# M. R. PATEL v. STATE OF BIHAR AND OTHERS

- **Citation:** [1965] 2 S.C.R. 693
- **Court:** Supreme Court of India
- **Decided:** 1965-01-05
- **Case number:** Civil Appeal No. 331 of 1962
- **Bench:** P. B. Gajendragadkar, M. Hidayatullah, 1. C. Shah, S. M. S!Kri, R. S. Bachawat 11
- **Source:** https://unisonlegal.in/judgment/supreme-court-of-india/m-r-patel-v-state-of-bihar-and-others-3434
- **Pages:** 6

## Headnote

Bihar and Orissa Excise Act, 1915 (Bihar and Orissa Act 2 of 1915},
u. 8, 35, 38 to 91-Board of Revenue-Issue of Directions-Whether
could increase security deposit-Powers of Revision-If exercisable
suo motu-Limitation.
Consequent upon a direction by the Board of Revenue, Bihar, fixing
tho security deposit ot Excise shops working under a certain system, the
Commissioner of Excise directed realisation of the defecit in the security
depooit of the appellant's shops.
The appellant moved
the Board ot
Revenue for revision of the Excise Commissioner's order. The Board of
Revonue held that it was open to the appellant to move the Excise Com·
missioner for relief.
Subsequently on the appellant's motion the Exciso
Commissioner in supersession of his previous order, directed that in the
special circumstances of the case, the security depoit in respect of the
appellant's shop need not be increased. In spite of a representation made
by the Deputy Commissioner, the Excise Commissioner refused to revise
his order. At the request of the Deputy Commissioner the Commissioner
of the Division referred the matter to the Board of Revenue. After hearing
the appellant, in exercise of its powers of revision under s. 8 of the Act
the Board, suo motu, set aside the order of the Excise Commissioner
with the direction that until the expiry of the current licences there would
be no change in the amount of security, but proper security in terms of
the eeneral directions by the Board should be demanded from the appellant at the time of the renewal of the licenses. In appeal,
HELD : (i) Neither the orginal order nor the
subsequent
order
was passed by the Excise Commissioner under s. 35 on a consideration of
the matters referred to in that section. The finality of s. 35 did not attach
to these orders and the Board of Revenue had ample power to revise them ·
under s. 8. [696 B-C]
(ii) On a true construction ot ss. 38 and 91 of the Act, the Board
in exercise of its powers under s. 38 road with s. 91 could from time to
time issue general directions with regard to the conditions of any licence
sranted under the Act including the amount of security to be deposited
by the licensee. [696 G-H]
(iii) Instruction No. IOI (10) of the Board of Revenue at p.
30
of Vol. III of the Bihar and Orissa Excise Mannual, 1955 Ed. read with
Board's circular letter No. 8624 dated September 9, 1956 did not prevent
onhancement of security at the time of the renewal of license.
[ 697
C-DJ
(iv) The Board ot Revenue may exercise its powers of revision under
1. 8(3) suo motu. [697 E-F]
(v) In a case where the Board exercises its power of revision of its
own motion, no question of limitation arises. [697 HJ
CML APPELLATE JURISDICTION: Civil Appeal No. 331 of
1962.
694
SUPRBMB COURT REPORTS
(1965) 2 S.C.ll.
Appeal by special leave from the Resolution dated October 4,
A
1959 of the Board of Revenue, Bihar, in Case No. 124 of 1959.
Rajeswari Prasad and S. P. Varma, for the appellant.
C. K. Daphtary, Attorney-General, R. K. Garg, S. C. A.garwala and D. P. Singh, for the respondents.

## Text

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M. R. PATEL
v.
STATE OF BIHAR AND OTHERS
January 5, 1965
693
[P. B. GAJENDRAGADKAR, C.J., M. HIDAYATULLAH, 1. C. SHAH,
S. M. S!KRI AND R. S. BACHAWAT 11.J
Bihar and Orissa Excise Act, 1915 (Bihar and Orissa Act 2 of 1915},
u. 8, 35, 38 to 91-Board of Revenue-Issue of Directions-Whether
could increase security deposit-Powers of Revision-If exercisable
suo motu-Limitation.
