrictions.
As the factual matrix would reveal, the State Government on the basis
of the recommendations invoked the power of relaxation under Rule 34
of the Rules and granted licence in favour of the said respondent for
the remaining period of 2008-09. Be it noted, in a similar manner
relaxation was granted for opening of the IMFL/Beer (‘ON’ shop)
at Hotel Sawadia for the period from 2.3.2009 to 31.3.2009.
4. Being grieved by the grant of said
licences, the first respondent invoked the jurisdiction of the High
Court under Article 226 of the Constitution principally contending
that the report submitted by the Excise Inspector with regard to
certain aspects, namely, location of the bathing ghat, etc. were not
factually correct; that the recommendations made by the authorities
were highly improper and unwarranted; and that the relaxation had
been granted in an extremely arbitrary manner and, therefore, the
grant of exclusive privilege and the licence deserved to be axed. The
High Court perused the documents brought on record, called for the
record to satisfy itself in what manner the power of relaxation was
exercised, and after perusal of the record and on consideration of to
various recommendations, came to hold that as far as the respondent
No. 5 was concerned for sanction of a beer parlour ‘ON’ shop
licence for the remaining period of 2008-09, no order was passed
relaxing the Rules before the grant of exclusive privilege. As far as
the sanction of IMFL Restaurant licence in respect of 6th respondent
was concerned, the High Court expressed the similar view. We think it
apt to reproduce the ultimate conclusion recorded by the High Court:
-
“13. Proviso to Rule 34 specifically
prescribes that restriction on the minimum distance as mentioned in
Clause (d) and (e) may be relaxed by the State Government in special
circumstances. There being no order by the State Government relaxing
the aforesaid two Clauses in relation to the minimum distance between
the proposed shops and the place of worship i.e. the Vishnu Temple,
petrol pump and bus stand, the order of the State Government
approving the sanction/grant of exclusive privilege in favour of
opposite parties 5 and 6 cannot be sustained in law.”
5. After so stating the High Court
referred to Section 41 of the Bihar and Orissa Excise Act, 1915 (for
brevity “the Act”) and observed as follows: -
“Rule 34 of the Rules castes a
statutory duty on the Department to pass order with reasons relaxing
the restrictions. When there has been infraction of such statutory
duty, the same cannot be covered under Section 41 of the Act.”
6. Being of the aforesaid view, the
High Court quashed the privileges and the licences granted in favour
of the private respondents therein.
7. We have heard Mr. Bhaskar P. Gupta,
learned senior counsel for the beneficiaries of the grant, Mrs. Kirti
Renu Mishra, learned counsel for the State and Mr. G. Ramakrishna
Prasad, learned counsel appearing for the respondent No. 1 in both
the appeals.
8. At the very outset we may note that
it is the admitted position that both the proposed sites come within
the prohibited area as envisaged under Rule 34(1)(d) and (e) of the
Rules. Rule 34 of the Rules stipulates that the places in respect of
which licences for consumption of liquor on vendor’s premises
should not be granted. The said Rule reads as follows: -
“34. Licences for shops for
consumption of liquor on vendor’s premises not to be granted at
certain places : (1) No new shop shall be licensed for the
consumption of liquor on the vender, premises –
a) in a marketplace, or
b) at the entrance to market place, or
c) in close proximity to a
bathing-ghat, or
d) within at least five hundred meters
from a place of worship, recognized educational institution,
established habitant especially of persons belonging to scheduled
castes and labour colony, mills and factories, petrol pumps, railway
stations/yard, bus stands, agricultural farms or other places of
public resort, or
e) within at least one kilometer from
industrial, irrigation and other development projects areas, or
f) in the congested portion of a
village :
Provided that the restriction on the
minimum distance as mentioned under clauses (d) and (e) may be
relaxed by the State Government in special circumstances.
(2) So far as practicable, an
established liquor shop licensed for the consumption of liquor on the
premises shall not be allowed to remain on a site which would not
under sub-rule (1) be permissible for the location of a new shop.
(3) In areas inhabited by Scheduled
Tribes, country spirit shops shall not be licensed to be placed
immediately on the side of a main road or in any other prominent
position that is likely to place temptation in their way.”
9. On a perusal of the aforesaid Rule,
it is crystal clear that the State Government has been conferred with
the power to relax the restriction on the minimum distance as
mentioned in clauses (d) and (e) pertaining to the minimum distance.
