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CASE NO.: Appeal (civil)  2152 of 2006

PETITIONER: Ashok Lenka

RESPONDENT: Rishi Dikshit & Ors

DATE OF JUDGMENT: 21/04/2006

BENCH: S.B. Sinha & P.K. Balasubramanyan

JUDGMENT: J U D G M E N T

[@SLP (C) No. 5141 of 2006] CIVIL APPEAL NO.2161 OF 2006 [@SLP (C) 5168 of 2006] CIVIL APPEAL NO.2160 OF 2006 [@SLP (C) 5169 of 2006] CIVIL APPEAL NO.2159 OF 2006 [@SLP (C) 5186 of 2006] CIVIL APPEAL NO.2158 OF 2006 [@SLP (C) 5202 of 2006] CIVIL APPEAL NO.2156 OF 2006 [@SLP (C) 5288 of 2006] CIVIL APPEAL NO.2155 OF 2006 [@SLP (C) 5291 of 2006] CIVIL APPEAL NO.2157 OF 2006 [@SLP (C) 5296 of 2006] CIVIL APPEAL NO.2154 OF 2006 [@SLP (C) 5571 of 2006]

S.B. SINHA, J:

       Leave granted.

INTRODUCTION         The Appellants are before us in the second round.  They, except the  State of Chhattisgarh, were granted excise licences.  Grant of such licences  indisputably is governed by the Chhattisgarh Excise Act, 1915 (for short  "the Act").  On or about 15.3.2002, the State Government under ’the Act’  made rules known as Chhattisgarh Excise Settlement of Licences for Retail  Sale of Country/ Foreign Liquor Rules, 2002 (for short "the Rules").   

       The State issued notices inviting tenders for grant of licences under  the Rules.  Pursuant to or in furtherance of the said notices inviting tenders  about 2,64,703 applications were filed.  The grant of licences in favour of  the Appellants in some of the appeals came to be questioned before the  Chhattisgarh High Court.  By reason of a judgment dated 31.3.2005, a  Division Bench of the said Court allowed the writ petition and directed  cancellation of the licences.  Appeals thereagainst were filed before this  Court.  Interim orders were passed therein as a result whereof licensees  continued to carry on their business.  This Court, however, while refraining  itself from setting aside the entire selection process thought it fit to ask the  respective District Level Committees to consider the matter relating to grant  of such licences afresh.  Having regard to the actions of the statutory  functionaries, the exercises as regard scrutiny so as to arrive at a satisfaction  that the requirement of the Rules vis-a-vis selection process were required to  be undertaken by the Selection Committees.  They were directed to do so  afresh.

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       We would advert to the said directions a little later.  However, we at  this juncture, may notice that, according to the State, in terms of the  directions of this Court, the District Level Committee under the strict  supervision of the Chief Secretary as also the Commissioner of Excise went  into the said exercise over again and found that the licensees were not only  eligible therefor but also fulfilled other conditions laid down in the Rules.  It  is not in dispute that the writ petitioners \026 Respondents, filed objections  before the District Level Committee.  The said objections were rejected.   Aggrieved by and dissatisfied therewith, the writ petitioners \026 Respondents  filed a writ petition before the Chhattisgarh High Court.  The State in the  meanwhile issued a notification effecting an amendment in Rule 9 of the  Rules in terms of a notification dated 22.3.2005.   

PROCEEDINGS BEFORE THE HIGH COURT

       In the writ petition,  the following reliefs were  prayed for:

"7.1    That, this Hon’ble Court may be pleased to  send for the entire records from the respondents  and district committees in regard to the compliance  of the directions of the Hon’ble Supreme Court  and observance of the statutory rules and all such  other relevant and complete record as are in their  possession leading to the affirmation of the  selection of the select candidates.

7.2 The respondents 1 to 12 be directed to satisfy  this Hon’ble Court regarding the compliance of the  mandatory directions as given by the Hon’ble  Apex Court in the case of Ashok Lanka Vs. Rishi  Dikshit.

7.3     That the Hon’ble Court may be pleased to  issue a writ in the nature of mandamus quashing  and annulling the entire selection of respondents  13 to 89 and also quashing the temporary licences  by issuing a writ in the nature of certiorari.

       That, the Hon’ble Court may be pleased to  issue a writ in the nature of mandamus  commanding the respondents 1 to 12 to make  selection strictly in accordance with law, rules and  the directions of the Hon’ble Supreme Court,  afresh.

7.4     That the contempt’ proceedings be initiated  against the respondents 2 to 12 for the non- compliance of the order of the Hon’ble Apex  Court."

       Before the High Court, the questions raised by the parties inter alia  were:

(i)     The permanent addresses of the persons in whose favour licences  were granted were not property verified.   (ii)    The temporary addresses given by them were wrong and in that  view of the matter scrutiny of their applications could not be  carried out.   (iii)   Provisions of Rule 9(d)(iii) in terms whereof criminal antecedents  not only of the applicants but also of their family members were  required to be verified, had  not  been complied with.  According  to the State, however,  there was no necessity to verify the criminal  background of the family members of the licensees as a mere error

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had crept in in the English version of the notification which stood  clarified by issuing another notification dated 5.7.2005.   

       Before the High Court, the parties produced a large number of  documents.  It is not in dispute that 191 persons had been granted licences.   Before the High Court, however, 65 licensees were made parties and 126  were not.  The private respondents also filed their counter affidavits  contending that the allegations made in the writ petition were incorrect.   Several instances of alleged irregularities on the part of the District Level  Committee in the matter of proper scrutiny of the contents of the  applications filed by the licensees had been brought on record.  The State  appears to have filed documents containing approximately 3000 pages in  order to show that the directions of this Court had been complied with, in  letter and spirit.  In reply to the said counter affidavit, the writ petitioners  filed a rejoinder to which we shall refer to hereinafter.  We may, however,  notice that the State in purported response to the said rejoinder affidavit filed  by the writ petitioners filed an additional affidavit dealing with the  contentions raised therein.   

       The High Court in its impugned judgment  has noticed  some of the   purported irregularities committed by the District Level Committees.   Several instances were brought to the notice of the High Court to show as to  how and in what manner the purported irregularities in the matter of  selection of the licensees had been effected, allegedly as a result whereof the  directions contained in this court’s decision in Ashok Lanka and Another v.  Rishi Dixit and Others [(2005) 5 SCC 598] (Ashok Lanka - I) were flouted.

        The High Court  held:

"Thus, it is quite clear that respondents 1 to 12  have failed to carry out the directions issued by the  Supreme Court in the manner expected of them  and in conformity with the mandatory Rules 9 and  11 of the Rules\005"

       The High Court noticed the contents of the additional return filed by  the State on 23.02.2006 but apparently the contents thereof had not been  taken into consideration on the ground that the same was by way of sur- rejoinder to the rejoinder filed by the writ petitioners and, as such, such  pleadings are impermissible without permission of the court.  It was  furthermore held that in the said additional return, untenable defences were  set up covering up serious lapses committed by Respondent Nos. 1 to 12.   

       The High Court thereafter proceeded to cite examples in support of its  findings.  It was noticed that the official respondents wrongly placed the  burden of proof on the objectors like the writ petitioners to prove that the  applicants for grant of licences did not possess the prescribed eligibility, as  the writ petitioners objectors were not supposed to prove the negative facts  by producing evidence.  The responsibility cast on the statutory authorities  has, thus, been sought to be placed on the objectors which constituted a  serious flaw in the enquiry vitiating the selection process.   