Consequent upon a direction by the Board of Revenue, Bihar, fixing
tho security deposit ot Excise shops working under a certain system, the
Commissioner of Excise directed realisation of the defecit in the security
depooit of the appellant's shops.
The appellant moved
the Board ot
Revenue for revision of the Excise Commissioner's order. The Board of
Revonue held that it was open to the appellant to move the Excise Com·
missioner for relief.
Subsequently on the appellant's motion the Exciso
Commissioner in supersession of his previous order, directed that in the
special circumstances of the case, the security depoit in respect of the
appellant's shop need not be increased. In spite of a representation made
by the Deputy Commissioner, the Excise Commissioner refused to revise
his order. At the request of the Deputy Commissioner the Commissioner
of the Division referred the matter to the Board of Revenue. After hearing
the appellant, in exercise of its powers of revision under s. 8 of the Act
the Board, suo motu, set aside the order of the Excise Commissioner
with the direction that until the expiry of the current licences there would
be no change in the amount of security, but proper security in terms of
the eeneral directions by the Board should be demanded from the appellant at the time of the renewal of the licenses. In appeal,
HELD : (i) Neither the orginal order nor the
subsequent
order
was passed by the Excise Commissioner under s. 35 on a consideration of
the matters referred to in that section. The finality of s. 35 did not attach
to these orders and the Board of Revenue had ample power to revise them ·
under s. 8. [696 B-C]
(ii) On a true construction ot ss. 38 and 91 of the Act, the Board
in exercise of its powers under s. 38 road with s. 91 could from time to
time issue general directions with regard to the conditions of any licence
sranted under the Act including the amount of security to be deposited
by the licensee. [696 G-H]
(iii) Instruction No. IOI (10) of the Board of Revenue at p.
30
of Vol. III of the Bihar and Orissa Excise Mannual, 1955 Ed. read with
Board's circular letter No. 8624 dated September 9, 1956 did not prevent
onhancement of security at the time of the renewal of license.
[ 697
C-DJ
(iv) The Board ot Revenue may exercise its powers of revision under
1. 8(3) suo motu. [697 E-F]
(v) In a case where the Board exercises its power of revision of its
own motion, no question of limitation arises. [697 HJ
CML APPELLATE JURISDICTION: Civil Appeal No. 331 of
1962.
694
SUPRBMB COURT REPORTS
(1965) 2 S.C.ll.
Appeal by special leave from the Resolution dated October 4,
A
1959 of the Board of Revenue, Bihar, in Case No. 124 of 1959.
Rajeswari Prasad and S. P. Varma, for the appellant.
C. K. Daphtary, Attorney-General, R. K. Garg, S. C. A.garwala and D. P. Singh, for the respondents.
The Judgment of the Court was delivered by
Bachawat, J. The appellant holds yearly licenses for the retail
sale of country spirit in respect of six shops in the town of.
Jamshedpur working under the sliding scale system under the
Bihar and Orissa Excise Act, 1915 (Bihar and Orissa Act 2 of
1915) hereinafter referred to as
the Act. A total sum ot
Rs. 11,099 was demanded and paid as security in respect of all
the licenses.
The original licenses in respect of the six shops
were issued long ago and were renewed from year to year.
By
an order dated June 27, 1956, the Board of Revenue, Bihar
directed that "the security deposit of an Excise shop working
under the sliding scale system is hereby fixed as equivalent to two
months' average license fees of the shop." The security depos!t
payable by the appellant on the basis of this direction would
amount to about Rs. 68,000. On November 14, 1956, the Commissioner of Excise, Bihar directed the Deputy Commissioner,
Singhbhum to realise from the appellant the deficit in the security
deposits of his shops.
This order was
communicated to the
appellant on December 7, 1956. On January 9, 1957, the appellant filed a petition before the Board of Revenue, praying for a
revision of the order of the Excise Commissioner dated November
14, 1956.