As has already been indicated hereinbefore there is no cavil that the
material on record pertained to the relaxation of the restriction as
prescribed under clauses (d) and (e) of sub-rule (1) of Rule 34 of
the Rules. The High Court, as the impugned order would reflect, has
quashed the order of approval/sanction and the consequent grant of
licences on the foundation that there has been no order relaxing the
restrictions on the minimum distance as mentioned in Clauses (d) and
(e) relating to the proposed shops in exercise of powers of the said
Rule by the State Government and, in any case, no reasons have been
ascribed. Thus, the question that emanates for consideration is
whether the High Court has appositely appreciated the note sheet in
the file and arrived at the correct conclusion or not.
10. The High Court, as demonstrable,
has reproduced the communications made by the Joint Secretary to the
Government by fax vide memo No. 1159/Ex. dt. 2.3.2009 addressed to
the Excise Commissioner about the Restaurant “ON” shop licence in
favour of Mukesh Kumar at “RASSOI RESTAURANT” in the premises of
Hotel ‘Sawadia Palace’, Ward No. 11, Bargarh Municipality over
Plot No. 1622, Khata No. 2542/362, in the district of Bargarh for the
remaining period of 2008-09 and also the memo No. 1161/Ex. dated
2.3.2009 in respect of Beer Parlour “ON” shop licence in favour
of Ropan Sahoo over Plot No. 1391/2260, Khata No. 393 in Ward No. 16
of Bargarh Municipality, in the district of Bargarh for the remaining
period of 2008-09. The communication that has been made in favour of
Mukesh Kumar reads as follows: -
“In inviting a reference to your
letter No. 1214 dt. 19.2.09 on the subject cited above, I am directed
to say that Govt. after careful consideration have been pleased to
grant IMFL Restaurant “ON” shop Licence in favour of Sri Mukesh
Kumar at “RASSOI RESTAURANT” in the premises of Hotel “Sawadia
Palace”, Ward No. 11, Baragarh Municipality over Plot No. 1622,
Khata No. 2542/362, in the district of Baragarh for the remaining
period of 2008-09 by relaxing rule 34 of the Orissa Excise Rules,
1965 and fixation of MGQ as per Excise Duty, Fee Structure and
Guidelines for 2008-09. The Excise Administration may be held
responsible if the existing nearby excise shops are affected by the
new “ON” shop.”
As far as grant of beer parlour “ON”
shop in favour of Ropan Sahoo is concerned, the communication vide
memo No. 1161/Ex. dated 2.3.2009 is as follows: -
“In inviting a reference to your
letter No. 1380 dt. 25.02.09 on the subject cited above, I am
directed to say that Govt. after careful consideration have been
pleased to sanction Beer Parlour “ON” shop Licence in favour of
Sri Ropna Sahoo over Plot No. 1391/2260, Khata No. 393/330 in Ward
No. 16 of Bargarh Municipality, in the district of Bargarh for the
remaining period of 2008-09 subject to condition that the district
excise officials will be held responsible if the nearby existing
excise shops are affected by opening of the new shop.”
11. As no reasons were assigned, the
High Court called for the file. On a perusal of the file the High
Court referred to the recommendations and, eventually, opined that no
order had been passed relaxing the Rule in respect of the said shops
by the Commissioner-cum-Secretary to Government, Department of
Excise. The thrust of the matter is whether any order has been passed
relaxing the restrictions imposed by the Rules and does it contain
reasons. As the first communication would reveal, it is clearly
mentioned therein that the Government has relaxed the restrictions
under Rule 34 and as far as the second communication is concerned, it
has been stated that the Government has sanctioned grant of licence.
The learned counsel for the State has referred to the note sheet to
highlight that the orders had been passed in consonance with the
proviso to Rule 34(1) of the Rules and on that basis the
communications were issued.
