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PETITIONER: STATE OF BIHAR & ORS. ETC. ETC.

       Vs.

RESPONDENT: BIHAR DISTILLERY LTD. ETC. ETC.

DATE OF JUDGMENT:       03/12/1996

BENCH: B.P. JEEVAN REDDY, K.S. PARIPOORNAN

ACT:

HEADNOTE:

JUDGMENT:                The BRD DAY OF DECEMBER, 1996 Present:             Hon’ble Mr. Justice B.P. Jeevan Reddy             Hon’ble Mr. Justice K.S. Paripoornan      S.B. Sanyal, Sr. Adv. and B.B. Singh, Adv. with him for the appellants.      Y.V. Giri,  Sr. Adv., Jyoti Saran, Praveen Kumar, Advs. with him for the Respondents.                       J U D G M E N T      The following Judgment of the Court was delivered:                       J U D G M E N T      B.P. JEEVAN REDDY, J.      Leave granted.      The distribution  and sale  of country  liquor  in  the State of  Bihar is  regulated by  the Bihar Excise Act, 1915 and the rules made thereunder. It was a two-tier system. The wholesale dealers (contractors) were lifting the liquor from the distilleries and supplying it to the retailers. Both the wholesale dealers  and retailers  were selected on the basis of auction/tender  process. The price at which the wholesale supplied the  country  liquor  from  the  warehouse  to  the retailer was  fixed by  the Government either statutorily or on  the   basis  of  negotiations  between  the  wholesalers (contractors) and  the Government.  The price  so determined was known  as the  cost price  of country  liquor which  was payable by  the retailer at the time of taking delivery from the concerned  warehouse. The  maintenance of  warehouse was the responsibility of the wholesale supplier (Contractor).      In the  year 1989,  a batch of writ petitions, C.W.J.C. No. 4722  of 1989  and others,  were filed in the Patna High Court. The  High Court  made interim  orders in  those  writ petitions directing  that till  the contract  is settled and until further  orders from  the Court, the supply of country liquor to  the retailers shall be made directly by the State through its  officers.  In  view  of  the  said  orders  the Government was  obliged to  undertake the  supply of country liquor  from   the  warehouses   maintained  by  it  to  the retailers. Even  after the said batch of writ petitions were disposed of,  the practice  of  the  Government  undertaking wholesale supply  of country  liquor to  retailers continued

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for some time. This happened during the period commencing on July 1,  1989, and  ending with March 31, 1992. (These facts are taken  from the  preamble to  the impugned Amendment Act being Bihar Act 9 of 1995.)      On December  15, 1989,  a meeting  was held between the Excise Officers  of the State and the representatives of the distilleries  to   determine  the   cost  price  of  country spirit/liquor.  The   representatives  of  the  distilleries pleaded that since the cost of price of rectified spirit has been increased  by  the  Government  of  India  under  Ethyl Alcohol (Price  Control) Order,  the cost  price of  country liquor should  also be  increased. They also pleaded that in view of  the levy  of sales  tax at  the rate  of 16% on the rectified spirit  earmarked for  country spirit/liquor, with effect from  December 1,  1989, and  the rise in price index over the  years, the  cost price of country liquor should be enhanced. The  Government side  at the  said meeting  agreed that in  view of  the enhancement  of  the  price  of  ethyl alcohol and  levy of sales tax on rectified spirit and other incidentals, the  price of  country-liquor  deserves  to  be enhanced. The  last para of the minutes of the meeting reads thus:      "As    per    discussion    between      representatives of  the  Distillers      and  Departmental  representatives,      the  Member,   Board   of   Revenue      suggested  certain  components  for      proper consideration  and  fixation      of  cost   price   of   spirit   by      following ways:......"      On February  19, 1990  the Excise  Commissioner,  Bihar addressed a  letter to  all the distilleries fixing the cost price of  country  liquor.  having  regard  to  the  crucial relevance of  this letter it would be appropriate to extract the letter in full.      "Patna, dated 19th February, 1990      Sub:   Meeting    between    Excise      Officers  and   representatives  of      Distilleries on 15.12.1989 presided      by  Member,   Board   of   Revenue:      regarding refixation  of cost price      of country spirit/liquor. Sir,      Your attention is drawn towards the      subject noted  above, and  to state      that the  Government  has  taken  a      decision to  fix the  cost price of      rectified spirit  to be supplied as      country  spirit/liquor   from   the      country  spirit   warehouses   with      immediate effect  @ Rs.3.42 (Rupees      three and paise forty-two only) for      L.P.     Litre     by     following      components:-      (i) Cost of spirit           Rs.1.72 per L.P.L.      (ii) Transport/Working           Wastage, etc.           Rs.0.08 -do-      (iii) Sales Tax              Rs.0.27 -do-      (iv) Transportation      Charges of spirit            Rs.0.45 -do-      (v) Maintenance charge      of spirit/liquor warehouses      (expenses on coolies wages/      house-rent/electric charges/      expenses on communications/

