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PETITIONER: DOONGAJI AND CO.

       Vs.

RESPONDENT: STATE OF MADHYA PRADESH AND ORS.

DATE OF JUDGMENT09/08/1991

BENCH: RAMASWAMY, K. BENCH: RAMASWAMY, K. KASLIWAL, N.M. (J)

CITATION:  1992 AIR  488            1991 SCR  (3) 492  1991 SCC  Supl.  (2) 324 JT 1991 (3)   356  1991 SCALE  (2)288

ACT:     Madhya  Pradesh  Excise   Act,  1915--Sections  13   and 14--Licence  to distil rectified spirit or denatured  spirit or  liquor--Clause 50--Interpretation of. Valuation  of  the materials such as plants & machinery etc. of the  distillery and payment thereof to outgoing licensee before handing over possession  to  the incoming licensee--Held  to  be  neither mandatory nor a condition precedent.

HEADNOTE:     The  appellants and its predecessors  continuously  held licences  under  Sections 13 and 14 of  the  Madhya  Pradesh Excise Act to distil rectified spirit or denatured spirit or liquor.  The  last of such licence which the  appellant  had related  to the period from 1.4.1977 to 31.3.1981. The  next licensing  period commenced from 1.4.1981 to  31.3.1986  and the respondent Rajdhani Distilleries Corporation became  the successful  tenderer in respect thereof which the  appellant impugned  by means of a writ petition before the High  Court but failed both before the High Court as also in this  Court in  a  special leave petition. Thereupon the  appellant  was called upon twice to be present to deliver the possession of the  distillery to the respondent but the appellant did  not co-operate.  Likewise  the appellant did not  co-operate  in fixing the value of the plant and machinery of the  distill- ery  and  warehouses as a result of which  a  committee  was appointed  in  terms  of the licence which fixed  a  sum  of Rs.10,53,016.45 p. as the total value payable to the  appel- lant.  Due  to  the non-cooperation of  the  appellant,  the Excise Department took over the possession of the distillery after  making inventory of stock in hand in the presence  of the  witnesses and the same was handed over to the  respond- ent.  The  appellant thereafter demanded redelivery  of  the distillery  and  on his failure to get the same it  filed  a writ petition in the High Court praying for a writ of manda- mus seeking inter alia restitution of the distillery and the warehouses etc., challenging the quantum of valuation fixed. The  High Court dismissed the writ petition. The High  Court found  that the appellant had no exclusive possession  which always  remained with the excise Department;  the  appellant worked  out the contract of manufacturing  rectified  spirit

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etc.  and  that  due to non-cooperation  of  the  appellant, possession was taken and delivered to the incoming  licensee as per rules and the 479 480 appellant was not entitled to restitution. Hence this appeal by special leave. It is contended on behalf of the appellant that clause 50 enjoins the State to fix the valuation of all the materials belonging to the appellant and pay the same to it  as an outgoing licensee, before taking  over  possession and handing over the distillery and the attached  warehouses to  the  respondents.  According to it, it  is  a  condition precedent  under clause 50 to dispossess the  appellant  and start the operation of the contract by the respondent  which admittedly  were  not done. This is a contravention  of  the mandatory  conditions  of  the licence and  the  rules.  The respondents on the other hand contend that the appellant  is not entitled to restitution as it was due to its non-cooper- ation, possession was taken. According to them prior  valua- tion and payment are not condition precedent to work out the licence. Partly allowing the appeal, this Court,     HELD:  In  the light of the scheme of valuation  of  the plant  and machinery of the distillery, or the apparatus  in the  warehouses and the stock in trade, the Court held  that strict construction (of clause 50) would lead to innumerable complications and loss of public revenue. We are inclined to hold that before the expiry of the licence, if the  outgoing licensee cooperates, the value can be fixed with  consensus, payment  should also be made within the time stipulated.  In all  other cases it could be done even after the  expiry  of the stipulated period. In that perspective the Court had  no hesitation to hold that prior valuation of plant and machin- ery  in the distillery, stock in trade therein or the  value of  the machinery in the warehouses and stock of the  liquor stored therein and payment thereof before taking  possession and  handing  them over to the incoming licensee  is  not  a mandatory, nor a condition precedent. Therefore, taking over possession from the appellant on August 28, 1981 and handing over the plant and machinery, etc. to the respondent is  not illegal. [490C-E]     In  this case admittedly the conditions of  licence  are not  questioned, but expressly given up in the  High  Court. Even  before us the validity of the valuation has  not  been questioned. It cannot cut the branch on which appellant sits to  assail the constitutional validity of the conditions  of the licence. Accordingly we have no hesitation to hold  that the  appellant  is not entitled to the  restitution  of  the plant  and  machinery of the distillery at  Ujjain  and  the attached warehouses. [491A-B]      It is open to the appellant to make a representation to Government and any officer not below a Secretary  preferably of the concerned 481 Department would go into the matter and decide the value  as per  the material on record. It is open to the appellant  to place all its material. It is also open to the respondent to place  its material and the authority would  consider  after giving  an opportunity of hearing through counsel, if  asked for, and decide the value accordingly. [491D]     Godhra Electricity Co. Ltd. and Anr. v. State of Gujarat and Ors., [1975] 2 SCR 42; Hat Shankar & Ors. v. Dy.  Excise JUDGMENT: of M. P.v. Nandial Jaiswal, [1987] 1 SCR 1, Referred to.

