# Ajay Pratap Singh v. State of U.P. & Ors

- **Citation:** (2022) 7 ILRA 78
- **Court:** High Court of Judicature at Allahabad
- **Decided:** 2022-07-06
- **Case number:** Writ C No. 5098 of 2017
- **Bench:** Pankaj Bhatia
- **Source:** https://unisonlegal.in/judgment/allahabad-high-court/ajay-pratap-singh-v-state-of-u-p-ors-48842
- **Pages:** 6

## Headnote

A. Civil Law - The United Provinces Excise
Act, 1910 - Section 34 - UP Excise
(Settlement of Licenses for Retail Sale of
Country Liquor) Rules, 2002 - R. 21 -
Suspension and cancellation of the licence
- Unauthorized liquor was found in rice
mill owned by the petitioner - Condition
required for suspension to the effect that
any other kind of liquor or intoxicating
drugs are found in the 'licensed premises'
or in 'possession of licensee', was not
fulfilled - Effect - Held, in the absence of
any allegation of any recovery from any
place in the 'licensed premises' or in the
'possession of the licensee', the powers to
suspend and cancel cannot be resorted to
under the Act or the Rules. (Para 15)
B. Civil Law - UP Excise (Settlement of
Licenses for Retail Sale of Country Liquor)
Rules, 2002 - R. 21 - Time limit of 7 days,
prescribed for calling explanation, was not
adhered to - Effect - Held, the orders
cancelling the licence were against the
substantive provisions and also violated
the procedural provisions. (Para 17 and
18)
Writ petition disposed off. (E-1)

## Text

78 INDIAN LAW REPORTS ALLAHABAD SERIES
----------
(2022)07ILR A78
ORIGINAL JURISDICTION
CIVIL SIDE
DATED: LUCKNOW 06.07.2022

BEFORE

THE HON'BLE PANKAJ BHATIA, J.

Writ C No. 5098 of 2017

Ajay Pratap Singh ...Petitioner
Versus
State of U.P. & Ors. ...Respondents

Counsel for the Petitioner:
Manoj Kumar Dwivedi

Counsel for the Respondents:
C.S.C.

A. Civil Law - The United Provinces Excise
Act, 1910 - Section 34 - UP Excise
(Settlement of Licenses for Retail Sale of
Country Liquor) Rules, 2002 - R. 21 -
Suspension and cancellation of the licence
- Unauthorized liquor was found in rice
mill owned by the petitioner - Condition
required for suspension to the effect that
any other kind of liquor or intoxicating
drugs are found in the 'licensed premises'
or in 'possession of licensee', was not
fulfilled - Effect - Held, in the absence of
any allegation of any recovery from any
place in the 'licensed premises' or in the
'possession of the licensee', the powers to
suspend and cancel cannot be resorted to
under the Act or the Rules. (Para 15)
B. Civil Law - UP Excise (Settlement of
Licenses for Retail Sale of Country Liquor)
Rules, 2002 - R. 21 - Time limit of 7 days,
prescribed for calling explanation, was not
adhered to - Effect - Held, the orders
cancelling the licence were against the
substantive provisions and also violated
the procedural provisions. (Para 17 and
18)
Writ petition disposed off. (E-1)
(Delivered by Hon'ble Pankaj Bhatia, J.)

1. Heard learned Counsel for the
petitioner and learned Additional Chief
Standing Counsel.

2. The present writ petition has been
filed
challenging
the
order
dated
24.02.2016 whereby 06 country liquor and
02 Indian Made Foreign Liquor (IMFL)
licenses of the petitioner were cancelled
and the security as well as the licence fee
was forfeited in exercise of powers under
Section 34 of The United Provinces Excise
Act, 1910 as well as the appellate order
dated 22.03.2016 whereby the appeal
preferred by the appellant was dismissed
and the order dated 17.02.2017 whereby
the revision preferred by the petitioner
before the State Government was rejected.

