judgement:
Criminal Appeal No. 662 of 1986.
From the Judgment and Order dated 24.10.1986 of the Bombay High Court in W.P. No. 743 of 1986.
Dr. V. Gauri Shanker, Ms. Halida Khatun and Ms. A. Subhashini for the Appellants.
Ram Jethmalani and Herjinder Singh for the Respondent.
The Judgment of the Court was delivered by KHALID, J.
The Union of India has brought this appeal by special leave against the Judgment of a full Bench of the Bombay High Court quashing the notice under Section 6(1) of the Smugglers and Foreign Exchange Manipulators (Forfeiture of Property) Act, 1976, hereinafter referred to as SAFEMA.
It is necessary to set out the brief facts to appreciate the questions involved in this appeal.
Manoharlal Narang, the respondent in this appeal and Ramlal Narang are brothers.
An order of detention was passed on 19th December 1974, under Section 3(1) of the COFEPOSA Act against Ramlal Narang.
This order was challenged before the Delhi High Court, in Writ Petition No. 10/75 and the High Court quashed the order of detention by its order dated 30th April, 1975.
An appeal was filed against that order before this Court by the Union of India.
Though an applica tion for stay was moved, this Court declined to grant stay but passed an order on the 1st May, 1975 imposing certain condi 457 tions on the movement of Ramlal Narang.
On 25th June, 1975, Emergency was declared.
On 1st July, 1975, a fresh order of detention was passed against Ramlal on the same facts and grounds.
In the meantime the appeal filed by the Union of India against the order of 'the Delhi High Court relating to the earlier order of detention, was dismissed by this Court in 1977, for want of prosecution.
Ramlal was detained under the second order.
A relative of his, filed Writ Petition No. 115 of 1975, in the Delhi High Court, challenging this detention.
That petition was dismissed on 25th November, 1975.
An appeal was filed by Certificate, against that order before this Court as Appeal No. 399 of 1975.
In the mean while, notices under Section 6 & 7 of the SAFEMA were issued against Ramlal.
These notices were challenged by him by filing Writ Petition No. 720 of 1975, in the Delhi High Court.
Subsequently, this Court took up appeal No. 399/75 and disposed it of saying that it would be open to the petitioner to raise all contentions available to him in Writ Petition No. 720 of 1975 notwithstanding what is contained in the Judgment in Writ Petition No. 115/75.
The Delhi High Court heard Writ Petition No. 720 of 1975 and dismissed it.
Against that dismissal order Ramlal filed special leave petition No. 9361/82 before this Court.
In this special leave petition, notice was issued limited only to the ques tion of the competency of the authorities to issue the second detention order on the same facts and grounds.
That petition was thereafter admitted and the criminal appeal arising therefrom is criminal Appeal No. 2790 of 1985, which has been referred to a Constitution Bench and is pending disposal at present.
That learned Counsel for the appellants made a fervent plea before us that since the question of competency of the authorities to issue the second detention order is pending consideration before a Constitution Bench of this Court, this appeal also should be directed to be posted along with that appeal.
The respondent 's counsel met this plea stating that for the purpose of this appeal, this question is cov ered by a three Judge Bench decision of this Court in Ibra him Bachu Bafan vs State of Gujarat and Ors., and that it was not necessary to direct this appeal to be tagged with Civil Appeal No. 2790/85.
After hearing the counsel for some time, we indicated to the learned counsel for the respondent, that we were inclined to direct this appeal to be posted along with the appeal pending before the Constitution Bench but were still willing to hear the matter if he could sustain the Judgment under appeal, on grounds other than the one referred to the Constitution Bench.
He was willing to do so and he argued the case 458 on the other grounds raised by him.
We will now proceed to consider those other grounds and see whether the Judgment could be sustained or whether it has to be reversed.
The facts and the relevant dates have been stated above.
A few more facts are necessary.
An order of detention under COFEPOSA was issued against the present respondent on 31st January, 1975.
At that time he was in England.
He was brought to India on some express understanding given to the Government of the United Kingdom.
His order of detention was challenged before the Bombay High Court being Writ Petition No. 2752/75, and the High Court quashed that order of deten tion as per order dated 8th July, 1980.
The appeal filed against that order before this Court was dismissed on 4th November, 1980.
The notice under challenge in this appeal was issued to the respondent under Section 6 of the SAFEMA with the aid of Section 2 of the Act.
Section 2 reads as follows: "2.
Application. (1) The provisions of this Act shall apply only to the persons specified in sub section (2).
" Sub section (2), relevant for our purpose, reads as follows: "(2) The persons referred to in sub section (1) are the following, namely: (a) . . . . . . . . (b). . . . . . . . (c) every person who is a relative of a person referred to in clause (a) or clause (b) (d) . . . . . . . . . (e) . . . . . . . . .
Explanation 2.
states "For the purpose of clause (c) rela tive" in relation to a person, means . . . . . . . . . . . (ii) brother or sister of the person; . . . . . . . . . . . 459 The learned counsel for the respondent contended that the respondent could challenge the order of detention against his brother, to get the notice issued against him under SAFEMA quashed on all the grounds available to him, though they were raised by his brother or not.
He was not seeking to get the order of detention against his brother quashed for his brother 's benefit nor was he doing it on his behalf, but he was invoking the jurisdiction of the Court only for his own benefit.
While doing so he is not lettered by what happened to his brother 's petition or to the grounds raised by him.
Nothing held against his brother would, according to the learned counsel, operate as res judicata against the respondent.
The provisions of SAFEMA were being pressed into service because a relative answering the de scription given in Explanation 2 to Sub section (2) of Section 2 of the Act was available.
He cannot be prevented from urging all the grounds available to him to get out of the mischief of the notice issued to him under Section 6 of the SAFEMA.
We find that this submission is well founded.
We hold that in such cases, the person against whom action is taken by invoking the Explanation to Sub section (2) re ferred to above, is at liberty to raise all grounds avail able to him though such grounds were raised and found against in a proceedings initiated by the relative.
The ground that found favour with the Bombay High Court in this case is that the detaining authority did not apply its mind to the order passed by this Court on 1st May, 1975, in the special leave petition against the decision of the Delhi High Court which quashed the detention of Ramlal.
The appellants before us sought a stay of the order passed by the Delhi High Court.
This Court declined the request but passed the following order: "We grant Special Leave on usual terms.
The petitioner appellant should have gone to the High Court first for a certificate.
In view of the arguments heard, we give special leave in this matter as a very special case, and this is not to be treated as precedent in future.
We are unable to grant any stay.
We impose a condition on Ram Lal Narang, Detenu pending the disposal of the appeal in this Court that he will report to the police station in whose jurisdiction he reside either at Bombay or at Delhi, once every day at 10 A.M. or at 5 P.M. and whenever he will leave for Delhi, he will inform the police as to when he is leaving and when he will arrive at Delhi, similarly when he will leave for Bombay, he will inform the police as to when he is leaving 460 for Bombay and when he will arrive at Bombay.
Certified copy of the judgment impugned shall be filed as soon as possible.
" It is not disputed that the detenu Ramlal was reporting to the officer in charge of the Bandra Police station, Bombay regularly, in due compliance with the above order passed by the Supreme Court.
We have already adverted to the fact that proceedings against the respondent taken under SAFEMA were abandoned after the order of this Court on 4th November, 1980.
It is nearly 3 years later, on 29th October, 1983, that the pro ceedings, from which this appeal arises, were initiated under Section 6 of SAFEMA on the basis of the detention order dated 1st July, 1975, issued against Ramlal.
It is necessary to bear in mind that on 1st July, 1975, when the order of detention against Ramlal was passed, the authori ties had before them the order of this Court, extracted above, dated 1st May, 1975.
By this order Ramlal was permit ted to be at large on condition that he will report to the Police Station as mentioned therein.
It cannot be disputed that this order of the Supreme Court is a relevant material for the detaining authority to consider when the detention order was passed.
From the records it is not seen that the Union of India had specifically put forward a case at any time that this order was not a relevant material or that this order was considered by the detaining authority.
The first respondent had specifically raised this contention in paragraph 'Q ' of the grounds of the Writ Petition, by an amendment which was allowed by the order of the Division Bench of the Bombay High Court on 29th April, 1986.
The specific contention raised in ground 'Q ' was "that vital and material facts which would have weighed the mind of the detaining authority one way or the other, have been sup pressed from him, thus vitiating the order of detention dated 1st July, 1975, and consequent declaration made under Section 12(a) of the COFEPOSA".
After that, reference was made to the order of this Court extracted above, accompanied by an assertion that Ramlal was complying meticulously with the orders of the Supreme Court.
This specific assertion is met by the appellants in paragraph 53 of the Counter Affida vit filed by Under secretary.
Ministry of Finance ' which reads as follows: "With reference to para 24 Q, additional ground it is not admitted that any detaining authority as alleged or other wise.
461 In paragraph 54, this ground is met more elaborately with the following observations: " . .
At any rate it is submitted that the contents pertain to the proceedings in the High Court and the Supreme Court and the detention law does not contemplate that the detaining authority is required to take into account the different court proceedings wheth er independent proceedings, under the law not initiated, conducted, managed or looked after by the detaining authority It is well known that the different Ministries of the Govern ment carry out different types of work in different ways and the detaining is not re quired under the law to take notice of work of the Ministries or Court proceedings.
The Court proceedings and adjudication proceedings are initiated and conducted by different authori ties which are not required under the law to submit their reports or communicate their actions to the detaining authority.
The de taining authority, in turn, is not required under the law to carry out the process of collection of any material about any Court proceeding or proceedings before other author ities for the purpose of issuance of a deten tion order.