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& CIVIL APPELLATE JURISDICTION: Civil Appeal No. 5483 of 1983.     From  the  Judgment and Order dated 7.10.  1982  of  the Madhya Pradesh High Court in M.P. No. 169 of 1982. R.F. Nariman and P.H. Parekh for the Appellants.     V.N. Ganpule, V.M. Tarkunde, S.K. Agnihotri, S.K. Sinha, Rajinder  Narain,  R.S. Singh, and Rameshwar  Nath  for  the Respondents. The Judgment of the Court was delivered by     K.  RAMASWAMY,  J-This appeal by  special  leave  arises against  the  judgment of the Division Bench of  the  Madhya Pradesh High Court, Indore Bench dismissing M.P. No. 169  of 1982  dated  October 7, 1982. The appellant,  a  partnership firm  filed the writ petition seeking writ of  mandamus  and other direction to remove Rajdhani Distilleries Corporation, the  7th respondent in the writ petition in the  High  Court and 6th respondent in this appeal for short ’respondent’  or his ’servants’ or ’agents’ and to deliver vacant and  peace- ful  possession  of U j jain Distillery and  warehouses  at- tached  to it and the plant and machinery mentioned  in  the schedule  Annexure P-3 to the writ petition. It also  sought for  mandamus  or other order to have the valuation  of  the plant and machinery in Annexure P-3 assessed or direction to return  the goods or things described in Annexure P-7 or  on its  failure to pay a sum of Rs.8,48,179.28 and  a  mandamus directing  the State Govt. to terminate the licence  granted on August 25, 1981 to the respondent and to issue licence to the appellant under s. 13 of the M.P. Excise Act, 19 15, for short ’the Act’, etc. Thus this appeal. The  material facts, to dispose of the point arose  in  this appeal, lie 482 in a short compass as stated hereunder:     In the State of Madhya Pradesh nine distilleries for the manufacture of spirit were established and one of which  was situated  at  Ujjain.  The appellant  and  its  predecessors continuously  had licence under ss. 13 and 14 of the Act  in form  D-2 to distil rectified spirit or denatured spirit  or liquor and D-I licence for wholesale supply of country  made liquor  in  the  distillery to retail vendors  in  the  area attached to the distillery. The licence was for a period  of 5  years. The last licence of which was for the period  from April  1,  1977 to March 31. 1981. The normal  procedure  in vogue  was  to  call for tenders and the  lowest  was  being accepted, though sometimes highest was also preferred.  Next licensing period commenced from April 1, 198 1 to March  31, 1986 and the respondent became the successful tenderer which the  appellant  impugned in Misc. Petition  No.  701/81  and obtained  stay of dispossession from the distillery and  the attached warehouses, The interim stay was later vacated  and the petition was dismissed on August 20, 198 1. We may  also mention  here that the writ petition was also dismissed  and the special leave petition was dismissed by this court. Thus grant  of  licence to the respondent under D-1 and  D-2  li- cences  became  final. On August 21,  1981  the  Officer-in- Charge  of  the distillery wrote a letter to  the  appellant calling upon them to be present on August 22, 1981 to deliv- er the distillery, plant, machinery, etc. to the respondent. The appellant neither received it nor cooperated to  deliver possession  of the distillery, etc. to the  respondent.  In- stead  it locked the distillery and went away. In the  mean- while  the  Excise Department also put their  locks  on  the

