# Brij Bhushan Chaudhari and others v. State of U.P. and others

- **Citation:** (2002) 2 ILRA 470
- **Court:** High Court of Judicature at Allahabad
- **Decided:** 2002-03-18
- **Case number:** Writ Petition (Tax) No. 504 of 2002
- **Bench:** S.K. Sen, C.J. S.R. Alam, V.M. Sahai
- **Source:** https://unisonlegal.in/judgment/allahabad-high-court/brij-bhushan-chaudhari-and-others-v-state-of-u-p-and-others-39972
- **Pages:** 38

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http://www.allahabadhighcourt.nic.in
 INDIAN LAW REPORTS ALLAHABAD SERIES [2002
470
(Delivered by Hon'ble M. Katju, J.)

1. Heard Sri S.C. Tripathi for
petitioners,
Sri
Avniash
Misra
for
Respondent No. 1 and learned Standing
Counsel.

2. Petitioners are challenging the
impugned recovery and one of the
grounds taken by the petitioner who are
guarantors of the loan is that the
petitioners are entitled to the benefit of
Section
22
of
the
Sick
Industrial
Companies (special provision) Act 1985
(in short the Act). We are of the opinion
that
prima
facie
the
Act
is
unconstitutional and is violative of Article
14 of the Constitution. This Act gives
protection to the rich businessmen by
staying
the
recovery
against
them
whenever they bring their company
before the B.I.F.R.

3. The poor people of the country do
not get any such protection against their
recoveries. For example if a poor peasant
has taken a loan for seeds, fertiliser, etc.
and if his crop fails e.g. for lack of
monsoons, recovery is issued against him
and his land is sold in pursuance of the
recovery and even his personal assets may
be sold, but this will not be done with
regard to companies because they can go
to the B.I.F.R. and get protection of
Section 22 of the Act.

4. One can understand giving
protection to the poor and weak people,
but the sick Industrial Companies (special
provision) Act, 1985 does just the reverse
by giving protection to the rich in respect
of recoveries against them, while no such
protection is available to the poor people
in respect of recoveries against them. This
is prima facie in our opinion highly
discriminatory against the poor people of
the country.

5. Learned counsel for the petitioner
is permitted to implead the Union of
India. Learned counsel for Union of India
will intimate the learned Attorney General
of India about this order.

6. List on 12.8.2002 before us by
which time parties may exchange the
affidavits.
---------
ORIGINAL JURISDICTION
CIVIL SIDE
DATED: ALLAHABAD 5TH JULY, 2002

BEFORE
THE HON'BLE S.K. SEN, C.J.
THE HON'BLE S.R. ALAM, J.
THE HON'BLE V.M. SAHAI, J.

Writ Petition (Tax) No. 504 of 2002

Brij Bhushan Chaudhari and others

 ...Petitioners
Versus
State
of
U.P.
through
Excise
Commissioner, Allahabad and others

 ...Respondents

Counsels for the Petitioners:
Sri Hemant Kumar
Sri P.P. Srivastava
Sri Bharatji Agrwal
Sri Mukesh Prasad
Sri H.P. Srivastava
Sri Arun Tandon

Counsels for the Respondents:
Sri Ashok Mehta
Sri Rakesh Dwivedi
S.C.

U.P. Excise Act- Section 36 A- The
petitioners do not have any fundamental
right to trade or business in liquor;
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2 All] Brij Bhushan Chaudhari and others V. State of U.P. and others
471
which is fact, the exclusive privilege of
the State.

The grant of licence being in exclusive
privilage of the state under the Rules,
the
State
Government
has
been
conferred power to renew the licence on
such terms and conditions as may deem
fit not proper.

The Rules do not provide for any right of
the petitioners to claim renewal as a
matter of right. If the State Government
decides to renew the licence, it has to
follow the Rules. The same however
does not take away the power of the
State Government to take decision that
no renewal of licence be granted for a
particular year.

Held- para 101

In the case of hand, it is fully established
that the State Government has adopted
uniform polict not to renew the licence.
It has also not been discrimanted in the
sense that there is renewal of one and
non
renewal
of
another.
In
such
circumstances, there is absolutely no
scope to interference.
Case law referred:
AIR 1980 SC P. 680
UPTC 1984 P. 178
UPTC 1988 P. 1348
SCC 2002 (2) P. 127
SCC 1998 P. 1
SCC 1991 (4) P. 139
SCC- 1997 (10) P. 338
AIR 1985 SC P. 956

(Delivered by Hon'ble S.K. Sen, C.J.)

