2005 (5) TMI 615 - SC - Central Excise

Whether the applicants concerned satisfied the eligibility conditions laid down in Rule 9 or not, as no information was required to be furnished in the format prescribed by the Commissioner of Excise in that behalf? Held that - All the parties participated in the selection process. Some of them became successful. They had not complied with the statutory requirements not because they were not willing to do so but because the statutory authorities were not correctly advised. The conduct of the statutory authorities although must be deprecated but that by itself, in our opinion, may not come in the way of the successful candidates in getting the just relief. Keeping in view the peculiar facts and circumstances of this case, we intend to issue the following directions i) The Member Secretary shall scrutinize all the applications of the successful candidates afresh and prepare a summary report within one week from date. ii) Irrespective of the format prescribed by the Commissioner of Excise, each of the selected candidates must file an appropriate affidavit, which would be in strict compliance of the requirement of Rule 9. iii) Such affidavits must be filed before the respective committees within one week from date, the contents whereof would be verified in terms of Order 6 Rule 15 of the Civil Procedure Code. The said affidavits shall be scrutinized by the Committee so as to enable them to arrive at a finding as to whether the applicants fulfil the eligibility criteria and are otherwise suitable for grant of licence under the Act and the rules. iv) The writ petitioners or any other person in the locality may file appropriate applications before the said Committee with a view to show that the selected candidates do not fulfill the eligibility criteria or are debarred or are otherwise unsuitable from obtaining a licence under the Act. v) Such objections may also be filed within two weeks from date. The Committee may consider the said objections and, if necessary, may call for further or better particulars from the selected candidates so as to satisfy themselves about their eligibility etc. vi) The respective District Level Committees shall strictly verify and scrutinize the affidavits as also other documents furnished by the said applicants so as to arrive at a decision that the statutory requirements have been complied with upon application of their mind. vii) The members of the Committee are made personally liable to see that all statutory requirements are complied with. They would strictly apply the statutory provisions as regard eligibility and suitability of the candidates. viii) The aforementioned exercise by the Committee should be completed within one month. In the event, any affidavit filed by a selected candidate either pursuant to this order or filed earlier in the format prescribed by the Commissioner of Excise is found to be incorrect, strict action in accordance with law shall be taken against him ix) The Superintendent of Police of each district within whose jurisdiction the selected candidates ordinarily reside shall verify the antecedents and other relevant particulars of the selected candidates vis- -vis their eligibility/suitability to obtain a licence and submit a report to the Committee by 12.6.2005 which would be strictly in terms of sub-rule (3) of Rule 9. While issuing such a certificate in favour of the selected candidates by 12.6.2005, he shall also file a copy of the report before the Committee. x) We direct the Chief Secretary of the State and Commissioner of Excise to act strictly in accordance with law and oversee the functioning of the Scrutiny Committees. xi) If the State and the Commissioner of Excise come across misconduct on the part of any of the officers including the members of the Committee, strict action must be taken against the concerned officer. xii) The selected candidates in the meanwhile may carry on the trade in liquor pursuant to the licence granted in their favour but the same shall be subject to this order as also the decision of the Scrutiny Committee.

Issues Involved:
1. Whether Rule 9 of the Chhattisgarh Excise Act, 1915 is mandatory or directory.
2. Whether the amendment of Rule 9 on 22.3.2005 has retrospective effect.
3. Whether the selection process for granting liquor licenses was vitiated due to non-compliance with Rule 9.
4. Whether the public interest litigation was maintainable.
5. Whether the actions of the Commissioner of Excise were within the statutory framework.
6. Whether the High Court's directions for fresh selection were justified.

Detailed Analysis:

1. Whether Rule 9 of the Chhattisgarh Excise Act, 1915 is mandatory or directory:
The Supreme Court analyzed Rule 9, which lays down the eligibility conditions for applicants seeking liquor licenses. It was observed that Rule 9 is in two parts: clauses (a), (b), and (c) are essential conditions that debar a person from filing an application if not fulfilled, while clause (d) requires the filing of an affidavit. The Court held that filing an affidavit is mandatory, as it is necessary for the authorities to verify the applicant's eligibility. The Court emphasized that the expression "has to submit an affidavit" is mandatory in nature, and such an affidavit must be filed at the time of application.

2. Whether the amendment of Rule 9 on 22.3.2005 has retrospective effect:
The Court noted that the notification amending Rule 9 did not explicitly state that it would have retrospective effect. It was held that a statute must be read reasonably and should not be presumed to have retrospective effect unless expressly stated. The Court concluded that the amendment could not be applied retrospectively to validate the selection process that was already completed by 16.3.2005.

3. Whether the selection process for granting liquor licenses was vitiated due to non-compliance with Rule 9:
The Supreme Court found that the selection process was indeed vitiated due to non-compliance with Rule 9. It was observed that the District Level Committees did not scrutinize the applications to ensure that the applicants met the eligibility conditions. The Court noted that the affidavit required under Rule 9 was not filed by the applicants at the time of application, which was a mandatory requirement. Consequently, the selection process was held to be flawed.

4. Whether the public interest litigation was maintainable:
The Court held that the public interest litigation was maintainable. It was noted that even if a petitioner moves the court for personal grievances, the court can treat it as a public interest litigation if it is in the interest of justice. The Court emphasized that the High Court entertained the public interest litigation without any objection and allowed it, thereby validating its maintainability.

5. Whether the actions of the Commissioner of Excise were within the statutory framework:
The Supreme Court held that the Commissioner of Excise acted beyond his statutory powers. The Commissioner issued a circular on 14.2.2005, allowing applicants to file affidavits after their selection, which was contrary to the mandatory requirement of Rule 9. The Court observed that the Commissioner did not have the authority to dilute or dispense with the statutory requirements prescribed by the rules.

6. Whether the High Court's directions for fresh selection were justified:
The Supreme Court upheld the High Court's decision directing a fresh selection process. The Court agreed that the applications needed to be scrutinized to ensure compliance with the eligibility conditions laid down in Rule 9. It was directed that the Member Secretary should scrutinize all applications afresh, and the selected candidates must file appropriate affidavits in compliance with Rule 9. The Court also mandated that objections could be filed against the selected candidates, and the District Level Committees must verify and scrutinize the affidavits and other documents to ensure statutory compliance.

Conclusion:
The Supreme Court concluded that the selection process for granting liquor licenses was vitiated due to non-compliance with Rule 9, which was mandatory in nature. The amendment of Rule 9 did not have retrospective effect, and the actions of the Commissioner of Excise were beyond his statutory powers. The public interest litigation was maintainable, and the High Court's directions for fresh selection were justified. The Court issued detailed directions for the scrutiny and verification of applications and affidavits to ensure compliance with the statutory requirements.

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