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distillery  etc.  On  August 27. 1981  the  District  Excise Officer  again  called upon the appellant to be  present  on August  28,  1981 to deliver possession of  the  distillery, etc.  to the respondent. But the appellant remained  absent. Consequently  possession  was taken of  the  distillery  and warehouses,  after taking inventory of stock in hand in  the presence  of the witnesses and the same were handed over  to the  respondent  on August 28, 1981. The  appellant  sent  a letter on February 23, 1982 valuing the goods taken  posses- sion  of at Rs.8,36,988.61. On August 8, 1982 the  appellant demanded  redelivery of the distillery, plant and  machinery and  warehouses and the value of the stock in trade  or  pay the  amount. On March 16, 1982 the appellant filed the  writ petition in the High Court but was dismissed.         The  appellant contended in the High Court  that  it had  been in exclusive possession of the  distillery,  plant and  machinery  at Ujjain  and the attached  warehouses  and dispossession was unlawful and that, 483 therefore, the appellant was entitled to restitution of  the plant  and machinery and also to the grant of licence  after cancellation  of the licence granted to the respondent.  The High Court found that the appellant had no exclusive posses- sion  which always remained with the Excise Department.  The appellant worked out the contract of manufacturing rectified spirit or spirit (country made liquor) in the distillery and wholesale  supply  to  the retail vendors  within  the  area attached  to the distillery. Due to non-cooperation  of  the appellant possession was taken and delivered to the incoming licensee, the respondent, as per rules and the appellant was not  entitled  to restitution. The other  findings  are  not necessary  as  they are not pressed before this  court.  The appellant had given up the reliefs of valuation of the plant and machinery and stock in trade. During the pendency of the appeal  on an application made by the appellant  this  court directed  the state to make over payment of a sum of Rs.  10 lacs  deposited by the respondent with the State  Govt.  and also  further  directed the respondent to deposited  sum  of Rs.5  lacs  in the Registry of this court and  directed  the Registry to keep that amount in fixed deposit to earn inter- est thereon subject to adjustment at the final hearing.     Despite  issuance of several notices by the  department, the appellant did not cooperate in the estimate of the value of the plant and machinery of the distillery and warehouses. the Committee appointed in  terms  of the  conditions of the licence,   fixed  a sum of Rs. 10,53,016.45 as  total  value payable  to  the appellant. Since a sum of Rs. 10  lacs  had already  been paid, the appellant is still entitled  to  the balance amount of Rs.53,016.45.      Sri.  R.F. Nariman, learned counsel for the  appellant, in  his  thorough and analytical arguments based  on  record made a shift in the stand and now contended that on a  read- ing  of several clauses in the licence Ex. P-2, in  particu- lar, clause 50 enjoins the state to fix the valuation of all materials  like buildings, still, machinery, etc.  belonging to  the  appellant as an outgoing licensee; should  be  pur- chased  by the respondent before the expiry of the  contract and commencement of the succeeding contract of the  respond- ent;  the  Committee appointed by the Excise  Department  in this  behalf  should  estimate fair  valuation  and  payment thereto be made to the appellant before taking over  posses- sion  and handing over the plant and machinery of  the  dis- tillery and the attached warehouses to the respondents as  a condition  precedent to dispossess the appellant  and  start the operation of the contract by the respondent which admit-