3. The facts in brief leading to the
filing of the present writ petition are that
the petitioner was granted six licences of
country liquor shop in District Amethi in
exercise of the powers conferred under the
Uttar
Pradesh
Excise
(Settlement
of
Licenses for Retail Sale of Country Liquor)
Rules, 2002 (in short 'the Rules 2002') and
was also granted two licences for selling
foreign liquor in District Amethi in terms of
the provisions of Uttar Pradesh Excise
[Settlement of Licenses for Retail Sale of
Foreign Liquor (Excluding Beer and Wine
Rules)] Rules, 2001 (in short 'the Rules
2001'). On 28.01.2016, an FIR came to be
lodged in Case Crime No.103 of 2016,
under Section 60 of the Excise Act read
with Sections 419 and 420 IPC at Police
Station Musafirkhana, District Amethi
against one Guddu Singh and Babblu
Singh. The said two accused took the name
of the petitioner and in pursuant to the said
statement, the petitioner was arrested under
the said FIR. The allegations as contained
7 All. Ajay Pratap Singh Vs. State of U.P. & Ors.
79
in the FIR referred to violation of Section
60 of the Excise Act read with Sections 419
and 420 IPC and it was also stated that
unauthorized liquor was found in a rice mill
owned by the petitioner.

4. Subsequently, the proceedings were
initiated for suspending the licences (six in
number)
in
exercise
of
the
powers
conferred under the Rules 2002 and the
Rules, 2001. A notice was served to the
petitioner on 04.02.2016 referring to the
FIR and alleging therein that there
appeared to be a violation of Section 34 of
the Excise Act and the Rules of 2002. The
petitioner put in appearance and denied the
allegations levelled against him, however,
orders were passed suspending the six
licences granted to the petitioner in respect
of the six shops vide order dated
21.02.2016. Thereafter on 22.02.2016, the
petitioner was called upon for personal
hearing in terms of Rule 21(2) of the 2002
Rules. The petitioner filed a reply denying
his involvement with the offence in
question,
he
also
filed
his
written
submissions, however, an order dated
24.02.2016 was passed cancelling the six
licences and through the same order, the
basic license fee, the license fee and the
security deposit were forfeited in favour of
the State Government. Aggrieved against
the said order cancelling the license, the
petitioner preferred an appeal before the
Excise Commissioner, which came to be
dismissed on 22.03.2016.

5. Subsequent to the dismissal of the
appeal, a final report was filed in favour of
the petitioner in the Case Crime No.103 of
2016 wherein nothing incriminating was
found against the petitioner and only the
other two accused were charge-sheeted. It
is also relevant that challenging the
appellate order, the petitioner has preferred
a revision before the State Government and
during the pendency of the revision, the
petitioner by means of an affidavit brought
the subsequent development as took place
in Case Crime No.103 of 2016 before the
Revisional Authority and pleaded that as
the sole ground for cancellation of the
licenses and the action of forfeiture of
security and licence fee was based upon the
lodging of the FIR, in which ultimately a
final report was filed in favour of the
petitioner, the revision deserves to be
allowed. The Revisional Authority, by the
impugned order proceeded to dismiss the
revision. On perusal of the said order, there
appears to be no discussion with regard to
the subsequent development that happened
in Case Crime No.103 of 2016.

6. In the above referred three orders,
which are under challenge, the main
submission of the Counsel for the petitioner
is that the entire action initiated and
concluded by means of the above three
orders, which are impugned herein, there is
a serious error committed by the authority
concerned in not following the mandate of
law. He draws my attention to the Rules
2002 as well as the Rules 2001 which
governs the grant of licenses in respect of
country
liquor
and
foreign
liquor
respectively. He also argues that even the
time limit prescribed under the rules for
filing replies was not adhered to.

