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PETITIONER: A.P. MANCHANDA

       Vs.

RESPONDENT: STATE OF HARYANA

DATE OF JUDGMENT27/10/1993

BENCH: AHMADI, A.M. (J) BENCH: AHMADI, A.M. (J) PUNCHHI, M.M.

CITATION:  1994 SCC  Supl.  (2)  45

ACT:

HEADNOTE:

JUDGMENT:                            ORDER 1.The  appellants  were promoted under Rule 6(1)  of  the Haryana  Service  of  Engineers,  Class  11,  Public   Works Department  (Irrigation  Branch)  Rules,  1970  (hereinafter called  ’the  Rules’).  Since they belonged to  the  Haryana Public  Works  Department  (Irrigation  Branch)  they   were governed  by source 4 of the said rules.  Rule  7(3)(ii)  is the other relevant rule which we must notice.  It lays  down the  qualifications  and  says  that  no  person  shall   be appointed from source 4 under Rule 6(1) unless he  possesses the  educational qualification set out therein and  has  the required experience.  It further provides that he will  have to  pass the departmental examination within three years  of such promotion otherwise he will be reverted to his original post  and his seniority will be determined from the date  of his  passing the examination.  The State contends  that  the appellants failed to pass the examination within three years as required by the said provision and, therefore, they  were liable  to  be  reverted.   But it  must  be  realised  that ordinarily  every  year examinations were  held  twice  and, therefore,  the  appellants would have had  six  chances  to clear the examination within the period of three years.  The appellants  contend  that in the year 1980  the  examination ordinarily to be held in the month of November, was not held and it was held as late as August 1982 which examination the appellants  successfully  cleared.   The  word  ’ordinarily’ would indicate that it was not compulsory on the part of the State to hold the examination twice in a year but it must be realised that the appellants have passed the examination  in August 1982 whereas they were reverted in October 1982  i.e. after they had cleared the examination.  In that view of the matter  there was no question of reverting them  since  they had qualified for promotion to the next higher post even  on the terms of Rule 6(1), source 4, read with Rule 7(3)(ii) of the  rules.  Under the orders of the Court  their  reversion was  stayed.   It  is an admitted  position  that  they  are

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continuing  to  serve  in  the  promotion  post.   We   are, therefore,  of  the  opinion  since  they  had  passed   the examination  in August 1982 and since the rules do  not  say that if they do not clear the examination within three years they will not be entitled to promotion for all times even if they  clear the examination subsequently, they  became  ripe for  promotion  on clearing the examination held  in  August 1982 and, therefore, there was no need to revert them and in any  case no such need now survives.  It is  another  matter that under Rule 7(3)(ii) the question of seniority may  have to be fixed in accordance with that rule but that is not  an issue before us. 2.   In the result the appeal is allowed accordingly with no order as to costs. 48 Advocates who appeared in this case : G.  Ramaswamy,  Senior  Advocate  (E.M.S.  Anam  and  George Poonthothan, Advocates, with him) for the Appellants; V.R.  Reddy,  Additional Solicitor  General,  A.S.  Nambiar, Senior  Advocate (M.A. Firoz, Advocate, with them)  for  the Respondents. The Judgment of the Court was delivered by R.M.  SAHAI,  J.- These are four  appeals  directed  against judgment  and  order  of  the High  Court  of  Kerala.   The appellants   are  owners  or  proprietors  of   hotels   and restaurants who were granted FL-3 licences under Rule  13(3) of  the  Kerala Excise Rules in October 1992  for  the  year 1992-93.   Their licences were cancelled soon thereafter  as in November 1992 the Government had taken a policy  decision to  cancel  all Foreign Liquor  (Hotel/Restaurant)  Licences under Rule 13(3) of the Kerala Foreign Liquor Rules, 1974 to hotels/restaurants/tourist  homes during the financial  year 1992-93.   They challenged the orders in the High  Court  by way  of  writ petitions.  The petitions  were  dismissed  on February  1, 1993.  Two special leave petitions  were  filed against this order.  One was numbered as 2310-17 of 1993 and the other as 3391 of 1993.  Some other petitions came up for hearing  before the High Court on March 4, 1993  which  were decided  on  March 10, 1993.  This order was  challenged  by Special Leave Petition (Civil) No. 4152 of 1993.  In Special Leave Petition Nos. 2310-17 of 1993 and 3391 of 1993 a Bench of this Court on March 1, 1993 passed the following order:               "Issue notice both on special leave  petitions               as  well  as on petitions for stay.   Mr  John               Joseph  on  behalf of Mr P.K.  Pillai  accepts               notice  on  behalf  of  Respondent  6.   Dasti               service is permitted additionally.  There will               be an interim stay which will enure only up to               March 31, 1993 in respect of FL-3 licence  for               the  year 1992-93 and the stay will not  enure               beyond that period.               It is open to the petitioners to approach  the               concerned  authorities  for  renewal  of   the               licence,  if  they  are so  entitled  and  the               concerned authorities thereupon shall  dispose               of the application in accordance with law  and               on merits." On March 2, 1993 it is alleged that a statement was made  on behalf  of  the State to the Press that the licence  of  the appellants shall not be renewed.  However, since on March 1, 1993 this Court had permitted the appellants to approach the concerned authorities and yet a statement had been issued on behalf of the State Government the appellants approached the High  Court, once again, for issue of direction to  opposite