1. The writ petitioners in these writ
petitions
are
licensees
for
country
liquor/foreign liquor and beers. Since
common issues, namely, claiming renewal
of their licences granted to them till
31.3.2002 for another period of one year
from 1.4.2002 and for quashing the notice
dated 18.3.2002 published in daily news
paper (Dainik Jagran, Gorakhpur) are
involved in these writ petitions, they are
being disposed of by this common
judgment. That apart, a large number of
writ
petitions
involving
the
same
questions of facts and law have been
instituted in this court and they have been
connected with these petitions. Therefore,
all those connected writ petitions will be
governed by the decision in these writ
petitions and they are also disposed of by
this common judgment.

2. The case of the petitioners is that
some of the licensees were granted
licenses in the year 2000 and some of
them in the year 2001 for a period of one
year or part thereof, renewable on the
conditions to be decided by the State
Government. According to relevant Rules
governing the grant of license in respect
of country made liquor, foreign liquor,
and beer, to be discussed hereinafter, the
licence granted to the writ petitioners may
be renewed for such period and on such
terms and conditions as to be decided by
the State Government, from time to time.
The State Government, however, had
already issued advertisement on 18th
March 2002 in several newspapers
inviting applications for grant of licence
for retail outlet for sale of beer, country
made liquor and foreign liquor. Some of
the writ petitioners applied for renewal of
their licenses. Their case has not been
considered. However, advertisement has
been issued for issuance of fresh licence.

3. When the writ petitions came up
for admission on 21.3.2002 before a
Division Bench, they were admitted and
an interim order to the following effect
was passed:

"Be that as it may, we are not
inclined to enter into the controversy. We
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 INDIAN LAW REPORTS ALLAHABAD SERIES [2002
472
are of the view that the interest of justice
shall be best served if those petitioners
who have already applied for renewal and
those
whose
applications
were
not
entertained apply within 23rd March 2002,
their cases for renewal is considered by
the State Government in accordance with
law and appropriate decision is taken by
State Government by 25th March, 2002.
In the event of refusal to grant renewal the
State Government to record reasons for
the same."

4. Pursuant to advertisement the
draw of lots shall take place as fixed and
the result shall be declared, but no
contract shall be executed till 5.4.2002. It
is made clear that this order is restricted to
the case of writ petitioners only. The
question of renewal shall be decided by
the Secretary, Excise Department, U.P.
Government, Lucknow.

5. The case shall be taken up on
1.4.2002 at 3 P.M. as specially fixed part
heard matter.

On 1st April 2002, when the matter
again came up for hearing the following
interim order was passed:-

"Learned Advocate General submits
that by way of interim measure it should
be provided that the petitioners who
moved applications by 23.3.2002, are not
required to deposit any money at the
moment.

6. The order passed by Secretary,
Department of Excise, State of U.P. on
25.3.2002 has not been communicated to
the petitioners. It shall be supplied to the
learned counsel for the petitioners by
2.4.2002.

7. State quo as on 31.3.2002 shall
continue till 5.4.2002 so far as the
aforesaid petitioners are concerned.

8. The matter will be taken up on
3.4.2002 at 2 P.M. as part heard.

9. Let certified copy of this order be
supplied to learned counsel for the parties
on payment of usual charges today."

10. Again, the matter came up for
hearing on 4th April 2002 before a
Division Bench consisting two of us, and
it had passed the following orders.

11. Shri S.C. Sinha, Joint Director,
Government Printing Press, Allahabad is
present in the Court in pursuance of our
order passed today before recess.

12. He submits that Director,
Government Printing Press has left for
Lucknow
today
early
morning
for
attending the meeting at Secretariat
Lucknow. He has produced the record and
submits that the Gazette, which is
produced today, was printed yesterday
night i.e. on 3.4.2002.

13. He further submits that Shri G.S.
Sethi, Director, Government Printing
Press has instructed him to print the
Gazette by any means by 3rd April night
since the publication is very important.

14. He further submits it was
received on 14.3.2002 and was in the
process of publication but it could not be
printed.

15. He further submits that no copy
has been sold out to any member of the
public as yet.
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2 All] Brij Bhushan Chaudhari and others V. State of U.P. and others
473

16. Shri S.C. Sinha, Joint Director,
Government Printing Press, voluntarily
submits that he had received instruction
that it must be published in view of the
urgency by night of 3.4.2002 from
Director, Government Printing Press. He
further voluntarily says that the Director
has instructed him specifically to publish
the Gazette by 3.4.2002 from his office at
Allahabad.

17. Considering the statements made
by Shri S.C. Sinha, Joint Director,
Government Printing Press, it appears to
us that the matter has taken a very serious
turn.