7. Rule 21 of the Rules 2002 provides
for the manner in which steps can be taken
for suspension and cancellation of the
license as well as provides for penalty. Rule
21 reads as under:

"21.
Suspension
and
cancellation of the licence and penalties -
(1) Licensing Authority may suspend or
cancel the license -
80 INDIAN LAW REPORTS ALLAHABAD SERIES

(a) if any bottle or container of
country liquor is found in the licensed
premises on which duty has not been paid
and
which does
not
carry
security
hologram duly approved by the Excise
Commissioner as a proof of payment of
duty;

(b) if any bottle or container of
any other kind of liquor or intoxicating
drug (for which licence is not granted) is
found in the licensed premises;

(c) if any liquor or intoxicating
drug is found in the possession of the
licensee against the provisions of the Act or
rules;

(d) if the affidavit submitted by
the licensee at the time of application is
found incorrect and assertions made
therein are found to be false;

(e) if it is found that the licence
has been obtained in a false name or the
licensee is holding the licence on behalf of
some other person.

(f) if the licensee fails to deposit
monthly instalment of licence fee or
replenish the deficit in security amount
within prescribed period;

(g) if the licensee is convicted of
an offence punishable under the Act or of
any cognizable and nonbailable offence, or
any offence punishable under Narcotics
Drugs and Psychotropic Substances Act,
1985 or of any offence punishable under
Sections 482 to 489 of the Indian Penal
Code.

(2) The Licensing Authority shall
immediately suspend the licence and issue
a show cause notice for cancellation of
licence and forfeiture of security. The
licensee shall submit his explanation within
7 days of the receipt of notice. There after
the Licensing Authority shall pass suitable
orders after giving due opportunity of
hearing to the licensee.

(3) In case the licence
is
cancelled the basic licence fee, licence fee
deposited by him shall stand forfeited in
favour of the Government and licensee
shall not be entitled to claim any
compensation or refund. Such licensee may
also be blacklisted and debarred from
holding any other exercise licence."

8. Similarly Rule 18 of the Rules
2001 provides for the manner of suspension
and cancellation of the licence in respect of
Foreign Liquor Shops, which is quoted
hereinbelow:

"18. (1) Licensing authority may
suspend or cancel the licnce. - (a) If any
bottle is found in licensed premises on
which duty has not been paid and which
does not carry security hologram duly
approved by the Excise Commissioner as a
proof of payment of duty.

(b) if any other kind of liquor or
intoxicating drug (for which licence is not
granted) is found in the licensed premises.

(c) if any liquor or intoxicating
drug is found in the possession of the
licensee against the provisions of the Act or
rules;

(d) if the affidavit submitted by
the licensee at the time of application is
found incorrect and assertions made
therein are found to be false.

(e) if the licensee is convicted of
any offence punishable under the Act or of
any cognizable and non-bailable offence,
or any offence punishable under Narcotics
Drugs And Psychotropic Substances Act,
1985 or of any offence punishable under
sections 482 to 489 of the Indian Penal
Code,

(f) if any bottle/container is found
in the licensed premises on which maximum
retail price is not printed and
7 All. Ajay Pratap Singh Vs. State of U.P. & Ors.
81

(g) if it is found that the licence
has been obtained in a false name and the
licensee is holding the licence on behalf of
some other person.

(2) The licensing authority shall
immediately suspend the licence and also
serve a show cause notice for cancellation
of licence and for forfeiture of security
deposit, the licensee shall submit his
explanation within 7 days of the receipt of
notice. Thereafter the licensing authority
shall pass suitable orders after giving due
opportunity of hearing to the licensee, if he
so desires.

(3) The licensee shall not be
entitled to claim any compensation or
refund for suspension or cancellation of
licence under this rule.

(4) In case the licence
is
cancelled the licensee may also be
blacklisted and debarred from holding any
excise licence."