       Before the High Court, a chart was produced by the writ petitioners  showing common addresses of a number of licensees.  The High Court in  detail noticed the findings of this Court and opined that the State and its  officers failed to comply therewith and, furthermore, flouted the mandatory  provisions of Rules 9 and 11.

       As regards the purported clarification made by the State in respect of  the variation in the Hindi version of Rule 3 and the English version thereof,  it was held:

(i)     The State and its officers were bound by the decisions of this  Court. (ii)    The English version shall prevail over the Hindi version, and

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(iii)   In any event, there is no conflict between the English version and  the Hindi version.

       On the aforementioned premise, holding that licences were illegally  granted to the Respondent Nos. 13 to 89 of the writ petition, it was directed:

"\005The respondents 13 to 89 who has the  beneficiaries of the illegal acts of respondent No. 1  to 12 cannot be allowed to have the continued  benefits of wrong-doing of respondents 1 to 12 till  the term of the licences comes to an end."

       On the aforementioned premise, the writ petitions filed by the  contesting respondents herein were allowed.

SUBMISSIONS

       We have heard a large number of counsel in support of these appeals.   Mr. Ashok Desai, Mr. Sunderam, Mr. Dushyant Dave, Mr. Mukul Rohtagi,  Mr. C.S. Vaidyanathan and Mr. Ranjit Kumar appearing on behalf of  successful licensees submitted:

(i)     The High Court committed a manifest error insofar as it failed to  take  into consideration that the compliance of this Court’s order  was not carried out with utmost diligence.   (ii)    Rule 8 does not envisage that a resident of a State other than the  State of Chhattisgarh was not eligible for filing application for  grant of licence and only in some cases temporary addresses had  been given only for the purpose of postal communications. (iii)   As regards compliance of Rules 9 and 11, the age of the candidates  was verified from documents such as driving licence, election ID  Card, PAN Card, telephone bills, electricity bills, ration cards,  residence certificates issued by competent authorities, birth  certificates, school certificate, etc.   (iv)    In cases where more than one document had been submitted, the  Selection Committee satisfied itself as regards the correctness  thereof from any of the said documents.  As, for example, when a  certificate in proof of residence had not been issued by an authority  competent therefor, other documents such as driving licence, PAN  Card, Election ID Card were taken into consideration.   (v)     The High Court, in arriving at the conclusion as regards purported  non-compliance of the rules, failed to notice various documents  and drew inferences which were contrary to the records.  (vi)    So far as the alleged non-compliance of Rule 9(c) of the Rules is  concerned, a consolidated list of defaulters along with their  complete addresses was available with all the licensing authorities  and the same had been relied upon while scrutinizing the various  applications.   (vii)   As regards, alleged compliance of Rule 9(d) of the Rules, it was  submitted that the Superintendent of Police of the respective  districts where the applicant was a resident of more than one  district and one State had issued character certificates. (viii)  In terms of Rule 12, in the case where there had been multiplicity  of applications, a lottery was held which was completely above  board being a computer generated programme operated by a  Central Government organization, viz. National Informatics  Centre. (ix)    The High Court had wrongly held that certificates were to be  granted only by the Revenue Authorities of Chhattisgarh   inasmuch as nothing in the excise rules or the decision of this  Court precluded a person who is resident of another State from  applying for and obtaining a liquor licence.   (x)     The requirements of the Rules being that the applicant should be a  citizen of India and above the age of 21, the certificates granted, as

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also character certificates, issued by the Superintendents of Police  of their respective Districts met the requirements of  the Rules. (xi)    Licences of some of the licensees could not have been directed to  be cancelled on the basis of  purported irregularities committed by  the District Level Committee in respect of those who were not  parties to the writ petition.   (xii)   Since many of the applicants were not permanent residents of the  State they had merely given a temporary address along with the  permanent address and only for that reason there had been  overlapping of addresses.   (xiii)  The High Court having not held the whole selection process to be  bad in law, no situation arose requiring cancellation of the entire  set of licenses. The High Court was required to identify the cases  whose requirements of law had not been complied with and only in  such cases, the licensees could have been directed to be revoked.   (xiv)   In view of the directions contained in Para 40 of this Court’s  judgment in Ashok Lanka - I (supra), the onus of proof, being on  the writ petitioners, the High Court committed a mistake in holding  that the burden of proof had been wrongly thrown on the objectors. (xv)    The findings of the High Court as regards purported non- compliance of the directions of this Court by the State is based on   a wrong premise as for example, in the case of Abhay Singh,  although the High Court proceeded on the basis that he is a fake  person, no objection in this behalf was taken by the writ petitioners  before the District Level Committees.   

       Mr. Srivastava, learned counsel appearing on behalf of the writ  petitioners, however,  has drawn  our attention to several instances showing  how the age of some of the applicants for grant of licences had been verified  only on the basis of the certificate issued by a doctor or a dental surgeon  which could not be held to be valid proof therefor.  In some cases, only  dwelling certificates had been produced by way of proof of residence which  again could not have been considered to be valid proof having not been  certified by any statutory or public authority.  In view of the admitted fact  that several persons have shown the same addresses, fictitious persons might  have been granted licences.

STATUTORY PROVISIONS

       The Act was enacted to consolidate and amend the Excise Law in the  State of Chhattisgarh.  Section 7(e) of the Act provides that the State  Government may, by notification, for the whole or for any specified part of  the State, delegate to the Chief Revenue Authority or the Excise  Commissioner all or any of its powers under the said Act except the power  conferred by Section 62 to make rules.   

       Rule 4 provides for formation of groups of liquor shops; clause (iii)  whereof prohibits an applicant/firm/company from obtaining licences for  more than two groups of shops. Rule 5 provides for the period of licence  which would be for an excise year or part thereof.  

       Rules 6 and 7 of the Rules read as under:

"6. Application fee with application \026          The application fee with the application for  licence of groups of liquor shops shall be as shown  in the table below \026  

S.No. Reserve Price of the group Prescribed  application fee 1. For group of shops of Rs. 5  lakh to 1 crore

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Rs. 1,000/- 2. For group of shops of Rs. 1  crore to 2 crore Rs. 3,000/- 3. For group of shops of Rs. 2  crore to 8 crore Rs. 5,000/-

       The amount of application fee will neither  be adjustable in licence fee nor the amount will be  refundable in case of not granting the licence.

7.      Issue of licence for liquor shops -          The licences for liquor shops shall be issued  by the licensing authority on deposit of the security  amount and licence fee for the month of advance  by the licensee."

       Rule 8 provides for procedure for grant of licence, which reads as  under: "8. Procedure for grant of licence\027 (a) Whenever a new licence is proposed to be  granted in an area or locality, the licensing  authority shall invite the applications for this  purpose after giving wide publicity through  daily newspapers having circulation in that  area. (b) A list of shops of country/foreign liquor for  which the licensing authority proposes to grant  licence shall be exhibited along with shopwise  licence fee minimum monthwise guaranteed  quantity, security amount, and annual quantity  in office of Collector, Tehsil, District Excise  Officer/Assistant Commissioner, Excise and  Deputy Commissioner, Excise (Flying Squad). (c) Application for grant of licence with  application fee shall be submitted in the  prescribed form as appended to these Rules as  Annexure 4. (d) The last date to be fixed for the receipt of  application shall not be earlier than ten days  with effect from the date of publication of the  advertisement in the newspapers."