18. Shri P.P. Srivastava, learned
counsel for the petitioners in the presence
of the Chief Standing Counsel made a
comment on 3.4.2002 that he apprehends
that such printing of Gazetter shall take
place by night as the printing of Gazette
has not taken place as yet and as such the
repealing Rules 2002 has not really come
in to force. It appears that to circumvent
and to stifle the course of justice, such a
process has been taken, so that the
submission of the learned counsel for the
petitioner cannot have any effect when the
Court is seized of the entire matter. It
shall not be in the interest of the justice to
take the matter lightly. Considering the
gravity of the situation, we direct the
Director, Government Printing Press, Shri
G.S. Sethi, who instructed Shri S.C.
Sinha,
Joint
Director,
Government
Printing Press to print the Gazette by any
means by the night of 3.4.2002 to be
present in the court tomorrow i.e., on
5.4.2002 at 2.00 p.m. The Secretary
Department
of
Excise
and
the
Commissioner of Excise, Uttar Pradesh,
Allahabad shall also be present on
5.4.2002 at 2.00 p.m. and explain on what
basis the printing could be made only in
the night of 3.4.2002. In the meantime no
sale to public of this gazette in question
shall take place.

19. It may be noted that by order
dated 21.3.2002 and 23.3.2002 the
Division Bench, inter-alia, directed as
follows: -

"Be that as it may, we are not
inclined to enter into the controversy. We
are of the view that the interest of justice
shall be best served if those petitioners
who have already applied for renewal and
those
whose
applications
were
not
entertained apply within 23rd March
2002,
their
cases
for
renewal
is
considered by the State Government in
accordance with law and appropriate
decision is taken by State Government by
24th March, 2002. In the event of refusal
to grant renewal the State Government to
record reasons for the same.

Pursuant to the advertisement the
draw of lots shall take place as fixed and
the shall be executed till 5.4.2002. It is
made clear that this order is restricted to
the case of writ petitioners, only. The
question of renewal shall be decided by
the Secretary, Excise Department, U.P.
Government, Lucknow."

20. On 1.4.2002 the Division Bench
passed an order directing the status quo as
on 31.3.2002 to continue till 5.4.2002 in
Writ Petition No. 504 of 2002 and Writ
Petition No. 509 of 2002 and in large
number of petitioners which came up for
hearing:

"We are prima facie satisfied that the
said order was not followed in its true
spirit.
By
one
general
order
the
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 INDIAN LAW REPORTS ALLAHABAD SERIES [2002
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applications for renewal of the applicants
for renewal were rejected referring to
section 36-A of the U.P. Excise Act. It is
well settled that no body has a specific
right to renewal, but each case has to be
decided in its own perspective in view of
Rules-5 for country and foreign liquor and
6 for Beer of U.P. Excise Rules, 2001.
The said rules provide for renewal and the
State Government has exclusive power to
decide the terms and conditions of such
renewal. The Rules of 2002 however
provided that the consent of the licensee
has to be obtained for the purposes of
renewal, Prima facie it appears to us that
the said order rejecting the case for
renewal was passed mechanically and
without application of mind. The Chief
Standing Counsel however pointed out on
the last occasion i.e. on 3.4.2002 that
Rules for the year 2001 have been
repealed with regard to country liquor
and, therefore, the petitioners cannot get
the benefit. We have already noted that
the repealing Act has not been published
as required under section 77 of the U.P.
Excise Act, 1910 and as such the same
has not come into force. In fact, the
Secretary,
Excise
Department,
Government of U.P., in his order dated
25th March, 2002, has not mentioned the
said Rules of 2001 have been repealed
and repealing rules have come into force
by publication in the official gazette.
Accordingly, we are prima-facie of the
view that the interim order of status quo,
which had continued upto 31.3.2002, shall
continue upto 10.4.2002 subject to further
order that may be passed tomorrow, since
we have heard the case of all the
petitioners today, all the petitioners shall
be entitled to this interim relief.

21. This interim order shall,
however, continue subject to the condition
that there is no arrears due against the
petitioners. In the event, there is any
arrear against any of the petitioners; they
will not be permitted to run their shops.
Since we are passing this order, by way of
interim measure, the petitioners shall be
granted licence on day-to-day basis. As an
interim measure the petitioners may be
permitted to run the spot on day today
basis on the terms and conditions as may
be fixed by the State Government. It is
expected that the supply of liquor shall be
ensured provided the petitioners make
payment of the amount due and payble
upto 10.4.2002 at a time.

22. The matter shall be listed on
5.4.2002 along with all connected matters,
as part-heard at 2.00 P.M. for hearing.

23. The office is directed to supply
copy of this order to learned Chief
Standing Counsel today for compliance of
the order."