9. In the light of the mandate of said
Rules, the Counsel for the petitioner
argues that the steps for suspending and
cancelling of the licence can take place
only in the event of 'any other kind of
liquor or intoxicating drugs are found in
the "licensed premises"'. He argues that
similar provisions exist in the Rules 2002
also, thus to exercise the power under the
said Rules, it is incumbent that there
should be an allegation and conclusion to
the effect that any liquor or intoxicating
drugs is found in the "licensed premises"
or in "possession of the licensee". He
submits that in the allegations contained
in the FIR as well as in the notices issued
to the petitioner, there is no averment to
the effect that any liquor or intoxicating
drugs
was
found
in
the
"licensed
premises" or in the "possession of the
licensee" and without there being any
finding to that effect, the powers could
not have been exercised for suspension
and cancellation of the license as has
been done in the present case.

10. The Counsel for the petitioner
further argues that in a similar case,
where no liquor was found in the licensed
premises and subsequently a final report
had been filed in favour of the licensee,
the appellate authority in exercise of
appellate
powers
had
quashed
the
cancellation order passed in respect of the
said licensee vide order dated 22.03.2016
which is contained in Annexure-20 to the
writ petition.

11. In the light of the aforesaid, the
counsel for the petitioner argues that
although the term of the licences have
come to an end and the same cannot be
renewed/ granted to the petitioner, the
forfeiting of the basic licence fee, licence
fee and the security, which was against the
law, should be directed to be refunded to
the petitioner.

12. Learned Standing Counsel, on the
other hand, argues that the orders have been
passed in exercise of powers under Section
60 read with Section 34 and Section 7 of
The United Provinces Excise Act, as such,
no fault can be found with the orders. He
further argues that the offending liquor was
found in the premises owned by the
petitioner and thus no fault can be found in
exercise of powers as has been done by
means of the impugned order. He lastly
prays that the writ petition is liable to be
dismissed.

13. Considering the submissions
made at the bar, the first question to be
determined is whether the condition existed
for suspension and cancellation of the
licence in terms of the powers conferred
82 INDIAN LAW REPORTS ALLAHABAD SERIES
under the statutory enactment being The
United Provinces Excise Act and the 2002
or the 2001 Rules.

14. It is common ground in between
the parties that the Rules 2002 and 2001
as extracted above would be applicable to
the grant of licence in respect of country
liquor shop as well as the foreign liquor
shop respectively.

15. The action as taken against the
petitioner under the orders impugned
herein was clearly an 'expropriatory
action' and the provision in the Rules are
also 'expropriatory'. It is well settled that
expropriatory powers conferred on State
through statutes are required to be
interpreted strictly and the orders passed
have to pass the 'strict scrutiny test'. On a
plain reading of the provisions of the
Rules 18 and 21 in the 2001 and 2002
Rules respectively, it is clear that the
steps for suspension and cancellation of
the licence can be taken only in the event
that (i) any liquor is found in the licensed
premises or (ii) it is found in the
possession of the licensee. The other
conditions specified in Rule 21 and Rule
18 need not detain this Court as the same
do not arise in the present case. The
words "licensed premises" has not been
defined under the Act and the Rules
referred above, however while granting
of licence, the premises for which the
licence has been granted is clearly
delineated and specified in the licence
itself and thus for the purposes of
interpreting
the
word
"licensed
premises", reference has to be drawn to
the premises referred to in the licence.
Any infraction or possession of liquor or
intoxicating drugs other than authorized
in the 'licensed premises' would certainly
empower the authority concerned to take
action under Rules 18 or Rule 21 of the
aforesaid Rules as the case may be.
Similarly the possession of any liquor or
intoxicating
drugs
other
than
the
authorized in the possession of the
licensee would also trigger the powers to
be exercised under Rules 18 and 21 of the
aforesaid Rules. In the absence of any
allegation of any recovery from any place
in the 'licensed premises' or in the
'possession of the licensee', the powers to
suspend and cancel cannot be resorted to
under the Act or the Rules referred above.

17. In the present case even the time
limit of 07 days provided under Rule 18
and Rule 21 of the Rules was not adhered
to for the reasons best known to the State.

