2020 (10) TMI 1057 - SC - Indian Laws

Vacation of interim order - vacation of stay on operation and execution of the settlement of FL 5 Shop Pithoragarh No.1 B in favour of the Appellant - HELD THAT - There is no allegation of malafides on the part of the Government. The only ground on which the High Court interfered with the license is on the basis of the purported loss caused to the revenue. In spite of the Division Bench being informed that there is absolutely no loss to the revenue in view of the recovery proceeding initiated against Sh. Balkar Singh, the interim order was not vacated. As a consequence, the Appellant was prevented from continuing with his business in spite of paying the amount of ₹ 3 lakhs per day to the Department. Interference with a valid license granted in accordance with rules is unwarranted. The First Respondent has misled the High Court by contending that he is willing to offer a higher amount. Such an offer should not have been entertained as he did not participate in the resettlement process. If such petitions are encouraged, there will be no finality to any license or permission granted by the Government, especially when there is no complaint of any malafides, favoritism or nepotism. The Orders of High Court set aside - Appellant shall be permitted to continue with the business activity of running the foreign liquor shop forthwith, subject to compliance of the terms of resettlement - Writ Petition filed by the Petitioner being frivolous in nature is, therefore, dismissed with cost of ₹ 1,00,000/- to be paid to the Appellant within a period of four weeks from today.

Summary

Issues:
Challenge to settlement of FL 5 Shop Pithoragarh, locus standi of First Respondent, legality and validity of judgment, loss of revenue, participation in resettlement process, interference with valid license, compliance with terms of resettlement.

Analysis:

1. The Writ Petition was initially filed by the First Respondent challenging the settlement of FL 5 Shop Pithoragarh in favor of the Appellant, which was dismissed by the Single Judge citing lack of locus standi. The First Respondent then filed a special appeal, leading to a Division Bench stay on the settlement. The Appellant approached the Supreme Court after an application to vacate the interim order was dismissed, seeking relief from the High Court's decision (Para 1).

2. Sh. Balkar Singh, the original licensee, failed to operate the liquor shop and subsequently requested cancellation of the allotment. The authorities directed him to surrender the license, leading to its cancellation under the Excise Act. The process of resettlement was initiated, and the Appellant emerged as the successful bidder for the shop (Para 2).

3. The First Respondent challenged the allotment, alleging revenue loss due to the acceptance of a lower bid compared to the total revenue fixed. The High Court dismissed the Writ Petition on grounds of locus standi, but a Division Bench stayed the settlement, citing concerns over revenue loss and public interest. The Appellant's attempts to vacate the interim order were unsuccessful (Para 4-5).

4. The Supreme Court found that the First Respondent did not participate in the resettlement process and had no standing to challenge the settlement. It was established that there was no actual revenue loss to the Government, as the shortfall was being recovered from the original licensee. The Court criticized the interference with a valid license and dismissed the Writ Petition as frivolous, ordering costs to be paid to the Appellant (Para 7-8).

5. Ultimately, the Supreme Court set aside the High Court's orders, allowing the Appellant to resume business subject to compliance with the resettlement terms. The Court emphasized the importance of upholding valid licenses and discouraged baseless challenges without evidence of malafides or irregularities (Para 8).