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    Water taxes, etc.)           Rs.0.70 -do-      (vi) Dividend                Rs.0.20 -do-                     Total:        Rs.3.42 per L.P.L.      (Rupees three and paise forty-two only) 2.   If you are ready to supply the rectified spirit/ to the country spirit/liquor  Warehouses  from  your  distilleries, then please  give your  written consent at once accordingly. Thereafter necessary  orders will  be issued,  so  that  the payment be made after recovery from the retail vendors.                Yours faithfully,                Sd/-Illegible                (Mehesh Prasad)      Excise Commissioner, Bihar, Patna"<slc>      (The break-up  of the  cost price  of Rs.3.42 paise per L.P.L. mentioned  in the  above letter  is the very break-up which is  said to  have been  mentioned at  the end  of  the Minutes of the Meeting dated 15.12.1989.)      This letter  shows that  pursuant to the discussion and negotiations held  at the  meeting held  on  15th  December, 1989, the  Government fixed  the cost  price  of  "rectified spirit to  be supplied  as country  spirit/liquor  from  the country spirit  warehouses" at  Rs.3.42 paise per L.P.L. The break-up of  the said price was also mentioned in the letter which includes,  "maintenance charge  of  spirit/liquor  are houses  (expenses   on   coolies   wages/house-rent/electric charges/expenses on  communications/water taxes,  etc.)"  at Rs.0.70 paise per L.P.L.      On 20th  February, 1990  the  Commissioner  of  Excise, Bihar intimated  all the  Collectors/Deputy Commissioners of the State  about the  said fixation of the price. The letter reads:      "Patna - Dated 20th February, 1990      Sub:  Fixation of the Cost Price of      Country   Liquor    supplied   from      Warehouses Dear Sirs,      With regard  to the  subject stated      above  I   have  been  directed  to      inform   you    that   the   matter      regarding  fixation   of  the  Cost      Price of  Country  liquor  supplied      form    Warehouses     was    under      consideration  of  the  Government.      After  thorough   discussions,  the      State Government  decided that  the      cost price  of the  Country  Liquor      supplied from  the Warehouses shall      be fixed  at Rs.3.42  (Rupees Three      and paise  forty two only) per L.P.      Litre. This  cost price  of Country      Liquor will  be collected  from the      retail vendors  of  Country  liquor      from the  date  of  issue  of  this      order.      As per  Board  Notification  No.23-      17/89-5,  dated  19.12.89  for  the      amendment  in   Clause  No.  15  of      Licence Form  No.  27,  a  separate      order is  being sent  to  the  non-      contracted distilleries for payment      of the  aforementioned  Cost  price      for their  supply of  Spirit to the      Warehouses   for   manufacture   of      Country Liquor.                Yours faithfully,

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                   Sd/-                  Illegible      Commissioner of Excise, Bihar"<slc>      Evidently, supplies were being made by the distilleries as per the letter dated 19th February, 1990.      On 26th  July, 1990,  the  Excise  Commissioner,  Bihar addressed   a    letter   to   all   the   Collectors/Deputy Commissioners in the State directing them to deduct 70 paise per L.P.L.  from the  cost price  of Rs.342 paise per L.P.L. and remit it to the Government account. para 2 of the letter which alone is relevant reads thus:      "2. In  this context,  this  is  to      state that  the earmarked component      for   meeting   the   expenses   of      maintenance  of   warehouses   e.g.      wages to  coolies  (engaged  n  the      warehouses),  house-rent   etc.  be      deposited under budget head - "8433      -  Civil  deposit  -  800  -  other      deposit -  cost  price  of  country      spirit/liquor, ganja,  etc."  after      recovering  from   distilleries  or      deducting  @   Rs.0.70  paise   per      L.P.L.   form    the   cost   price      (Rs.3.42)   so    fixed   for   the      rectified spirit which is meant for      country   spirit/liquor    to    be      supplied from  the  country  spirit      warehouses.   Payment    for    the      expenditure on day-to-day expenses,      e.g. wages  to coolies, electricity      charges,        expenses         on      communications, water  supply  tax,      etc. has  to be  made  twice  in  a      month from  the  deposited  sum  by      withdrawing the  same as  per  need      and its  account has  to be kept as      per   rule.    Payment   for    the      maintenance of the warehouses, e.g.      house-rent,  construction   of  the      building,  erection  of  the  Vats,      etc. shall  be made  by withdrawing      from  the   balanced  amount  after      obtaining sanction  order from  the      Excise Commissioner and its account      of  such  expenses  shall  be  kept      separately."      Until the  receipt of  the Commissioner’s  letter dated 26th July,  1990, the  distilleries were  being paid  at the rate of  Rs.3.42 paise per L.P.L. for the spirit supplied by them. On  receipt of  the said  letter the Collectors/Deputy Commissioners not only started deducting 0.70 paise from the price payable  to the  distilleries but also called upon the distilleries to  refund the  excess amount  paid to  them on that account.  The  distilleries  thereupon  approached  the Patna High  Court by  way  of  a  batch  of  writ  petitions challenging the  communication/letter of the Commissioner of Excise, Bihar  dated 26th  July, 1990 and the communications issued pursuant  to  it.  The  distilleries  submitted  that though they  demanded the  cost price of Rs.4.00 per L.P.L., the State  Government on  its own fixed the price at Rs.3.42 paise per  L.P.L. as  per their  letter dated 20th February, 1990. They  submitted that  the distilleries are entitled to receive at  least the  said cost  price of Rs.3.42 paise, if not more.  They submitted  that they  are not concerned with