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tedly were not done. This is in contravention of the  manda- tory conditions of the licence and the rules. The 484 appellant,  therefore,  is entitled to  restitution  of  the plant  and  machinery  of the distillery  and  the  attached warehouses  illegally taken possession of by the  respondent and the state. In support thereof he placed strong  reliance in Godhra Electricity Co. Ltd. & Anr. v. State of Gujarat  & Ors., [1975] 2 SCR 42. He also referred to us in support  of his  contention  various documents. In our view  it  is  not necessary  to  dwelve deep into them. Sri  Ganpule  and  Sri Tarkunde,  the learned senior counsel for the State and  the respondent. contended that the appellant was requested twice to-be present for delivery of the plant and machinery in the distillery  and warehouses to the respondent and due to  its non-cooperation  possession was taken. Even for the  assess- ment  of the valuation, before the expiry of  the  contract. the  appellant  was given several notices requesting  it  to furnish the evidence of the value of the plant and machinery stock  in trade, etc., and due to its  non-cooperation.  the valuation could not be made. Prior valuation and payment are not condition precedent to work out the licence. The  appel- lant has no right to the restitution after the expiry of the licence.  Sri Tarkunde, in particular, emphasised  that  the restitution prayed for became infructuous on account of  the subsequent  events, namely, pursuant to December 1984  Govt. policy  the respondents established their distillery at U  j jain at their own expenses.     The second period of licence also expired in 1991. There was  further change in the policy of the Govt., namely  each District was made a supply area under a separate licence for two  years. Under these circumstances the appellant  is  not entitled  to any reliefs. It is also further contended  that the conditions in the licence in Ex. P-2 marked in the  High Court  should be read harmoniously. It is clear  that  prior fixation  of the valuation and the payment of the  price  is not  a condition precedent. The ratio in Godhra  Electricity Co. Ltd. case is inapplicable to the facts of this case.     The  sole question is whether fixation of the  price  of the  plants and machinery at Ujjain and the  attached  ware- houses and stock in trade and payment thereof to the  appel- lant is a condition precedent to take possession and  deliv- ery  thereof  to the respondent on August 28, 1981.  At  the outset  we may make it clear that, though Sri  Nariman  con- tended  that the grant of licence to the respondent  was  in gross  violation  of  the conditions of the  tender  as  the respondent  did not comply with any of the mandatory  condi- tions stipulated therein and the delivery of the  possession of  the distillery in pursuance of the illegal  contract  is without  jurisdiction, we decline to go into this  question, though prima facie may be plausible to be countenanced,  for the 485 reasons that the grant of licence for the period of 1981  to 1986 to the respondent became final and expired by efflux of time.  It was also contended by Sri Nariman that the  valua- tion  made at Rs. 10,53,0 16.45 was not proper and  contrary to  the  tender’s conditions which stipulated deposit  of  a minimum  of Rs. 19 lacs by the respondent as a condition  to grant  licence, and that, therefore, the appellant is  enti- tled to valuation of at least Rs. 19 lacs. We decline to  go into  that question also since the relief of  valuation  was given up in the High Court. It is also clear from the record that  the  appellant had not cooperated  in  estimating  the value  and the Committee of designated officers, namely  the

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Addl. Collector, the District Excise Officer, Astt.  Commis- sioner  of Excise and Accounts Officers was compelled to  go into  the  question and made an assessment of the  value  on January  5, 1984. That valuation was also not questioned  in the writ petition.     To  find whether it is a condition precedent to fix  the valuation of the plants and machinery of the distillery  and the  warehouses and the stock in trade and  payment  thereof before  taking over possession and handing over the same  to the  incoming licencee, the material clause 50 to be  looked into reads thus:               "All  the  materials  like  buildings,  still,               machinery,  drums,  wood  fuel,  coal,  mahua,               bottling,  machinery,  bottles,  spices,   red               sealing  wax,  coaltar,  pilfer  proof  seals,               crown  corks,  alongwith  alu  capsules,  etc.               belonging  to the outgoing licensee  purchased               for  the  use  of  distillery  and  warehouses               attached  thereto, shall be valued before  the               expiry  of the old contract and the  commence-               ment  of the new one by a committee  appointed               by  the Excise Department in this behalf.  The               committee aforesaid shall be appointed by  the               Excise  Commissioner under the previous  sanc-               tion  of  the  Government  (Separate   Revenue               Department)  and  it  shall  consist  of  five               members,  namely (1) Collector  or  Additional               Collector-convenor, (2) Assistant Commissioner               of Excise of the Division concerned member (3)               Executive   Engineer--Technical  member,   (4)               Accounts     Officer     of     the     Excise               Department--Member, and (5) Representative  of               the licensee--Member. If the representative of               the  licensee remains absent in the  committee               at  the  appointed time,  the  remaining  four               members shall begin their work in his  absence               and  no  objection  of the  licensee  in  this               respect shall be heard. The valuation made and               agreed  upon by the Committee shall  be  sanc-               tioned by the Excise Commis-               486               sioner with such necessary changes as he deems               fit  and  in  case of  difference  of  opinion               amongst  the members, the Excise  Commissioner               shall pass orders relating to disputed  valua-               tion. The orders of Excise Commissioner  shall               be final and binding upon the licensee.                        Note:  The  valuation  of  sanctioned               plant  at  the  warehouses may be  done  by  a               committee consisting of some of the members of               the  above referred committee, subject to  the               orders of the Excise Commissioner, which shall               be final and binding on the licensee.     Prima  facie, if the clause by itself is read in  isola- tion, it would indicate that prior fixation of the value and payment  is a condition precedent. But in our view  all  the conditions of the licence, policy of the Act and Rule of the possession,  manufacture, supply, sale and  distribution  of the rectified spirit or denatured spirit or liquor from  the stage  of manufacture in Distillery till retail sale to  the consumer  be  viewed as an integrated whole  and  the  human behaviour  of the outgoing licensee also has to be  kept  in view.  Any other view would disrupt smooth  transition  from the outgoing to the incoming licensee; hampers the continui- ty of supply and sale of intoxicants and cause collosal loss