By order dated March 20, 1957, the Board of Reve>-
nue held that the
merits of the appellant's case need not be
examined at that stage, and observed that the order of the Excise
Commissioner would constitute no bar to the appellant moving
the Commissioner for considering the special circumstances, if
any, of his case on merits and, for this purpose, it would be open
to the appeilant to move the Commissioner in an appropriate
manner.
Subsequently, the appellant moved the Excise Commissioner for reconsideration and setting aside of his previous order
dated November 14, 1956. By his order dated March 5, 1958,
the Commissioner of Excise, in supersession of his previous order,
directed that in the special circumstances of the case, the security
deposit in respect of the appellant's shops need not be increased
and the appellant could continue to manage the shops on the
-existing total security of Rs. 11,099 only.
In spite of a representation made by the Deputy Commissioner,
Singhbhum, the
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M. 1. PATEL v. STATE (Bachawat, 1.)
895
Excise Commissioner refused to revise this order. On June 27,
1958, at the request of the Deputy Commissioner, Singhbhum,
the Commissioner, Chotanagpur Division, referred the matter to
the Board of Revenue. On April 24, 1959, the Board of Revenue
directed the issue of a notice to the appellant asking him 'to show
cause why he should not be ordered to pay the difference between
the prescribed security deposit and the amount already deposited.
By a petition dated July 30, 1959, the appellant showed cause.
At the hearing of the case before the Board of Revenue, the
appellant was represented by counsel. By an order dated October 4, 1959, the Board of Revenue, in exercise of its powers of
revision under s. 8 of the Act, set aside the order of the Com•
missioner of Excise dated March 5, 1958, with the direction that
until the expiry of the current licenses on .March 31, 1960 there
would be no change in the amount of security, but the proper
security in terms of the general directions issued by the Board
should be demanded from the licensee at the time of the renewal
Of the licenses, wiih effect from the next licensing year.
The
appellant now appeals to this Court from this order by special
leave.
On behalf of the appellant, Mr. Rajeshwari Prasad contended
that in view of s. 35 of the Act, the Board of Revenue could not
under s. 8 of the Act revise the order of the Excise Commissioner
dated March. 5, 1958. There is no substance in this contention.
Section 8 ( 3) provides that the Board may revise any order passed
by the Excise Commissioner.
Section 35 provides that the
Excise Commissioner may, on a consideration of the list, objections and opinions sent to him by the Collector under s. 34,
modify or annul any order passed or any license granted by the
Collector, and notWithstanding anything contained in s. 8, his
orders shall be final.
The Excise Commissioner did not pass the
order dated· March 5, 1958 in exercise of his powers under s. 35,
on a consideration of the list, objections and opinions sent to him
under s. 34. He passed the order in. exercise of his general powers
of control over the collector and the Excise Department under
ss. 8; and 7(2)(a) read with s. 2(7) of the Act.
During tho
currency of the licenses issued to the appellant for the year
195(;.57, a question arose whether the additional security should
be demanded from ·the appellant in view of the general directions
iasued by th~ Board of Revenue on June 27, 1956. By his order
B
dated· November 14, 1956, the Excise Commissioner directed that
tH additional security should be realised from the appellant. On
a, nwision petition filed. by the af>pellant under s. 8, the Board of
696
SUPREME
COURT
REPORTS
[1965] 2 S.C.ll.
Revenue by its order dated March 20, 1957, permitted the appellant to move the Excise Commissioner for reconsideration of his
order dated November 14, 1956. On being moved by the appellant under. the liberty so granted by the Board of Revenue, the
Excise Commissioner by his order dated March 5, 1958 reviewed
and set aside his previous order on a consideration of the general
directions issued
by the Board of Revenue, the Board's order
dated March 20, 1957 and the special circumstances of the case.
Neither the original order dated November 14, 1956 nor the
subsequent order dated March 5, 1958 was passed by the Excise
Commissioner under s. 3 5 on a consideration of the matters
referred to in that section.
The finality of s. 35 did not attach
to these orders and the Board of Revenue had ample power to
revise them under s. 8.