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parties  to  renew the licences of the  appellants  for  the years  1993-94.  This petition was disposed of on March  30, 1993   directing   the  respondents  to   dispose   of   the applications for renewal filed by the appellants as directed by  this  Court in accordance with law and  on  merits.   In pursuance of this order applications filed by the appellants for  renewal  of their licence for 1993-94 appears  to  have been  forwarded by the Excise Commissioner to the  Board  of Revenue  which in its turn returned it with instructions  to dispose  them  of in the light of G.O. No.  179/92/TD  dated November  9, 1992.  On May 24, 1993 the Excise  Commissioner rejected  the applications for renewal in the light of  G.O. dated November 9, 1992 as directed by the Board.  This order has been challenged by a separate Special Leave Petition (C) No. 5808 of 1993 in which notice was issued on May 13, 1993. 49 2.Lengthy arguments were advanced by learned counsel  for both the sides.  One of the questions that was raised was if the appellants have a fundamental right to carry on trade in liquor.   This question has been referred to a  Constitution Bench  by  a Bench of three Judges of this  Court  in  Civil Appeal Nos. 4708-12 of 1989.  The Civil Appeal Nos.  6043-50 of  1993 arising out of SLP (C) Nos. 2310-17 of 1993;  Civil Appeal  No. 6051 of 1993 arising out of SLP (C) No. 3391  of 1993;  and Civil Appeal No. 6052 of 1993 arising out of  SLP (C)  No.  4152 of 1993 are therefore directed to  be  tagged with Civil Appeal Nos. 4708-12 of 1989. 3.The  appeal arising out Special Leave Petition (C)  No. 5808  of 1993 is however confined to the short  question  if the opposite parties committed any error of law in rejecting the  application filed by appellants for renewal of  licence for 1993-94.  Two basic attacks were made on the correctness of  the order dated May 24, 1993.  One, that the  policy  of the  Government is not in consonance with practice.  It  was claimed that even though the State claimed implementation of directive principles of the Constitution it had  liberalised import  of  arrack from outside the State.  It  was  claimed that  this unmistakenly demonstrates that the State was  not interested  in enforcing the policy of prohibition but  only denying the right to carry on business to the appellants for extraneous  reasons.  The other ground was that the  renewal of   381  licences  who  were  similarly  situated  as   the appellants  was  contrary  both to the  policy  decision  of Government and directive principles of the Constitution.  It was  also urged that the State being in contempt as  it  not only  made  statement  to  the press  which  was  in  direct conflict  with  the  order issued by  this  Court  but  even rejected  the applications filed by the  appellants  without examining  them on merits was not liable to be  heard.   The State defended both its policy decision and the order. 4.Although  we do not propose to decide if any  statement was made on behalf of the State Government and it  purported to  interfere  with  the courts  of  justice  as  sufficient material  has not been placed on record but we  consider  it necessary  to  record  our  disapproval  of  the  nature  of affidavit  filed  by  the  Secretary  (Excise)  on  such  an important  issue.  Paragraph 11 of the counter affidavit  is reproduced below :               "I  submit  that the allegation in Para  5  of               Special  Leave Petition No. 5808 of 1993  that               ’the  Government have made its mind clear,  on               the very next day of the order of this Hon’ble               Court  which  was prominently flashed  in  all               Malayalam newspapers in headline news, by  the               Hon’ble  Chief Minister of the State making  a