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the maintenance of warehouses which is the responsibility of the Government  and that  no amount can be deducted from out of  the  said  cost  price  on  account  of  maintenance  of warehouses.  The   Government  opposed  the  writ  petitions submitting that  the aforesaid  cost price  was fixed in the joint meeting  held on  15th December,  1989, that  the writ petitioners were  party to  the said  decision including the break-up of  the said  cost price  and that, therefore, they are not justified in opposing the deduction of 0.70 paise on account of  the maintenance  charges of  the warehouses. The High Court  allowed the  writ  petitions  on  the  following reasoning; under  Section 90(2) of the Bihar Excise Act, the Board of  Revenue is  given the  power to  fix  maximum  and minimum price of country liquor but the Board has not chosen to excise that power; instead of doing that the Commissioner of Excise  has chosen to issue Annexures 5,6 and 7 (Annexure 5 is the communication dated 26.7.1990 and Annexures 6 and 7 are  the   consequential  directions/demands   made  by  the Superintendents of Excise); the Commissioner "cannot be said to have  exercised the  jurisdiction, if  any, vested in the Board of  Revenue."* Annexures  5 to 7 are not backed by any authority of  law and  are therefore,  unforceable. The High Court  quashed   the  said  orders/communications  with  the observation that  "the Government  or the respondents cannot force the  petitioners for  the refund of the amount already paid to the petitioner and as a logical conclusion, they are bound to  carry out  the obligations  created earlier by the interim orders of the said Court."      For some  unexplained reasons,  the Government of Bihar and its  Officials did not choose to appeal against the said judgment,  with   the  result  the  judgment  became  final. Contempt  petitions  were  taken  out  by  the  distilleries against the Government and its Officials for disobedience to the judgment  of the  High Curt.  The Governor of Bihar then came forward with an Ordinance amending the Bihar Excise Act seeking to  provide statutory  basis to  the aforesaid price fixation and  the deduction  of 70 paise per L.P.L. In other words, the  Governor of  Bihar sought  to remove  the defect pointed out  by the High Court viz., that the price fixation by the  Commissioner was  without jurisdiction and that that power belonged  to the  Board of  Revenue alone. By amending the Act  itself, the  Ordinance sought  to validate the saio price fixation by treating it as fixation by the Legislative itself. It  is stated  that one  after the other, ordinances were issued  to the  same effect, until the enactment of the Bihar Excise  (Amendment and Validating) Act, 1995 being Act 9 of  1995 in  the same  terms. The  Amending Act  was given retrospective effect  from 20th  February,  1990.  The  long Preamble to  the Amending  Act sets out the circumstances in which the  Government was  obliged to  undertake  supply  of country liquor  from the  warehouses pursuant to the interim orders of  the High  Court, the  fixation of  cost price  of country liquor  at Rs.3.42  paise per  L.P.L.  by  agreement between the government and the distilleries, the break-up of the price  into  several  components  and  the  developments leading to  the enactment of the Amending Act. Having regard to the contentions urged before us and the findings recorded by the High Court in the order under Appeal, it is necessary to set out the entire Preamble to the Act. It reads:      "Preamble.-    WHEREAS,    it    is      necessary in  public interest  that      out of  the cost  price of  Country      Spirit   the    amount   of   money      earmarked for  the  maintenance  of      warehouse be regulated;