The contents of the paragraph refers to such proceedings which are not required to be collected by the detaining authority from such authorities or courts. ]" We are not very happy with the manner in which this important contention has been met in the Counter Affidavit.
An order of this Court is not an inconsequential matter.
It cannot be assumed for a moment that the detaining authority or the sponsoring authority did not know, at the time the detention order was passed, that this Court had refused stay of the Judgment of the Delhi High Court and that Ramlal was allowed freedom of movement subject to certain conditions.
It is to be regretted that the portion extracted above from the Counter Affidavit (shown in bracket) betrays an atti tude, to put it mildly, that lacks grace.
Be it understood that the braketted portion was made to meet a case that there existed an order of this Court which was a relevant and vital material.
We can use stronger language to express our displeasure at the manner in which reference was made indirectly to this Court 's order but we desist from doing so.
If the sponsoring authority and the detaining authority are to adopt such cavalier attitude towards orders of courts and of this Court in particular, their orders will meet with the same fate as the one under review.
462 If the detaining authority had considered the order of this Court, one cannot state with definiteness which way his subjective satisfaction would have reacted.
This order could have persuaded the detaining authority to desist from pass ing the order of detention since this Court had allowed freedom of movement.
Detention is only a preventive Act.
This Court did not find it necessary to restrict the liberty of Ramlal when the order on the stay application was passed.
It may also be that the detaining authority after consider ing the order of this Court carefully could still feel, that an order of detention is necessary with reference to other materials which outweigh the effect of this Court 's order.
In all these cases, non application of mind on a vital and relevant material need not necessarily lead to the conclu sion that application of mind on such materials would, always be in favour of the detenu.
Application of mind in such cases is insisted upon to enable the detaining authori ty to consider one way or the other, as to what effect a relevant material could have, on the authority that decides the detention.
In our view the absence of consideration of this important document amounts to non application of mind on the part of the detaining authority rendering the deten tion order invalid.
In Ashadevi vs K. Shivraj, ; this Court had occasion to consider the plea whether an order of deten tion would be vitiated if relevant or vital facts, essential to the formation of subjective satisfaction, were kept away from the consideration of the detaining authority.
This is how this Court dealt with this aspect: "It is well settled that the subjective satis faction requisite on the part of the detaining authority, the formation of which is a condi tion precedent to the passing of the detention order will get vitiated if material or vital facts which would have a bearing on the issue and would influence the mind of the detaining authority one way or the other are ignored or not considered by the detaining authority before issuing the detention order.
in Sk.
Nizamuddin vs State of West Bengal, the order of detention was made on September 10, 1973 under Section 3(2)(a) of MISA based on the subjective satisfaction of the District Magis trate that it was necessary to detain the petitioner with a view to preventing him from acting in a manner prejudicial to the mainte nance of supplies and services essential to the community and this subjective satisfac tion, according to the grounds of detention furnished to the petitioner, was founded on a solitary incident of theft of aluminium wire 463 alleged to have been committed by the peti tioner on April 14, 1973.
In respect of this incident of theft a criminal case was filed inter alia against the petitioner in the Court of the Sub Divisional Magistrate, Asansol, but the criminal case was ultimately dropped as witnesses were not willing to come forward to give evidence for fear of danger to their life and the petitioner was discharged.
It appeared clear on record that the history sheet of the petitioner which was before the District Magistrate when he made the order of detention did not make any reference to the criminal case launched against the petitioner, much less to the fact that the prosecution had been dropped or the date when the petitioner was discharged from that case.
" Then this Court, referred to a decision reported in and extracted the following in support of their view: "We should have thought that the fact that a criminal case is pending against the person who is sought to be proceeded against by way of preventive detention is a very material circumstance which ought to be placed before the District Magistrate.
That circumstance might quite possibly have an impact on his decision whether or not to make an order of detention.
It is not altogether unlikely that the District Magistrate may in a given case take the view that since a criminal case is pending against the person sought to be de tained, no order of detention should be made for the present, but the criminal case should be allowed to run its full course and only if it fails to result in conviction, then preven tive detention should be resorted to.
It would be most unfair to the person sought to be detained not to disclose the pendency of a criminal case against him to the District Magistrate.
" The material not placed before the detaining authority is mentioned in paragraph 7 of the Judgment which reads as follows: "7.
In the instant case admittedly three facts were not communicated to or placed before the detaining authority before it passed the impugned order against the detenu, namely, (i) that during interrogation of the detenu, in spite of request, neither the presence nor the consultation of the Advocate was permitted; (ii) that in spite of intimation to 464 the Advocate in that behalf the detenu was not produced before the Magistrate on December 14, 1977, and (iii) that the confessional state ments were squarely retracted by the detenu on December 22, 1977 at the first available opportunity while he was in judicial custody; the first two had a beating on the question whether the confessional statements had been extorted under duress from detenu or not, while the third obviously was in relation to the confessional statements which formed the main foundation of the impugned order and as such were vital facts having a bearing on the main issue before the detaining authority.
" Ultimately the order of detention was quashed because the retracted confessional statement of the detenu was not placed before the detaining authority who passed the deten tion order on the detenu 's confessional statements.
This Court observed: "it cannot be disputed that the fact of retraction would have its own impact one way or the other on the detaining authority before making up its mind whether or not to issue the impugned order of detention and also to see whether the confessional statements recorded were voluntary statements or were statements obtained from the detenu under duress and also whether the retracted confession was in the nature of an after thought." On the facts of this case, by way of reiteration, we wish to state that the facts that Ramlal was detained, that he had undergone substantive period of detention did not weigh with this Court when the above order was passed, which clearly indicated that this Court felt that there was no need to detain him further pending appeal.
In Mohd. Shakeel Wahid Ahmed vs State of Maharashtra and Ors., a Constitution Bench of this Court had to deal with a somewhat similar situation.
There, one of the grounds of detention on which the appellant before this Court was detained was the same as the one on which one Shamsi was detained.
The Advisory Board had reported that there was no sufficient cause for Shamsi 's detention.
A case was pleaded before this Court that the report of the Adviso ry Board to the above effect ought to have been placed before the detaining authority which passed the order of detention against the petitioner before this court in that case.
It was contended that if this material had been placed before the detaining authority it may not have passed an order of detention against the petitioner in that case.
This court accepted this plea and observed as follows: "This submission is well founded and must be accepted.
It 465 is clear that Shamsi was detained for engaging in a smuggling activity arising out of the same incident and transaction which forms the subject matter of ground 1 in the instant case.
The opinion of the Advisory Board that there was no sufficient cause for Shamsi 's detention may not have been binding on the detaining authority which ordered the deten tion of the petitioner but, it cannot be gainsaid that the fact that the Advisory Board had recorded such an opinion on identical facts involving a common ground was at least relevant circumstance which ought to have been placed before the detaining authority in this case.
Since three out of the four grounds on which the petitioner was detained have been held to be bad by the High Court, we have to proceed on the basis that the petitioner was detained and could validly be detained on the remaining ground only.
That ground is similar to one of the grounds on which Shamsi was detained, the transaction being one and the same, as also the incident on which the two orders of detention are based.
That is why the opinion of the Advisory Board in Shamsi 's case becomes relevant in the petitioner 's case.
The failure of the State Government to place before the detaining authority in the instant case, the opinion which the Advisory Board had recorded in favour of a detenu who was de tained partly on a ground relating to the same incident deprived the detaining authority of an opportunity to apply its mind to a piece of evidence which was relevant, if not binding.
In other words, the detaining authority did not, because it could not, apply its mind to a circumstance which, reasonably, could have affected its decision whether or not to pass an order of detention against the petitioner.
" This Court observed further the scope of the consideration of the relevant materials in the following words: ". .
But the question for considera tion is not whether the detaining authority would have been justified in passing the order of detention against the petitioner, even after being apprised of the opinion of the Advisory Board in Shamsi 's case.
The question is whether the order of detention was passed in this case after applying the mind to the relevant facts which bear upon the detention of the petitioner.
It seems to us plain that the opinion of the Advisory Board in 466 Shamsi 's case was, at any rate, an important consideration which would and ought to have been taken into account by the detaining authority in the instant case.
That opportuni ty was denied to it.
" The Constitution Bench has in unambiguous terms out lined the scope of the doctrine of the application of mind and the purpose being it, in the above observation.
In a recent case, Sita Ram Somani vs State of Rajasthan and Ors., to which one of us was a party, it was held that non application of mind about the bail appli cations of the detenu in pending criminal case and his applications to the Collector of Customs, informing him that he had retracted his earlier confessional statements not having been placed before the detaining authority, the order of detention was held to be vitiated.
In another case, Criminal Writ Petition No. 397 of 1986, in a Judgment given by one of us along with Pathak J. (as he then was), the detention order which was based on three separate incidents, was quashed on the ground that the detaining authority did not apply its mind while passing the detention order, that the detenu had moved an application for bail, in the three pending cases and that he was enlarged on bail on 13 1 1986, 14 1 1986 and 15 1 1986.
Since the order of detention did not mention that the detenu in these cases was an under trial prisoner, that he was arrested in connection with the three cases, that applications for bail were pending and that he was released on three successive days in the three cases, this Court had to observe that there was a total absence of application of mind on the part of the detaining authority while passing the detention order and quashed the order of detention.
Appellants ' counsel in this case found it difficult to get over this plea made by the respondent, supported by weighty authorities.
He could not put forward any persuasive submissions to compel us to disagree with the consistent view taken by this Court in such matters.
He acted with propriety in not adopting the argument put forward in the Counter Affidavit that it was not the function of the authorities to go after all proceedings that take place in Courts of Law, relating to a detenu.