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             statement  to the Press that the  licences  of               the petitioners will in no case be renewed for               the  year  1993-94’, is  a  vague  allegation.               Since  no paper report has been produced,  the               deponent  is not in a position to  verify  the               veracity  of the allegation.  However, I  deny               the  imputation  that  the  Government  had  a               closed mind." It  has  been  repeatedly  emphasised  by  this  Court  that averments in the affidavit should be clear and specific.  To our  dismay it is not only vague but highly  unsatisfactory. An  officer of such high stature has not cared to  discharge his  duty with responsibility.  He did not come out  clearly if the statement was made or not.  A very flimsy pretext was advanced  that  the  appellants did  not  produce  newspaper reports.   Even  this much is not stated that  no  newspaper published  in  Malayalam  carried such  statement.   We  are constrained  to  observe  that such  affidavits  instead  of assisting in resolving the issues complicate them.  It is 50 capable  of creating reasonable apprehension in the mind  of an ordinary citizen, that the opposite party did not  decide their  applications  on  objective  considerations  but   on invisible yet apparent pressure from extraneous source.   We stop  here  and  say no more as in our  opinion  it  is  not necessary, for purpose of deciding this appeal. 5.The rules do not appear to make any distinction between renewal  of a licence and its grant.  We find some merit  in the  submission of the learned Additional Solicitor  General that  renewal or fresh grant normally is not dealt  with  by the  same yardstick, yet we do not consider it necessary  to pronounce  on it as validity of the G.O. issued on  November 9,  1992  is subject-matter of challenge  in  other  appeals which we have directed to be heard along with other  appeals pending before Constitution Bench.  As stated earlier we are concerned in this appeal only with correctness of the  order dated May 24, 1993.  The opposite parties have rejected  the applications filed by the petitioners on the ground that the State Government having taken a policy decision on  November 9,  1992  not  to issue licences  the  appellants  were  not entitled  to claim renewal.  The order was attempted  to  be justified  by  the learned Additional Solicitor  General  as according  to  him the appellants formed  a  separate  class inasmuch  as  they  were issued  licences  in  1992-93  and, therefore,  they could not claim to be in the same group  as other  licensees who were operating from before.   According to him since there were two groups or class of persons, one, who  were  operating  from before and  the  other  who  were granted  licences in the year 1992, the opposite  party  did not commit any error of law in rejecting the applications of appellants or acted discriminately in renewing the  licences of others.  We again do not propose to decide this issue  in detail or examine it extensively as the validity of the G.O. has been referred to the Constitution Bench.  Suffice it  to say that the classification which can be sustained must have a  reasonable nexus with objective sought to be achieved  by the  impugned  action.   The reason  for  not  renewing  the licence  of the appellants was the prohibition  policy  that the State is envisaging to enforce.  We may agree that  this is  a valid ground for reducing the number of  licensees  in the  State.  We may also agree that such steps can be  taken in  stages  and  not  at  one  stroke,  but  the  facts  are otherwise.  As stated earlier the consumption of liquor  has gone  up.  The volume of imported arrack has been  enhanced. Therefore except for the appellants who are 21 in number the

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State  could  not  point out any  circumstance  which  could establish that the policy of prohibition was being  enforced or  implemented  in  the State.   True,  that  some  public- interested  persons  are agitating but the validity  of  the State action has to be judged on positive steps taken by the State for enforcing the policy.  But in the affidavits filed by the State no material has been brought on record to  show that  any  concrete  step has been  taken  in  this  regard. Moreover  the  appellants  are hoteliers  who  were  granted licence for promoting tourism.  No figure has been furnished about  traffic  in  these hotels.   The  agitation  must  be against consumption of liquor.  How is the State  curtailing it  by permitting import of arrack has not  been  explained. In  fact  it is not disputed in the affidavit filed  by  the Excise Secretary that import was permitted under new  Abkari policy adopted from April 1, 1993 as the State presumed that contractors  were purchasing spirit clandestinely  and  such clandestine imports were adversely affecting State  revenue. The  affidavit  asserts that it "was to get over  the  above problem in a logical manner that Government 51 desired to make a realistic assumption of consumption".   So on the one hand the Government is taking the realistic  view by  permitting  import of arrack which is consumed  more  by common  man  and  its quota in 1992-93 was  one  crore  bulk litres and on the other cancelling licence of 21 persons  in the  entire  State of Kerala who were  granted  licence  for promoting  tourism  as  it  would  help  in  achieving   the prohibition  policy.  We do not comment any further  on  it. The appellants who were granted licence in 1992-93 and those who  are granted licence and are operating from  before  are hoteliers  and  are required under rules to conform  to  two star hotel standard.  Both are required to promote  tourism. In all respects their licences are same.  Further the  State does  not appear to follow a consistent and uniform  policy. In  June  1992 it announced its intention not to  issue  any licence,  ’afresh’  from September 18, 1991 but it  did  not adhere  to it and within a month it issued another order  in February  1992  deciding to grant the privilege  of  selling liquor  for  promotion  of tourism.   In  November  1992  it decided  to cancel all licences issued in current year.   If the  licences issued in 1993-94 to licensees operating  from before and to the appellants were issued afresh as the rules do not make distinction between renewal and fresh grant then all  licensees were on same footing and the attempt to  pick and  choose the appellants, in our opinion, was contrary  to rules without any valid justification. 6.For these reasons appeals arising out of Special  Leave Petition Nos. 2310-17, 3391 and 4152 of 1993 are directed to be tagged with Civil Appeal Nos. 4708-12 of 1989. 7.Civil  Appeal  No.  6042 of 1993  arising  out  of  SLP (Civil)  No. 5808 of 1993 is allowed.  The  respondents  are restrained from interfering in the carrying on of appellants as FL-3 licensees subject to complying with other conditions and  payment  of annual rental  proportionately  till  their application  for grant of licence are decided on  merits  as directed by this Court on March 1, 1993 without adverting to order dated November 9, 1992 or till the policy decision  is enforced uniformally.  Parties have to bear their own costs. 52