2018 (2) TMI 823 - HC - Indian Laws

Transfer of license in favor of partnership firm - manufacture of liquor - payment of the requisite transfer fees and damages for short lifting of liquor - Held that - this Court is satisfied that the petitioner cannot lay a challenge to the transfer of licence in favour of the partnership firm in accordance with the partnership deed dated 1st April, 2002, even though such an application was filed by the said firm belatedly in the year 2013, since the respondent firm undertook and paid the requisite transfer fees and other due charges of the Respondent Excise Department. The said transfer has already been effected way back in the year 2014 by the impugned endorsement and the same has been upheld by the Tribunal. Petition dismissed - decided against petitioner.

Summary

Issues:
Challenge to transfer of CL-9 licence to partnership firm based on partnership deed reducing profit sharing ratio.

Analysis:
The petitioner, aggrieved by the transfer of CL-9 licence to a partnership firm, alleged that his younger brother, a partner in the firm, reduced his profit sharing ratio to 2% in a partnership deed dated 1st April, 2002. The respondent, Deputy Commissioner of Excise, approved the transfer in 2013, leading to the petitioner's appeal before the Karnataka Appellate Tribunal, which was dismissed in 2015. The petitioner approached the High Court challenging the transfer.

The respondent, in his Statement of Objections, contended that the petitioner wanted to retain a 2% share in the partnership firm, M/s. Status Bar and Restaurant, despite agreeing to be a dormant partner. The respondent argued that the transfer was done in accordance with rules, as the petitioner had signed all necessary documents. The respondent also highlighted that the petitioner had shifted to Hyderabad to manage family business in Andhra Pradesh, leaving the CL-9 licence business in Bangalore under the respondent's control.

The Court considered the arguments of both parties and held that the petitioner could not challenge the transfer of licence to the partnership firm based on the partnership deed of 2002. The Court emphasized that if there were any partnership disputes, the appropriate forum would be the Civil Court, not the present writ petition. The Court found no illegality in the transfer process, as the partnership firm had fulfilled all requirements and paid necessary fees to the Excise Department. Consequently, the Court dismissed the writ petition, stating it lacked merit and did not warrant any costs.

In conclusion, the High Court upheld the transfer of the CL-9 licence to the partnership firm, rejecting the petitioner's challenge based on the profit sharing ratio in the partnership deed. The Court emphasized the need for resolving partnership disputes in the Civil Court and affirmed the legality of the transfer process carried out by the partnership firm.