       Rule 9 provides that the applicant shall affirm an affidavit as regards  the matters specified therein.  It reads as under:

"9. Eligibility conditions for applicant \026 The  applicant has to fulfill the following conditions for  obtaining the licence for shop/ group of shops of  Country / foreign liquor. (a)     Should be a citizen of India or a  partnership firm whose partners are  citizen of India.  No change in  partnership shall be allowed after  settlement of shop (s) groups of shops  except with the permission of the Excise  Commissioner. (b)     Should be above 21 years of age. (c)     Should not be defaulter/ blacklisted or  debarred from holding an excise licence  under the provisions of any rules made

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under the Act. (d)     Has to submit an affidavit duly verified  by public notary as proof of the  following, namely \026  

(1)     That he possessed or has an  arrangement for taking on rent  suitable premises in that  locality for opening the shops  in accordance with the rules. (2)     That he possess good moral  character and have no criminal  background and have not been  convicted of any offence  punishable under the Act or  Narcotic Drugs and  Psychotropic Substances Act,  1985 or any other law for the  time being in force or any other  cognizable and non-bailable  offence. (3)     That in case he is selected as  licensee, he will furnish a  certificate issued by  Superintendent of Police of the  district of which he is the  resident, showing that he as  well as his family members  possess good moral character  and have no criminal  background or criminal record,  within thirty days of grant of  licence. (4)     That he shall not employ any  salesmen or representative who  has criminal background as  mentioned in clause (iii) or who  suffer from any infectious or  contagious disease or is below  21 years of age or a woman. (5)     That no government dues are  outstanding against him."

       Rule 10 envisages formation of a district-level committee; whereas  Rule 11 provides for selection of licensees, clauses (b) and (c) whereof read  thus: "(b) The said Committee shall select licensees  from the list of applicants. In case more than one  applicants are found suitable for any particular  group of shops the Committee shall select the  licensee for such group of shops by lottery. In case  the selected applicant does not deposit the required  amount according to Rule 13 and does not fulfil  the prescribed formalities or is unable to arrange  suitable premises for the shops within stipulated  period, the licensing authority shall cancel the  allotment and take steps for resettlement of the  shops/group of shops. (c) In case there is no application for a particular  group of shops or no applicant is found suitable for  a group of shops the licensing authority shall take  immediate steps for resettlement as per procedure  laid down in Rule 8."

       Rule 12 reads as under:

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"12. Statement of settled shops \026 A statement of  the settled shops alongwith names and address of  the licensees, shop wise annual quantity, details of  security amount and licence fee deposited shall be  sent by the District Excise Officer/ Assistant  Commissioner Excise to the Excise Commissioner  within 15 days of the settlement."

       Rule 13 provides for payment of licence fee and security amount,  which reads as under: "13. Payment of licence fee and security  amount.\027In case an applicant is selected as  licensee, he shall deposit one month’s amount of  licence fee and the security amount within three  days of being informed of his selection. If he fails  to deposit the amount of one-month licence fee and  security amount within prescribed period, his  selection shall stand cancelled and the said  licensee shall be debarred from holding any excise  licence in future, anywhere in the State and his  application fee shall also stand forfeited. A  consolidated list of such defaulters under this rule,  along with their complete addresses shall be  forwarded by the District Excise Officer/Assistant  Commissioner to the Excise Commissioner, who  will circulate the consolidated list of the State to  all the licensing authorities of the State."

CONSTITUTIONAL SCHEME         When a law is made, having regard to the phraseology used in Part IV  of the Constitution of India, it is expected that law made or actions taken  would be in furtherance thereof.  In terms of the Directive Principles of State  Policy, the State is bound to make endeavours to promote public health  which is one of its primary duties of the State.  One important component of  the said directions was regulation and control over the trade in intoxicating  drinks so as to enable the State to curb or minimize, as far as possible, the  consumption thereof.  The State may or may not prohibit manufacture, sale  or consumption of liquor but it is vital that while parting with its exclusive  privilege to deal with intoxicating liquor, the provisions of the Act and the  Rules for which the same had been enacted must be strictly complied with.

       The Act and the Rules deal only with control and regulations.  There  was no provision which gives any discretion to the authorities concerned to  relax the provisions of the Rules.  The Rules in this behalf again must be  framed upon taking into consideration of all relevant factors.  The State in  making the rules and formulating the policy decisions must be guided by  public interest.  In such matters, the State has a positive obligation to ensure  that any activity contemplated, strictly conforms to the requirements of  public good and is not otherwise derogative of public health.  The State parts  with its exclusive privilege on certain statutory conditions such as payment  of excise fee.  When it lays down criteria for selection of persons who would  become qualified for grant of licence under the Act, not only the eligibility  criteria therefor should be laid down, but having regard to its past experience  as to how and in what manner, the licensees find means and methods to  circumvent the said provisions, all endeavours  should  be made to plug all  loopholes.  The State has an extremely solemn obligation to fulfil in that  behalf.  All information supplied by the applicants for licences, thus, must  undergo and satisfy the ’strict scrutiny test’.  The State should not treat its  right of parting with its privilege only as a means of earning more and more  revenue.  It may certainly earn revenue but only upon fulfillment of its  constitutional and statutory obligations.  There exists a strong underlying  notion of public health and welfare when the matter comes to retention of  the exclusive privilege and/ or parting therewith either in whole or in part.

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Inception of Article 47

       Article 47 of the Constitution of India reads as under:

"The State shall regard the raising of the level of  nutrition and the standard of living of its people  and the improvement of public health as among its  primary duties and, in particular, the State shall  endeavour to bring about prohibition of the  consumption except for medicinal purposes of  intoxicating drinks and of drugs which are  injurious to health."

The importance of Article 47 of the Constitution of India may have to  be noticed tracing the history back from the date of constitutional debate.   With a view to find out the intent and purport for which the said provision  was inserted, Shri H.M. Seervai in his treatise, Constitutional Law of India,  Vol.II, 4th Ed. p.2012 noticed that all sections of the society including the  Mohammadan community, whose social habits were reinforced by the  Koranic injunction in relation to intoxicating liquor, supported the insertion  of such a provision.  The learned Author stated:

"The prohibition of intoxicating liquor had long  been a part of the policy of the Indian National  Congress; and its inclusion in Art. 47 received  support from the Mohammedan community whose  social habits were reinforced by the Koranic  injunction against intoxicating liquor.  In  considering the directive in Art. 47, it may be  observed that alcohol (the intoxicating ingredient  of liquor) is a "narcotic", a word replaced by the  word "depressant" to describe the same effects  contrary to the popular belief that it is a stimulant.   It is not mere accident that intoxicating liquor and  dangerous drugs have been clubbed together in  entry 8, List II."

       Article 47 has a unique feature in the sense that the first part refers to  public health, whereas the second part specifically refers to prohibition of  liquor.   Similar provisions are found in the Constitution of U.S. and  Lithuania as well.  It is of some significance to note that Section 70 was  inserted in the draft Constitution after the first part was suggested by Shri  B.N. Rau derived from the recommendations of the U.N. Conference on  Food and Agriculture, 1943 as several members, including Seth Govind Das  and Shri Bishwanath Das specifically wanted that prohibition should find  specific mention at a suitable place in the Constitution.  One of the members,  Kazi Sayed Karimuddin expressed his desire that such a provision should be  included in a separate Article having regard to the preachings of Mahatma  Gandhi and also having regard to the fact that the same has been approved  by all communities.  In Article 47, however, only liquor was specifically  mentioned at the instance of Shri Bishwanath Das who opined that if  prohibition of liquor is to be included in a separate Article, other harmful  articles like opium, tabacco and like products should also find mention in  Article 47.  (See CAD Vol. VII No.9, pp. 496 to 498.)