24. The matter was thereafter taken
up on 7th April, 2002 as part heard when
it was directed that the matter shall appear
as part heard on 8th April, 2002 and
interim order shall continue up to that
date. Thereafter, the matter was heard on
several dates, i.e. on 8.4.2002, 10.4.2002
and
11.4.2002,
on
11.4.2002,
the
following orders, by the Division Bench
consisting of two of us, were passed:-

"Sri S.C. Budhwar, learned Senior
Advocate assisted by Sri Neeraj Sharma,
learned Advocate, intervener in Writ
Petition No. 595 of 2002 argued the case
at length and placed before us the various
provisions of the Uttar Pradesh Excise
(Settlement of Licences for Retail Sale of
Beer) Rules, 2001 (hereinafter referred to
as the Rules), other relevant rules, country
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2 All] Brij Bhushan Chaudhari and others V. State of U.P. and others
475
liquor, foreign liquor and all the three
Rules of 2002 particularly Rules 7,8,9,10
and 11 of the Rules which relate to the
procedure and settlement of shops on the
basis of new applications received. The
State Government in spite of our granting
repeated time has declined to life (file)
counter affidavit in the matters. Therefore
the State Government is directed to
produce records relating to the procedure
for grant of licence and settlement of
shops adopted by it by 15th April, 2002.
The matter shall be taken up as part heard
at 2.00 P.M. on 15.4.2002. On 10.4.2002
in Writ Petition Nos. 504 and 509 of 2002
this Court has passed the following order:

"Put up tomorrow as part heard at
2.00
P.M.
alongwith
all
connected
matters. The interim order shall continue
till tomorrow.

This order shall also apply in all other
connected matters where the interim order
is already operating.

Till 15.4.2002 status quo as of today be
maintained. This order shall apply in all
other connected matters where the interim
order had been passed by this Court. The
office is directed to issue certified copy of
this order in all connected matters where
said order is already operating.

The
Chief
Standing
Counsel
shall
communicate this order to the State
Government
and
the
Excise
Commissioner. The office is directed to
hand over a copy of this order today to the
learned Chief Standing Counsel."

25. The matter was finally heard and
concluded on 15th April 2002 when the
interim order of status quo was directed to
continue till 19th April, 2002. It was also
provided that the said interim order was to
continue in all other connected matters in
which the interim order was already
operating. Ultimately, on 1.5.2002, the
Division Bench consisting of two of us
passed the following orders:-

"....it may be noted that during the
course of hearing on 15.4.2002 learned
Advocate General pointed out to us that
similar writ petitions were being heard by
Division Bench of the Lucknow Bench
and the Bench had reserved the orders, we
had also concluded the hearing and
reserved the judgment and the interim
orders was directed to continue till
19.4.2002. In the meantime, however, we
were informed on 17.4.2002 that on
16.4.2002
that
the
Division
Bench
comprising Hon'ble Mr. Justice Pradeep
Kant and Hon'ble Mr. Justice M.A. Khan,
dismissed the writ petition no. 1543 (MB)
of 2002 Kiran Jaiswal v. State of U.P. and
others and connected writ petitions.

26. Records of the said writ petitions
were called for and it appears from the
records of the said writ petitions that the
said writ petitions were assigned to the
Bench comprising Hon'ble Mr. Justice
Bhalla and Hon'ble Mr. Justice R.D.
Shukla and on 25.3.2002. The said
Division Bench passed the following
order:-

"......To maintain judicial property
and law of certainty, we find it to be
appropriate to direct the Secretary, Excise
Department, U.P. Government, Lucknow
to
dispose
of
petitioners'
renewal
applications if they have been received by
23rd March, 2002 upto 11 P.M., in
accordance with law and the remaining
order of the two benches (Supra) would
also be available to the petitioners.
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 INDIAN LAW REPORTS ALLAHABAD SERIES [2002
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List on 1st of April, 2002.

27. We are further of the view that
let these matters be communicated/placed
before the Hon'ble Chief Justice during
Holi vacation for considering as to where
all the matters can be heard and disposed
of together i.e., the matters filed at
Allahabad and at Lucknow by the same
Division Bench...."