In view of the above conclusions we do not think it necessary to consider the question whether the authorities acted rightly in not considering the representation made by the respondent.
It cannot be disputed that provisions of SAFEMA cannot be invoked in cases where 467 there is no valid order of detention.
We agree with the High Court that the order of detention is bad on the ground discussed above.
Consequently we hold that the High Court was justified in quashing the notice issued under Section 6 and the proceeding initiated under Section 7 of the SAFEMA.
We accordingly dismiss the appeal.
S.R. Appeal dis missed.

summary/full:
Respondent and Ramlal Narang are brothers.
An order of detention passed on 19.12.1974 under section 3(1) of the COFEPOSA against Ramlal Narang was successfully challenged by W.P. 10/75 before the Delhi High Court.
An appeal was filed against that order before the Supreme Court by the Union of India.
Refusing a stay application, the Supreme Court passed an order imposing certain conditions on the movement of Ramlal Narang.
On 25.6.1975 Emergency was de clared.
On 1.7.1975 a fresh order of detention was passed against Ramlal on the same facts and grounds.
The earlier appeal filed by Union of India against W.P. 10/75 was dis missed in 1977.
Ramlal was detained under the second order of detention.
A writ petition No. 115/75 flied by his rela tive before the Delhi High Court challenging the second detention was dismissed on 25.11.1975.
An appeal was filed by certificate against that order before the Supreme Court as Crl.
Appeal No. 399/75.
In the meanwhile, notices under sections 6 and 7 of the Smugglers and Foreign Exchange Manipulators (Forfeiture of Property) Act, 1976 were issued against Ramlal.
These notices were challenged by him by filing W.P. No. 720/75 in the Delhi High Court.
Subsequently Crl.
Appeal No. 399/75 was disposed of observing that it would be open to raise all contentions available to him in W.P. 720/75 notwithstanding what is contained in W.P. 115/75.
The Delhi High Court having dismissed W.P. NO.
720/75, Crl.
Appeal No. 2790/85 was preferred to the Supreme 455 Court and is now pending before the Constitution Bench on the question of competency of the authorities to issue second detention order on the name grounds and facts.
While Respondents Manoharlal was in England an order of detention under COFEPOSA was issued against him on 31.1.1975.
He was brought to India on some express under standing given to the Government of the United Kingdom.
His order of detention was quashed by the Bombay High Court, wile allowing his writ petition No. 2752/75 on 8.7.1980.
The Union appeal against the same was dismissed on 4.11.1980 by the Supreme Court.
A further notice under section 6 of the SAFEMA read with section 2 was issued to the Respondent on 29.10.83 on the basis of the detention order dated 1.7.1975 issued against Ramlal.
A full Bench of the Bombay High Court quashed the said notice resulting in the present Crl.
Appeal No. 662/86 by Union of India.
The appellants plea to have the case tagged on to Crl.
Appeal No. 2790/85 pending before the Constitution Bench was opposed by respondent since he could succeed on merits.
Dismissing the appeal, the Court, HELD: 1.
In this case, the provisions of Smugglers and Foreign Exchange Manipulators (Forfeiture of Property) Act, 1976 were being pressed into service because he is a rela tive answering the description given in Explanation 2 to sub section (2) of section 2 was available.
Therefore, in such cases, the person against whom action is taken by invoking the Explanation to Sub section 2 referred to above, is at liberty to raise all grounds available to him though such grounds were raised and found against in a proceedings initiated by the relative.
[459C D] 2.
An order of the Supreme Court is not an inconsequen tial order.
If the detaining authority has considered the order of Supreme Court, one cannot state with definiteness which way is subjective satisfaction would have reacted.
This order could have persuaded the detaining authority to desist from passing the order of detention since Supreme Court had allowed freedom of movement.
Detention is only a preventive Act.
The Supreme Court did not find it necessary to restrict the liberty of Ramlal when the order on the stay application was passed.
It may also be that the detaining authority after considering the order of the Supreme Court carefully could still feel, that an order of detention is necessary with reference to other materials which outweigh the effect of Supreme Court 's order.
In all these cases, non application of mind 456 on a vital and relevant material need not necessarily lead to the conclusion that application of mind on such materials would, always be in favour of the detenu.
Application of mind in such cases is insisted upon to enable the detaining authority to consider one way or the other, as to what effect a relevant material could have, on the authority that decides the detention.
The absence of consideration of this important document amounts to non application of mind on the part of the detaining authority rendering the detention order invalid.
[462A D] Ibrahim Bachu Bafen vs State of Gujarat & Ors., ; Ashadevi vs K. Shivraj, ; ; Mohd. Shakeel Wahid Ahmed vs State of Maharashtra & Ors.
,[1983] 2 SCC 392 and Sita Ram Somani vs State of Rajasthan & Ors., , referred to.


judgement:
ivil Appeal No. 4110 of 1985.
From the Judgment and Order dated 22.5.1985 of the, Patna High Court in Appeal from Appellate Decree No. 51 of 1982.
S.S. Javali, B .P.
Singh and Ranjit Kumar for the Appel lants.
S.N. Kacker, M.S. Singh and K.K. Gupta for the Respondent.
The Judgment of the Court was delivered by, NATARAJAN, J.
This appeal by special leave by the ten ants is directed against the judgment of a Full Bench of the Patna High Court in a Second Appeal against Appellate Decree No. 51 of 1982.
By the impugned judgment the High Court allowed the appeal preferred by the landlord (respondent herein) and restored the order of eviction passed by the Trial Court against the appellants herein on grounds of default in payment of rent and bona fide requirement of the leased premises for the business needs of the landlord.
The circumstances under which the suit came to be filed and the contentions of the parties may be summarised as below.
One Babu Lal who died on 14.11.73 and the respondent were 536 brothers and were members of a Joint Hindu Family governed by the Mitakshra Law.
The joint family was the owner of a non residential building in the G.B. Road, Gaya.
One room in the said building was given on rent in the year 1932 to one Dr. Ramachandra, the husband of the first appellant and father of the second appellant for running a medical shop known as Punjab Dental and Opticals Works.
The joint family has been running its business in the other portions of the building.
The rent was fixed at Rs. 16 per month.
Over the years the rent came to be increased from Rs. 16 to Rs.60 per month.
It would appear that the rent was increased to Rs.20 in 1943, to Rs.25 in 1946, to Rs.30 in 1947, to Rs.32 in 1951, to Rs.35 in 1963, to Rs.40 in 1967, to Rs.50 in 1970 and finally to Rs.60 in 1971.
Dr. Ramachandra, the tenant died in or about 1960 and therefore his wife, the first appellant came to be recognised as the tenant and rent receipts were issued in her name.
Before the Trial Court it was sought to be contended that the second appellant had become the tenant after the demise of his father and as such the notice of termination of tenancy issued to the first appellant was not an effective and valid notice.
The conten tion was repelled by the Trial Court and that finding has not been challenged before the Appellate Court and the High Court.
As already stated Babu Lal the Karta of the family died on 14.11.73.
Consequent on his death the respondent herein became the Karta of the family as the senior most male member of the joint family.
The respondent issued notice on 12.6.74 terminating the tenancy with effect from 30.6.74 and called upon the first appellant to surrender possession of the leased shop from 1.7.74.
It was the case of the respond ent that the first appellant had committed default in pay ment of rent from November 1973 onwards and furthermore the leased portion was required for expansion of the joint family business carried on in the other portion of the building.
As the appellants failed to deliver possession a suit for eviction was filed under the Bihar Buildings (Lease, Rent and Eviction) Control Act (hereinafter referred to as the 'Act ') for a decree for eviction against the appellants.
A sum of Rs.540 was also claimed in the suit as arrears of rent.
The appellants contested the suit raising various de fences.
The principal defences were that the respondent was not the Karta of the family and one Ram Prakash Gupta, the eldest son of deceased Babu Lal was the Karta, that rent was tendered to him after the death of Babu Lal but the said Ram Prakash Gupta demanded rent at Rs. 150 per month refused to receive the rent that was tendered, that thereupon the rent was sent by money order but it was refused and as such 537 there was to default in payment of rent.
It was alternative ly contended that even if there had been default in payment of rent it would not afford a cause of action for seeking eviction because the original rent of Rs. 16 had been ille gally raised to Rs.60 per month in contravention of the terms of the Act, that as such the appellants were entitled to seek adjustment of the excess payments made by them towards the alleged arrears of rent and consequently there can be no arrears of rent under law.
In so far as the re quirement of the shop for the business needs of the respond ent is concerned it was contended that it was not a bona fide claim but only a make believe story in order to get the appellants evicted.
The Trial Court, after a detailed consideration of the oral and documentary evidence adduced by the parties, held that the appellants had neither tendered the rent to Ram Prakash Gupta nor had the latter refused to receive it, that in the absence of a refusal to receive rent the appellants were not entitled under the Act to make remittances of the rent by money order, that in any event the payment of rent to a junior member of the family instead of to the Karta was not a valid payment and that as such the appellants had committed default in payment of rent and were, therefore, liable to be evicted.
On the other ground also the Trial Court held that the leased portion was bona fide required by the Karta for the gainful engagement of two members of the joint family who were unemployed and that was a second ground for ordering eviction.
Accordingly the Trial Court decreed the suit for eviction.
On the appellants preferring an appeal, the Appellate Court reversed the findings of the Trial Court and dismissed the suit for eviction.
The Appellate Court held that even if the appellants had failed to pay the rent from, November 1973 onwards the appellants cannot be deemed to have commit ted default in payment of rent because the enhancement of rent from Rs. 16 to Rs.60 was in contravention of the provi sions of the Act and as such the appellants were entitled to have the excess payments adjusted towards arrears of rent as well as future payments of rent.