Mr. Prasad next referred us to s. 40 of the Act and the stan•
dard form of license for the retail vend of country spirit, and
contended that only the authority granting the license could fix
the amount of the security,
and one of the conditions of tho
license was that the licensee would be required to deposit .only
the amount so fixed but the Board of Revenue by its order dated
October 4, 1959 illegally and in excess of its powers altered the
amount of the security so fixed and the corresponding condition
in the license for the deposit of the amount.
This argument is
based on a misreading of the order of October 4, 1959, and must
be rejected. By that order, the Board expre;ssly directed that
there would be no change in the amount of the security during
the currency of the license. The licenses were due to expire on
March 31, 1960.
The Board directed that if and when
the
licenses were renewed with effect from the next licensing year,
the proper security should be demanded from the licensee as a
condition of the renewal.
No_ exception can be taken to this
direction.
The licensee had no vested right to a renewal of the
license.
Section 45 of the Act provides that he shall have no
claim to its renewal.
The licensing authority was not bound to
renew the license.
If, in its discretion, it granted a renewal, it
could require the licensee to give proper security as a condition
of the renewal.
On a true construction of ss. 38 and 91 of the
Act it must be held that the Board, in exercise of its powers under
'· 38 read with s. 91, could from time to time issue general
directions with regard to the conditions of any license granted
under the Act including the amount of the security to be deposited by the licensee.
In exercise of its powers under ss. 38 and
91, the Board had fixed the security deposit of an Excise shop
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M. R. PATEL v. STATE (Bachawat, !.)
697
working under the sliding scale system
as equivalent to two
months' average license fees of the shop.
The Board was entitled to direct, as it did by the order dated October 4, 1961, that
the general directions issued by it under ss. 38 and 91 should
be observed and carried out by the licensing authority and the
proper security in accordance with those directions should be
demanded if and when the licenses were next renewed.
Mr. Prasad next contended that the direction for the increase
of the security at the time of the renewal of the licenses is contrary to the instruction No. 101 ( 10) of the Boarc: of Revenue
at p. 39 of Vol. III of the Bihar and Orissa Excise Manual, 19S5
Edn. There is no substance in this contention. In its order
dated October 4, 1959, the Board of Revenue exhaustively
reviewed all the relevant instructions issued by it from time to
time, and rightly pointed out that instruction No. 101 (10) read
with the Board's circular letter No. 8624 dated
September 9,
1956 did not prevent of the security at the time of the rrnewal of
the licenses.
Mr. Prasad lastly argued that (a) the power of revision under
s. 8(3) of the Act could be exercised by the Board of Revenue
only on an application by an aggrieved party, and (b) the proceedings in revision in the instant case were barred by limitation.
There is no substance in these contentions. The Board of Revenue may exercise its powers of revision under s. 8 (3) SUD mDtu.
No period of limitation is prescribed by the Act for exercise of
the power of revision under s. 8 ( 3). Mr. Prasad drew our
attention to paragraph 71, Chap. V of Part III of the Bihar Practice and Procedure Manual, 1958, pp. 99 and 100, which provides
that where there is no provision of law as to the period within
which an application for revision may be allowed, the application
for revision should be preferred within one month of the date of
the Commissioner's order deducting the time occupied in obtaining a copy of the order, but the Board has a discretion to admit
the application for revision preferred after one month.
In the
instant case, in its order dated October 4, 1959, the
Board
stated that it would exercise its powers of revision
suD mDtu.
In a case where the Board exercises its power of revision of its
own motion, no question
of limitation arises.
Moreover, the
Board held that this was a fit case for interference even after the
expiry of the ordinary period of limitation.
No other arguments were advanced before us.
We see no
reason to interfere with the Board's order. The learned Attorney-
698
SUPREME COURT REPORTS
(1965] 2 S.C.R.
General raised a preliminary objection as to the maintainability
of the appeal on the ground that the Board is not a tribunal
within the meaning of Art. 136 of the Constitution. In view of
our conclusion that the appellant has no case on the merits, we
do not think it necessary to express any opinion on the preliminary
objection.
In the result, the appeal is dismissed with costs.
Appeal dismissed.