28. On the reopening of the Court on
1.4.2002 the said matters were taken up
by Hon'ble Mr. Justice Pradeep Kant and
Hon'ble Mr. Justice M.A. Khan. On
3.4.2002 the said Division Bench referred
to the order passed by Hon'ble Mr. Justice
J. Bhalla and Hon'ble Mr. Justice R.D.
Shukla,
passed
on
25.3.2002
and
proceeded with the hearing of the matter,
in view of the fact that there was no
specific order of the Hon'ble The Chief
Justice on the observation made by the
Division Bench on 25.3.2002. The bench
on 3.4.2002 passed the following order:-

"A Division Bench of this Court
while entertaining the writ petitions noted
the fact that similar writ petitions have
been filed both at Allahabad as well at
Lucknow and observed that these matters
be communicated/placed before Hon'ble
the Chief Justice for considering as to
where all the matters can be heard and
disposed of together that is the matters
filed at Allahabad and at Lucknow by the
same Division Bench. These matters were
listed on 1.4.2002 (Listing) that because
of
the
ignorance,
the
aforesaid
observations made in the order, could not
be communicated to Hon'ble the Chief
Justice, therefore, we postponed hearing
for today and required the Joint Registrar
(Listing) to place these matters before
Hon'ble
the
Chief
Justice,
in
the
meantime.

29. Sri P.K. Chaturvedi, Joint
Registrar (Listing) is present. He informs
that the order has been sent and placed
before Hon'ble the Chief Justice on 1st
April, 2002 itself but no written orders
have been sent or communicated till this
time. He has been informed telephonically
by Sri D.N. Agarwal, Joint Registrar
(Listing), Allahabad that the Hon'ble
Chief Justice has observed that he could
not pass any order for transferring the
petitions otherwise than under Clause 14
of the Amalgamation Order which can
only be passed when he sits at Lucknow.

30. Learned counsel for the
petitioners
argued
that
since
the
jurisdiction to entertain the petitions at
Lucknow has already been upheld by the
Division Bench while entertaining the
writ petitions and there being no prayer
for transferring the matters under Clause
14 of the Amalgamation Order nor there
is any such order till date and Hon'ble the
Chief
Justice
having
been
duly
communicated the observation made by
the
Division
Bench
there
is
no
impediment for the Court to proceed with
the matters.

31. We are also of the view that in
view of the information given by the Joint
Registrar (Listing) and the fact that the
order has been communicated to Hon'ble
the Chief Justice and the writ petitions
have been entertained at the Lucknow,
there appears to be no legal impediment
in hearing the matters and, therefore, we
proceed with the hearing.
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2 All] Brij Bhushan Chaudhari and others V. State of U.P. and others
477
32. Put up tomorrow i.e., on
4.4.2002 for hearing alongwith other
connected matters."

33. The question, however, still
remains that if the matter was assigned to
another bench, whether the matter could
be taken up by the other Division Bench.
However, we are not willing to go into the
said controversy being a bench of coordinate jurisdiction. We feel that the
question should be decided by a larger
bench or higher forum wit several other
questions which have been raised on
behalf of the petitioners, by representing
counsel for the petitioners Mr. Arun
Tandon and Mr. Mukesh Prasad and Mr.
K.D. Mishra.

34. It has been strongly contended
by Mr. Arun Tandon that the judgment of
the Division Bench of Lucknow is not
binding, being contrary to the settled law
that the matter was assigned to another
bench could not be decided. That apart it
was also argued that the judgment and
decision of Division Bench of Lucknow
Bench in Kiran Jaiswal's case is per
incuriam.

35. Mr. Mukesh Prasad, learned
counsel on behalf of another bunch of the
writ petitioners states that the judgment
and the order passed by the Division
Bench at Lucknow should be treated as
per incuriam. He argued that matter
should be referred to the larger bench.

36. Mr. K.D. Mishra, learned
counsel for the petitioner in writ petition
no. 610 of 2002 has argued vehemently
that the Rules of 2002 are ultra-vires U.P.
Excise Act 1910 since the Commissioner
under the statute has not been authorized
for the purpose of grant of licence as has
been done by the Rules 2002. He also
placed before us the necessary averments
in the writ petition and he has prayed in
the writ petition also, which are as
follows:-

"(i) Issue a writ, order or direction in
the nature of certiorari to quash the U.P.
Excise (Settlement of licences for retail
sale of country liquor) Rules, 2002,
notified by the notification No.27091/XLicence-59, Dated March, 14, 2002
(Annexure-1 to the writ petition).

(ii) Issue a writ order or direction in
the nature of Mandamus directing the
respondents to consider for the extension
of renewal of the petitioners licences for
further period or till the New Rules are
framed by the State Government."

37. The petitioners have challenged
the lottery system in Mr. K.D. Mishra's
Writ Petition No. 610 of 2002 and also
prayed for the relief of quashing of the
Rules of 2002, what was the effect of the
said Rules on the advertisement as also on
the notification on the basis of which the
lottery was held pursuant to the Rules
2002 and on the basis of letter of
14.3.2002 from Joint Secretary, U.P.
Government to Excise Commissioner,
U.P. which is stated to be the policy of the
State Government. We called upon the
Chief Standing Counsel who has very
fairly submitted that the said letter which
is treated as Government policy is the
basis of the Rules 2002. The said policy is
reflected in the said Rules.