The ground of bona fide requirement was also not accepted by the Appellate Court.
Against the judgment of the Appellate Court the respond ent herein preferred a second appeal to the High Court.
As there was a conflict of decisions of different Benches of the High Court on the question whether tenants paying rent in excess of the agreed rent would be affected by the rule of "in pari delicto" and cannot, there 538 fore, seek adjustment of the excess payments towards arrears of rent to resist a suit for eviction for default in payment of rent, the second appeal was referred to a Full Bench.
The Full Bench, after elaborately considering the matter held that the rule of "in pari delicto" would squarely apply to tenants who pay enhanced rents in contravention of the terms of the Rent Restriction Acts and hence the appellants are guilty of pari delicto and cannot, therefore, seek adjust ment of the excess payments made by them and seek avoidance of their eviction for default in paying the rent.
The Full Bench further held that the finding of the Appellate Court on the question of the landlord 's bona fide requirement of the leased premises was vitiated on account of misreading of facts and misapplication of law and hence the Trial Court 's finding warranted restoration.
The Full Bench, therefore, allowed the appeal and restored the decree of eviction passed by the Trial Court on both the grounds set out in the plaint.
Mr. Javali, learned counsel for the appellants strenu ously contended that the High Court was not justified in allowing the second appeal since the appellants had not committed any default in payment of rent and furthermore even if there was any default, due to their erroneous ten der, they were entitled to seek adjustment of the excess payments made by them and avoid eviction.
It was also sub mitted that the appellants, being in the disadvantageous position of tenants, cannot be placed on par with the land lord and held that they are "in pan delicto" and cannot seek adjustment of the excess payments towards arrears of rent.
The further submission was that the respondent 's requirement of the shop for the business needs of the members of the joint family was not established either by the pleadings or the evidence and as such the Appellate Court was perfectly in order in rejecting the second ground on which eviction was sought for and the High Court had erred in interfering with a finding of fact in a second appeal.
In the view we propose taking of the matter we do not think it necessary to go into the question whether the appellants had committed default in payment of rent and secondly even if they had committed default, they are enti tled to adjust the excess rent paid by them over a span of 30 years without reference to the rule of "in pari delicto".
The reason for our refraining to go into these questions is because we find the decree for eviction passed against the appellants can be sustained on the second ground viz. bona fide requirement of the shop for the business requirements of the members of the joint family.
Even so we think it necessary to point out an error contained in the argument of Mr. Javali.
The learned counsel submitted that the 539 decision of the High Court on the question of "in pari delicto" may not be good law in view of recent decision of this Court in Mohd. Salimuddin vs Misri Lal & Anr., ; It is true that the case related to a dispute regarding default in payment of rent between a landlord and a tenant and this Court held that it will be a judicial sin to treat the landlord and tenant on a par and apply the doctrine of pari delicto because the parties were placed in the position of "oppressor" and "oppressed".
The learned counsel has failed to notice that the facts in that case were entirely different.
It was a case where a tenant was obliged to advance a loan of Rs.2,000 to the landlord in order to secure the lease of a premises.
The agreement between the parties specifically provided that the loan amount was to be adjusted against the rent which accrued.
In spite of it the landlord sought the tenant 's eviction on the ground of arrears of rent and set up a plea of "in pari delicto" against the tenant.
It was in such circumstances this Court held that the doctrine of pari delicto cannot be applied since the tenant was perforce compelled to advance a loan to secure the lease even though such advancement of loan was against the terms of the Rent Act.
The learned Judges have taken care to set out that the doctrine will not be attracted when there is no element of compulsion or exploitation and both parties have by consensus contravened the provisions of law for their mutual advantage.
They, however, found that the tenant concerned in that case was a victim of exploitation and hence he was not "in pari delic to".
The relevant portion of the judgment reads as follows: "The doctrine is attracted only when none of the parties is a victim of such exploitation and both parties have voluntarily and by their free will joined hands to flout the law for their mutual gain.
Such being the position the said doctrine embodying the rule that a party to a transaction prohibited by law cannot enforce his claim in a court of law is not attracted in a situation like the present." Coming now to the ground of eviction based on the bona fide requirement of the respondent, Mr. Javali argued that the bona fides of the claim is not established either by the pleadings or the evidence and hence the Trial Court and the High Court were in error in sustaining the said ground of eviction.
It was pointed out by the counsel that in the plaint there is only a casual statement about the require ment of the shop by the landlord and in the evidence it was not made clear whether the shop was required for expansion of the existing business or for starting a new business venture for the benefit of the younger members 540 of the joint family.
The Trial Court has discussed the case of bona fide requirement in para 14 of its judgment and has held that the landlord is bonafide in need of the shop to engage two members of the joint family in business.
The Appellate Judge has reversed the finding of the Trial Court on four grounds viz. that the tenants were refugees from West Pakistan and had no shop of their own in the town of Gaya, that from the point of comparative hardship it would be the tenants who would suffer more than the landlord by an adverse decision, that the shop occupied by the appellants is only a small portion in a massive building in the occupa tion of the landlord and that the landlord 's requirement of the building was more attributable to a desire to recover possession rather than on account of any genuine need for it.
The High Court has pointed out that the Appellate Judge had completely misdirected himself in his approach to the question because of erroneous assumptions of facts as well as law.
Admittedly, the tenancy had commenced in 1932 which was long prior to the partition in 1947 and hence there can be no question of the tenant being a refugee from West Pakistan.
Likewise, the application of the test of compara tive hardship between the landlord and the tenant was an extraneous test because no such test has been prescribed by the Act for going into the reckoning.
Then again it was noticed that without any evidence or materials the Appellate Judge has assumed that the main building in the occupation of the joint family is a massive building and that the leased portion constitutes only a negligible area.
Likewise the Appellate Judge had no materials to hold that the land lord 's requirement of the building was only borne out of desire and not on account of any genuine need.
Since the Appellate Judge had rendered his findings on the question of bona fide requirement of the shop by the landlord on base less assumptions and wrong principles of law, the High Court was justified in setting aside the finding of the Appellate Judge even though it was factual in character.
It is true that in a second appeal a finding on fact even if erroneous will generally not be disturbed but where it is found that the finding is vitiated by application of wrong tests or on the basis of conjectures and assumptions then a High Court will be well within its rights in setting aside in a second appeal a patently erroneous finding in order to render justice to the party affected by the erroneous finding.
Mr. Javali tried to canvass that the Appellate Judge had ren dered his finding mainly with reference to the pleadings and the evidence and his incidental references to other factors and circumstances were only to reinforce his conclusion and as such his finding does not suffer from any infirmity or error.
We are not persuaded by this argument because it cannot be predicated as to how far the Appellate Judge 's conclusion 541 was influenced by the mistaken tests applied by him to determine the issue.
We are, therefore, of the view that the finding of the Trial Court which has been confirmed by the High Court regarding the respondent being bona fide in need of the shop for the business needs of the joint family does not call for any interference by this Court in this appeal under Article 136 of the Constitution.
In the result, the appeal fails and will stand dis missed.
There will be no order as to costs.
To enable the appellants to find alternate accommodation to shift their business they are given time till 30.6.87 to vacate the premises.
S.R. Appeal dis missed.

dataset_name: IN-Abs

summary/full:
The first appellant, widow of one Dr. Ramachandra, a tenant since 1932 of one room used as a medical shop was recognised as tenant on the death of her husband in or about 1960 by Babu Lal, the original landlord.
The rent was fixed at Rs.416 per month.
Over the years the rent came to be increased from Rs.16 to 60 per month, i.e. both when Dr. Ramachandra was alive and also later.
Babulal died on 14.11.1973 and the respondent became the Karta of the family as the senior most male member of the joint family.
The respondent issued a notice on 12.6.1974 terminating the tenancy with effect from 30.6.1974 and called upon the first appellant wife to surrender possesssion of the leased shop from 1.7.74.
As the appellants (wife and son of Dr. Rama chandra) failed tO deliver possession a salt for eviction was filed under the Bihar Buildings (Lease, Rent and Evic tion) Control Act on two grounds: (a) default of rent and (b) bonafide requirements of the junior members of the Joint family.
The trial court allowed the eviction petition.
In appeal, the appellate court reversed the findings of the Trial Court and applying the principle of unjust enrichment contrary to statutory law, held that the appellants were entitled to have the excess payment adjusted towards arrears of rent as well as future payments of rent since 1943.
However, in the Second Appeal, the Full Bench of the Patna High Court held that the rule of "in pari delicto" would squarely apply to tenants who pay enhanced rents in contra vention of the terms of the Rent Restriction Acts and there fore the appellants cannot claim adjustment of excess rent paid and seek avoidance of their eviction.
The High Court also reversed the finding of the appellate court on the question of bona 535 fide requirement as being vitiated by misreading of facts and misapplication of law.
Hence the tenant 's appeal by special leave.
Dismissing the appeal, the Court, HELD: 1.
In Mohd Salimuddin vs Misrilal & Anr.
, ; , the Supreme Court have taken care to set out that the doctrine of "in pari delicto" will not be attracted when there is no element of compulsion or exploitation and both parties have by consensus contravened the provisions of law for their mutual advantage.
[539D E] 2.
It is true that in a second appeal a finding on fact even if erroneous will generally not be disturbed but where it is found that the finding is vitiated by application of wrong tests or on the basis of conjectures and assumptions then a High Court will be well within its rights in setting aside in a second appeal a patently erroneous finding in order to render justice to the party affected by the errone ous finding.
[540F G]


judgement:
ivil Appeal Nos.