18. The orders passed and impugned
herein, thus were against the substantive
provisions
and
also
violated
the
procedural provisions.

19. In the present case, the
allegations in the FIR were that the
unauthorized liquor was found in a rice
mill owned by the petitioner. Clearly the
rice mill not being covered within the
definition of "licensed premise" would
not attract the rigor of Rules 18 and 21 of
the
aforesaid
Rules.
In
any
event
subsequently even the said allegations of
recovery of goods from the rice mill
could not be substantiated and the police
authority proceeded to file a final report
in favour of the petitioner and which facts
even demolishes the allegation in the FIR
that any unauthorized liquor was found in
possession of the licensee.

20. Thus for all the reasoning
recorded above, the order passed against
the petitioner are clearly unsustainable
and
are
liable
to
be
set
aside.
7 All. Dinesh Singh Sarathi Vs. State of U.P. & Ors.
83

21. Accordingly, the order dated
24.02.2016, the order dated 22.03.2016 and
the order dated 17.02.2017 are set aside.

22. As no direction for renewal of the
licences can be issued in view of the
change in the policy of the State
Government, the writ petition is disposed
off with a direction to refund the
proportionate
basic
license
fee,
the
proportionate license fee and the security
deposit as forfeited by means of the order
dated 24.02.2016 within a period of two
months from the date of the petitioner
moving an appropriate application before
the District Magistrate, District Amethi.

23. There shall be no order as to costs.
----------
(2022)07ILR A83
ORIGINAL JURISDICTION
CIVIL SIDE
DATED: ALLAHABAD 22.04.2022

BEFORE

THE HON'BLE AJIT KUMAR, J.

Writ C No. 10572 of 2022

Dinesh Singh Sarathi ...Petitioner
Versus
State of U.P. & Ors. ...Respondents

Counsel for the Petitioner:
Sri Narendra Kumar Chaturvedi, Sri Ashok
Khare (Senior Adv.)

Counsel for the Respondents:
C.S.C., Sri Balwant Singh, Sri Amit Saxena
(Senior Adv.)

A. Civil Law - Societies Registration Act,
1860
-
Section
4-B
&
25(2)
-
Membership dispute - Electoral college -
Earlier, the order of Assistant Registrar,
Societies holding membership of 54
members genuine, was upheld by the
High Court in writ petition and Special
Appeal - Controversy of the same
membership again raised - Exercise of
power by Assistant Registrar u/s 4-B to
change it, how long permissible
-
Remedy available discussed - While
exercising power under Section 4-B of
the Act, 1860, the Assistant Registrar,
Societies cannot reopen the controversy
to return a finding qua membership
contrary to what has already been held
by such an authority previously and
affirmed
by
the
High
Court
-
Controversy with regard to the 54
members
did
not
remain
open
to
challenge
any
further
except
in
proceedings to be drawn either under
Section 25(1) of the Act, 1860 or
through a common law remedy of
instituting the suit. (Para 16 and 17)
B. Interpretation of Statute - de facto
doctrine - Meaning and Scope - The
doctrine of de facto is based on sound
principle of public policy and is aimed at
removing any kind of insecurity and
confusion amongst the people whose
rights would get prejudiced in the event
the orders passed or actions taken by a
person who in fact occupied the office, is
held to be void on account of his
occupation of office subsequently being
held to be illegal. (Para 26)
C. Committee of management - Elected
office bearer continuing in office and
working - Challenge to the validity of
the
office,
how
far
effect
their
proceeding and resolution - Application
of de facto doctrine - Held, mere
challenge to an office in absence of any
order of interim stay or rider making
continuance subject by express words,
would not mean that such persons,
board of Management or Committee
illegally continued and so exercise of
power would stand served by the de
facto
doctrine
-
Committee
of
Management that had validly continued
until the elections were set aside, its
conduct
of
proceeding
including
resolution adopted by it, shall stand