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TMI Blog1991 (8) TMI 329X X X X Extracts X X X X X X X X Extracts X X X X ..... failure to pay a sum of Rs.8,48,179.28 and a mandamus directing the State Govt. to terminate the licence granted on August 25, 1981 to the respondent and to issue licence to the appellant under s. 13 of the M.P. Excise Act, 19 15, for short 'the Act', etc. Thus this appeal. The material facts, to dispose of the point arose in this appeal, lie in a short compass as stated hereunder: In the State of Madhya Pradesh nine distilleries for the manufacture of spirit were established and one of which was situated at Ujjain. The appellant and its predecessors continuously had licence under ss. 13 and 14 of the Act in form D-2 to distil rectified spirit or denatured spirit or liquor and D-I licence for wholesale supply of country made liquor in the distillery to retail vendors in the area attached to the distillery. The licence was for a period of 5 years. The last licence of which was for the period from April 1, 1977 to March 31. 1981. The normal procedure in vogue was to call for tenders and the lowest was being accepted, though sometimes highest was also preferred. Next licensing period commenced from April 1, 198 1 to March 31, 1986 and the respondent became the successful te ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... non-cooperation of the appellant possession was taken and delivered to the incoming licensee, the respondent, as per rules and the appellant was not entitled to restitution. The other findings are not necessary as they are not pressed before this court. The appellant had given up the reliefs of valuation of the plant and machinery and stock in trade. During the pendency of the appeal on an application made by the appellant this court directed the state to make over payment of a sum of Rs. 10 lacs deposited by the respondent with the State Govt. and also further directed the respondent to deposited sum of Rs.5 lacs in the Registry of this court and directed the Registry to keep that amount in fixed deposit to earn interest thereon subject to adjustment at the final hearing. Despite issuance of several notices by the department, the appellant did not cooperate in the estimate of the value of the plant and machinery of the distillery and warehouses. the Committee appointed in terms of the conditions of the licence, fixed a sum of Rs. 10,53,016.45 as total value payable to the appellant. Since a sum of Rs. 10 lacs had already been paid, the appellant is still entitled to the balance ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 984 Govt. policy the respondents established their distillery at U j jain at their own expenses. The second period of licence also expired in 1991. There was further change in the policy of the Govt., namely each District was made a supply area under a separate licence for two years. Under these circumstances the appellant is not entitled to any reliefs. It is also further contended that the conditions in the licence in Ex. P-2 marked in the High Court should be read harmoniously. It is clear that prior fixation of the valuation and the payment of the price is not a condition precedent. The ratio in Godhra Electricity Co. Ltd. case is inapplicable to the facts of this case. The sole question is whether fixation of the price of the plants and machinery at Ujjain and the attached ware- houses and stock in trade and payment thereof to the appellant is a condition precedent to take possession and delivery thereof to the respondent on August 28, 1981. At the outset we may make it clear that, though Sri Nariman contended that the grant of licence to the respondent was in gross violation of the conditions of the tender as the respondent did not comply with any of the mandatory condi- ti ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... epresentative of the licensee--Member. If the representative of the licensee remains absent in the committee at the appointed time, the remaining four members shall begin their work in his absence and no objection of the licensee in this respect shall be heard. The valuation made and agreed upon by the Committee shall be sanctioned by the Excise Commissioner with such necessary changes as he deems fit and in case of difference of opinion amongst the members, the Excise Commissioner shall pass orders relating to disputed valuation. The orders of Excise Commissioner shall be final and binding upon the licensee. Note: The valuation of sanctioned plant at the warehouses may be done by a committee consisting of some of the members of the above referred committee, subject to the orders of the Excise Commissioner, which shall be final and binding on the licensee. Prima facie, if the clause by itself is read in isolation, it would indicate that prior fixation of the value and payment is a condition precedent. But in our view all the conditions of the licence, policy of the Act and Rule of the possession, manufacture, supply, sale and distribution of the rectified spirit or denatured spir ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... is no fundamental right to a citizen to carry on trade or business in liquor. The state under its regulatory power, has power to prohibit absolutely any form of activity in relation to an intoxicant, its manufacture, possession, import and export. No-one can claim, as against the state, the right to carry on trade or business in any intoxicants, nor the state be compelled to part with its exclusive right or privilege of manufacture, sale, storage of liquor. Fur- ther when the state has decided to part with such right or privilege to the others, then state can regulate consistent with the principles of equality enshrined under Art. 14 and any infraction in this behalf at its pleasure are arbitrary violating Article 14. Therefore, the exclusive right or privilege of manufacture, storage, sale, import and export of the liquor through any agency other than the state would be subject to rigour of Article 14. Vide Har Shankar & Ors. v. Dy. Excise & Taxation Commissioner & Ors., [1975] 2 SCR 254 and State of M. P.v. Nandial Jaiswal., [1987] 1 SCR 1. When the state was dealing with the grant of the privilege of establishing or manufacturing intoxicants, rectified spirit or denatured spiri ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s licence, the licensee shall buy all sanctioned plant at the Ujjain distillery including spare parts, furniture, motor trucks and fittings at a price to be fixed by the State Government. Licensee shall pay the price thereof within 30 days of the communication. Similarly, clause 41, 42(1) and clause 44 provide that the incoming licensee shall take on lease all other buildings structures attached to the distillery at Ujjain on such conditions and terms as per Public Works Department Manual Vol. II within a period of one month of the intimation of the acceptance of the tender. Then comes clause 50 quoted hereinabove. The incoming licensee shall make payment within 30 days from the date of communication of the value. Therefore, the courts should adopt realism, pragmatism, practicality and the purpose envisaged under the Act and the rules in construing the relevant clauses in the licence. The purpose of the Act the rules made therein is to regulate the manufacture, distribution sale of the intoxicants, rectified spirit or denatured spirit, liquor, sale to consumers within the state of Madhya Pradesh. It is an on going process conducted through the licensing system, an exclusive privil ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... achinery or warehouses the State Govt. After the decision of the Commissioner or the State Government, it shall be communicated to the succeeding licensee, who has been given maximum period of three months to make payment to the outgoing licensee. In the light of the scheme of valuation of the plant and machinery of the distillery, or the apparatus in the warehouses and the stock in trade, we hold that strict construction would lead to innumerable complications and loss of public revenue. We are inclined to hold that before the expiry of the licence, if the outgoing licensee cooperates, the value can be fixed with consensus, payment should also be made within the time stipulated. In all other cases it could be done even after the expiry of the stipulated period. In that perspective we have no hesitation to hold that prior valuation of plant and machinery in the distillery, stock in trade therein or the value of the machinery in the ware- houses and stock of the liquor stored therein and payment thereof before taking possession and handing them over to the incoming licensee is not a mandatory, nor a condition precedent. Therefore, taking over possession from the appellant on August ..... 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