38. It may be noted that on the same
day the Policy and Rules came to light.
Admittedly, the said Rules 2002 were not
taken into consideration by the Division
Bench.
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 INDIAN LAW REPORTS ALLAHABAD SERIES [2002
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39. The Division Bench, felt that it
was not necessary to consider the Rules. It
has also been argued before us by the
counsel for the petitioners that if the
Rules 2001 and 2002 is declared to be not
valid and binding then the U.P. Licensing
under the Surcharge Fee System Rules
1968 shall hold the field. Naturally, the
procedure mentioned there in has to be
complied with and procedure under the
2002 Rules cannot have any effect. It is
the specific case of the State Government
that both the administrative policy and the
advertisement are in consonance with the
2002 Rules. This aspect of the matter has
been totally ignored by the Division
Bench at Lucknow perhaps due to
inadvertence or due to the fact that
learned counsel appearing therein did not
make out this case.

40. Be that as it may, the matter
involves substantial question of law of
very great importance as argued before
us. Accordingly, we are framing the
following question:-

1.
If the judgment and order passed by
Division Bench comprising of Hon. Mr.
Justice Pradeep Kant and Hon. Mr. Justice
M.A. Khan at Lucknow, dismissing the
writ petition on 16.4.2002, is valid and
has any binding effect in view of the fact
that the said writ petitions were assigned
to another bench comprising of Hon. Mr.
Justice J. Bhalla and Hon. Mr. Justice
R.D. Shukla?

2.
If the principles of per incuriam and
sub silentio are applicable to the said
judgment and decision rendered by the
Division
Bench
of
Lucknow
on
16.4.2002?

3(a). If the rules framed by the Excise
Commissioner being Rules of 2000, 2001
and 2002 for country liquor, foreign
liquor and beer on the basis of which, it
has been contended by the respondents
that grant of excise license for the period
2000-2001, 2001-2002 and 2002-2003
was made, are valid in the eye of law?

3(b). If so, when the said Rules came into
force?

4.
Are the petitioners entitled to the
renewal of licence or for grant of new
licence since they filled up the forms and
paid the deposit as asked for by the
respondent authorities?

41. We refer the entire bunch of writ
petitions to be heard and decided by the
larger bench, on the aforesaid questions
amongst other question, which may be
examined by it, for the determination by
said bench to be constituted by the Chief
Justice.

42. This order shall be applicable to
Civil Misc. Writ Petition Nos. 504 of
2002, Writ Petition No.509 of 2002, Writ
Petition No. 610 of 2002 and all other
connected writ petitions."

43. It may be noted that pursuant to
the interim order dated 21.3.2002, the
application for renewal of the licenses
were considered by the Secretary, Excise
Department who passed an order on
25.3.2001 declining to grant renewal of
excise licenses issued for 2001-02. The
main reason disclosed for issuance of
such order was that the State Government
had taken a policy decision not to grant
renewal of excise license and to hold
public lottery for the purpose.
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2 All] Brij Bhushan Chaudhari and others V. State of U.P. and others
479

44. Mr. Bharatji Agarwal, learned
Senior Advocate assisted by Mr. Mukesh
Prasad, Mr. H.P. Srivastava and Mr. Arun
Tandon, learned Advocates argued on
behalf of most of the writ petitioners and
others learned counsel, appearing on
behalf of rest of the writ petitioners,
adopted their submissions. The contention
of Mr. Bharatji Agrawal, learned Senior
Advocate is that the writ petitioners did
not commit any breach of the terms and
conditions of the licence and they have
complied
with
all
the
necessary
formalities. As such, they moved an
application for renewal of the licence. On
the one hand, applications of some of the
petitioners were rejected by the State
Government by means of an order dated
25.3.2002 and renewal applications of
other
petitioners
were
not,
at
all,
entertained whereas, on the other hand,
the applications of other petitioners have
been accepted but could not be decided by
the respondents on the ground that there
did not exist any direction of this Court.
Mr. Agarwal also urged that the license of
the petitioners is to be renewed for such
period and on such terms and conditions,
as may be decided by the State
Government in accordance with Rules of
2001 and 2002, as amended by U.P.
Excise (Second) Amendment Rules, 2002
and U.P. Excise (Third) Amendment
Rules, as well as, terms and conditions
and the period is the discretion of the
State Government subject to which the
existing licenses are to be renewed.