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    AND, WHEREAS,  the price of country      spirit  to   be  supplied   to  the      retailer    by    the    Contractor      (Wholesale   supplier)   from   the      Warehouse    belonging    to    the      Contractor or  the State or another      person, is  fixed by the Government      of   Bihar,   on   the   basis   of      negotiations between the Contractor      and the  Government and  such price      being known  as the  cost price  of      country  spirit   payable  by   the      retailer at  the time  of taking or      issue of  Country liquor  from  the      warehouse concerned;      AND,  WHEREAS,   as  a   regulatory      measure    the    maintenance    of      warehouse is  the responsibility of      the contractor;      AND, WHEREAS,  in the  year 1989 in      C.W.J.C. No.4722  of 1989 and other      similar  cases  a  situation  arose      whereby and  whereunder  the  Patna      High  Court   ordered   that   till      contract  is   settled   and   till      further order  from the  Court, the      supply of  country liquor  shall be      made to  the retailers  directly by      the State through its Officers:      AND, WHEREAS,  in pursuance  to the      said direction  the country  liquor      had to  be supplied  from different      warehouses situated  in the  State,      by the State Government through its      Officers:      AND, WHEREAS, after the Final Order      of the  High  Court  in  the  above      writs  in   the   year   1990   the      situation emerged  that in  certain      areas of  the State  the supply  of      country  liquor  to  the  retailers      continued to  be made  by the State      Government through its Officers due      to non-functioning of the concerned      Contractors;      AND, WHEREAS,  during  this  period      the warehouses  were required to be      maintained by the State;      AND, WHEREAS,  in fixing  the price      of country liquor to be supplied by      the  Contractor  holding  exclusive      privilege   licence    the    State      Government had  taken into  account      the cost  of spirit,  the  cost  of      transportation of  such spirit, the      cost of  maintenance of warehouses,      sales tax and dividend;      AND,  WHEREAS,   while  fixing  the      price  of   country  liquor  to  be      supplied  to   the  retailer,   the      following components  of cost  were      included in the cost price:-                                Rs.      Costofspirit              1.72      Transit/Working wastages  0.08

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    Warehouse maintenance charges 0.70      Transportation  charges    0.45      Sales Tax ..               0.27      Dividend...                0.20       Total       ..            3.42      AND, WHEREAS,  in February 1990 the      Government had decided that country      spirit would  be  supplied  at  the      rate  of  Rs.3.42  per  L.P.  Litre      which  include   Rs.0.70  Per  L.P.      Litre  as   maintenance  charge  of      warehouses;      AND, WHEREAS,  the amount deposited      by  the   retailers  as   price  of      country spirit  was to be deposited      in Treasury  through Bank draft and      thereafter      the      Distillers      (Suppliers) were  to  be  paid  the      amount  after   deduction  of   the      component  of   price   meant   for      maintenance of  warehouse, that  is      Rs.3.42-0.70 = 4 Rs.2.72;      AND,  WHEREAS,  in  some  cases  by      mistake  the   entire   amount   of      Rs.3.42 was  paid to the Distillers      (Suppliers);      AND,   WHEREAS,    some   of    the      Distillers  (Suppliers)  challenged      the   authority    of   the   State      regarding  deduction  of  warehouse      maintenance charges  from the  cost      price fixed  for supply  of country      spirit to warehouses;      AND,  WHEREAS,   in  C.W.J.C.   no.      6863/90 and  in other  similar writ      petitions the  Court held  that  in      the  absence  of  Rules  the  State      Government is not authorised to fix      the price  of country spirit and to      make deductions  of maintenance  of      warehouse charges therefrom;      AND,   WHEREAS,   it   has   become      necessary to  levy and validate the      deduction/realisation of  warehouse      maintenance charges  from the  cost      price of  the country  spirit fixed      by the State in the year 1990;      BE it enacted by the Legislature of      the State  of Bihar  in  the  forty      sixth year of the Republic of India      as follows.      Section 2 of the Amending Act added Section 22-A to the Excise Act.  Section 22-B  contains  the  validation  clause while Section  22-C gives  overriding effect to the Amending Act over  any judgment, decree and order of the Court or any other law  for the  time being  in force.  The said Sections read as follows:      "22-A. The  Fixation of  cost price      of country  liquor,  by  the  State      Government.-  (1)        The  State      Government,     while      granting      exclusive       privilege        of      manufacturing  supplying  wholesale      or of  selling wholesale  or retail      of country  liquor may fix the cost