12. We have bestowed our anxious
consideration and carefully perused the note-sheet. On a studied
scrutiny of the same it is luculent that the Excise Commissioner,
Orissa, Cuttack, had recommended the proposals and in support of the
same had furnished seventeen documents. The note sheet has referred
to the report which states that the proposed site exist at 350 meters
from Vishnu Temple, 250 meters from the petrol pump, 200 meters from
the private bus stand and 50 meters from the irrigation canal. The
recommendation which forms part of the note sheet reads as follows: -
“The Collector, Bargarh, in his
report at P-84/C has stated that the local consumers demand for
consumption of liquor within the hotel premises. Illegal liquor cases
have been booked in the nearby area and hence, there is demand for
the “ON” shop. The apprehension that the existing IMFL “OFF”
shop will be affected after opening of the proposed “ON” shop is
ruled out, because the consumers of “OFF” shop are different from
“ON” shop. The customers of “ON” shop has to consume liquor
inside the Hotel premises with peg system and pay service charge,
whereas such a facility is not available with “OFF” shops.
Besides, the bathing ghat is not nearby as objected. But only one
irrigation canal is flowing at a distance of about 50 meters.
Therefore, Collector has recommended for relaxation of rule 34 of
Orissa Excise Rules, 1965 for sanction of the proposal in the
interest of Govt. revenue and to check illegal liquor trade.”
13. The objections of A.K. Sharma and
that of the Secretary, Human Society, Bargarh have also been
considered. Thereafter, the Joint Secretary has recommended thus: -
“In the above circumstances and in
view of recommendation of the Excise Commissioner, Orissa, Cuttack,
it may kindly be considered to grant IMFL Restaurant “ON” shop
licence in favour of Sri Mukesh Kumar at “Rasooi Restaurant” in
the premises of Hotel “Sawadia Palace” Ward No. 11, Bargarh
Municipality over Plot No. 1622, Khata No. 2542/362, in the district
of Bargarh, for the remaining period of the year 2008-09 by relaxing
rule 34 of Orissa Excise Rules, 1965 and MGQ fixed as per the Excise
Duty, Fee Structure and Guidelines for 2008-09. The District Excise
Administration may be held responsible if the existing nearby excise
shops are affected by the new “ON” shop.”
14. The Commissioner-cum-Secretary to
Government, Excise Department, has endorsed the same in the following
terms: -
“Notes from P.10/N explain. We had
received a representation from Shri A.K. Sharma, Exclusive Privilege
Holder of IMFL ‘Off Shop’ No. 4 of Bargarh (P.23-22/C) against
the proposal received from Collector, Bargarh and endorsed by the
Excise Commissioner, Orissa for opening of IMFL ‘On Shop’ at
Rasoi Restaurant in the premises of Hotel Sawadia Palace, Ward No. 11
of Bargarh. The objections raised by Shri Sharma have been enquired
into by the District Administration. In this regard, the letter
received from Collector, Bargarh at P.34-32/C may please be glanced
through. The objections of Shri Sharma are found to be devoid of
merit. The report received from the Excise Commissioner, placed
below, may also be perused. The Excise Commissioner had recommended
to consider the sanction of IMFL ‘On Shop’ at Rasoi Restaurant in
favour of Shri Mukesh Kumar situated in the premises of Hotel Sawadia
Palace, Ward No. 11 of Bargarh. The proposal may kindly be considered
and approved.”
15. The same has been signed by the
Minister of Excise and Tourism, Orissa. As far as the second shop is
concerned, the note sheet referred to the recommendations of the
Collector, which reads as follows: -
“...the Collector, Bargarh has
reported that both the petrol pumps are situated in such a manner
that the shops will have no effect at all on the proposed Bar and
hence he has suggested for relaxation of restrictive provisions of
rule-34 of Orissa Excise Rules, 1965.
The Collector, Bargarh has also
reported that the proposed Beer Parlour shall cater to the needs of
the consuming people of the locality besides fetching Govt. revenue
and checking illicit sale of Beer, since the population of the area
is increasing. Only 3 (three) IMFL “OFF’ shops, one IMFL ‘ON’
and one Beer Parlour are functioning in the entire town area having
population of more than one lakh. There is feasibility and
potentiality for opening of the Beer Parlour ‘ON’ shop, since
illegal sale of liquor has been detected in the area. The proposed
shop will check illicit trade of liquor. He has also stated that the
opening of new Beer Parlour will not affect the nearby IMFL shops in
the Municipality.”
