Full Judgment
IN THE HIGH COURT OF KERALA AT ERNAKULAM
PRESENT THE HONOURABLE MR.JUSTICE K.VINOD CHANDRAN & THE HONOURABLE MR.JUSTICE C. JAYACHANDRAN THURSDAY, THE 9TH DAY OF MARCH 2023 / 18TH PHALGUNA, 1944 WA NO. 1711 OF 2015 AGAINST THE ORDER/JUDGMENT IN WPC 17826/2013 OF HIGH COURT OF KERALA APPELLANTS:
1 K.VIJAYAN LEKSHMI, PARAMBILANGADI, KOTTAKKAL, MALAPPURAM DISTRICT 676503. 2 T.M. SETHUMADHAVAN S/O.BALAKRISHNAN NAIR, MAVANCHERRY HOUSE, THANNUR,MALAPPURAM DISTRICT 3 A. KOMALAVALLI W/O.NARAYANAN KUTTY, GEETHA NIVAS, AMBAL,VALIYAKUNNU P.O, VALANCHERRY, MALAPPURAM DISTRICT. 4 B. PUSHPAVALLY WO.K.NANDANAN "ANJALI", THATTAMALA P.O., KOLLAM 691 010. 5 P. MOIDEEN SO.KUNHI MOIDEEN PUNNAKKODAN HOUSE, PALACHIRAMAD, PERUMANNA,EDARIKODE P.O, MALAPPURAM DISTRICT 6 LAZAR CHAKKOLA S/O. GEORGE CHAKOLA, MISSION QUARTERS, FATHIMA NAGAR,TRISSUR-5. 7 M. ARAVINDAKSHAN SO.KESHAVAN NAIR MALAYATIL HOUSE, ADHAVANAD, MALAPPURAM DISTRICT. 8 LIJO CHACKOLA S/O.GEORGE CHAKOLA, CHAKOLA HOUSE, MISSION QUARTERS,FATHIMA NAGAR, TRISSUR - 680005. 9 M. JANARDHANAN MALAYATTIL HOUSE, ADHAVANADU POST, MALAPPURAM DISTRICT. 10 ADDL.A10.K.VASANTHA KUMARI AGED 64 YEARS AGED 64 YEARS, AND 3 OTHERS (SOUGHT TO BE IMPLEADED) BY ADVS. SRI.A.SUDHI VASUDEVAN (SR.) JOSE JONES JOSEPH SMT.K.PUSHPAVATHI - 2 -
RESPONDENTS:
1 STATE OF KERALA REPRESENTED BY SECRETARY TO GOVERNMENT, TAXES (A) DEPARTMENT, SECRETARIAT, THIRUVANANTHAPURAM -695 001. 2 THE COMMISSIONER OF EXCISE EXCISE COMMISSIONERATE, PUBLIC OFFICE BUILDING,THIRUVANANTHAPURAM -695 001. 3 DEPUTY COMMISSIONER OF EXCISE EXCISE BHAVAN, KOLLAM 691 001. 4 BINU JOSE SO.MATHEW MANAKKATU HOUSE, PALA P.O, PIN 686 575 5 SHIBU K. S/O.KRISHNAN CHETTIAR, THILAK LIONS NAGAR, KOLLAM 6 K. SUDHAKARAN VIKKATH HOUSE, INDIANNORE POST, KOTTAKKAL, MALAPPURAM DISTRICT - 676 501. 7 G. SUDARSANAN PILLAI S/O.GOPALA PILLAI, AMMACHI VEEDU, KAIKULANGARA WARD,KOLLAM 691 012. BY ADVS. GOVERNMENT PLEADER SMT.SHILPA SATHISH SRI.JAI GEORGE
THIS WRIT APPEAL HAVING BEEN FINALLY HEARD ON 09.03.2023, ALONG WITH WA.1862/2015, 2412/2016 AND CONNECTED CASES, THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING: - 3 -
IN THE HIGH COURT OF KERALA AT ERNAKULAM
PRESENT THE HONOURABLE MR.JUSTICE K.VINOD CHANDRAN & THE HONOURABLE MR.JUSTICE C. JAYACHANDRAN THURSDAY, THE 9TH DAY OF MARCH 2023 / 18TH PHALGUNA, 1944 WA NO. 1862 OF 2015 AGAINST THE ORDER/JUDGMENTWPC 17826/2013 OF HIGH COURT OF KERALA APPELLANT: BINU JOSE AGED 45 YEARS S/O.JOSE MATHEW, MANAKKATTU HOUSE, PALA P O, PIN- BY ADV SMT.SHILPA SATHISH RESPONDENTS:
1 STATE OF KERALA REP BY THE SECRETARY TO GOVERNMENT TAXES(A)DEPARTMENT, SECRETARIAT,THIRUVANANTHAPURAM- 2 THE COMMISSIONER OF EXCISE EXCISE COMMISSIONRATE,PUBLIC OFFICE BUILDING, THIRUVANANTHAPURAM-695001 3 THE DEPUTY COMMISSIONER OF EXCISE EXCISE BHAVAN, KOLLAM 691001 4 SHIBU K S/O.KRISHNAN CHETTIAR, 'THILAK'LINOS NAGAR, HOUSE NO 16,,MUNDAKKAL P O, KOLLAM 1-691001 5 K VIJAYAN AGED 54 YEARS S/O.PADMANABHAN NAIR , LEKSHMI , PARANBILANGADI , KOTTACKAL, MALAPPURAM DISTRICT 676503 6 T M SETHUMADHAVAN AGED 61 YEARS S/O.BALAKRISHNAN NAIR ,MAVANCHERRY HOUSE, THANUR, MALAPPURAM DISTRICT 676302 7 A KOMALAVALLAY AGED 49 YEARS - 4 -
W/O.NARAYANANKUTTY, GEETHA NIVAS, AMBAL, VALIYAKUNNU P O, VALANCHERRY, MALAPPURAM DISTRICT 8 B PUSHPAVALLI W/O.K NANDANAN, ANJALI, THATTAMALA P O, KOLLAM 10 9 P MOIDEEN AGED 50 YEARS S/O.KUNHI MOIDEEN, PUNNAKKODAN HOUSE, PALACHIRAMAD, PERUMANNA, EDARIKODE P O, MALAPPURAM DISTRICT 10 LAZAR CHAKOLA S/O.GEORGE CHAKOLA, MISSION QUARTERS, FATHIMA NAGAR THRISSUR 5 11 A ARAVINDAKSAN S/O.KESAVAN NAIR, MALAYATTIL HOUSE, ADHAVANAD, MALAPPURAM DISTRICT 676310 12 LIJO CHAKOLA S/O.GEORGE CHAKOLA, MISSION QUARTERS, FATHIMA NAGAR, THRISSUR 5 13 K SUDHAKARAN AGED 48 YEARS S/O.PADMANABHAN NAIR, VIKKATH HOUSE, INDIANNORE P O, KOTTACKAL, MALAPPURAM DISTRICT 676503 14 M JANANRDHANAN MALAYATHIL HOUSE, ADHAVANAD P O, MALAPPURAM 15 G SUDARSANAN PILLAI S/O.GOPALA PILLAI, AMMACHI VEEDU, KAIKULANGARA WARD , KOLLAM 12-691012 BY ADVS. GOVERNMENT PLEADER SRI.P.A.JACOB SRI.A.SUDHI VASUDEVAN (SR.) SRI.JOSE JONES JOSEPH
THIS WRIT APPEAL HAVING BEEN FINALLY HEARD ON 09.03.2023, ALONG WITH WA.1711/2015 AND CONNECTED CASES, THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING: - 5 -
IN THE HIGH COURT OF KERALA AT ERNAKULAM
PRESENT THE HONOURABLE MR.JUSTICE K.VINOD CHANDRAN & THE HONOURABLE MR.JUSTICE C. JAYACHANDRAN THURSDAY, THE 9TH DAY OF MARCH 2023 / 18TH PHALGUNA, 1944 WA NO. 2412 OF 2016 AGAINST THE ORDER/JUDGMENTWPC 18343/2013 OF HIGH COURT OF KERALA APPELLANT: BINU JOSE AGED 45 YEARS S/O. JOSE MATHEW, MANAKKATTU HOUSE, PALA P.O, PIN - 686 575. BY ADV SRI.BINU JOSE (PARTY) RESPONDENTS:
1 STATE OF KERALA, REPRESENTED BY THE SECRETARY TO GOVERNMENT, TAXES(A) DEPARTMENT, SECRETARIAT, TRIVANDRUM - 695 001. 2 THE COMMISSIONER OF EXCISE, EXCISE COMMISSIONERATE, PUBLIC OFFICE BUILDING, THIRUVANANTHAPURAM 695 001. 3 G. SUDARSANAN PILLAI S/O. GOPALA PILLAI, AMMACHI VEEDU, KAIKULANGARA WARD, KOLLAM -12. 4 LAZER CHAKOLA AGED 39 YEARS, S/O. GEORGE CHAKOLA, MISSION QUARTERS, FATHIMA NAGAR, THRISSUR 5. 5 A. KOMAVALAVALLY, W/O. NARAYANANKUTTY, AGED 49 YEARS, GEETHA NIVAS, AMBAL, VALIYAKUNNU P.O, VALANCHERRY, MALAPPURAM DISTRICT- 676 552. 6 A. ARVINDAKSAN S/O. KESAVAN NAIR, AGED 53 YEARS, MALAYATTIL HOUSE, ADHAVANAD, MALAPPURAM DISTRICT 676 505. 7 K. VIJAYAN S/O. PADMANABHAN NAIR, 54 YEARS, LEKSHMI, - 6 -