45. Mr. Agarwal further urged that
the
writ
petitioners
have
already
expressed consent for renewal prior to
31.3.2002. Thus, the advertisement issued
by the State Government on 18.3.2002 for
grant of license for retail sale of beer,
foreign liquor and country liquor is
contrary to law and provisions of the
existing Rules of 2002 as well as
amended Rules of 2001 which came into
force
with
effect
from
3.4.2002.
Therefore, the petitioners who were
license holders up to 21.3.2002 are
certainly entitled to get their applications
for renewal considered, on merits, as per
Rules and amended Rules, issued on
14.3.2002 and published in the Official
Gazette on 3.4.2002.

46. Mr. Agrawal very specifically
pointed out that on the own showing of
Mr. G.S. Sethi, the Joint Director,
Government Printing Press Allahabad, the
amended
Rules
of
2002
were
printed/published in the official Gazette in
the night of 3.4.2002 and, thus, by virtue
of Section 77 of U.P. Excise Act, new
Rules shall be deemed to have come into
force from the date of publication in the
official Gazette. It was next argued by
Mr. Bharatji Agarwal that any action
taken under the new Rules of 2002 for
drawing the lottery prior to 3.4.2002 shall
be invalid. In support of his contention,
Mr. Agarwal placed reliance in State of
U.P. V. Kishori Lal Miccha (A.I.R. 1980
S.C.-680), wherein the Hon'ble apex
court, at page 682 of the Report has held
as follows:-

"Section 77 of the U.P. Excise Act,
1910
States-All
rules
made
and
notification issued under the Act shall be
published in the official Gazette and shall
have effect as if enacted in this Act from
the date of such publication or from such
other date as may be specified in the
behalf. The High Court found that the
conditions mentioned in Rule 357 had
never been published as required and they
did not, therefore, have the force of law.
The High Court held that part II of the
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 INDIAN LAW REPORTS ALLAHABAD SERIES [2002
480
Excise Manual which includes Rule 357
contained
provisions
which
were
"commonly referred to as rules" but were
not really statutory rules and that it was "
a sort of bocks of guidance'. Before us, it
was claimed on behalf of the appellant
that some of the conditions contained in
Rule 358 had been published in the
official Gazette, but the learned counsel
for the appellant, State of Uttar Pradesh
was not in a position to dispute that at
least the last part of the 5th condition
providing that in case of default if the
price fetched at the resale was less than
the bid as the first sale, the difference
would be recovered from the defaulter,
had not been published. That being so, it
must be held that there was no law under
which the respondent could be asked to
make amends for the shortfall."

47. The learned senior counsel- Mr.
Agarwal further submitted that similar
view was taken by a Division Bench of
this Court in Vijay Prakash Jaiswal and
others V. State of U.P. and others-1984
U.P.T.C.-178 (para 17). According to Mr.
Agarwal, the aforesaid decision has been
upheld by the apex court in State of U.P.
V. M/s National Industrial Corporation,
decided on 17.9.1976. The apex court has
approved the view of this court to the
effect that the additional license fee of
Rs.25,000/- cannot be recovered from the
excise licenses under the U.P. Excise Act
even though such a condition was in
existence in the excise license but the
rules made were not printed in the
Gazette. Hence, the statutory rules will
prevail.

48. Mr. Agrawal vehemently urged
that the action of drawing lotteries on the
basis of Rules of 2002 is abinitio invalid
and no license can be granted on the basis
of such lottery drawn in pursuance of the
Rules of 2002 as no action under the
Rules of 2002 could be permissible in the
eye of law, prior to 3.4.2002 (the date,
when the Rules of 2002 came into force).
According to Mr. Agrawal, renewal
applications are to be considered as per
existing Rules of 2001, as amended by
U.P. Excise Rules of 2002, (U.P. Excise
Rule No. 6 of 2002 for beer and U.P.
Excise Rule No. 5 of 2002 for foreign
liquor) and similarly for country liquor as
these Rules of 2002 have also come into
force
with
effect
from
3.4.2002.
According to Mr. Agrawal, learned Senior
Counsel, the administrative instructions of
14.3.2002 contained in the letter of
Secretary to Excise Commissioner, relied
upon by the State, being contrary to rules,
is invalid and, therefore, the State cannot
get any advantage of the said instructions
for the purpose of renewal of license by
way of lottery. In support of this
contention, he placed reliance on the
decision in Aditya Chemicals V. State of
U.P.- 1988 U.P.T.C.-1348 Km. M.
Chikka Puttaswamy V. State of Andhra
Pradesh- AIR 1985 S.C. 956 and
Collector of Central Excise Bombay V.
Kores (India) Ltd., Thane- 1997 (10)
SCC-338 (para 4). The argument of Mr.
Agrawal is that the executive instructions
and the circulars, if they are favourable to
the assessee can be relied upon by the
assessee as binding on the Department,
but the administrative instruction, which
are contrary to law can have no binding
effect either on the assessee or on the
court as has been held by the apex court
in Collector of Central Excise, Bombay's
case (para 4) (Supra). According to Mr.
Bharatji Agrawal, Rules 5 and 6 of the
existing rules are binding upon the
Government and the Government is
estopped from asserting the same to be
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2 All] Brij Bhushan Chaudhari and others V. State of U.P. and others
481
contrary to Section 36-A of U.P. Excise
Act (hereinafter referred to as 'the Act').

