2013 (9) TMI 724 - HC - Indian Laws

Cancellation of license for retail sale of country liquor - Inability to pay debts - Surrender of license - Demand of balance fees and dues - Held that - It is not in dispute that the petitioner did make an application for being considered for grant of licence for retail sale of country liquor - After draw of lottery he was selected for grant of such licence by the excise authority at Meerut. However, because of the interim order dated 18.04.2002 passed by the High Court in Writ Petition No. 505 of 2002 and connected matters the excise authorities were restrained from settling the licence regularly and were permitted to run the shop only on daily wages basis either with the old licensee or with the newly selected candidates - notice was issued to the petitioner to deposit the licence fee, earnest money and the security money by the Excise Officer, Meerut and it was specifically stated in the notice that in case the petitioner does not deposit the said amount, his selection shall be cancelled - The petitioner admittedly did not deposit the licence fee, earnest money and the security money and as a matter of fact vide his application dated 15.07.2002 requested that the term of his daily basis licence be not extended beyond 22nd July, 2002 - It is, therefore, clear that the petitioner, who was the selected candidate, did not comply with the requirement of Rule 12 of Rules, 2002 in the matter of deposit of the money as required. State Government while passing the order impugned has completely loss sight of the statutory rules while holding that non-deposit of the security money, earnest money and the licence fee by the selected candidate would amount to surrender of the licence covered by Section 36 of the U.P. Excise Act - since the selection of a candidate stands cancelled under Rule 10(c) read with Rule 12 for non-deposit of the licence fee and the security money, the question of grant of licence and surrender thereof does not arise. Surrender/cancellation of licence is a stage subsequent to the deposit of money as per Rule 12 - order passed by the State Government dated 19.07.2007 cannot be legally sustained and is hereby set aside.

Summary

Issues:
- Interpretation of U.P. Excise (Settlement of Licenses for Retail Sale of Country Liquor) Rules, 2002 regarding deposit requirements for selected licensees.
- Whether non-deposit of license fee, earnest money, and security money by a selected candidate amounts to surrender of license under Section 36 of the U.P. Excise Act.
- Distinction between cancellation of selection and surrender/cancellation of license under the Rules.
- Analysis of relevant case law and precedents regarding consequences of non-compliance with deposit requirements.

Interpretation of U.P. Excise Rules, 2002:
The petitioner applied for a retail liquor license and was selected after a lottery process. However, due to interim orders, the petitioner operated on a daily wage basis. When asked to deposit the required fees, the petitioner failed to comply, leading to the cancellation of the selection as per Rule 10(c) and Rule 12 of the Rules, 2002. The State Government mistakenly considered this non-deposit as surrender under Section 36 of the U.P. Excise Act, ignoring the specific provisions of the Rules.

Distinction between Selection Cancellation and License Surrender:
The Court emphasized the distinction between cancellation of selection for non-deposit and surrender/cancellation of a granted license. Rules 10(c) and 12 address selection cancellation due to non-compliance with deposit requirements, while Rule 21 pertains to license cancellation. The judgment clarifies that surrender or cancellation of a license comes after deposit, and the Rules differentiate between these processes.

Analysis of Case Law and Precedents:
The judgment differentiates the present case from the precedent of Brij Kishore Jaiswal, highlighting that the former involves non-deposit issues not addressed in the latter. Citing legal principles from Bhavnagar University v. Pitiola Sugar Mills, the Court emphasizes the importance of factual distinctions in determining the precedential value of decisions. Consequently, the State Government's order was set aside, and the case was remanded for a fresh decision considering Rules 10(c) and 12 within a specified timeframe.

Conclusion:
The Court allowed the writ petition, subject to specified observations, emphasizing the correct application of the U.P. Excise Rules, 2002 regarding deposit requirements for selected licensees. The judgment underscores the necessity of adherence to statutory provisions and the distinction between selection cancellation and license surrender in such matters, ensuring a fair and lawful process in granting retail liquor licenses.