PARANBILANGADI, KOTTACKAL, MALAPPURAM DISTRICT 676 503. 8 K SUDHAKARAN S/O. PADMANABHAN NAIR, AGED 48 YEARS, VIKKATH HOUSE, INDIANNORE P.O, KOTTACKAL, MALAPPURAM DISTRICT 676 503. 9 LIJO CHAKOLA S/O. GEORGE CHAKOLA, AGED 36 YEARS, MISSION QUARTERS, FATHIMA NAGAR, THRISSUR 5. 10 B. PUSHPAVALLI W/O. K NANDANAN, AGED 58 YEARS, ANJALI, THATTAMALA P.O, KOLLAM 10. 11 T.M. SETHUMADHAVAN AGED 61 YEARS, S/O. BALAKRISHNAN NAIR, MAVANCHERRY HOUSE, THANNUR, MALAPPURAM DISTRICT 676 302. 12 P. MOIDEEN AGED 50 YEARS, S/O. KUNHI MOIDEEN, PUNNAKKODAN HOUSE, 'PALACHIRAMAD, PERUMANNA, EDARIKODE P.O,MALAPPURAM DISTRICT 676 501. 13 M. JANARDHANAN MALAYATHIL HOUSE,ADHAVANAD, MALAPPURAM 676 505 14 SHIBU K S/O. KRISHNAN CHETTIAR, THILAK, LIONS ROAD, HOUSE NO 16,MUNDAKKAL P.O, KOLLAM 1 BY ADVS. SRI.P.A.JACOB SRI.P.A.JACOB SRI.JOSE JONES JOSEPH SRI.MILLU DANDAPANI SRI.A.SUDHI VASUDEVAN SR.
THIS WRIT APPEAL HAVING BEEN FINALLY HEARD ON 09.03.2023, ALONG WITH WA.1711/2015 AND CONNECTED CASES, THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING: - 7 -
IN THE HIGH COURT OF KERALA AT ERNAKULAM
PRESENT THE HONOURABLE MR.JUSTICE K.VINOD CHANDRAN & THE HONOURABLE MR.JUSTICE C. JAYACHANDRAN THURSDAY, THE 9TH DAY OF MARCH 2023 / 18TH PHALGUNA, 1944 WA NO. 2458 OF 2016 AGAINST THE ORDER/JUDGMENTWPC 8343/2013 OF HIGH COURT OF KERALA APPELLANT/S:
1 LAZAR CHAKKOLA AGED 1 YEARS S/O.GEORGE CHACKOLA, MISSION QUARTERS, FATHIMA NAGAR, TRISSUR-5 2 A.KOMALAVALLI W/O.NARAYANAN KUTTY, GEETHA NIVAS, AMBAL 3 M.ARAVINDAKSHAN S/O.KESHAVAN NAIR, MALAYATIL HOUSE, ADHAVANAD, MALAPPURAM DISTRICT 4 K.VIJAYAN S/O.PADMANABHAN NAIR, LEKSHMI, PARAMBILANGADI, KOTTAKKAL, MALAPPURAM DISTRICT-676503 5 LIJO CHACKOLA S/O.GEORGE CHACKOLA, CHAKOLA HOUSE, MISSION QUARTERS, FATHIMA NAGAR. 6 B.PUSHPAVALLY W/O.K.NANDANAN, 'ANJALI'. THATTAMALA P.O., KOLLAM- 7 T.M.SETHUMADHAVAN S/O.BALAKRISHNAN NAIR, MAVANCHERRY HOUSE, THANNUR, MALAPPURAM DISTRICT. 8 P.MOIDEEN S/O.KUNHI MOIDEEN, PUNNAKKODAN HOUSE, PALACHIRAMAD, PERUMANNA, EDARIKODE P.O., MALAPPURAM DISTRICT 9 M.JANARDHANAN MALAYATTIL HOUSE, ADHAVANADU POST, MALAPPURAM DISTRICT BY ADVS. SRI.A.SUDHI VASUDEVAN (SR.) SRI.JOSE JONES JOSEPH - 8 -
RESPONDENTS:
1 STATE OF KERALA REPRESENTED BY SECRETARY TO GOVERNMENT, TAXES(A) DEPARTMENT, SECRETARIAT, THIRUVANANTHAPURAM-695001 2 THE COMMISSIONER OF EXCISE EXCISE COMMISSIONERATE, PUBLIC OFFICE BUILDING, THIRUVANANTHAPURAM-695001 3 G.SUDARSANAN PILLAI S/O.GOPALA PILLAI, AMMACHI VEEDU, KAIKULANGARA WARD, KOLLAM-691012 4 K.SUDHAKARAN VIKKATH HOUSE, INDIANNORE POST, KOTTAKKAL, MALAPPPURAM DISTRICT 5 SHIBU K. S/O.KRISHNAN CHETTIAR, THILAK LIONS NAGAR, KOLLAM- 6 BINU JOSE S/O.JOSE MATHEW, MANAKKATU HOUSE, PALA.P.O., PIN- 688978. BY ADV SRI.MILLU DANDAPANI
THIS WRIT APPEAL HAVING BEEN FINALLY HEARD ON 09.03.2023, ALONG WITH WA.1711/2015 AND CONNECTED CASES, THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING: - 9 - K.VINOD CHANDRAN & C.JAYACHANDRAN, JJ. ----------------------------------------------------------- Writ Appeal Nos.1711 of 2015, 1862 of 2015, 2412 of 2016 & 2458 of 2016 --------------------------------------------------------- Dated this 09th March, 2023
JUDGMENT
K.Vinod Chandran, J.
The background facts to be noticed for the proper disposal of the appeals; which relate to renewal of a FL-3 license for the year 2012-13, are as follows. One Sudarsanan Pillai purchased 21.5 cents of property at Kalluvathukkal Grama Panchayat in Parippally Village by Sale Deed No. and obtained FL-3 Hotel (Restaurant) licence under the Foreign Liquor Rules 1953, which first licence was dated 19.10.1992. He was running the hotel, restaurant and bar in the name and style Hotel Alakananda. While so he entered into a partnership deed on 01.04.1993 with 13 others, including his wife. The parties are referred to from W.A 1862 of 2015. Sudarsanan Pillai, the 15th respondent had two shares, his wife one share and the appellant, the respondents 4 to 13 and one Jose Mathew, the father of the petitioner in W.A 1862 of 2015, had one share each. There were 14 persons holding 15 shares at its inception. On 23.11.1998, the 4 th respondent retired and one Krishanan Chettiar, his father was included in - 10 - his place. The wife of R15, Sudarsanan Pillai also retired and her share was distributed among the remaining partners. On such reconstitution there were 13 partners holding 14 shares. Again on 30.09.2004 Jose Mathew retired and his share was distributed among the others upon which there were 12 partners with 13 shares. On 23.01.2006 the appellant, Binu Jose retired and Jose Mathew was again inducted. Jose Mathew died upon which the petitioner succeeded to his share. As on 2012-13 there were 12 partners and 13 shares. The 14th respondent who was a stranger to the partnership claimed that he purchased the share of R9 Moideen. R14 is no more and his legal representatives are impleaded as addl.R16 to R19 in W.A 1862 of 2015.