Regulation of liquor vis-‘-vis Public Health                  Having noticed the parliamentary debate, we may also notice the  importance of regulation of liquor vis-‘-vis public health.   

In common parlance, public health tends to refer only to aspects of  medical care and prevention of disease.  However, a true interpretation of

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the term ’public health’ will include not only this traditional notion but  several other aspects that promote healthy living.

Public health refers to both a goal for the health of a population and to  professional practices aimed at its attainment. In both senses, the term tends  to be broadly defined. The Constitution of the WHO defines the goal as a  state of complete physical, mental and social well-being and not merely the  absence of disease or infirmity. The Institute of Medicine defines it as the  fulfillment of society’s interest in assuring the conditions in which people  can be healthy. Public health, as the practice that pursues the goal of a  healthy population, also has a broad definition, including the development of  the social machinery, which will ensure to every individual in the  community a standard of living adequate for the maintenance of health. [See  Lawrence O. Gosten, Scott Burris and Zita Lazzarini, The Law and the  Public’s Health: A Study of Infectious Disease Law in the United States,  Columbia Law Review, Vol 99 No. 1, January 1999, pp. 61 and 69]

The relationships among medicine, public health, ethics and human  rights are now evolving rapidly, in response to a series of events,  experiences and struggles. In general people equate medical care with  health, but the vast majority of research into the health of populations  identifies so called ’societal factors’ as the major determinants of health  status. Public health, although starting as a social movement, has at least in  recent years, responded relatively little to this profound knowledge about the  dominant impact of society on health, such as behaviour like excess alcohol.  Given that the major determinants are societal in nature, it seems evident  that only a framework that expresses fundamental values in societal terms,  and a vocabulary of values that links directly with societal structure and  function, can be useful to the work of public health. [See Jonathan M. Mann,  Public Health and Human Rights, American Bar Association Journal on  Human Rights, Fall 1998, Vol. 25 No.1, pp. 2,3 and 4.]   

Grant of licence as a measure of control of intoxicating liquor is an  age-old phenomenon.  Even in England several statutes have been enacted  therefor including the current one which was enacted in 2003.  (See  Halsbury’s Laws of England, 4th Ed. Volume 26 p.5.)

Regulation of liquor under the Act

The Chhattisgarh Act provides  for a unified regulation of sale and  supply of alcohol.  It seeks to promote fundamental licencing objectives.  It  enjoins several duties upon the licensing authorities, namely, (i) prevention  of crime and disorder, (ii) public safety; (iii) prevention of public nuisance;  and (iv) the protection of children from harm.   

In view of Article 47 of the Constitution, indisputably, public health  in society  plays a vital role.  By the said expression, the makers of the  Constitution refer both to the goal of health of the public and the attending  promotion of healthy practices.   

Prohibition of liquor was, thus, inserted as part of public health.  Strict  control was contemplated and it was made necessary.  This in turn would  require that while granting licence the statutory committees and other  authorities must resort to strict scrutiny of the applications.  For the purpose  of grant of licence, the law as contained in the rules, do not contain any  provision for relaxing any condition.  The legislative policy, therefore, was  not to grant any relaxation therein.  Relaxation, it is trite, can be granted by  the authorities provided there exists a specific provision therefor.  Relaxation  cannot be granted by exclusion, when there does not exist any provision.   This aspect of the matter has recently been considered by this Court wherein  it was held  that if an exemption notification is to be issued, the same must  be  done within the four-corners of the legislative policy.   (See Consumer  Action Group and Another v. State of T.N. and Others, Tata Iron & Steel  Co. Ltd. v. State of Jharkhand and Others, (2005) 4 SCC 272,  Government  of India and Ors. v. Indian Tobacco Association, (2005) 7 SCC 396 and

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Commnr. Of Central Excise, Raipur v. Hira Cement, JT 2006 (2) SC 369]     The provisions of the Act therefore deserve strict construction.  We  may in passing notice that whereas in cases of suspect legislation or where  the statute ex facie is arbitrary requiring the burden of proof of the State to  be shifted, the strict scrutiny test would apply whereas in a case where the  provision is not so arbitrary, intermediate construction, the doctrine of  proportionality would apply.  [See R. v. Hughes 2002 UKPC 12 : 12 BHRC  243 (P.C.)]    

We may also notice that the English Courts while departing from the  Wednesbury principle developed the ’anxious scrutiny’ test which was later  modified by the Court of Appeal into the strict scrutiny test.  (See  Bugdaycay v. Secy of State for Home Department (1987) 1 All ER 940 at  952, R. v. Secy of State for Home Department, ex. p. Brind (1991) 1 AA ER  720, R. v. Ministry of Defence, ex p Smith (1996) 1 All ER 257 and B.  Archana Reddy v. State of AP, (2005) 6 ALT 6).

NECESSARY PARTIES        

       The licensees whose licences were directed to be cancelled were  necessary parties to the writ petition.  In the absence of any opportunity of  hearing given to them, their right to continue their businesses has been  violated.  It is not a case where the State, for one reason or the other, did not  intend to part with its exclusive privilege to deal in liquor.  It is also not a  case where the State has acted in such an arbitrary manner which would  attract the wrath of Article 14 of the Constitution of India.  All the licensees  in relation to whom allegations had been made, thus, were necessary parties  in the writ petition and in their absence the same could not have been  decided.

       Furthermore, it would be a travesty of justice if the parties against  whom serious allegations were made and are said to have been found had  not been made the parties to the writ petition as by reason thereof they in  terms of the High Court judgment were not allowed to carry on their  businesses in terms of the licences granted in their favour.   

       All such persons whose licences had been cancelled were, thus,  necessary parties.

EN-MASSE CANCELLATION \026 PRINCIPLES OF

       In law it is permissible to cancel the entire selection process if it is  held that the same is tainted to such an extent that it may not be possible to  separate the innocent from the tainted ones.  As, for example, in a case of  mass cheating adopted by the students in a Board Examination, it may be  permissible to cancel the entire examination.  When selections, however, are  carried out not by one agency but by several ones, the principle of en masse  cancellation  may not apply.  In this case, admittedly, several District Level  Committees have carried out the selection process and in that view of the  matter it was obligatory on the part of the High Court to consider the mode  of manner  of selection made by each one of them individually.  It was not a  case of mass cheating in an examination or an illegality or gross irregularity  in the selection process which would lead to cancellation of the entire  selection process.   

       In the writ petition, the writ petitioners have not disclosed as to how  each one of the licensees who had appeared as respondents therein were  ineligible or otherwise disqualified and/ or did not fulfil the conditions  therefor.  Had such opportunities been given, the State as also the said  respondents could have met the said allegations.  Such allegations were  made only in the rejoinder.  No new plea ordinarily could have been  permitted in the rejoinder without the leave of the court.  We would not have  commented upon this as the High Court does not appear to have placed  reliance upon the additional affidavit filed by the State inter alia on the

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ground that the same being a sur-rejoinder could not have been filed.  The  High Court’s attention was evidently not drawn to the fact that writ  petitioners brought on record new facts for the first time in the rejoinder and,  thus, the State was entitled to file a sur-rejoinder controverting the  allegations made therein.  