437448 Of 1978 Etc.
From the Judgment and Order dated 18.1.
1977 of the Andhra Pradesh High Court in Writ Petition No. 4485, 3399, 4979, 5819 of 1974.
Y.S. Chitale, Soli J. Sorabjee, P.P. Rao, A.S. Nambiar, A. Chitale, T.V.S.N. Chari, N. Mathur, W. Quadri, Ms. V. Grover, Ms. Sunita Mudigouda, T.D. Ramayya, A. Mariarputham, T.C. Gupta, K.V.G. Rama Rao and G. Narayana Rao for the appearing parties.
The Judgment of the Court was delivered by CHINNAPPA REDDY, J.
The primary question involved in these appeals and petitions is whether under the 'Excise Law ' prevailing in the State of Andhra Pradesh, the Govern ment is entitled to claim from the Excise Contractors who have failed to lift the 'Minimum Guaranteed Quantity ' of liquor the amount said to represent the 'excise duty compo nent ' in the issue price of liquor relating to such unlifted quantity of liquor.
A full bench of three judges of the High Court of Andhra Pradesh, in V. Narasimha Rao vs Superintend ent of Excise, AIR 1974 AP 157 held that the Government could but this view was overruled by a Full Bench of Five Judges of the same High Court in Atluri Brahmanandam vs Tahsildar of Gannavaram AIR 1977 AP 196 where it was held that the Government could not.
It is the judgment of the Full Bench of Five Judges which is in question in the ap peals and petitions filed by the Government.
With a view to cure the defects pointed out by the Full Bench of Five Judges and to validate the demands raised by the Government, the Andhra Pradesh Legislature enacted the Andhra Pradesh Excise Amendment Act X of 1984.
Demands raised pursuant to the Amending Act were upheld by the High Court by a later judgment.
The aggrieved Excise Contractors have filed ap peals and they are also before us.
In some cases the con tractors who had originally succeeded because of the deci sion of the Five Judge Full Bench were again called upon to make good the deficit after the Amending Act was passed.
They questioned the fresh demands but failed in the High Court.
Their petitions for Special Leave to Appeal are also before us.
517 Entry 51 of List II of the seventh schedule to the Constitution empowers the State to levy duties of Excise on alcoholic liquors for human consumption (not including medicinal and toilet preparations containing alcohol) manu factured or produced in the State ' and counter availing duties on such alcoholic liquors manufactured or produced elsewhere in India.
An Excise duty levied by the State on alcoholic liquors is therefore.
primarily a duty on the manufacture or production of such alcoholic liquors.
Section 2(10) of the Andhra Pradesh Excise Act.
1%8 defines "Excise Duty" or "Countervailing duty" to mean "the duty of Excise or countervailing duty, as the case may be mentioned in Entry 51 is List II of the Seventh Schedule to the Constitu tion." 'Excise Revenue ' is defined by s.2(12) to mean 'Rev enue derived or derivable from any duty, fee, tax, rent, fine, penalty or confiscation levied, imposed or ordered under the provisions of this Act or other law for time being in force elating to intoxicating drugs '.
Section 17 of the Act, before and after the amendment was and is as follows: "Section 17 before amendment Section 17 as amended by Act No.10 of 1984.
Power to grant lease: Sec. 17: Grant of exclusive (i) The Government may, sub privilege of manufacture etc: ject to such conditions as (1) subject to the provisions they may deem fit to impose, of s.28 and any rules made grant for a fixed period to in this, the Govt.
may, subject any person, at any place a to such conditions as they lease jointly or severally may deem fit to impose, grant for the supply, manufacture for a fixed period to any or sale of any intoxicant.
person at any place a lease or licence or both either Explanation: A lease shall jointly or severally for the not take effect until the exclusive privilege collector or any other comp etent officer has issued (i) of manufacturing or of a licence under this Act.
supplying by wholesale or of both, or (2) The Government may (ii) or selling by wholesale confer on any officer the or by retail, or power mentioned in sub 519 section(1).
(iii) of manufacturing Or Of supplying by wholesale, or of both, and of selling by retail, any liquor or other intoxicant within any such area in the State as may be specified in the said order.
Explanation: A lease shall not take effect until the Collector or any other competent officer has issued a licence under this Act.
(2) The Government may confer on any officer the power mentioned in sub section( 1).
" Sections 21 and 22 which remained unchanged are as follows: "Section 21: Excise duty or Countervailing duty on excisable articles: (1) The Govt.
may, by notification levy an excise duty on any excisable article manufactured or produced in the State at such rate, not exceeding the rates mentioned in the Schedule, as may be specified in the notification.
(2) The Govt.
may by notification, levy a countervailing duty on any excisable article manufactured or produced elsewhere in India and imported into the State at such rate as may be specified in the notification which may not exceed the rates on excise duty on similar excisable articles levied under sub section(1).
(3) Different rates may be specified in sub section(1) and (2) for different kinds of excisable articles and different modes of levying duties under s.22.
Section 22: Modes of levying duties: The excise duty and the countervailing duty under s.21 shall be levied in one or more of the following modes: (a) rateably, on the quantity of any excisable article produced or manufactured in or issued from a distillery, brewery or manufactory or warehouse or imported into the State; 520 (b) in the case of spirits or other liquors produced in any distillery, brewery or manu factory in according with its quality or strength or in accordance with such scale of equivalents calculated on the quantity of materials used, or by the degree or attenua tion of the wash or wort as the case may be, prescribed; (c) In the case of today, in the form of a tax on each variety of excise tree from which teddy is drawn having due regard to the period during which such tree is capable of yielding today; (d) by fees on licences for the manufacture supply or sale of any excisable article.
" Section 23 before and after amendment was as follows: "Section 23 before amend Section 23 as substituted by ment Act 10 of 1984 Excise duty in respect of Sec. 23: Payment for exclu lease: Notwithstanding any sive privilege: Instead of or thing in Sections 21 and in addition to any excise 22, the sum accepted in con duty or fees leviable under sideration of the grant sections 21 and 22, the of any release relating to Commissioner or any any other any excisable article under competent officer may accept section 17, shall be the excise payment of a sum in consi duty or countervailing deration of the grant of duty payable in respect of lease or licence or both the excisable article, in for the exclusive privilege addition to any duty or in respect of the liquor or fees paid under s.21 & 22.
any other intoxicant under sec.
Validation: Where before the commencement of this Act.
, any issue price (which includes excise duty also) has been collected or recovered from the licensee in respect of short drawn 521 or undrawn minimum guaranteed quantity of arrack in pursu ance of rule 15 of the A.P. Excise (Arrack Retail, Vend and Special conditions of Licences) Rules, 1969, by deducting such price from the advance money paid by the licensee, then, notwith standing anything contained in any judgment, decree or order of any court, tribunal or other authority to the contrary, the price so col lected or recovered shall be deemed to be and shall be deemed always to have been validly collected or recov ered as consideration for the grant of lease or licensee or both to the lessee or licen see for the exclusive privi lege in respect of sale of liquor in accordance with the provisions of the principal Act as amended by this Act as if the amendments made to the principal Act by a sections 2 and 3 of this Act had been in force at all material times and accordingly (a) all acts, proceedings or things done or taken by the State Govt.or by any officer of the State Govt.
or by any other authority in connection with the collection of such price shall for all purposes, be deemed to be and to have always been done or taken in accordance with law; (b) no suit or other proceeding shall be maintained or contained in any Court or before any authority 522 for the refund of and no enforcement Shall be made by any Court of other authority of any decree or order directing the refund of any such price which has been collected as if the provisions of the principal Act as amended by this Act had been in force at all material times.
" The first entry in the Schedule to the Act is as follows: "No. Description of Mode of levying Maximum rate excisable article duty of duty 1.
Arrack on the quantity Rupees eight per issued from the litre of the distillery of ware strength of house.
proof spirit.
" We mentioned earlier that the Andhra Pradesh Legislature amended the Andhra Pradesh Excise Act to nullify the effect of the Full Bench judgment in Atluri Brahmanandam vs Tahsil dar of Gannavaram (supra).
We may refer to the provisions of the amending Act.
Section 2 of the Amending Act provides for the substitution of a new section 17 for the old.
section 17.
We have already extracted both the old and the new sections.
Sec tions 3 of the amending Act provides for the substitution of old s.23 by a new s.23.
We have already extracted both the old and the new sections.
Section 4 of the amending Act provides for the Validation of earlier demands made in respect of issue price of short drawn minimum guaranteed quantity of liquor.
It is necessary to set out the whole of this provision.
It is as follows: "4.
Validation Where, before the commence ment of this Act, any issue price (which includes excise duty also) has been collected or recovered from the licensee in respect of short drawn or undrawn minimum guaranteed quantity of arrack in pursuance of rule 15 of the Andhra Pradesh Excise (Arrack Retail, Vend and Special Conditions of Licences) Rules, 1969, by deducting such price from the advance money paid by the licensee, then, notwith standing 523 anything contained in any judgment decree or order of any court, tribunal or other authori ty to the contrary, the price so collected or recovered shall be deemed to be and shall be deemed always to have been validly collected or recovered as consideration for the grant of lease or licence or both of the lessee or licensee for the exclusive privilege in re spect of sale of liquor in accordance with the provisions of the principal Act as amended by this Act as if the amendments made to the Principal Act by sections 2 and 3 of this Act had been in force at all material times and accordingly, : (a) all acts, proceedings or thing done or taken by the State Government or by any offi cer of the State Government or by any other authority in connection with the collection of such price shall for all purposes be deemed to be and to have always been done or taken in accordance with law.