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    price which  includes the  price of      the  spirit,   the   transportation      charges,   warehouse    maintenance      charges, taxes,  if any,  and other      charges, such  as bottling, packing      etc. and dividend.      (2) Any  person to  whom the  State      Government  has  granted  exclusive      privilege     of     manufacturing,      supplying  wholesale   or   selling      wholesale or  retail country liquor      during the  year 1990  wherein  the      cost price  of the  country  liquor      was fixed  by the  State Government      taking  different  components  into      account     including     warehouse      maintenance charges  at the rate of      70 paise  per L.P.  Litre shall  be      deemed to  have  been  fixed  under      this Section.      22-B. Validating  of cost  price of      country liquor  and realisation  of      warehouse maintenance charges.- (1)      Notwithstanding    any    judgment,      decree  or   order  of  any  court,      Tribunal or  Authority the price of      country   spirit,   including   the      warehouse  maintenance  charges  at      the rate of 70 paise per L.P. Litre      fixed during the year 1990 shall be      deemed to  have  been  fixed  under      this Act  and any  amount collected      from the  retailer as  a cost price      of country  liquor per  L.P.  Litre      shall be  paid to or payable to the      Contractor     (Distiller/Supplier)      after deducting  at the  rate of 70      paise  per   L.P.  Litre   as   the      maintenance    charges    of    the      warehouses  and   the  said  amount      shall not  be payable  and the said      amount shall  not be payable to the      Contractor (Distiller/Supplier).      (2) The  amount so  collected shall      be deemed  to have  been  collected      under the provision of this Act and      the  said   amount   of   warehouse      maintenance charges  shall  not  be      refundable and  no Court,  Tribunal      or Authority shall order for refund      of such amount;      Provided  that   where  the  amount      collected  from  the  retailer  has      been   paid   to   the   Contractor      (Distiller)/Supplier,   the   State      Government   shall   realise   such      amount form the Contractor shall be      required to  refund the said amount      to the State Government;      Provided further,  that  the  State      Government  may  adjust,  the  said      amounts from  any amounts  from any      amount  due   or  payable   to  the      Contractor by the Government;      Provided also  that the said amount

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    shall be  spent by  orders  of  the      Excise      Commissioner      under      administrative instructions  issued      for the maintenance of warehouses;      Provided  further  also,  that  any      amount  realised   on  account   of      warehouse maintenance  charges  but      refunded to the supplier, under the      order of  any  Court,  Tribunal  or      Authority shall  be refunded by the      Supplier and  the State  Government      shall recover  the  same  from  the      Contractor (Distiller)/Supplier  as      arrears of revenue.      22-C.  Overriding   effect  of  the      Act.- Notwithstanding  anything tot      he  contrary   contained   in   any      judgment, decree or order passed by      any Court  and in any other law for      the  time   being  in   force,  the      provisions of  this Act  shall have      the effect."                     (emphasis supplied)      The portions  underlined by  us clearly bring about the scope and  intendment of  the Amending Act. To repeat, it is to vest  the price  fixation done  by  the  Commissioner  of Excise, under his letters dated 17th and 20th February, 1990 with the  legislative  authority;  that  fixation  shall  be deemed to have been done by the Legislature itself.      Another batch  of  writ  petitions  was  filed  by  the distilleries challenging  the validity  of the Ordinance and the Amending  Act. This  batch of  writ petitions  have also been allowed  by the Patna High Court under the judgment and order impugned  herein. The  basis upon which the High Court has  allowed  the  writ  petitions,  without  declaring  the Amending Act  as invalid,  is better  set out  in their  own words. The High Court said:      "12.  It   will  be   evident  from      Section  22-A  aforesaid  that  the      same relates to manufacture/sale of      ‘country liquor’. So far as Section      22-B  is   concerned,  therein  the      words  ‘country  liquor’  have  not      been  mentioned,   nor  the   words      ‘rectified       spirit’/Commercial      spirit’ has  been mentioned, rather      the  ‘country   spirit’  has   been      mentioned therein.  When query  was      made  from   the  learned  Advocate      General, as  to  what  is  ‘country      spirits’, learned  Advocate General      submitted  that  the  same  is,  in      fact,  ‘country   liquor’  and  not      ‘rectified spirit’  from which  the      ‘country liquor’  is  prepared.  It      was accepted  at  the  Bar  by  the      learned Advocate  General that  the      Hindi version  of the  Act 9/95  is      the original one, wherein the words      ‘DESHI SARAB’  has been  mentioned,      which means  ‘country  liquor’  and      not the rectified spirit.      13.  From   the   aforesaid   plain      reading of  the provisions  of  Act      9/95,   particularly,   the   Hindi