       In Benny T.D. and Others v. Registrar of Cooperative Societies and  Another [(1998) 5 SCC 269], this Court repelled a contention raised therein  that in view of the findings of the Public Inquiry Commission that there has  been tampering of marks in respect of several candidates and as such there  has been no fair and objective selection, public interest demanded annulment  of the entire selection.  This Court held that the same could not be done as  the same would tantamount to gross violation of principles of natural justice  which cannot be brushed aside on the ground that public interest demands  annulment of the selection.   

       Yet again in Onkar Lal Bajaj and Others v. Union of India and  Another[(2003) 2 SCC 673], this Court while dealing with a case of en  masse cancellation of the licences granted to the LPG Distributors as a result  whereof unequals were said to have been clubbed by reason of arbitrary  exercise of executive power,  the same was held to be impermissible stating:

"The solution by resorting to cancellation of all  was worse than the problem. Cure was worse than  the disease. Equal treatment to unequals is nothing  but inequality. To put both the categories \027  tainted and the rest \027 on a par is wholly  unjustified, arbitrary, unconstitutional being  violative of Article 14 of the Constitution\005"                  It was further held:

"The aforesaid observations would apply with  equal if not more force to DSBs if media exposure  that the allotments were made either to the high  political functionaries themselves or their near and  dear ones is correct, the authorities would not only  be justified in examining such cases but it would  be their duty to do so. Instead of fulfilling that duty  and obligation, the executive cannot unjustly resort  to cancellation of all the allotments en masse by  treating unequals as equals without even prima  facie examining any cases exposed by the  media\005"

       It was also not a case where the writ petitioners had impleaded the  private respondents in their representative capacity.  In the writ proceedings,  no leave in terms of Order 1, Rule 8 of the Code of Civil Procedure or the  principles analogous thereto had been obtained.  No public notice had also  been given as regard pendency of the said writ petition.

       In Union of India and Others v. Rajesh P.U., Puthuvalnikathu and  Another [(2003) 7 SCC 285], this Court observed:

"\005Applying a unilaterally rigid and arbitrary  standard to cancel the entirety of the selections  despite the firm and positive information that  except 31 of such selected candidates, no infirmity  could be found with reference to others, is nothing  but total disregard of relevancies and allowing to  be carried away by irrelevancies, giving a  complete go-by to contextual considerations  throwing to the winds the principle of  proportionality in going farther than what was

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strictly and reasonably to meet the situation. In  short, the competent authority completely  misdirected itself in taking such an extreme and  unreasonable decision of cancelling the entire  selections, wholly unwarranted and unnecessary  even on the factual situation found too, and totally  in excess of the nature and gravity of what was at  stake, thereby virtually rendering such decision to  be irrational."

       We are, therefore, of the opinion that the High Court committed an  error in directing cancellation of licences of all the private respondents of the  writ petition without arriving at a finding as to how and in what manner  licence granted to each one of them was either in violation of the provisions  of the statute or the directions of this Court.

       To put it shortly, the inadequacies or otherwise of fulfillment of  eligibility criteria or the violation of the statute should have been decided by  taking up individual matters and upon proper scrutiny of the case.  To the  aforementioned extent, the judgment of the High Court cannot be sustained.

       It was also not a case wherein en masse cancellation was warranted as  enunciated in Bihar School Examination Board v. S.C. Sinha [AIR 1970 SC  1269], Union of India v. Anand Kumar Pandey [(1994) 5 SCC 663],  Hanuman Prasad and Others v. Union of India and Another [(1996) 10 SCC  742] and Union of India and Others v. O. Chakradhar [(2002) 3 SCC 146]  

ASHOK LENKA - I

       Analysing the provisions of the Act and the Rules, this Court opined  that the Rules contemplated strict compliance of the Rules as also the terms  and conditions of the licences.  Eligibility clause contained in the  advertisement was, therefore, required to be considered applying a rigorous  standard.  Emphasising the necessity to verify the requisite documents by the  District Level Committees and the mode and manner in which the selection  processes  were  to be adverted to in terms of Rule 11 of the Rules, it was  held that the Scrutiny Committee was entrusted  with the duties  to oversee  as to whether the conditions have been complied with or not.  The  expression "has to submit an affidavit" contained in Rule 9 ex facie was  found to be mandatory in nature.  It was opined:

"Furthermore, filing of an affidavit in the  prescribed format is a statutory requirement under  the Rules. Filing of such an affidavit is necessary  as in the event the same on verification is found to  be incorrect, not only the deponent can be  proceeded against but his licence would also be  liable to be cancelled. Filing of an affidavit under  the Rules is, therefore, mandatory in character."

       This Court noticed from the chart filed on behalf of the writ  petitioners that different persons belonging to different communities had  filed different applications showing the same addresses and even the persons  with same names have filed more than one application.  It was held:

"\005The authorities of the State cannot raise a plea  that they would not even notice the inherent  defects contained in the application. They could  not proceed on a presupposition, for which there is  no legal sanction, that contents of the affidavit  would be correct. No summary report required to  be prepared by the Member-Secretary for its  placement before the Committee appears to have

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not been prepared. The Rules postulate that each  and every application must be examined carefully.  Mere fact that a large number of applications have  been filed, as a result whereof the State had been  able to obtain crores and crores of rupees by itself  did not entitle the State to dispense with the  statutory requirements. The application fees were  not meant to be utilised for the purpose of earning  revenue but to meet the administrative charges  required therefor. Application fee cannot be  equated with tax."

       In the aforementioned situation, it was directed:

"Keeping in view the peculiar facts and  circumstances of this case, we intend to issue the  following directions: (i) The Member-Secretary shall scrutinise all the  applications of the successful candidates afresh  and prepare a summary report within one week  from date. (ii) Irrespective of the format prescribed by the  Commissioner of Excise, each of the selected  candidates must file an appropriate affidavit,  which would be in strict compliance with the  requirement of Rule 9. (iii) Such affidavits must be filed before the  respective Committees within one week from date,  the contents whereof would be verified in terms of  Order 6 Rule 15 of the Civil Procedure Code. The  said affidavits shall be scrutinised by the  Committee so as to enable them to arrive at a  finding as to whether the applicants fulfil the  eligibility criteria and are otherwise suitable for  grant of licence under the Act and the Rules. (iv) The writ petitioners or any other person in the  locality may file appropriate applications before  the said Committee with a view to show that the  selected candidates do not fulfil the eligibility  criteria or are debarred or are otherwise unsuitable  for obtaining a licence under the Act. (v) Such objections may also be filed within two  weeks from date. The Committee may consider the  said objections and, if necessary, may call for  further or better particulars from the selected  candidates so as to satisfy themselves about their  eligibility, etc. (vi) The respective district-level committees shall  strictly verify and scrutinise the affidavits as also  other documents furnished by the said applicants  so as to arrive at a decision that the statutory  requirements have been complied with upon  application of their mind. (vii) The members of the Committee are made  personally liable to see that all statutory  requirements are complied with. They would  strictly apply the statutory provisions as regards  eligibility and suitability of the candidates. (viii) The aforementioned exercise by the  Committee should be completed within one month.  In the event, any affidavit filed by a selected  candidate either pursuant to this order or filed  earlier in the format prescribed by the  Commissioner of Excise is found to be incorrect,

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strict action in accordance with law shall be taken  against him. (ix) The Superintendent of Police of each district  within whose jurisdiction the selected candidates  ordinarily reside shall verify the antecedents and  other relevant particulars of the selected candidates  vis-‘-vis their eligibility/suitability to obtain a  licence and submit a report to the Committee by  12-6-2005 which would be strictly in terms of sub- rule (3) of Rule 9. While issuing such a certificate  in favour of the selected candidates by 12-6-2005,  he shall also file a copy of the report before the  Committee. (x) We direct the Chief Secretary of the State and  the Commissioner of Excise to act strictly in  accordance with law and oversee the functioning  of the Scrutiny Committees. (xi) If the State and the Commissioner of Excise  come across misconduct on the part of any of the  officers including the members of the Committee,  strict action must be taken against the officer  concerned. (xii) The selected candidates in the meanwhile  may carry on the trade in liquor pursuant to the  licence granted in their favour but the same shall  be subject to this order as also the decision of the  Scrutiny Committee."