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of public revenue. So let us consider the relevant  proposi- tions from this background.     Section 13 of the Act requires a licensee to manufacture intoxicants:               (a) Licence is required for manufacture,  etc.               of intoxicants;               (b)  No  intoxicant shall be  manufactured  or               collected ...........                     (f) No person shall induce, keep in  his               possession  any material............  for  the               purpose  of manufacture of intoxicants,  other               than  tari,  except under  the  authority  and               subject  to  the terms and conditions  of  the               licence granted in that behalf.               Section 14 provides that:                     (a)  establish  a  distillery  in  which               spirit  may  be  manufactured  under   licence               granted under s. 13 on such conditions as  the               Govt. may impose......               487                     (C)  license on such conditions  as  the               State  Govt. may impose the  construction  and               working of the distillery and brewery;                     (c)  establish  or  licence   warehouses               wherein  any intoxicant may be  deposited  and               kept  without  payment  of  duty,  subject  to               payment  of  such fee as the State  Govt.  may               direct.....     Section 17 provides inter alia that no intoxicant  shall be sold except under the authority and subject to the  terms and conditions of licence granted in that behalf. Thus  it  is clear that establishment of a distillery  or  a warehouse; manufacture of intoxicants, spirit (country  made liquor),  the possession and distribution and  sale  thereof are regulated under the Act.     The  Govt. in exercise of its power under s. 62  of  the Act  made rules regulating the control of  distilleries  and warehouses by Officers of the Excise Department,  especially appointed  by  the  Excise Commissioner  for  that  purpose. Therefore, any licensee, under the Act and the Rules, be  it incoming  or outgoing, should have D-2 and D-I licences  for establishment  of distillery and warehouses,  possession  of raw materials, manufacture of liquor or rectified spirit  or denatured  spirit  and supply to the retail vendors  of  the area  attached to the distillery. Any infraction is  an  of- fence.     It  is  settled law by several decisions of  this  court that there is no fundamental right to a citizen to carry  on trade or business in liquor. The state under its  regulatory power, has power to prohibit absolutely any form of activity in  relation to an intoxicant, its manufacture,  possession, import  and export. No-one can claim, as against the  state, the right to carry on trade or business in any  intoxicants, nor the state be compelled to part with its exclusive  right or  privilege of manufacture, sale, storage of liquor.  Fur- ther  when the state has decided to part with such right  or privilege to the others, then state can regulate  consistent with the principles of equality enshrined under Art. 14  and any infraction in this behalf at its pleasure are  arbitrary violating  Article  14. Therefore, the  exclusive  right  or privilege  of manufacture, storage, sale, import and  export of the liquor through any agency other than the state  would be subject to rigour of Article 14. Vide Har Shankar &  Ors. v.  Dy. Excise & Taxation Commissioner & Ors., [1975] 2  SCR

