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Sameer Nijhawan Vs. State of Chhattisgarh and Ors. - (High Court of Chhattisgarh) (14 May 2019)

Licencing authority is empowered to cancel a licence on breach of terms or conditions thereof by the holder



Facts of the case, are that at the relevant time, the Petitioner was holding a licence in form FL-2 popularly known as beer bar licence to operate the said bar at his hotel named as 'Tandoor Bar'. The licence was granted to the Petitioner for a period of one year ending on 31st March, 2018. On 8th February, 2018, a show cause notice was issued to the Petitioner stating, that on inspection of the bar by the Assistant District Excise Officer, certain irregularities were found regarding non-production of permit of the stock available at the bar and further that certain beer of different batch numbers other than the batch allotted in the permit, was found in the stock, attracting violation of terms of licence punishable under Section 39 (a) (c) of the Chhattisgarh Excise Act, 1915.

The Petitioner was instructed to show cause as to why action should not be taken under Rule 23 (1) of the Chhattisgarh Excise Settlement of Licences for Retail Sale of Country/Foreign Liquor Rules, 2002 (Rules, 2002) read with Section 31 (b) of the Act, 1915.

The Collector (Excise) was not satisfied with the explanation offered by the Petitioner, therefore, the licence was cancelled on the ground that, permit was not presented to the Divisional Flying Squad, when raid/inspection was carried and that the stock of liquor was having different batch number than the one purchased by the petitioner. This was in violation of condition No. 5 of the licence, therefore, the same being serious in nature the licence deserves to be cancelled. Petitioner is habituated in violating the terms of licence. The order passed by the licencing officer has been affirmed by the Excise Commissioner under the order impugned.

Section 31(1-A) of the Act, 1915 makes it incumbent on the authority to record in writing the reasons for the proposed action, furnish to the holder thereof a brief statement of the same and afford him a reasonable opportunity of being heard. The show cause notice issued to the Petitioner categorically records the reason as to the grounds on which the Petitioner is liable to be proceeded for imposition of punishment under Section 31 (1) (b) of the Act, 1915. The said provision empowers the licencing authority to cancel or suspend a licence when any of the terms or conditions thereof have been breached by the holder or his servant or agent. When the show cause notice was replied by the Petitioner, no ground was raised alleging violation of principles of natural justice or that the servant or agent available in the shop was not authorized by the Petitioner.

Once it is found that, the Petitioner had no cogent reply to offer to the grounds for initiating action against him, as mentioned in the show cause notice, the licencing officer was fully justified in proceeding to take action in accordance with the provisions of Section 31 (1) (b) of the Act, 1915. The Petitioner having not sought for copy of the report, the plea of violation of principles of natural justice appears to be after thought. Such plea is not sustainable because the show cause notice would categorically mention the reasons for the proposed action.

At the time of raid/inspection by the Flying Squad Team, the Petitioner's agent was present in the licenced premises and had admitted by writing that 'charges admitted' and putting his signature thereunder. It is not the case of the Petitioner in his reply to the show cause notice that, the authorized agent was misled or pressurized by the Excise Officer. The Petitioner has not made out a case for interference of this Court under Article 226 of the Constitution of India. Petition dismissed.


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