WERE THE DIRECTIONS COMPLIED WITH ?

       We may notice in the following chart some of the cases, by way of  sample as to the mode and manner in which the Committees dealt with the  applications in respect of the private respondents both who were parties and  who were not parties:

Private Respondents who were parties S.  No. No. and name of  respondent Direction No. 6 Direction No.  9 Direction No.  10

Details of records  received in regard to  examination of the  affidavit and page No. Photocopy of  the report  submitted by  the Supdt. Of  Police  regarding  character  verification Details of the  supervision  conducted by  the Chief  Secretary and

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Excise  Commissioner 1 2 8 11 12 1. Shri Amit Singhal,  Ganjpara,  Respondent No. 3 1. Domicile Certificate,  2. Higher Sec.  Certificate, 3.Telephone  Bill 32-34

Enclosed 35-36 Directions  issued for time  bound  proceedings on  14.05.2005,  meeting held  by the Excise  Commissioner  on 16.05.2005.  Video  Conferencing  held by the  Chief Secretary  on 26.05.2005,  letter issued to  the Suptd. Of  Police by Chief  Secretary,  Chhattisgarh  on 26.05.2005,  letter issued to  the General  Director,  Police,  Chhattisgarh  by Chief  Secretary on  07.06.2005 Page No. 37 to  130 45. Shri Vikram  Vishwal, Sarsiva,  respondents No.  61 and 80 1. Dwelling Certificate,  2. Age Certificate by  Doctor 1391-1392 Enclosed  1393 As above 47. Shri Manish  Upadhyaya,  Bhanwarpur

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Respondent No. 66 1. Dwelling Certificate,  2. Voter List, 3. Rent  Deed, 4. PAN Card, Age  Certificate, 1433-1441 Enclosed  1442-1445 As above 65. Shri Pawan Singh,  Fingeshwar,  Respondent No. 88 1. Dwelling Certificate,  2. Age Certificate by  Doctor 1990-1991 Enclosed 1992 As above

Private Respondents who were not parties S.  No. No. and name of  respondent Direction No. 6 Direction No.  9 Direction No.  10

Details of records  received in regard to  examination of the  affidavit and page No. Photocopy of  the report  submitted by  the Supdt. Of  Police  regarding  character  verification Details of the  supervision  conducted by  the Chief  Secretary and  Excise  Commissioner 1 2 8 11 12 1. Rameshwar Prasad  Dhimar,  Tikarapara,  Graoup, Raipur 1. Age Certificate by  Doctor, 2. Family Card

6-8

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Enclosed 9 Directions  issued for time  bound  proceedings on  14.05.2005,  meeting held  by the Excise  Commissioner  on 16.05.2005.  Video  Conferencing  held by the  Chief Secretary  on 26.05.2005,  letter issued to  the Suptd. Of  Police by Chief  Secretary,  Chhattisgarh  on 26.05.2005,  letter issued to  the General  Director,  Police,  Chhattisgarh  by Chief  Secretary on  07.06.2005 Page No. 10 to  103 19. Maheshbar Dass,  Basna Group,  Mahasamund 1. Domicile Certificate,  2. Rent Deed, 3. PAN  Card, 4. Age Certificate  278-283 Enclosed  284-287 As above 36. Ajay Singh  Choteekoni group,  Bilaspur 1. Inquiry Report of the  Committee constituted by  Revenue Officials 2. Rent Deed 3. PAN Number 608-624 Enclosed  625-628 As above 125. Pintu Singh,  Chanderpur group,  Janjgir 1. Bank Pass Book, 2  Medical Certificate, 3.  Domicile Certificate 2106-2110

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Enclosed 2111-2117 As above

       A tabular statement has also been placed before us indicating how  each of the directions issued by this Court in para 90 are said to have been  complied with, which is as under:

"Srl  No.  DIRECTION COMPLIANCE i The Member-Secretary shall  scrutinise all the applications  of the successful candidates  afresh and prepare a  summary report within one  week from date. ?       On 16.05.2005 the Excise  Commissioner convened a  meeting of all the Assistant  Commissioner Excise and  District Excise Officers for  instructing them to comply with  the Order passed by the Hon’ble  Supreme Court within the  prescribed time.  In this meeting  the officers were also appraised  as to how the scrutiny is to be  conducted, the affidavits are to  be obtained and the eligibility  criteria have to be checked and  further as to how the objections  are to be dealt with. ?       The Member \026 Secretary, who is  the District Excise Officer  scrutinized all the applications  of the successful candidates  afresh and prepared a summary  report within one week. ii Irrespective of the format  prescribed by the  Commissioner of Excise,  each of the selected  candidates must file an  appropriate affidavit, which  would be in strict compliance  with the requirement of Rule  9. ?       Each of the selected candidates  filed appropriate affidavits, in  strict compliance of the  requirement of Rule 9. iii Such affidavits must be filed  before the respective  Committees within one week  from date, the contents  whereof would be verified in  terms of Order 6 Rule 15 of  the Civil Procedure Code.  The said affidavits shall be

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scrutinised by the Committee  so as to enable them to arrive  at a finding as to whether the  applicants fulfill the  eligibility criteria and are  otherwise suitable for grant  of licence under the Act and  the Rules.

?       It is submitted that the Scrutiny  Committees have scrutinized the  Affidavits submitted by the  successful candidates, the  contents of which were verified  in terms of Order 6 Rule 15.  It  is submitted that the Scrutiny  Committee consisting of the  District Collector, Assistant  Commissioner, Excise and the  District Excise Officer have  personally interviewed each of  the successful Applicants before  the Licenses were confirmed. iv The writ petitioners or any  other person in the locality  may file appropriate  applications before the said  Committee with a view to  show that the selected  candidates do not fulfil the  eligibility criteria or are  debarred or are otherwise  unsuitable for obtaining a  licence under the Act. ?       Respondents merely sought to  raise general and omnibus  objections that the addresses of  some of the other successful  candidates seem to be  incomplete or duplicated. v Such objections may also be  filed within two weeks from  date. The Committee may  consider the said objections  and, if necessary, may call  for further or better  particulars from the selected  candidates so as to satisfy  themselves about their  eligibility, etc. ?       The objectors were given an  opportunity for making  representations before the  Committee. ?       The Committee decided the  objections raised by the  objectors after considering the  objections with the documents  that had been submitted by the  successful Applicants. ?       However, the objectors did not  point out a single instance  where Applicant was ineligible

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as not fulfilling the eligibility  criteria as prescribed in Rule 9  of the Excise Rules. vi The respective district-level  committees shall strictly  verify and scrutinise the  affidavits as also other  documents furnished by the  said applicants so as to arrive  at a decision that the  statutory requirements have  been complied with upon  application of their mind.