49. Mr. Agrawal, learned senior
counsel strenuously urged that section 36A of the Act is an enabling provision. It
enables the State Government and the
Excise Commissioner to frame Rules in
exercise of powers under Section 40 and
41 of the Act in respect of renewal of a
license. In exercise of powers under
Section 41 of the Act, the Excise
Commissioner has framed the Beer,
Country Liquor and Foreign Liquor
Rules, which provide for renewal of
licence. Thus, the petitioners are entitled
for their application to considered on
merits for renewal on the basis of the
existing Rules for the year 2001 amended
by Rules of 2002, which has now come
into force with effect from 3.4.2002.

50. The further argument of Mr.
Agrawal is that Rules 5 and 6 are not
contrary to Section 36-A of the Act and it
is not open to the State Government to
argue that the Rules are contrary to
Section 36-A of the Act. To fortify his
submission, Mr. Agrawal placed reliance
on paragraph 11 of the decision of
Hon'ble the Supreme Court in Collector of
Central Excise Vadodra Vs. Dhiren
Chemical Industries- (2002) 2 SCC-127,
wherein, the apex court has held that if
there are circulars issued by the Central
Board of Excise and Customs which place
a different interpretation upon the said
phrase, that interpretation will be binding
upon
the
Revenue
regardless
of
interpretation placed by the Supreme
Court.

51. With regard to question no. 1 for
consideration by the Full Bench, citing
paragraph 59 (4) of the decision of apex
court in State of Rajasthan V. Prakash
Chand and others- 1998 SCC-1, it has
been submitted by Mr. Agrawal learned
Senior Advocate assisted by Mr. Mukesh
Prasad, learned Advocate, that a Bench
can only take up judicial business
assigned to it by or under the direction of
Hon'ble the Chief Justice. In the instant
case, since the matter was specifically
assigned to the Bench presided over by
Hon'ble Jagdish Bhalla, J. by the Chief
Justice, Mr. Agrawal contended that the
Division Bench presided over by Hon'ble
Mr. Pradeep Kant, J. had no jurisdiction
to decide the matter and as such, the said
decision is no decision, in the eye of law,
and the same is not binding.

52. So far as question no.2 is
concerned, it has been contended by Mr.
Agrawal that the conclusion of law by the
Lucknow Bench of this court, dated
16.4.2002 to the effect that the writ
petitioners have failed to establish any
enforceable right for consideration of
renewal of licence for excise year 200203, falls within the rule of sub-silentio and
is per incuriam, since the Lucknow Bench
of this court has not considered all the
relevant provisions of the Act and the
Rules framed there under and several
issues have been left open. They were not
adjudicated upon by the Lucknow Bench.
To fortify his contention Mr. Agrawal
took us through paragraphs 40 to 42 of the
decision of apex court in State of U.P. and
another V. Synthetic and Chemicals Ltd.
and another (1991) 4 SCC-139 Mr.
Agrawal, however, submitted that the
order passed by the Lucknow Bench of
this court, in any event, cannot and will
not prevent the Full Bench of this court to
pass an order and to take an appropriate
decision, irrespective of the findings
recorded by the Division Bench, since this
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 INDIAN LAW REPORTS ALLAHABAD SERIES [2002
482
Bench is a larger Bench and, therefore,
the question of validity of the order
passed by the Division Bench as on the
question of jurisdiction or on the question
of sub-silentio and per incuriam has
become immaterial.

53. So far as question no.3 is
concerned, Mr. Agrawal has submitted
that there is no infirmity in the Rules
framed by the Excise Commissioner. The
Rules of 2000, 2001 and 2002 have been
validly
framed
by
the
Excise
Commissioner in exercise of powers
under Section 41 of the Act. By framing
Rule 5 of the Uttar Pradesh Excise
(Settlement of Licenses for Retail of
Country Liquor) Rules, 2001, Foreign
Liquor Rules, 2001 and Beer Rules, in
exercise of power under Section 41 (a),
the Excise Commissioner has imposed
two specific conditions, firstly, that the
licenses will be for an excise year, and,
secondly, that the licence will be
renewable.