(b) no suit or other proceeding shall be maintained or continued in any court or before any authority for the refund, of, and no enforcement shall be made by any Court or other authority of any decree or order direct ing the refund of, any, such price which has been collected and which would have been validly collected as if the provisions of the Principal Act as amended by the Act had been in force at all material times.
" The Andhra Pradesh(Arrack, Retail Vend Special Condi tions of Licences) Rules, 1969 were made by the Government of Andhra Pradesh in exercise of the powers conferred by various provisions of the Andhra Pradesh Excise Act.
Rule 7 obliges the licensee to buy arrack from a recognised dis tillery, warehouse or depot as may be allotted by the de partment at the issue price as notified by the Commissioner from time to time.
Rule 11 provides for remittences of duty etc.
into the Government treasury.
Rule 15 deals with mini mum guaranteed quantity of liquor.
It is necessary to ex tract the first two clauses of rule 15 and they are as follows: "15.
Minimum guaranteed quantity of arrack (1) No licensee shall purchase arrack less than the speci fied minimum guaranteed quantity in any month.
If in any month, quantity less than the minimum guaranteed 524 quantity fixed for that month is drawn, at the end of that month issue price to the extent of deficit purchase shall be deducted from the advance money paid by the licensee under the minimum quantity of arrack guaranteed by him and the licensee shall be called upon to indemnity the amount so adjusted by the end of the succeeding month in which short drawn quantity had occured.
Provided that the Excise Superintendents may permit the licensee to lift the short drawn minimum guaran teed quantity of the previous month in the succeeded month for special reasons expert for the month of September, unless the licensee has committed default in lifting the minimum guaranteed quantity for two successive months; Provided further that where the Commissioner deems it necessary to permit a shop keeper to draw the deficit quantity short drawn in any month in the subsequent, he shall obtain the prior approval of the Government for grant ing such permission.
(2) Where a licensee fails to lift the arrack as permitted by the Excise Superintendent or to indemnity the advance amount so adjusted by the end of the succeeding month in which the short drawal of quantity had occurred, the right acquired by the defaulting licensee shall be reauctioned forthwith.
" Rule 17 prescribes "every licensee shall be bound by the provisions of Andhra Pradesh Excise Act, 1968, and the rules and orders made under from time to time.
" The Andhra Pradesh Excise(Lease of fight to sell liquor in retail) rules 1969 are another set of rules made under the various provisions of Andhra Pradesh Excise Act.
Rule 2(ix) defines "rental" to mean 'the rent payable in respect of a shop or group of shops in consideration of the grant of lease for sale of liquor '.
Rule 3 provides for the lease of the fight to sell liquor in retail.
Clause 1 of Rule 3 may be usefully extracted here and it is as follows: "3.
Lease to right to sell liquor in retail: (1) Subject to the provisions of these rules, every lease of right to sell 525 liquor in retail shall be granted by auction.
The lease shall ordinarily be for a period of one excise year; Provided that where the Commissioner considers it necessary to grant the lease of right to sell liquor in retail in any other manner, he shall do so with the prior approval of the Government.
" The rest of the rules relate to the procedure to be followed at the auction and thereafter.
Rule 16 requires the auction purchaser to pay 2 per cent of the annual rental as earnest money together with one month 's rental on the day of auction immediately after the acceptance of tender or bid as the case may be.
The earnest money and one month 's rental are to be in addition to the deposit of rental prescribed by Rule 18.
Rule 18(1) provides for the deposit by auction purchaser within fifteen days from the date of auction, two months ' rental in cash or in fixed deposit certificates.
Rule 21 provides for execution of counterpart agreement by the licensee in form 42.
This is required to be done before taking out a licence in respect of lease granted to him for the sale of liquor.
Rule 22 provides that the lease shall not take effect until the auction purchaser obtains a li cence.
Rule 24 prescribes that every auction purchaser shall be bound by all the provisions of the Excise Laws which are in force or which may come into force and of the rules or orders made from time to time by the Government or Commis sioner or by the competent authority.
The prescribed form for the counterpart agreement provides among other thing for an undertaking that the licensee shah abide by all the provisions of the Andhra Pradesh Excise Act and the Rules and Orders thereunder existing and also those that would be issued from time to time in that respect.
The Andhra Pradesh Excise (Lease of right to sell liquor in retail) Rules, 1969 and the Andhra Pradesh Excise(Arrack, Retail Vend Special Conditions for Licences) Rules were duly amended in 1984.
It is to be mentioned here that the issue price of arrack is notified well in advance of the Excise year and the minimum guaranteed quantity of liquor is also fixed in regard to each shop well in advance of the auction.
The issue price is always a definite sum per bulk litre of liquor.
The notification specifying the issue price does not attempt to split up the issue price into various components such as cost price, Excise duty, transport charges etc.
Cost price, Excise duty and transport charges are not separately and individually charged.
Issue price is the sum total of whatever has gone into the price of liquor at the time it is issued and it is a single pre determined definite sum and not the total 526 of separate sums representing so many specified components.
For example, the issue price of arrack for the year 1979~80 was notified in the following manner: "In exercise of the powers conferred by Rule 7(1) of the Andhra Pradesh Excise (Arrack, Retail sale Special Conditions for Licences) Rules, 1969, the Commissioner of Excise, Andhra Pradesh, hereby notifies the issue price of arrack for the Excise Year 1979 80 at Rs.5.10 per bulk liter of 30x U.P. strength and Rs.3 per bulk liter of 60x U.P. strength.
" It is however not disputed that excise duty does enter the determination of the issue price but that has nothing to do with the excise contractor whose obligation is to pay the whole of the issue price.
As we said the issue price as well as minimum guaranteed quantity are both fixed well in ad vance and it is with full knowledge of the issue price and the minimum guaranteed quantity that every bidder partici pates in the auction.
We wish to emphasise here that the 'issue price ' is that which is not notified as issue price and not its components, if any.
These components which have come together to become 'issue price ' are not to be separat ed again.
To borrow the analogy of Chemistry it is a chemi cal compound and not a mechanical mixture.
Excise duty loses its identity, as it were, and becomes an inseparable part of 'issue price '.
The learned counsel for the contractors however, argued that excise duty was admittedly a part of issue price and that the legislature, while amending the Excise Act in 1984, had also recognised the distinctive duty element in issue price.
He also invited our attention to Narasimha Rao vs Superintendent of Excise (supra).
It is true that it is not disputed that the element of excise duty has entered the issue price but that does not mean that it continues to retain its character as Excise duty.
In V. Narasimha Rao vs Superintendent of Excise (supra), the High Court of Andhra Pradesh, after refering to Rule 11 of the retail vend Rules, observed that it could be safely taken that the three items, namely, duty, cost and sales tax constituted the issue price.
It is one thing to say that several elements enter into the determination of issue price but it is altogether a different thing to say that these erstwhile constituent elements retain their character and individually as such even after determination of issue price.
In the statement of objects and reasons of the amend ing Act there is reference to 'issue price ' together with excise duty ' and 'issue price including excise duty '.
In s.4 of the amending Act there is a reference to 'issue price(which includes excise duty also) '.
These references to issue 527 price and excise duty are made in the context of the judg ment of the Five Judge Full Bench of the Andhra Pradesh High Court which has treated excise duty as a severable element of issue price, the effect of which was sought to be got rid by the amending Act.
It was in that context that there was a reference to the excise duty element of issue price.
We do not think that it is permissible for us to hold that the element of excise duty which has gone into the determination of issue price continues to retain its individual character so as to be capable of being severed and dealt with sepa rately.
Basing himself on an observation made in Panna Lal vs State of Rajasthan; , it was argued by the learned counsel on behalf of the Excise Contractors, that issue price can only relate to liquor drawn by the contrac tors and cannot pertain to undrawn liquor.
There can be no question that issue price must generally relate to liquor which is drawn by the Contractors but it does not follow therefrom that issue price cannot be adopted by agreement between the parties as the measure of compensation to be paid in the case of undrawn liquor.
In fact, it may not be quiet correct even to view it as compensation as we shall presently see.
It is no more and no less than the price which the contractor agrees to pay for the grant of the privilege to sell liquor, drawn or undrawn.
We may now examine the situation as it obtained before the amending Act, 1984.
It is well settled that all right in regard to manufacture and sale of intoxicants vest in the State.
It is open to the State to part with those rights for a consideration.
The consideration for parting with the privilege of the State is neither Excise duty nor Licence fee but it is the price of the privilege.
Section 17 of the Andhra Pradesh Excise Act as it stood before the amendment provided for the grant of a lease for the manufacture or sale of an intoxicant subject to such conditions as the Government deemed fit to impose.
It also provided that a lease shall not take effect until a licence under the Act was also issued.
Section 21 provided for the levy of Excise duty on excisable articles and s.22 prescribed the mode of levy of excise duty.
Section 23 provided that, notwithstand ing anything in sec.
21 and 22, the sum accepted in consid eration for the grant of any lease under section 17 was to be the excise duty payable in respect of that excisable article.
The marginal note of s.23 is "Excise duty in respect of lease".
Rental we have seen has been defined in the Andhra Pradesh (Lease of fight to sell liquor in retail) Rules, 1969, as meaning "the rent payable in respect of a shop or group of shops in consideration of the grant of lease for the sale of liquor".
Rule 3 prescribes that every lease of right 528 to sell liquor in retail shall be granted by auction.
Rule 7 of the Andhra Pradesh (Arrack Retail Vend Special Conditions of Licences) Rules prescribes that the licensee shall pur chase arrack from the distillery, warehouse or depot allot ted by the Government and shall pay issue price as notified by the Commissioner from time to time.