?       The District Level Committees  strictly verified and scrutinized  the affidavits and supporting  documents furnished by the said  applicants so as to arrive at a  decision that the statutory  requirements have been  complied. ?       The Committee also personally  interviewed each of the  successful Applicants before the  Licenses were confirmed. vii The members of the  Committee are made  personally liable to see that  all statutory requirements are  complied with. They would  strictly apply the statutory  provisions as regards  eligibility and suitability of  the candidates.

viii The aforementioned exercise  by the Committee should be  completed within one month.  In the event, any affidavit  filed by a selected candidate  either pursuant to this order  or filed earlier in the format  prescribed by the  Commissioner of Excise is  found to be incorrect, strict  action in accordance with law  shall be taken against him.

?       The Scrutiny Committees  completed the exercise within  one month. ix The Superintendent of Police  of each district within whose  jurisdiction the selected  candidates ordinarily reside  shall verify the antecedents  and other relevant particulars  of the selected candidates  vis-‘-vis their

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eligibility/suitability to obtain  a licence and submit a report  to the Committee by 12-6- 2005 which would be strictly  in terms of sub-rule (3) of  Rule 9. While issuing such a  certificate in favour of the  selected candidates by 12-6- 2005, he shall also file a copy  of the report before the  Committee.

?       That immediately after the  passing of the Order dated  11.05.2005, by letter dated  16.05.2005, the Excise  Commissioner requested  Director General of Police  Chhattisgarh to submit character  verification report of successful  applicants within the time  allowed by the Hon’ble  Supreme Court i.e. by 12th June,  2005. ?       By letter dated 26.05.2005 the  Excise Commissioner requested  the Superintendent of Police of  the concerned District of other  States in such cases where the  successful applicants have  shown their permanent resident,  to verify the antecedents of such  candidates.  It is submitted that  report from Superintendent of  Police of concerned districts of  other States were also received  in the concerned Excise Office  of the concerned district. ?       It is submitted that all the  character verification reports  were received in the office of  District Level Committee by  12th June, 2005. x We direct the Chief Secretary  of the State and the  Commissioner of Excise to  act strictly in accordance  with law and oversee the  functioning of the Scrutiny  Committees. ?       The Chief Secretary,  Government of Chhattisgarh  convened several meeting with  Collectors/ Assistant  Commissioner Excise/ District  Excise Officers through Video  Conferencing and took stock of  stage of compliance of the  Order passed by the Hon’ble  Supreme Court."

       Before we advert to the rival contentions of the parties, we may also  notice the following chart showing licence holders against whom findings  have been recorded in the impugned judgment and subsequently the licences

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were cancelled:

NAME OF  PARTIES REASONS FOR  CANCELLATION ADDRESS I ADDRESS  II AGE/CERTIFIED  BY Satyendra  Singh (i)Discrepancies in  certificates with  respect to  addresses; (ii) Age certified by  private practitioner In character  certificate by  police  authrority-  Vialleg  Karhara, Post  Jaipur, Police  Station Mali,  District  Aurangabad In letter by  SP, Bilaspur-  Village Mali,  Police Station  Nabinagar,  Aurangabad. 47 years- certified  by private  practitioner Dr.  H.S. Hura  Abhay  Singh (i) Certificate issues  by Tahsildar does  not bear revenue  case number or seal  of office of  Tahsildar; (ii) Age certified by  private practitioner. --- ---- 27 years- certified  by private  practitioner Dr.  H.S. Hura Arvind  Singh (i) Residential  certificate issued by  the Sarpanch does  not mention the  revenue case  number or the  authority of the  Sarpanch to issue

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the Certificate; (ii) Age certified by  a dental surgeon; (iii) Discrepancies  in addresses. Certificate  suggesting  that he is a  resident of  Batha. Certificate  suggesting  that he is  residing at  Baya Kasdol,  District  Raipur Certified by Dr.  N.L. Upadhyay, a  dental surgeon. Anil Pal (i) Discrepancies in  addresses. Certificate  indicating  him to be a  resident of  village  Jhapla, P.O.  Jhapla,  district  Palamou  (Jharkhand) Police  verification  report  suggests that  he is a  resident of  village  Bankat,  Police Station  Husainabad,  district  Palamou  (Jharkhand) ---- Pradeep  Gupta

Anil Kumar  Gupta (i) He is not an  independent person; (ii) His financial  condition indicates  that he could not  undertake the  financial burden of  liquor trade.

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(i) Not residing  within the territorial  jurisdiction of the  police station  issuing the  certificate.  

---

----

---

----

---

----

       From the aforementioned chart, it would appear  that although various  instances have been cited in respect of the persons against whom findings  have been recorded in the impugned judgment, their licences remained valid  whereas licences have been directed to be annulled in respect of Satyendra  Singh, Abhay Singh, Arvind Singh, Anil Pal, Pradeep Gupta and Anil  Kumar Gupta.  We have hereinbefore dealt with the consequences of not  impleading some successful licensees in the writ petition.

SOME INDIVIDUAL CASES

       Before us, various instances had been shown as to how the provisions  of the mandatory rules have been flouted in the selection process.  The  eligibility of the candidates was also questioned.   

       Rule 9 provides for affirmation of an affidavit by the applicant  categorically stating that in the event he is selected, he shall furnish the  information specified therein within 30 days from the date of grant of  licence including a certificate issued by the Superintendent of Police of the  district of which he is the resident.

       The learned counsel for the Appellant has placed before us a chart, as  noticed hereinbefore, showing the mode and manner in which the directions  of this Court had been purportedly complied with.  From the said chart, it  would appear that there are several cases where only residence certificate of

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some incompetent person was produced in support of residence  and  certificate by a  doctor in support of age were produced as proof  without  producing any other document to prove those two facts.  Thus, there was no  proper proof of residence or age produced by these applicants.  The record  of scrutiny produced by the State shows that, those applicants who had  submitted aforesaid improper documents were not even asked by the State at  the scrutiny, to submit proper documents such as residence certificate by  Revenue Authority, etc. or proper proof of age such as School Certificate or  Birth Certificate, etc.

       We may in this connection notice some findings of the High Court.   Before the High Court, it had been conceded that the residential certificates  issued by the Councillors of Municipal Council or Sapranches or other  persons who had no legal authority and/ or otherwise incompetent to issue  the same, had been taken into consideration.  It may be true that residence  certificates granted in favor of the applicants who are not ordinarily  inhabitants of the State of Chhattisgarh, cannot be procured from the  Revenue Department of the State.  The applicants, however, could procure  such certificates from the competent authorities of the respective States  where the applicant was a resident and who hold similar status in their State,  particularly, when it is one of the eligible criteria.  The High Court in  paragraph 21 of its judgment has noticed the example of residence certificate  of Abhay Singh, which does not even bear the revenue case number or seal  of the office of the Tehsildar which are mandatory requirements.  The High  Court has also noticed that the certificates relating to age had been  issued by  Dental Surgeons and Orthopaedic Surgeons.  The High Court furthermore  noticed the report of the Station House Officer, Chirmiri to S.P. Koria  mentioning about one licensee Pradeep Gupta that he is an employee of  liquor contractor Amolak Singh Bhatia and financial condition of Pradeep  Gupta is not such that  he could take the financial burden of liquor trade.  In  spite of it, liquor licence was granted to him.   