2. There were differences of opinion between Sudarsanan
Pillai and the other partners, who separately approached the Commissioner of Excise for renewal of FL-3 licence for the year 2012-13. The Excise Commissioner under R.13B of the Foreign Liquor Rules, found the partnership firm having been constituted, to run the licence without sanction obtained from the authorities and refused renewal. The rift among the partners travelled to Court, with allegations raised by R3 Sudarsanan Pillai of fraud, coercion and undue influence exerted on him to enter into a partnership as also sale of the properties; the partnership deed and the sale deeds being challenged as null and void. It was in the - 11 - wake of such disputes arising that the three writ petitions were filed.
3. WP(C)No.2576/2012 claimed that R15 therein, Sudarsanan
Pillai had executed a sale deed in respect of the land & building in which the Bar Hotel was conducted by the partnership firm. By virtue of the sale deeds produced as Exts.P4 and P5, R15 relinquished his exclusive claim over the properties; after execution of which necessary changes were made under the Transfer of Registry Rules to carry out mutation in the name of the transferees who also paid tax as evidenced by Ext.P9. The challenge in the writ petition was against Ext.P12 order which rejected the application filed before the Panchayat seeking change of ownership of the building. By Ext.P12 order the Panchayat rejected the prayer and directed the parties to approach a civil court.
4. WP(C) No.18343/2013 sought a certiorari against Exts.P23
order passed by the Excise Commissioner refusing to renew the FL-3
licence issued in the name of the 3rd respondent. Asserting that the licence issued in the name of the 3rd respondent was actually carried on by a partnership firm, to which firm, the land and building, in which was carried on the bar, were also sold; the writ petition prayed for regularisation of the FL-3 license in the name of the partnership firm. The Excise Commissioner found the constitution of the partnership firm, to run the license issued in the name of an individual to have altered the - 12 - nature, content and scope of the licence. The order stood confirmed by the Government in revision, by Ext.P25, which was also challenged. The petitioner sought a mandamus to regularise the transfer of FL-3 licence in the name of the partnership firm in the name and style Hotel Alakananda. The 15th respondent filed WPC 17826/2014 seeking a certiorari against the denial of renewal of licence and its affirmation by the Government, by orders produced as Exts.P10 and P16 in the said writ petition. He sought renewal of the license granted to him, in his name.
5. All the three writ petitions were heard together by the
learned Single Judge and disposed of by a common judgment. As far as the sale deed executed by the 15th respondent, the learned Single Judge noticed a number of proceedings under the Arbitration Act, pending in various stages before different forums. There was also an arbitration request pending before this Court filed by the 3 rd respondent. The constitution of the partnership as well as the validity of the sale deed, since was pending consideration in separate proceedings, the learned Single Judge was of the opinion that there was no reason to anull the
order of the Panchayat. Learned Single Judge specifically noticed that R.19
of the Foreign Liquor Rules does not enable the transfer of a license on
the basis of the transfer of ownership of the licensed premises. It was held
that insofar as the cancellation of licence there was no bar under R.19 to - 13 - sell or otherwise transfer the licensed premises without the previous sanction of the Excise Commissioner. The cancellation was effected on the ground of the partnership firm having been constituted to carry on the FL-3 licence without the previous sanction of the Excise authorities. It was found that admittedly the licence stood in the name of 15th respondent, the FL-3 licensee and what could have been decided by the Excise Commissioner was whether the licence could be extended in the name of that respondent. The Excise Commissioner instead of considering such extension or renewal cancelled the licence. WP (C) 25716/2012 was dismissed leaving the parties to pursue the various proceedings initiated under the Arbitration Act. There is no appeal from the said writ petition and we notice that the arbitration proceedings culminated in an arbitral award which stood affirmed by the Commercial Court at Kollam; now appealed against as Arb.Appeal No.2/2020. We have admitted the appeal and the issue of the partnership and title to the land will have to be considered in that appeal.