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    version, it  will be  manifest  and      clear that  the Act in question has      been promulgated  with  respect  to      the    manufacturers/dealers     of      ‘country liquor’.  No provision has      been laid down therein with respect      to   manufactures   of   ‘rectified      spirit’/commercial  spirit’,  which      is  the   original   raw   material      manufactured by the petitioners and      supplied  to  the  Respondents.  No      rate has  been fixed  by the  State      Government  with  respect  to  such      ‘rectified spirit’  be the impugned      Act 9/95 and/or earlier ordinances.      Thereby, I  hold that  the impugned      Act 9/95  is not  applicable to the      petitioners,      who      supplied      ‘rectified spirit’  to the State in      their Warehouses.      It is  for  the  said  reason,  the      question of  declaring the impugned      Act as ultra  vires does not arise,      in  the   present  case,   and  for      similar   reason,   there   is   no      necessity of  giving  any  specific      finding with  respect to  the first      three issues  raised by the counsel      for the petitioners."      The High Court also made certain observations as to the quantity of  the rectified  spirit required  for obtaining 1 L.P.L. of  country liquor, the cost structure of the country liquor as  well as  to the absence of the power in the State to fix the price of rectified spirit.      Mr. S.B.  Sanyal, the  learned counsel for the State of Bihar assailed  the judgment  of the  High Court  on various grounds. He  submitted that  since the  warehouses belong to and are  maintained  by  the  State  Government,  the  State Government was  fully justified  in seeking  to deduct  0.70 paise  per   L.P.L.  on   account  of   the  maintenance  of warehouses. Counsel  submitted that the break-up of the cost price of  the country  liquor was  agreed to between the two parties and  that one  of the  components of  the said  cost price was  the item  of 0.70  paise per L.P.L. on account of maintenance charges  of warehouses,  which fixation  has now been validated  by the  Amending  Act  removing  the  defect pointed out by the High Court in its first judgment. In this view of  the matter,  he submitted,  the distilleries cannot legitimately resist  the deduction  of 0.70  paise.  Counsel submitted that the High Court has not really appreciated the true nature  and character of the price fixation done by the Commissioner of  Excise and the amending Act and has allowed the writ  petitions adopting a highly technical approach and on a totally erroneous basis. Mr. Y.V. Giri, learned counsel for the  respondents distilleries,  however,  supported  the reasoning and  conclusion of  the High  Court. He  submitted that the  distilleries have nothing to do with the supply of country liquor  to the  retailers.  According  to  him,  the distilleries manufacture  only the rectified spirit and that alone is  sold by  them to the Government. Counsel submitted that for  obtaining one litre of country liquor, 1/4th litre of rectified  spirit is  required  and  that  the  price  of Rs.3.42  paise  per  L.P.L.  represents  the  cost  of  said quantity of  rectified spirit required for obtaining 1 litre of  country  spirit  and  that,  therefore,  the  claim  for

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deduction of 0.70 paise on account of maintenance charges is wholly untenable  and illegal.  Counsel submitted  that  the distilleries have  nothing  with  the  warehouses  or  their maintenance which  was the  responsibility of the Government during the relevant period. The cost of 1 litre of rectified spirit,  he  submitted,  is  much  more  than  Rs.4.00  and, therefore,  the  distilleries  cannot  be  asked  to  supply country liquor  at the  rate of  Rs.2.72 per  L.P.L.  (i.e., Rs.3.42 minus  70 paise). The learned counsel submitted that there was  no agreement  between the  distilleries  and  the Government with  respect to  the price  of country liquor at the joint meeting held by 15.12.89 and that the distilleries were unaware of the Commissioner’s letter dated 19.2.1990 as well  as   the  Commissioner’s   communication  dated   20th February, 1990 referred to above.      We have already set out the substance of the minutes of the meeting  held on  15.12.89,  the  letter  dated  19.2.90 (which was  issued on  the basis  of the discussions held at the  said   meeting)  as  well  as  to  the  letter  of  the Commissioner dated 20.2.90. The minutes of the meeting dated 15th, December,  1989 speak of fixation of the cost price of country liquor.  The letter dated 19th February, 1990 speaks of "cost price of rectified spirit to be supplied as country spirit/liquor from  the country spirit warehouses" while the letter dated  20th February,  1990 speaks  of "cost price of country liquor supplied from the warehouses." This mix up of the expressions  of "rectified  spirit  to  be  supplied  as country spirit/liquor"  and "country  liquor"  in  the  said proceedings/letters may  perhaps be  for the reason that all that it  takes to  convert the rectified spirit into country spirit, it  is said, is adding of water to rectified spirit. May be or may not be. That is not material for our purposes. What is  material is  that the  price of  Rs.3.42 per L.P.L. said to  have been  agreed upon  at the meeting held on 15th December, 1989,  and referred  to in  the said  letters  and which cost  price has  now been legislatively validated, all give the  break-up of  the said  price  which  includes  the figure of  70 paise  per L.P.L.  on  account  of  "warehouse maintenance charges".  Now, it  is admitted  - indeed, it is the positive  case of  Mr. Y.V. Giri - that the distilleries have nothing  to do  with maintenance of warehouses and that they were  being maintained  by the Government itself during the said  period. The  preamble to  the Amending Act and the amended provisions  expressly speak  of the  said cost price and  its   break-up.  The   Amending  Act  further  provides expressly for  deduction of  the said  70 paise  per  L.P.L. component for being credited to the government’s account. In the fact  of all  these facts, it is difficult to understand on what  basis  can  the  distilleries  say  that  the  said component of  70 paise  should not be deducted. The Amending Act is not taking away anything from the distilleries; it is merely affirming  and validating the acts and orders already issued in  view of,  and with  a view  to remove, the defect pointed out  by the  High Court  in its  first judgment.  It cannot be  disputed, at this stage, by the distilleries that they were  not parties to the meeting held on 15th December, 1989 or  that  they  did  not  receive  the  letter  of  the Commissioner dated  19th February, 1990. If this were so, it is un-understandable  on what  basis and at whose request or order, they  were supplying  the spirit to the distilleries. It  cannot  but  be  held  in  the  circumstances  that  the distilleries   accepted   the   offer   contained   in   the Commissioner’s letter  dated 19th  February, 1990  and  were making supplies  on the  basis of  the said  letter and  the orders placed  pursuant to  that letter and their acceptance