       Furthermore, the High Court in paragraph 22 of its judgment found  that the Official Respondents have failed to carry out the directions issued  by this Court in the manner expected of them and in conformity with the  mandatory rule 9 and 11 of the Rules.  The High Court in paragraph 23 also  found that the burden was wrongly shifted on objectors to prove the negative  facts by evidence which was a serious flaw in enquiry.  In paragraph 24, it  also took notice of a chart and found that vague and incomplete address such  as ’resident of Raipur’ and ’resident of Saja’ which is an assembly  constituency, has been accepted by the authorities.   

       The aforesaid findings of the High Court establish that the licences  might have been issued in fake names and to the ineligible applicants.  Our  attention has furthermore been drawn to the fact that some of the applicants  are facing criminal trials, veracity whereof is not established.

       The contention of the learned counsel appearing on behalf of the  Appellant that this Court has placed burden of proof on the objector may not  be entirely correct.  The initial burden was on the applicants themselves for  grant of licences  to satisfy the members of the District Level Committees  that they fulfill the eligibility and other criteria.  This Court merely opined  that even in such matters, the satisfaction was required to be arrived at by the  competent authority upon considering the objections raised by the writ  petitioners.  This Court, thereby, did not mean that whenever an objection  was raised, the burden thereof would be upon the objector to prove the same.   Sub para (iv) of Paragraph 90 of the judgment in Ashok Lanka \026 I (supra)  merely gave the objectors an additional opportunity to place materials before  the District Level Committees to show that some of the applicants might be  ineligible.

       Our attention has further been drawn to the fact that certificates issued  by the doctors or dental surgeons, orthpaedics as regards proof of age of the  applicants had been taken into consideration.  The same was wholly illegal.   But, it does not appear that such a contention had been raised before the

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High Court.  It is expected that in future the competent authority shall  consider the desirability of verification of age for arriving at the satisfaction  that a person below the age of 21 years is not granted a licence.

NOTIFICATION

       Before us the Hindi version of the notification has been read  wherefrom it appeared that the requirement of providing the certificate as  regards the alleged criminal background of the family members of the  licensees had inadvertently appeared in the English version of the  notification, but were absent in the Hindi version.   

       It is true that this Court had delivered the judgment in Ashok Lanka - I  (supra) on 11th May, 2005.  A clarificatory notification was issued on  5.7.2005 by deleting the words "as well as his family members" from the  notification dated 15.3.2005.  The relevant portion of the said notification  reads as under:

"\005In the said rules, -  (1)     In sub rule 3 of clause (d) of rule 9 the  words "as well as his family members"  shall be omitted."

       The said notification was given a retrospective effect.

       Ordinarily a subordinate legislation cannot be given a retrospective  effect.  The Notification dated 15.3.2005, however, is said to be clarificatory  in nature.  A clarificatory Notification can be given retrospective effect.   Such a clarification, according to the State, was necessary to be issued as  there was an apparent conflict between the Hindi version and the English  version of the Notification.   

       It may be true that before the High Court such a contention has not  been raised but we are satisfied about the bona fide of the State in this  behalf.  In that view of the matter, it was not necessary for the District Level  Committee or the State to verify the criminal background of the family  members of the applicants.

       Presumably, character certificates were required to be issued by the  respective Superintendents of Police in respect of the candidates concerned.   Of course, if they had been residing at different places at different points of  time, such character certificates were required to be issued by the  Superintendent of Police of each such place.  But the same would not mean  that character certificates were required to be produced by the candidates in  respect of their family members also particularly when it was not certain as  to who would come within the purview of the said term.  It was in that sense  the Notification dated 15.3.2005 was a clarificatory one, and, therefore,  could be given a retrospective effect.    

CHARACTER CERTIFICATES

       In view of the directions contained in sub-paragraph (xi) of Paragraph  90, we do not accept the contention of Mr. Desai that only certificate issued  by the Superintendent of Police of the place of his permanent residence is to  be filed.  It, however, appears that the Commissioner of Excise had issued  letters to the concerned Superintendents of Police as regard requirement  to   comply with the provisions of Rule 9 of the Rules.  The reason why we say  so is that if a person is resident of any district for a year, the certificate  which may be issued by the Superintendent of Police of that place may  remain  valid only for that year.  He would not be in a position to vouchsafe  about the conduct of the person concerned or as to whether he has any  criminal antecedents prior or subsequent thereto.

       It may, therefore, be necessary that the applicant should state the  details of the places where he had stayed or carried on business and produce

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a certificate from the concerned authorities from each such place.

ADDRESS OF THE APPLICANT           No case, however, has been pointed out before us where such  certificates had been given by the Superintendent of Police other than from  the place wherein the applicant is a permanent resident.  Terms and  conditions of the advertisement did not mandate that a person residing  outside the State of Chhattisgarh would be ineligible for filing an  application.  If that be so, then those who were residents of places other than  the State of Chhattisgarh would also be eligible therefor.  They may have a  temporary address in Chhattisgarh or they may not have a permanent address  within the said State but by way of temporary address, they cannot give an  address which is not their residence even for temporary purpose.  Even in  paragraph 71 of the judgment in Ashok Lanka - I (supra), this Court pointed  out the said fact.  No serious dispute has been raised that the said contention  of the writ petitioners was not correct.  But, even if they had no temporary  address but they had been able to file their character certificates and proof of  permanent address, they cannot be held to be ineligible for the grant of  licences.  Furthermore, there is nothing to indicate that the District Level  Committees had information  as to whether the applicants were defaulters in  respect of some  other State.  Such mechanism of scrutiny is not available in  the statutory scheme and in our  opinion should be provided.

       We hope and trust that in future, i.e., for the following excise year,  appropriate steps shall be taken to make the position clear that if the  applicants are not residents of the State of Jharkhand either on a temporary  or permanent basis, they would not be shown to be residents of such places  wherefrom their antecedents cannot be verified.  Such applicants, therefore,  should not be allowed to furnish an address only for the purpose of  communication and if so, the same should clearly be stated in the  application.  

       In the Act or the Rules, again no particular authority had been  mentioned as having been  authorized to issue certificate.  No particular  method of verification of  proof of address and identity had also been shown   to exist.  It will be appropriate if a clarification is issued in this behalf.

       The Scrutiny Committee appears to have relied upon certificates  issued by Tahsildars, Municipal Counsellors, etc. which had not been  objected to by the writ petitioners.  It is stated that most of the applicants are  income tax payees.  They have been granted a PAN Card.  In future,  however, the authorities should insist that the applicants must enclose  Xeroxed copies of their PAN Cards along with their applications.

CONCLUSION

       The period for which licences had been granted is over.  For all  practical purposes, the State and the licensees have succeeded in their  attempts to defeat the purpose for which the writ petitions were filed by the  writ petitioners \026 Respondents.  We must express our dismay that despite  our directions, the applications filed by the Appellants had not been  scrutinized minutely which should have been done.  The State of  Chhattisgarh, we are not very sure, whether was aware of its constitutional  duties and functions.  It seems to have been more concerned with raising of  revenue.  To that extent it had succeeded, as the High Court in the first round  of litigation despite directing a fresh scrutiny of the applications did not  direct refund of the huge amount collected by it by way of application fees.   We would, however, expect the State and its officers to scrupulously follow  the constitutional mandate in future.  It was with this intention we have dealt  with these matters  at  some detail.

                We hope and trust that the State of Chhattisgarh and its authorities

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would not commit the same mistakes in the coming years keeping in mind  the mandate of Article 47 of the Constitution of India and scrupulously  observe the rules for disposal of liquor shops.

       With the aforementioned observations and directions, these appeals  are allowed.  The parties, however, are directed to pay and bear their own  costs.