2016 (4) TMI 726 - HC - Central Excise

Auction for the privilege - denial of preference - Held that - With respect to the contention that the first respondent has granted the benefit of preference to the fourth respondent though such a relief has been declined by this Court in Ext.P9 order, we notice that such a contention was raised before this Court earlier W.P.. The said contention was considered by this Court and rejected, in Ext.P5 judgment. This Court has found that, the consequence of Ext.P9 interim order was to set at naught all the proceedings initiated against the fourth respondent pursuant to registration of the crime against him, including cancellation of his license. Therefore, a further declaration to the effect that his right of preference was available to him was unnecessary. Having suffered the said judgment, it is not open to the appellant to agitate the said contention again. Another contention put forward by the learned Counsel is that, the fourth respondent had requested for the grant of privilege to him and upon rejection therof, had participated in the auction from the general category. Since he had participated in the auction and was unsuccessful, it was not open to him to claim the privilege after the auction was conducted. We notice that, the fourth respondent had challenged the denial of preference to him before this Court in earlier W.P.. In the said writ petition an interim order had been granted by this Court staying confirmation of the auction that was conducted on 5.3.2014. It is clear from the conduct of the fourth respondent that he had challenged the proceedings of the auction without any delay and had obtained interim orders against confirmation thereof. The said writ petition was disposed of by Ext.P3 judgment, with the appellant also on the party array, directing the first respondent to consider and take a decision in the matter after hearing all the parties. Having suffered Ext.P3 judgment pursuant to which the first respondent had considered the rival contentions of the appellant as well as the fourth respondent and decided the issues, it is not open to the appellant to contend that the fourth respondent should be held disentitled to the preference claimed by him for the reason that he had participated in the auction. The said contention is therefore rejected.

Issues Involved:
1. Cancellation of provisional allotment of toddy shops.
2. Preferential right of the fourth respondent.
3. Validity of the crime registered against the fourth respondent.
4. Interim orders and their implications.
5. Participation in the auction by the fourth respondent.
6. Judicial and administrative considerations in the decision-making process.

Issue-wise Detailed Analysis:

1. Cancellation of Provisional Allotment of Toddy Shops:
The petitioner, who emerged as the successful bidder in the auction for toddy shops in Kuttanad Excise Range, had his provisional allotment canceled by the first respondent. This cancellation was challenged in a writ petition, which was dismissed by the learned Single Judge. The court examined the process leading to the cancellation, including the interim orders and the procedural fairness observed by the first respondent.

2. Preferential Right of the Fourth Respondent:
The fourth respondent, the previous licensee, claimed a preferential right under Rule 5(1)(a) of the Kerala Abkari Shops Disposal Rules, 2002. This rule grants preference to licensees from the previous year unless an Abkari case is registered against them. Despite participating in the auction as a general candidate after being denied a preference certificate, the fourth respondent sought judicial relief, leading to the cancellation of the appellant's provisional allotment and the re-granting of the license to the fourth respondent.

3. Validity of the Crime Registered Against the Fourth Respondent:
The crime registered against the fourth respondent involved the sale of Indian Made Foreign Liquor (IMFL) in a toddy shop. The court noted that the registration of the crime was under judicial scrutiny, with an interim stay on further proceedings. The court emphasized that the interim order effectively nullified the grounds for denying the fourth respondent's preferential right, as the investigation was stayed and the validity of the crime registration was in question.

4. Interim Orders and Their Implications:
The interim orders played a crucial role in the decision-making process. The court highlighted that the interim stay on the investigation and the cancellation of the fourth respondent's license meant that he was allowed to operate his toddy shops until the end of the license period. This interim relief influenced the first respondent's decision to grant the preferential right to the fourth respondent, as the grounds for denial were effectively suspended.

5. Participation in the Auction by the Fourth Respondent:
The appellant argued that the fourth respondent, having participated in the auction and being unsuccessful, should not be allowed to claim the preferential right post-auction. However, the court noted that the fourth respondent had challenged the denial of preference promptly and obtained an interim stay against the confirmation of the auction. This timely legal action preserved his right to contest the auction results and claim the preferential right.

6. Judicial and Administrative Considerations in the Decision-Making Process:
The court examined the administrative and judicial considerations in the first respondent's decision-making process. It was noted that while the first respondent's order (Ext.P8) was criticized for being a verbatim reproduction of an earlier set-aside order (Ext.P4), the court found that the first respondent had substantially addressed the contentions raised. The court emphasized that administrative decisions need not match the precision of judicial pronouncements but should demonstrate a reasonable consideration of the issues.

Conclusion:
The court dismissed the appeal, upholding the learned Single Judge's decision and the first respondent's order (Ext.P8). The judgment reinforced the importance of interim judicial reliefs, the procedural fairness in administrative decisions, and the rights of previous licensees under the Kerala Abkari Shops Disposal Rules, 2002. The appellant's contentions were rejected, affirming the fourth respondent's entitlement to the preferential right and the legality of the provisional allotment cancellation.

← Previous Next →