Rule 15 provides for the purchase of a specified minimum guaranteed quantity of arrack every month and for the adjustment of the issue price in case of any short fall in the purchase of the minimum guaranteed quantity of liquor.
Thus reading sections 17 and 23 of Andhra Pradesh Excise Act together with the Andhra Pradesh Excise (Lease of Right to sell liquor in retail) Rules, 1969 and Andhra Pradesh (Retail Vend Special Condi tions of Licences) Rules, the picture which emerges is that the privilege of selling liquor which includes the lease of the shop for an area and the licence to sell liquor therein may be granted by the State by public auction subject to (1) payment of rental being the highest bid at the auction (It is to be noted here that rental is the rent payable in consideration of grant of lease for the sale of liquor but it is not the sale or exclusive consideration for the lease), (2) the requirement that the licensee shall purchase arrack at the issue price, and (3) the further requirement that the licensee shall purchase a minimum guaranteed quan tity of arrack, which he has to make good in case of short fall.
The consideration for the grant of the privilege to sell liquor is not merely the rental to be paid by the lessee but also the issue price of the arrack supplied or treated as supplied in case of short fall, which is also to be paid by the lessee licensee.
There is no question of the lessee licensee having to pay the excise duty though it may be that the issue price is arrived at after taking into account the excise duty payable.
If this is the true posi tion, the question arises whether the contractor can claim to deduct from the issue price payable by him in respect of short drawn arrack, the amount said to be attributable to excise duty.
Once we have understood the true nature of 'issue price ' and the true consideration for the grant of the exclusive privilege to sell liquor, the question posed in the previous paragraph is not difficult to answer.
We have guidance from several decisions of this Court.
The first of the cases on which the learned counsel for the liquor contractors relied was that of Bimal Chandra Banerjee vs State of Madhya Pradesh, ; The successful bidders at an excise auction who had failed to take delivery of the prescribed minimum quantity of liquor which they were required to sell under the condition of auction were called upon to pay excise duty on the quantity of liquor which they had failed to take.
Clause 2(c) of the 529 notification prescribing the conditions of auction provided that the contractor had to make good every month "the defi cit of monthly average of the total minimum duty".
The court found that none of the provisions of the Act empowered the rule making authority viz. the State Government to levy tax on excisable articles which had not been either imported, exported, transported, manufactured, cultivated or collected under any licence or manufactured in any distillery estab lished or distillery or brewery licenced under the Act.
The Court said, "Quite clearly the State Government purported to levy duty on liquor which the contractors failed to lift.
In so doing it was attempting to exercise a power which it did not possess.
No tax can be imposed by any by law or rule or regulation unless the statute itself under which the subordinate legislation is made specially authorises the imposition even if it is assumed that the power to tax can be dele gated to the executive.
" This was clearly a case where the State purported to levy excise duty on the unlifted quantity of liquor ' and this could not be done under the authority of law.
The second case on which the learned counsel relied was that of State of Madhya Pradesh vs Firm Gappulal etc.
; , In that case there was no dispute that the demand made on the contractors was in respect of duty on liquor which had not been lifted.
It was held that the demand could not be made.
The decision of the court in Panna Lal 's case was distinguished on the ground that in that case there was not levy of excise duty in enforcing the payment of the guaranteed sum or the stipulated lump sum mentioned in the licences.
It was also pointed out that in Panna Lal 's case the excise duty component of the issue price was found to be a measure of the quantum of or extent of the conces sion or the remission to be given to the liquor contractors.
The lump sum amount payable for the exclusive privilege was not to be confused with the issue price.
In essence, it was said, what was sought to be recovered from the liquor con tractors in Panna Lal 's case was the shortfall occasioned on account of failure on the part of liquor contractors to fulfil the terms of licence.
Gappulal 's case is not of any assitance to the contractors in the present case as what was sought to be recovered there, was undoubtedly excise duty which was not leviable on unlifted liquor.
The third case relied on by the learned counsel for the con 530 tractors was that of Excise Commissioner, Uttar Pradesh vs Ram Kumar, The licence granted to each of the contractors in this case provided that on his failure to lift the monthly proportonate quota in any month, he shall be liable to pay compensation to the State Government at the rate equal to the rate of still head duty . on the quantity falling short of such monthly proportionate quota.
The contractors having failed to lift or sell the minimum quantity of quota of liquor were required to compensate the State as provided by the licence.
The Court held that the demand though disguised as compensation was in reality a demand for excise duty on the unlifted quantity of liquor and that was not authorised by the provisions of the Act.
Thus we see that in Bimal Chandra Banerjee 's case and Gappulal 's case, what was sought to be recovered, was excise duty and in Ram Kumar 's case also what was sought to be recovered was excise duty, though disguised as compensation.
Such excise duty on unlifted liquor was not leviable.
Refer ring to these cases, Chandrachud, CJ.
observed in State of Haryana vs Jage Ram, ; "In Bimal Chandra Banerjee 's case, it was held by this court that the levy of excise duty on undrawn liquor was beyond the power of the State Government and that therefore, the rule imposing the condition to that effect was invalid.
That decision was followed in State of Madhya Pradesh vs Firm Gappulal where also the licensees were required to pay what was described as 'Pratikar ' which was nothing but excise duty on undrawn liquor.
The same situa tion obtained in Excise Commissioner vs Ram Kumar because the real nature of the payment which the licensee were required to pay there, was excise duty on undrawn liquor.
"These decisions cannot held the respondents because the true position, as we stated earlier, is that the amount which the respondents are called upon to pay is not excise duty on undrawn liquor but is the price of a privilege for which they bid at the auction of the vend which they wanted to conduct.
" The learned counsel for the State of Andhra Pradesh relied on Har Shankar & Ors., vs The Dy.
Excise & Taxation Commr.
& Ors.
, ; ; Panna Lal vs State of Rajasthan (supra) and State of 531 Haryana vs Jage Ram (supra).
In Har Shankar 's case, it was held by a Constitution Bench of the Court (Chandrachud, J. speaking for the Court) that since rights in regard to intoxicants belonged to the State, it was open to the Gov ernment to part with those rights for a consideration.
In a scheme providing for the parting of the right for a consid eration, it was not of the essence whether the amount charged to the licences was pre determined or whether it was left to be determined by bids offered in auctions.
The power of the Government to charge a price for parting with its rights and not the mode of fixing that price was constituted the essence of the matter.
Nor indeed did the label affixed to the price determine either the true nature of the charge left by the Government or its rights to levy the same.
The amount charged was neither a fee properly so called nor indeed a tax but was in the nature of a price of the privi lege which the purchaser had to pay in any trade or business transaction.
Once it was appreciated that the auctions were only a mode or medium for ascertaining the best price ob tainable for the grant of a privilege to sell liquor, there would be no further contradiction in them.
In Panna Lal 's case, the court held: "The agreements gave the liquor contractors an exclusive privilege to sell country liquor in a specified area for the period fixed for a stipulated sum of money for enjoying the privilege.
If the contractors do not sell any liquor, they are yet bound to pay the stipu lated sum.
If they sell liquor, they are given the benefit of remission in the price of the exclusive privilege.
The measure for this remission is the excise duty leviable to the extent that the liquor contractor can neutra lise the entire amount of exclusive privilege in the excise duty payable by them.
If the contractors fail to lift adequate quantity of liquor and thereby fail in neutralising the entire price of exclusive privilege, the contractors are not called upon to pay excise duty.
" It was held that there was no leviable excise duty in en forcing the payment of the guaranteed sum or the stipulated lump sum mentioned in the licence.
We have already referred to the references made to 'rental ' and 'issue price '.
We finally come to the State of Haryana vs Jage Ram (supra) which we may now take to be the last word on the subject.
Chandrachud, CJ spoke for the Court and said,: "The amount which the respondents agreed to pay to the 532 State Government under the terms of the auc tion is neither a fee properly so called which would require the existence of a quid pro quo, nor indeed is the amount in the nature of excise duty, which by reason of the constitu tional constraints had to be primarily a duty on the production or manufacture of goods produced or manufactured within the country.
The respondents cannot therefore complain that they are being asked to pay 'excise duty ' or "stillhead duty" on quota of liquor not taken, lifted or purchased by them.
The respondents agreed to pay a certain sum order the terms of the auction and the Rules only prescribe a convenient mode whereby their liability was spread over the entire year by splitting it up into fortnightly instalments.
The Rules might as well have provided for payment of a lump sum and the very issuance of the licence could have been made to depend on the payment of such sum.
If it could not be argued in that event that the lumpsum payment represented excise duty, it cannot be so argued in the present event merely because the quota for which the respondents gave their bid is re quired to be multiplied by a certain figure per proof litre and further because the re spondents were given the facility of paying the amount by instalments while lifting the quota from time to time.
What the respondents agreed to pay was the price of a privilege which the State parted with in their favour.
They cannot therefore avoid their liability by contending that the payment which they were called upon to make is truly in the nature of excise duty and that no such duty can be imposed on liquor not lifted or purchased by them".
The result of our discussion is that even prior to the 1984 amendment, the amount which each of the contractors was required to pay or have adjusted was not excise duty on undrawn liquor, but was part of the price which he had agreed to pay for the grant of the privilege to sell liquor.
The judgment of the High Court of Andhra Pradesh in Atluri Brahmanandam vs Tahsildar of Gannnvaram (supra) is reversed.
The appeals filed by the State of Andhra Pradesh are al lowed.
We mentioned that in order to remedy the situation resulting from the Full Bench judgment of the Andhra Pradesh High Court, the Andhra Pradesh Legislature enacted the Andhra Pradesh Excise (Amendment) Act 10 of 1984.