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of it.      Now coming  to the  reasoning in the impugned judgment, we must  say with  all respect that we have not been able to appreciate it.  The approach  of the  Court, while examining the challenge  to the  constitutionality of an enactment, is to start  with the  presumption  of  constitutionality.  The Court should  try to  sustain its  validity  to  the  extent possible. It  should strike  down the enactment only when it is not possible to sustain it. The Court should not approach the enactment  with a  view to  pick holes  or to search for defects of  drafting, much  less  inexactitude  of  language employed. Indeed,  any such  defects of  drafting should  be ironed  out   as  part   of  the   attempt  to  sustain  the validity/constitutionality of  the enactment.  After all, an Act made  by the  Legislature represents  the  will  of  the people and  that cannot  be  lightly  interfered  with.  The unconstitutionality must  be plainly and clearly established before an  enactment is  declared as void. The same approach holds good  while ascertaining  the intent and purpose of an enactment or  its scope  and application. Now, the result of the impugned Judgment is that the Amending Act has become an exercise in  futility -  a purposeless piece of Legislation. And this  result has  been arrived  at by  pointing out some drafting  errors  and  some  imperfection  in  the  language employed. If only the High Court had looked into the minutes of the meeting dated 15th December, 1989 and the two letters of the  Commissioner aforementioned,  it would  have  become clear that the Amending Act was doing no more than repeating contents of  the said  letters and  placing the  legislative imprimatur  on   them.  As   the  impugned  judgment  itself suggests, part  of the  imperfection of  language is perhaps attributable to  translation from  Hindi to English. Indeed, it is surprising that the Court has not even referred to the long preamble  to the Act which clearly sets out the context and purpose  of the  said enactment.  It was  put in at such length only  with a  view to  aid the  interpretation of its provisions. It  was not  done without a purpose. To call the entire exercise  a mere  waste is,  to say  the least,  most unwarranted  besides  being  uncharitable.  The  Court  must recognize  the   fundamental  nature   and   importance   of legislative process  and accord  due regard and deference to it, just  as the  Legislature and the Executive are expected to show due regard and deference to the Judiciary. It cannot also be forgotten that our constitution recognizes and gives effect to the concept of equality between the three wings of the State  and the concept of ‘checks and balances’ inherent in such scheme.      Though the  above propositions are well settled, it may not be  out of  place  to  refer  to  a  few  decisions.  In Charanjit Lal  Chowdhary v. Union of India [A.I.R. 1951 S.C. 41],  Fazal  Ali,  J.  stated:  "......it  is  the  accepted doctrine of  the American  Courts, which  I consider  to  be well-founded on principle, that the presumption is always in favour of  the constitutionality  of an  enactment, and  the burden is  upon him  who attacks  it to  show that there has been   a   clear   transgression   of   the   constitutional principles". In  Burrakur Coal  Company v.  Union  of  India (A.I.R. 1961  S.C. 654  AT 963], Mudholkar, J., speaking for the Constitution  Bench, observed:  "Where the validity of a law made by a competent legislature is challenged in a court of law,  that Court  is bound  to presume  in favour  of its validity. Further, while considering the validity of the law the  court  will  not  consider  itself  restricted  to  the pleadings of  the State  and would be free to satisfy itself whether under  any provision of the Constitution the law can

