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TMI Blog2006 (12) TMI 511X X X X Extracts X X X X X X X X Extracts X X X X ..... The penal provision contained in first part not only directs that all toddy kept or offered for sale should be of good quality and unadulterated but also provides that nothing shall be added to it to increase its intoxicating power or for any other purpose. If the second part prescribing the contents of the ethyl alcohol in toddy is read in the context of the first part vis-`-vis Section 57(a) of the Act, it would be evident that prohibition is aimed at adulteration by addition of any foreign substance to increase its intoxicating power or for any other purpose. Validity of Rule 9(2), therefore, can be saved if the said provision is read in its entirety and rule of harmonious construction is resorted to. If, however, Rule 9(2) is sought to be invoked even for the purpose of initiating a prosecution as against a licensee even he does not add any foreign substance to it, the same, in our opinion, would render the same ultra vires, as would appear from the discussions made hereinafter. It is not in dispute that there does not exist any mechanical devise to measure the contents of ethyl alcohol present in toddy. It also stands admitted that contents of ethyl alcohol in toddy would depe ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... implication. The Act or the Rules do not say either. It is in that sense vague or unreasonable. Once, thus, it is found to be ex facie unreasonable and unworkable, the court would not hesitate to strike down the said rule. We do so. Hence, we hold that Rule 9(2) to be unworkable being vague in nature, unless read in the manner as suggested supra. It is not in dispute that whereas if an offence is committed u/s 56 of the Act, renewal of licence is permissible; but in a case where a licensee faces a prosecution u/s 57, renewal of licence would be denied to him. Consequences of attracting the provisions of Section 57, thus, must also be judged from the said angle. Thus, Civil Appeals arising out of Special Leave Petition (Civil) filed by the State of Kerala are dismissed and Civil Appeals arising out of Special Leave Petition (Civil) are allowed. X X X X Extracts X X X X X X X X Extracts X X X X ..... e punished for each such offence with imprisonment for a term which may extend to six months, or with fine which may extend to two thousand rupees, or with both." Section 57 of the Act, however, provides for a penal provision for adulteration of liquor by a licenced vendor or manufacturer, in the following terms : "57. For adulteration etc. by licensed vendor or manufacturer Whoever being the holder of a licence for the sale or manufacture of liquor or of any intoxicating drug under this Act. (a) mixes or permits to be mixed with the liquor or intoxicating drug, other than a noxious drug or any foreign ingredient likely to add to its actual or apparent intoxicating quality or strength, or any article prohibited other than an article which the Government shall deem to be noxious by any rule made under Section 29, clause (k), when such admixture shall not amount to the offence of adulteration under Section 272 of the Indian Penal Code; or (b) … (c) … (d) … shall on conviction before a competent court, be punished for each such offence with imprisonment for a term which may extend to five years, or with fine which may extend to fifty thousa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... easonable amounts without harm to the system." 8. In State of Kerala and Others v. Maharashtra Distilleries Ltd. and Others. ((2005) 11 SCC 1), the history of the said Act and its subsequent amendments were noticed by a Constitution Bench of this Court. 9. On obtaining samples of toddy taken from the business premises of the licensees, it was, inter alia, found that ethyl contained therein was 9.50% v/v. They were prosecuted under Section 57(a) of the Act. 10. It is not in dispute that if a prosecution is instituted under Section 57(a) of the Act, renewal of the licence shall not be granted, whereas renewal of the licence would not be a bar if the licensee is prosecuted under Section 56 thereof. 11. Writ petitions were filed, inter alia, questioning the validity or otherwise of Rule 9(2) of the Rules and/or applicability of Section 57(a) of the Act, in the event sample of toddy was found to be exceeded 8.1%. 12. A learned Single Judge of the Kerala High Court by a judgment and order dated 31.03.2003 held the said rules to be ultra vires. The learned Single Judge, however, did not consider it necessary to go into the question of interpretation of the two penal provisions v ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ach sample is sent to the laboratory for chemical analysis. 18. Excise Manual has been made by the State of Kerala itself. It is presumed to have been prepared upon making scientific studies. It has defined 'fermented liquor', which states that the maximum self-generated alcohol content that would be present in a fermented liquor, which is not fortified, is only 12% by volume. It is not the case of the State that the licensees had added any foreign material. Paragraph 5 occurring in Chapter X of the Excise Manual, however, provides that average alcoholic strength of fermented toddy may be taken as follows : Coconut : 8.1% by volume Palmyrah : 5.2% " " Date : 4.9% " " Sago : 5.9% " " (Emphasis supplied) 19. It, therefore, does not rule out the possibility of fermented toddy containing ethyl alcohol of more 8.1% v.v. It is accepted that the fermentation is a natural process. No scientific data is available on records, nor the State could furnish any information as to how much time would it require for toddy to become fermented which would contain more than 8.1% of ethyl alcohol. Toddy, as noticed hereinbefore, has been defined in Secti ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ut rest magis valeat quam pareat'. 26. The principles on which constitutionality of a statute is judged and that of a subordinate legislation are different. 27. We have noticed the definition of 'toddy'. It does not limit the extent of fermentation. Fermented toddy would, therefore, come within the purview of definition of toddy. Manufacture and sale of toddy, which is fermented, is not prohibited. Excise Manual clearly points out that the contents of ethyl alcohol by reason of fermentation in toddy can go upto 12%, whereafter only it ceases to be a toddy. While laying down the norms in Excise Manual, the State had used the words 'average yield'. The percentage specified therein, thus, is only average. 