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254 and State of M. P.v. Nandial Jaiswal., [1987] 1 SCR 1. 488     When the state was dealing with the grant of the  privi- lege of establishing or manufacturing intoxicants, rectified spirit or denatured spirit, spirit (country made liquor)  in a  distillery owned or regulated by it, and invites  tenders in this regard it should conform to the rigour of Art. 14 of the  Constitution. Admittedly, the licence of the  appellant expired on March 31, 1981 and thereafter it had no right  to manufacture and store at distillery in Ujjain and  distribu- tion  as  wholesaler  of the country made  liquor  from  the attached  warehouses to the retail vendors within that  area granted  to the respondent. But for the stay granted by  the High Court the operation of the respondent’s licence was  to begin  on April 1,198 1. The outgoing licensee,  the  appel- lant,  had to hand it over to the respondent on  that  date. The conditions in the licence P-2 postulate of mutual rights and  obligations between the outgoing licensee to  sell  and the incoming licensee to purchase the plant and machinery of the distillery, stock in trade and also the machinery in the warehouse  including the apparatus, etc. enumerated  in  the conditions  either  at the price fixed  or  agreed  directly between the parties or fixed by the committee of the  desig- nated  officers. In case of any difference in the  valuation between  the members, the Commissioner of the Excise or  the State  Govt. would fix the valuation, which was made  final. The  Committee designated was to be constituted  with  prior approval  of the Govt. as per condition 50 to  evaluate  the plant  and machinery of the distillery and some of  them  of the warehouses. Outgoing licensee also is entitled to repre- sent  in the Committee. On his non-cooperation the  rest  of the four members of the Committee are empowered to determine the value.     Clause  23(iii)  provides that any dispute  relating  to valuation  of the sanctioned plant shall be referred to  the State  Government and the decision of the State Govt.  shall be final and binding on the parties to the dispute. Clause 2 thereof  refers that the licensee shall made over  the  said distillery  and warehouses buildings on the  termination  of the  licence in as good condition as they were at  the  com- mencement hereof excluding reasonable wear and tear.  Clause 36(4)  provides  that any dispute relating to  the  sale  of spirit  or  plant by the licensee or the  valuation  of  the plant shall be referred to the State Govt. and the  decision of the State Govt. shall be final and binding. Clause  39(1) in particular, mentions that at the commencement of the term of this licence, the licensee shall buy all sanctioned plant at the U j jain distillery including spare parts, furniture, motor  trucks  and fittings at a price to be  fixed  by  the State  Government.  Licensee  shall pay  the  price  thereof within  30 days of the communication. Similarly, clause  41, 42(1) and clause 44 provide that the incoming licensee shall take on lease all 489 other  buildings  structures attached to the  distillery  at Ujjain  on  such conditions and terms as  per  Public  Works Department  Manual Vol. II within a period of one  month  of the  intimation of the acceptance of the tender. Then  comes clause  50 quoted hereinabove. The incoming  licensee  shall make  payment within 30 days from the date of  communication of the value.     Therefore, the courts should adopt realism,  pragmatism, practicality and the purpose envisaged under the Act and the rules in construing the relevant clauses in the licence. The purpose of the Act the rules made therein is to regulate the

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manufacture, distribution sale of the intoxicants, rectified spirit or denatured spirit, liquor, sale to consumers within the  state  of  Madhya Pradesh. It is an  on  going  process conducted through the licensing system, an exclusive  privi- lege  of the state through the licences granted  under  form D-1  and D-2 in this behalf. The duration of the licence  is fixed  one. On expiry of the licence the  outgoing  licensee shall be bound to handover the distillery plant and  machin- ery  therein, and warehouses attached thereto, the stock  in trade  and other apparatus and goods used for  the  manufac- ture,  storage and distribution. The outgoing contractor  is entitled  continue his business activity till the last  date of  the  licence, namely March 31, of the ending  year.  The succeeding  licensee would take over the business  from  the outgoing  licensee on April 1 of the year of  licence.  Thus there  should be no hiatus between taking over  and  handing over  the manufacture, possession. storage of the  wholesale business  of the spirit (country made liquor)  or  rectified spirit  or  denatured spirit. Under these  circumstances  it will well-nigh be impossible to assess the valuation of  the entire stock in trade or plant and machinery in the distill- ery  or the warehouses till the last date. In  addition  the cooperation  of the outgoing licensee is also necessary  and expected as he would be in possesssion of the records of the previous  purchases of the materials, or plant or  machinery if  any  new additions are made etc. Unless  they  are  made available,  it  is not possible to assess  the  value  after giving  due  rebate or depreciation, etc.  to  the  incoming licensee.  The human nature and conduct would be  such  that the  outgoing  licensee, being  the  unsuccessful  tenderer, would  not cooperate in handing over possession of the  dis- tillery and stock in trade and would approach the High Court under Art. 226 of the Constitution as was done in this case. The  incoming  licensee has time of thirty days in  case  of stock  in  trade or three months in the case  of  plant  and machinery  from the date of communication to him to pay  the value to the outgoing licensee. Keeping those  circumstances at  the  back of our mind we decline  to  adopt  lexographic strict construction of clause 50 which 490 would  thwart continuity; create hiatus in smooth  operation of  manufacture,  storage,  distribution and  sales  of  the intoxicants.  Moreover, after the assessment is made and  in case  of any difference of opinion in the valuation  or  the outgoing  licensee  claims higher value  the  final  arbiter would be in some cases like stock in trade, the Commissioner of  Excise and in case of plant and machinery or  warehouses the  State Govt. After the decision of the  Commissioner  or the  State Government, it shall be communicated to the  suc- ceeding licensee, who has been given maximum period of three months  to  make payment to the outgoing  licensee.  In  the light of the scheme of valuation of the plant and  machinery of  the distillery, or the apparatus in the  warehouses  and the  stock in trade, we hold that strict construction  would lead  to innumerable complications and loss of public  reve- nue.  We are inclined to hold that before the expiry of  the licence, if the outgoing licensee cooperates, the value  can be fixed with consensus, payment should also be made  within the  time  stipulated. In all other cases it could  be  done even  after  the expiry of the stipulated  period.  In  that perspective we have no hesitation to hold that prior  valua- tion  of  plant and machinery in the  distillery,  stock  in trade  therein  or the value of the machinery in  the  ware- houses  and stock of the liquor stored therein  and  payment thereof  before taking possession and handing them  over  to