16. The Joint Secretary after referring
to the objections and the recommendations of the Excise Commissioner
has passed the following order in the note sheet: -
“In the above circumstances and in
view of recommendation of the Excise Commissioner, Orissa, Cuttack,
it may kindly be considered to sanction Beer Parlour ‘ON’ shop
licence in favour of Sri Ropna Sahu over plot No. 1391/2260, Khata
No. 393/330 in Ward No.16 of Bargarh Municipality in the district of
Bargarh for the remaining period of 2008-09 subject to condition that
the district excise officials will be held responsible if the nearby
existing shops are affected by opening of the new shop.
Government orders may kindly be
obtained in the matter.”
17. Thereafter, the
Commissioner-cum-Secretary to Government in the Department of Excise
has endorsed the same and the Minister, Excise and Tourism has signed
in approval thereof and thereafter the movement of the file took
place. On the basis of the aforesaid orders the communications have
been sent.
18. On a keen scrutiny of the entire
note sheet we have no hesitation in our mind that the
Commissioner-cum-Secretary had accepted the recommendations of the
Collector and the Excise Commissioner, and upon perusal of the note
sheet of the Joint Secretary had recommended for consideration and
approval by the Minister of Excise and Tourism. The Minister, as
stated earlier, has signed and thereafter, the file had travelled
back for communication. We really fail to fathom the reasons ascribed
by the High Court that there is no order whatsoever relaxing the
Rules before the order of grant of exclusive privilege was passed.
After the Minister had signed on the file on the basis of the
recommendations sent by the Commissioner-cum-Secretary which was
founded on the recommendations of the Joint Secretary who had
concurred with the recommendations of the Collector and the Excise
Commissioner, communications were made by the Joint Secretary. The
note sheet clearly indicates application of mind to the relevant
facts which pertain to the restrictions on the distance from the
proposed site and the endorsement by the Minister. In this context,
we may refer with profit to the decision in Tafcon Projects (I) (P)
Ltd. v. Union of India and others[1], wherein the High Court, after
taking note of the order passed by the Secretary who, in anticipation
of the formal approval by the Minister concerned, had allowed the
party to go ahead for appointing the appellant therein as “Event
Manager”. This Court referred to the earlier order passed by the
Secretary granting permission and the latter order in which he had
mentioned that the party may be allowed to go ahead with the proposal
for making the preliminary arrangement in anticipation of the formal
approval of the Minister and expressed the view that the High Court
had erred in coming to hold that the Secretary had not taken any
final decision with regard to the appellant therein as the Event
Manager. Thereafter, the Court adverting to the justification of the
conclusion of the High Court that no final decision had been taken by
the Minister expressed thus :-
“12. It appears also from the record
as noted by the High Court, that the file had been pending with the
Minister for some time and despite expressions of urgency, the
Minister did not sign the file since he was busy with “elections
and other important matters”. What the High Court has overlooked is
that the relevant file was again placed before the Minister on
30.8.1999 by JS&FA with a note which stated that Tafcon had been
appointed as the “Event Manager” for three years. This was signed
by the Minister with the endorsement “file returned”.
13. The High Court deduced from this
signature of the Minister that no approval was in fact granted by him
to the appointment of M/s. Tafcon either expressly or impliedly. We
are unable to agree. Where the Minister has signed the various notes
put up before him seeking his approval, his signature, without more,
must mean that he has approved the steps taken by the Department.”
19. Be it noted, in the said case, the
Court referred to Rule 3 of the Transaction of Business Rules, 1961
which provided for all business to be conducted on general or special
directions of the Minister-in- charge.
20. In the case at hand, Rule 7 of the
Orissa Government Rules of Business made under Article 166 of the
Constitution confers the power on the Minister to pass an order in
respect of a matter pertaining to his portfolio. The effect of such a
delegation has been dealt with by a three-Judge Bench in Narmada
Bachao Andolan v. State of Madhya Pradesh[2] wherein it has been held
that: -
“The
decision of any Minister or Officer under the Rules of Business made
under Articles 77(3) and 166(3) of the Constitution is the decision
of the President or the Governor respectively and these Articles do
not provide for `delegation’. That is to say, that decisions made
and actions taken by the Minister or Officer under the Rules of
Business cannot be treated as exercise of delegated power in real
sense, but are deemed to be the actions of the President or Governor,
as the case may be, that are taken or done by them on the aid and
advice of the Council of Ministers.”