28. If by reason of the rule making power, the State intended to impose a condition, the same was required to be reasonable one. It was required to conform to the provisions of the statute as its violation would attract penal liability. It was expected to be definite and not vague. Indisputably, the State having regard to the provisions of Article 47 of the Constitution of India, must strive hard to maintain public health. While, however, imposing conditions in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... or secures the object of the Act. It is not in dispute that the purport and object of such Rules is to rehabilitate the former employees of arrack shops. Rehabilitation of the employees is not within the statutory scheme and, thus, the Rules are ultra vires the provisions of the Act. " 31. Unreasonableness is one of the grounds of judicial review of delegated legislation. Reasonableness of a statute or otherwise must be judged having regard to the various factors which, of course, would include the effect thereof on a person carrying on a business. 32. we are not oblivious of the fact that nobody has any fundamental right to carry on business in toddy or liquor, but all the licensees are entitled to be treated equally. If the matter of validity or otherwise of the subordinate legislation is to be considered, Article 14 of the Constitution of India shall be attracted. (See State of Punjab and Another v. Devans Modern Breweries Ltd. and Another (2004) 11 SCC 26, Ashok Lanka and Another v. Rishi Dikshit and Others (2005) 5 SCC 598 and Ashok Lanka-II v. Rishi Dikshit (2006) 9 SCC 90) When a statute provides for a condition which is impossible to be performed, unreasonableness of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... y and Others ((2005) 2 SCC 692), it was opined : "In State of T.N. v. M.K. Kandaswami this Court held that where the object of a provision is to plug leakage and prevent evasion of tax, in interpreting such provision, a construction which would defeat its purpose and, in effect, obliterate it from the statute-book should be eschewed. If more than one construction is possible, that which preserves its workability and efficacy is to be preferred to the one which would render it otiose or sterile." 40. The said decision was on a interpretation of a taxing statute. 41. Interpreting a rent control legislation, Lahoti, J. (as His Lordship then was) in Rakesh Wadhwani and Others v. Jagdamba Industrial Corporation and Others ((2002) 5 SCC 440), opined : "There are two means of resolving the riddle: firstly, by placing such meaningful interpretation on the provision as would enable the legislative intention being effectuated; and secondly, by devising such procedure without altering the structure as would enable the substantive law being meaningfully implemented. Let us see whether the expression "assessed by the Controller" qualifies only "the cost of ap ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Environmental Action Group & Others. and (2006) 3 SCC 434 Paras 201 & 214). 47. A person may be held to be guilty even if the contents of ethyl alcohol exceed 8.1% marginally. He must, therefore, be in a position to know as to what extent he can go and to what extent he cannot. The matter cannot, thus, be left to an act of nature. A penal provision must be definite. Unless the statutory intention otherwise provides, existence of mens rea must be read into a penal statute. It must be a deliberate act and not an unintentional one, unless the statute says so explicitly or by necessary implication. The Act or the Rules do not say either. It is in that sense vague or unreasonable. 48. Once, thus, it is found to be ex facie unreasonable and unworkable, the court would not hesitate to strike down the said rule. We do so. 49. We for the reasons aforementioned, hold Rule 9(2) to be unworkable being vague in nature, unless read in the manner as suggested supra. 50. We may now consider interpretation of Sections 56(b) and 57(a) of the Rules. 51. Sections 56 and 57 operate in different fields. They lead to different consequences. They provide for different punishments. Whereas Section 56 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... o exception to the general rule of law that a penal statute must be construed strictly." 58. We are not oblivious that there are certain exceptions to the said rule. In Iqbal Singh Marwah and Another v. Meenakshi Marwah and Another ((2005) 4 SCC 370), a Constitution Bench of this Court held : "Dr. Singhvi has also urged that since we are dealing with a penal provision it should be strictly construed and in support of his proposition he has placed reliance upon a Constitution Bench decision in Tolaram Relumal v. State of Bombay wherein it was held that it is well-settled rule of construction of penal statutes that if two possible and reasonable constructions can be put upon a penal provision, the court must lean towards that construction which exempts the subject from penalty rather than the one which imposes penalty and it is not competent for the court to stretch out the meaning of expression used by the legislature in order to carry out the intention of the legislature. The contention is that since Section 195(1)(b)(ii) affords protection from private prosecution, it should not be given a restrictive interpretation to curtail its scope. We are unable to accept such b ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ence was made to Tolaram Relumal v. State of Bombay, SCR at p. 164 and Girdhari Lal Gupta v. D.H. Mehta. It is true that all penal statutes are to be strictly construed in the sense that the court must see that the thing charged as an offence is within the plain meaning of the words used and must not strain the words on any notion that there has been a slip that the thing is so clearly within the mischief that it must have been intended to be included and would have been included if thought of. All penal provisions like all other statutes are to be fairly construed according to the legislative intent as expressed in the enactment. Here, the legislative intent to prosecute corporate bodies for the offence committed by them is clear and explicit and the statute never intended to exonerate them from being prosecuted. It is sheer violence to common sense that the legislature intended to punish the corporate bodies for minor and silly offences and extended immunity of prosecution to major and grave economic crimes." 61. The matter may have to be considered from another angle. Renewal of a licence is a valuable right. (See D. Nataraja Mudialiar v. The State Transport Authority, Mad ..... X X X X Extracts X X X X X X X X Extracts X X X X
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