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the  incoming licensee is not a mandatory, nor  a  condition precedent. Therefore, taking over possession from the appel- lant  on  August  28, 1981 and handing over  the  plant  and machinery, etc. to the respondent is not illegal.     Undoubtedly this court, in Godhra Electricity case  held that  it is mandatory that a person who is deprived  of  his property, before its taking over, the value should be  esti- mated  and the payment made or else it is illegal.  But  the ratio would be considered in the light of the setting there- in. The licence granted under s. 6 of the Indian Electricity Act.  1910 as amended in 1959 to produce  electrical  energy was acquired by the Electricity Board. Section 6(6) provides that where a notice exercising the option of purchasing  the undertaking  has been served upon the licence, the  licensee shall deliver the undertaking to the State Electricity Board on expiry of the relevant period referred to in s. 6(1).  In that  case the constitutional validity of s. 6(6) was  ques- tioned which did not provide for payment before taking  over of the undertaking as offending Article 19(1)(f) and (g) and Art. 14 of the constitution. While considering the constitu- tional  validity of s. 6(6) this court held  that  valuation and  payment is a condition precedent since the Act did  not envisage any payment of interest subsequent thereto. Accord- ingly this court directed redelivery of the undertaking 491 to  the licensee subject to follow the procedure as per  law laid down therein. In this case admittedly the conditions of licence  are not questioned, but expressly given up  in  the High Court. Even before us the validity of the valuation has not  been questioned. It cannot cut the branch on which  the appellant sits to assail the constitutional validity of  the conditions of the licence. Accordingly we have no hesitation to  hold that the appellant is not entitled to the  restitu- tion of the plant and machinery of the distillery at  Ujjain and the attached warehouses.     The appellant though claimed that the value of the plant and machinery was too low, contrary ’to the specification in this behalf in tender condition and though we decline to  go into  the question, the appellant appeared to  have  smarted under apprehension that it had to face the plea of  acquies- cence, if it were to cooperate earlier. So it is open to the appellant  to  make a representation to the  Govt.  and  any officer  not below a Secretary preferably of  the  concerned Department would go into the matter and decide the value  as per  the material on record. It is open to the appellant  to place all its material. It is also open to the respondent to place  its material and the authority would  consider  after giving  an opportunity of hearing through counsel, if  asked for,  and decide the value accordingly. As  regards  deposit now  made  in the Registry of this Court,  the  Registry  is directed to make payment of a sum of Rs.53,016.45 and inter- est accrued thereon to the appellant and the balance  amount and  the interest accrued on the residual to the  respondent and  the  respondent’s  liability would be  subject  to  the decision by the Secretary as indicated in the judgment.  The appeal is accordingly allowed to the above extent and  since the  appellant substantially failed there would be no  order as to costs. Y.L.                                          Appeal  partly allowed. 492