In the view that we have now taken the amendment of the Act has become a needless exercise.
However, we 533 may briefly consider the attack on the amending Act.
It was argued that the amending Act did not effectually remove the vices or defects pointed out by the Full Bench in Brahmanan dam 's case (supra) as secs.
21 and 22 were left in tact.
It was said that without amending secs.
21 and 22, the amend ment of sec.
23 effected by the Andhra Pradesh Legislature led no where towards achieving the result aimed at by the Legislature.
Nor could the Legislature validate the demands earlier made and struck down by the courts merely by enact ing that the demands were to be deemed to be valid without removing the vices or defects from which those demands suffered.
We are not inclined to agreed with these submis sions. Sec.
17 of the Andhra Pradesh Excise Act which deals with the grant of the fight to sell liquor has been substan tially amended.
Even the marginal note has been changed from "power to grant lease" to "grant of exclusive privilege of manufacture, etc.
" The new sec.
17 makes it clear that what is proposed to be granted is the exclusive privilege to manufacture or sell liquor in the shape of a lease or li cence or both.
The explanation makes it clear that the lease shall not take effect unless a licence is issued.
Having regard to the vital amendment of sec.
17, no further amend ment of secs.
21 and 22 was necessary.
The consequential amendment to sec.
23 has however been made.
Again the mar ginal note has been changed from "excise duty in respect of lease" to "payment for exclusive privilege.
" It is now specified in the new section that the payment of the same in consideration of the grant of lease or licence or both for the exclusive privilege is to be instead of or in addition to any excise duty or fees leviable in secs.
21 and 22.
We are, therefore, satisfied that the amendments effected to secs.
17 and 23 have fulfilled the object of removing the vices or defects pointed out by the Full Bench in Atluri Brahmanandam 's case, if indeed there were defects or vices.
In the result, the petitions for special leave to appeal filed against the judgments of the Andhra Pradesh High Court upholding the amending Act and the demands made by the excise authorities are dismissed.
P.S.S. Appeals & Petitions dismissed.

summary/full:
Section 17 of the Andhra Pradesh Excise Act 1968, as it stood at the relevant time, provided for the grant of lease for the manufacture or sale of an intoxicant.
It also pro vided that a lease shall not take effect until a licence under the Act was also issued.
Section 23 provided that the sum accepted in consideration for the grant of any lease under s.17 was to be the excise duty payable in respect of that excisable article.
Rule 3 of the Andhra Pradesh (Lease of Right to Sell Liquor in Retail) Rules, 1969 prescribes that every lease of right to sell liquor in retail shall be granted by auction.
Rule 7 of the Andhra Pradesh (Arrack Retail Vend Special Conditions of Licences) Rules, 1969 requires the licences to purchase arrack from the distillery, warehouse or depot allotted by the Government and to pay 'issue price ' as notified.
Rule 15 provides for the purchase of a specified minimum guaranteed quantity of arrack every month and for the adjustment of the issue price in case of any short fail in the purchase of the minimum guaranteed quantity of liq uor.
A question arose as to whether under the Excise Law prevailing in the State, the Government was entitled to claim from the excise contractors, who failed to lift the minimum guaranteed quantity of liquor, the amount said to represent the excise duty component in the issue price of liquor relating to such unlifted quantity of liquor.
A Full Bench of three Judges of the High Court in V. Narasimha Rao vs Superintendent of Excise, (AIR held in favour of the Government.
It took the view that three items, namely, duty, cost 514 and sales tax constituted the issue price.
This view, howev er, was overruled by the Full Bench of Five Judges of the same High Court in Atluri Brahmanandam vs Tahsildar of Gannavaram, (AIR wherein it was held that the Government could not do so.
It treated the excise duty as a severable element of issue price.
That judgment was assailed in the appeals and petitions filed by the Government.
To nullify the effect of that judgment and to validate the demands raised by the Government the State Legislature enacted the Andhra Pradesh Excise (Amendment) Act X of 1984.
The amended s.17 provides for grant of lease or licence for exclusive privilege of manufacture, supply by wholesale or sale of any liquor or other intoxicants.
The new s.23 empow ers the competent officer to accept payment of a sum in consideration of the grant of lease or licence or both for the exclusive privilege in respect of the liquor or any other intoxicant under s.17.
Section 4 of the Amending Act, provides for the validation of earlier demands made in respect of issue price of short drawn minimum guaranteed quantity of liquor.
Demands raised pursuant to the Amending Act were upheld by the High Court by a later judgment.
The aggrieved excise contractors filed appeals to this court.
Some of the contractors who had originally succeeded because of the decision of Five Judges Bench and were again called upon to make good the deficit after the Amending Act was passed, having failed in the High Court filed special leave petitions to this Court.
It was contended for the aggrieved contractors that what was sought to be recovered from them was excise duty on unlifted quantity of liquor which was not authorised by the provisions of the Act, as the excise duty being a part of the issue price it could only ;elate to liquor drawn by them and not pertain to undrawn liquor, that without amending ss.21 and 22 of the Excise Act the amendment of s.23 affect ed by the Legislature led nowhere towards achieving the result aimed at by the Legislature and that the Legislature could not validate the demands earlier made and struck down by the Courts, merely by enacting that the demands were to be deemed to be valid without removing the vices and the defects.
Disposing of the appeals and the special leave petitions, the Court, HELD: 1.1 Once 'issue price ' is determined its compo nents, such as excise duty, cost price, transport charges etc.
cease to retain their individual character.
They cannot then be severed from the issue 515 price and dealt with separately.
The Five Judges Bench of the High Court was, therefore, wrong in holding that excise duty was a severable element of issue price.
[526H; 527A B] 1.2 Issue price is the sum total of whatever has gone into the price of liquor at the time it is issued and it is a single pre determined definite sum per bulk litre and not the total of separate sums representing to many specified components.
The 'issue price ' is that which is notified as issued price and not its components, if any.
These compo nents which have come together to become 'issue price ' are rendered incapable of being separated again.
Excise duty loses its identity, as it were, and becomes an inseparable part of 'issue price '.
[525H; 526A] A lessee licensee, therefore, was not entitled to claim deduction from the issue price payable by him in respect of short drawn quantity of arrack the amount attributable to the excise duty.
[528F] V. Narasimha Rao vs Superintendent of Excise, AIR 1974 AP 157, distinguished.
Atluri Brahamanandam vs Tahsildar of Gannavaram, AIR 1977 AP 196, overruled.
2.1 The issue price is no more and no less than the price which the contractor agrees to pay for the grant of the privilege to sell liquor, drawn or undrawn.
The minimum guaranteed quantity of liquor as well as the issue price are both fixed well in advance of the auction in regard to each shop and it is with full knowledge of the issue price and the minimum guaranteed quantity that every bidder partici pates in the auction.
1527D; 526C D] 2.2 There can be no question that issue price must generally relate to liquor which is drawn by the contractor but it does not follow therefrom that issue price cannot be adopted by agreement between the parties as a measure of compensation to be paid in the case of undrawn liquor.
[527C D] Panna Lal vs State of Rajasthan, , referred to.
3.1 Even prior to the 1984 amendment, the amount which each of the contractors was required to pay or to have adjusted was not excise duty on undrawn liquor, but was part of the price which he had agreed to pay for the grant of the privilege to sell liquor.
[527D] 516 3.2 All rights in regard to manufacture and sale of intoxicants vest in the State.
It is open to the State to part with those rights for a consideration.
The considera tion for parting with the privilege of the State is neither excise duty nor licence fee but it is the price of the privilege.
[S27E F] 3.3 Reading sections 17 and 23 of the Andhra Pradesh Excise Act 1968 together with the Andhra Pradesh Excise (Lease of Right to Sell Liquor in Retail) Rules 1969 and Andhra Pradesh (Arrack Retail Vend Special Conditions of Licences) Rules 1969, makes it evident that the privilege of selling liquor, which includes the lease of the shop for an area and the licence to sell liquor therein may be granted by the State by public auction subject to: (1) payment of rental being the highest bid at the auction, (2) the re quirement that the licensee shall purchase arrack at the issue price, and (3) the further requirement that the licen see shah purchase a minimum guaranteed quantity of arrack, which he has to make good in case of short fail.
The consid eration for the grant of the privilege to sell liquor is not merely the rental to be paid by the lessee but also the issue price of the arrack supplied or treated as supplied in case of short fail, which is also to be paid by the lessee licensee.
There is no question of the lessee licensee having to pay the excise duty though it may be that the issue price is arrived at after taking into account the excise duty payable.
[S28B E] Panna Lal vs State of Rajasthan, ; ; State of Haryana vs Jage Ram, ; and Har Shankar & Ors.
vs The Dy.
Excise & Taxation Commr.
& Ors.
, ; , referred to.
Bimal Chandra Banerjee vs State of Madhya Pradesh, ; ; Madhya Pradesh vs Firm Cappulal etc.
; , and Excise Commissioner, Uttar Pradesh vs Ram Kumar, 1976 (Suppl) SCR 532, distinguished.
The new s.17 of the Excise Act makes it clear that what is proposed to be granted is the exclusive previlege to manufacture or sell liquor in the shape of a lease or li cence or both.
The explanation makes it clear that the lease shall not take effect unless a licence is issued.
Having regard to the vital amendment of section 17, no further amendment of s.21 and 22 was necessary.
In the new s.23 it is now specified that the payment in consideration of the grant of lease or licence or both for the exclusive privilege is to be instead of or in addition to any excise duty or fees leviable in ss.21 and 22.
The amendments effected to ss.17 and 23, 517 therefore, have fulfilled the object of removing the vices or defects in the Act if indeed there were any.
[533C F]