21. The Bench to fructify its opinion
has placed reliance on State of U.P. & Ors. v. Pradhan Sangh
Kshettra Samiti & Ors.[3] and pronouncement by the
seven-Judge Bench in Shamsher Singh v. State of Punjab &
Anr.[4] For the sake of completeness, we may note with profit what
has been stated in paragraph 27 of the aforesaid decision: -
“27. In Dattatraya Moreshwar v. The
State of Bombay & Ors.[5], a Constitution Bench of this Court
held that an omission to make and authenticate an executive decision
in the form mentioned in Article 166 does not make the decision
itself illegal, on the basis that its provisions were directory and
not mandatory.”
22. In this regard we may quote a
passage from Sethi Auto Service Station and another v. Delhi
Development Authority and others[6] : -
“14. It is trite to state that
notings in a departmental file do not have the sanction of law to be
an effective order. A noting by an officer is an expression of his
viewpoint on the subject. It is no more than an opinion by an officer
for internal use and consideration of the other officials of the
department and for the benefit of the final decision-making
authority. Needless to add that internal
notings are not meant for outside exposure. Notings in the
file culminate into an executable order, affecting the rights of the
parties, only when it reaches the final decision-making authority in
the department, gets his approval and the final order is communicated
to the person concerned.”
23. In State of West Bengal v. M. R.
Mondal and another[7] it has also been held that an
order passed on the file and not communicated is non- existent in the
eye of law.
24. In the present case it is luminous
that the file had travelled to the concerned Joint Secretary of
department who had communicated the order. The High Court has opined
that there is no order by the State Government relaxing the
restrictions enshrined in clauses (d) and (e) of Rule 34(1) of the
Rules in relation to the minimum distance between the proposed shops
and the Vishnu Temple, petrol pump and bus stand and at a latter part
of the judgment has expressed the opinion that there has been
infraction of statutory Rule, namely, Rule 34 which casts a statutory
duty on the department to pass on order with reasons relaxing the
restrictions. We are disposed to think that the High Court, as far as
the first part of the opinion is concerned, has been guided by the
factum that the Commissioner-cum-Secretary in his recommendation to
the Minister of Excise and Tourism had not specifically referred to
clauses (d) and (e) of Rule 34(1) of the Rules. It is pertinent to
state here that it is perceptible from the note sheet that the
Secretary had referred to the proposal received from the Collector,
endorsement made by the Excise Commissioner, the objections raised by
the objectors and also expressed the view that the said objections
were devoid of merit and, accordingly, recommended for approval. The
cumulative effect of the note sheet goes a long way to show that
every authority was aware of the distance and recommended for
relaxation of clauses (d) and (e) of sub-rule (1) of Rule 34 and the
concerned Minister had endorsed the same. Non-mentioning of the Rule
or sub-rule, in our considered opinion, does not tantamount to
non-passing of an order. The dominant test has to be the application
of mind to the relevant facts. The second part of the order, if
properly appreciated, conveys that no reasons have been ascribed. The
proviso to Rule 34(1) lays a postulate that the distance as mentioned
under clauses (d) and (e) may be relaxed by the State Government in
special circumstances. The recommendations made by the Collector
refers to the circumstances, namely, that there is a demand for
consumption of liquor within the hotel premises; that illegal liquor
cases have been booked in the nearby area; and that the proposal is
in the interest of the Government revenue. The said recommendations,
as is reflectible, have been concurred with by the higher authorities
and, hence, there can be no trace of doubt that they constitute the
special circumstances.
25. In view of our aforesaid analysis,
the appeals are allowed and the order passed by the High Court is set
aside. It is further clarified that if the Government, if so advised,
can invoke the power under the proviso to Rule 34(1) of the Rules for
the purpose of relaxation for grant of exclusive privilege and
licence pertaining to the said shops in respect of current and
subsequent financial years. In the facts and circumstances of the
case, the parties shall bear their respective costs.
……………………………….J.
[K. S. Radhakrishnan]
……………………………….J.
[Dipak Misra]
New Delhi;
January 22, 2013
-----------------------
[1] (2004) 13 SCC 788
[2] AIR 2011 SC 3199
[3] AIR 1995 SC 1512
[4] AIR 1974 SC 2192
[5] AIR 1952 SC 181
[6] (2009) 1 SCC 180
[7] AIR 2001 SC 3471
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