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be sustained."      We may  quote the  pertinent propositions enunciated in Ram Krishna  Dalmia, Etc. v. Justice S.R. Tendolkar & Others Etc. [A.I.R. 1958 S.C. 538] to the following effect:      "(b)  that   there  is   always   a      presumption  in   favour   of   the      constitutionality of  an  enactment      and the  burden  is  upon  him  who      attacks it  to show  that there has      been a  clear transgression  of the      constitutional principles;      (e) that  in order  to sustain  the      presumption  of   constitutionality      the    Court    may    take    into      consideration  matters   of  common      knowledge,   matters    of   common      report, the  history of  the  times      and may assume every state of facts      which can  be conceived existing at      the time of legislation; and.."      We  may   also  refer   to  the   following  perceptive observations in  the decision  of Lord  Denning  is  Seaford Court Estates Ltd. v. Asher [1949 (2) K.B. 481]:      "Whenever a  statute comes  up  for      consideration it must be remembered      that it  is not  within human power      to foresee  the  manifold  sets  of      facts which may arise, and, even if      it were,  it  is  not  possible  to      provide for them in terms free from      all ambiguity. The English language      is    not    an    instrument    of      mathematical     precision.     Our      literature would be much the poorer      if  it  were.  This  is  where  the      draftsmen  of  Acts  of  Parliament      have    often     been     unfairly      criticized.  A   judge,   believing      himself  to   be  fettered  by  the      supposed rule  that he must look to      the  language   and  nothing  else,      laments that the draftsman have not      provided for  this or that, or have      been  guilty   of  some   or  other      ambiguity. It  would certainly save      the  judges   trouble  if  Acts  of      Parliament were drafted with divine      prescience and  perfect clarity. In      the absence  of it,  when a  defect      appears a  judge cannot simply fold      his hands  and blame the draftsman.      He  must   set  to   work  on   the      constructive task  of  finding  the      intention  of  Parliament,  and  he      must do  this  not  only  from  the      language of  the statute,  but also      from a  consideration of the social      conditions which  gave rise  to it,      and of  the mischief  which it  was      passed to  remedy, and then he must      supplement the  writter word  so as      to give  ‘force and  life’  to  the      intention of  the legislature. That      was  clearly   laid  down   by  the      resolution   of   the   judges   in

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    Heydon’s case, and it is the safest      guide today.  Good practical advice      on the  subject was given about the      same time by Plowden. . . . . . Put      into homely  metaphor it is this: A      judge  should   ask   himself   the      question: If  the makers of the Act      had  themselves  come  across  this      ruck in  the  texture  of  it,  how      would  they  have  straightened  it      out? He  must then do as they would      have done.  A judge  must not alter      the material  of which it is woven,      but he  can and should iron out the      creases."      The above  observations have  been quoted with approval by this  Court in a number of decisions. We felt impelled to reproduce them  only because of the kind of approach adopted by the  High Court in the Judgment under appeal. it helps to remind ourselves  of the  above observations  from  time  to time.      Now coming  to the  validity of the Amending Act we are unable to see on what ground can its validity impeached. All that it  does is  to provide statutory basis and legislative imprimatur to  the price  fixation done  by the Commissioner and  its   break-up.  It  also  provides  for  recovery  and deduction  of   the  0.70  paise  component  on  account  of maintenance  charges   of  warehouses.  It  can  neither  be suggested that  the  Bihar  Legislature  did  not  have  the legislative competence  to enact  the said  Amending Act nor can it  be suggested  that  the  Act  violates  any  of  the fundamental  rights  enshrined  in  para  III.  The  general averment of  Mr. Y.V.  Giri that the Act is arbitrary is too vague to  merit any  acceptance, apart from the fact that an act of Legislature cannot be struck down merely saying it is arbitrary -  See this  Court’s Judgment in State of A.P. And Others v. Mcdowell & Company And Others [1996 (3) S.C.C. 709 at 737  to 739.]  - apart from the fact that the charge does not appear to be justified in the facts and circumstances of the case.      For the  above reasons,  the appeals  are allowed,  the judgment of  the High  Court is set aside and it is declared that the Amending Act 9 of 1995 being Bihar Act of 9 of 1995 is neither unconstitutional nor is it ineffective to achieve the objective  it set out to achieve - object set out in the Preamble.      The writ petitions filed by the respondents in the High Court are dismissed. No costs.