6. In the present appeals we are concerned with only the
cancellation of license agitated by both Sudarsanan Pillai on his own behalf and Binu Jose on behalf of himself and other partners. We have heard learned Counsel Silpa Satheesh for the appellants, learned Senior Counsel Sumathi Dandapani instructed by Adv. Mathew Kuriakose for - 14 - Sudarsanan Pillai, K. Sudhakaran, a partner, who appears in person and the learned Government Pleader for the State. M/s Silpa Satheesh at the outset contended that the appellants are only concerned with the finding of the learned Single Judge that R.19 is not applicable especially since S.67 of the Abkari Act provides for regularisation of a reconstituted, altered or modified partnership, carried out without previous permission of the Commissioner. If R.19 is made applicable then there could be a regularisation sought under S.67(3), in the name of the partnership firm, runs the argument. The learned Counsel would rely on the decisions in Mallika Residency v. State of Kerala 2012 KHC 514.
7. Smt. Sumathi Dandapani at the outset pointed out that none of
the three situations as contemplated by R.19(1) under the Foreign Liquor Rules has transpired. There is no sale, transfer or sub-rental and the partnership entered into was merely for sharing the profit and loss. Learned Senior Counsel relies on Mariamma v. Varkey Mathayi 1981 KHC 459 wherein a partnership to share the profit and losses without the transfer of a license was found to be not in violation of the provisions of the Abkari Act. Reliance was also placed on Addl.Commissioner of Incometax v. Degaon Ganga Reddy G. Ramakrishna & Co. 1995 Suppl. 2 SCC146 wherein sub partnerships formed by the individual partners of the lessee firm, merely to finance the business of the partner of the lessee - 15 - firm doing Abkari business, was found to be not in violation of S.14 Andhra Pradesh (Telangana area) Abkari Act. It is also argued that the sole arbitrator in the arbitration proceedings found the partnership itself to be null and void and also that there was no transfer of assets or liabilities to the partnership firm.
8. We cannot accept the argument of the learned Counsel for
the appellants that R.19 is not applicable in the present case. We have to immediately observe that R.19 has not been invoked by the Excise Commissioner in the impugned order, Ext.P10 produced in W.P(C)
order having been passed in three petitions, one filed by Sudarsanan Pillai
and other two filed by the partners seeking renewal of license for the year 2012-13. The Excise Commissioner refused renewal of license with reference to the proviso to R.13B(3) of the Foreign Liquor Rules. R.13B
(3) provides that an order sanctioning the issue of a license will not by
itself authorise operations and transactions can be conducted only after a formal license is issued in the appropriate form. The authority entitled to consider the renewal of license was also specified and the proviso mandated that such renewal can be only if there is no change in the nature, content or scope of the licence or premises. As far as the application of R.19 is concerned, learned Single Judge's finding is in the - 16 - writ petition, wherein the order of the Panchayat refusing to change the ownership of the building in the name of the partnership was challenged. It was found that merely on the basis of the transfer of ownership of the licensed premises there cannot be a transfer of license. In that context, it was also held that R.19 does not enable the cancellation of a license merely for reason of the sale or transfer otherwise of the licensed premises; the transfer of licensed premises requiring no previous sanction of the Excise Commissioner. Both these propositions are unassailable and unimpeachable. R.19 provides for cancellation of the licence when there is a sale, transfer or sub rental without the previous sanction of the Excise Commissioner. Sub-rule (ii) of R.19 also provides that any change in partnership or the Director Board of a Company, be it be a reconstitution, addition or deletion resulting in change of ownership would also be deemed to be transfer of license. By an amendment introduced in 2018 an addition of a partner or a Director due to death of a partner or Director or licensee are also deemed to be a transfer of license. Hence cancellation would be enabled only if there is a sale transfer or sub-rental of the license and not of the licensed premises. As a corollary, the mere transfer of the licensed premises would also not enable the transfer of a license to the name of the new owner of the premises; unless such transfer of license is with a proper sanction from the Excise - 17 - Authorities.
9. Now we have to consider whether the impugned orders
were proper, which as we noticed invoked the proviso under R.13B(3) and not R.19. In fact the proviso under R.13B(3) is a prohibition to the renewal of a license if the nature, scope and content of the license is changed, which takes within its ambit a change of ownership without the sanction of the Excise authority by way of sale, transfer or sub rental. The distinction is only insofar as the proviso to R.13B(3) arises at the time of a renewal while R.19 can be invoked by the Excise authorities during the validity period of license, when such change of ownership without the sanction of authorities come to their knowledge.
10. Mallika Residency (supra) is not applicable to the facts
arising in the above appeals, but would squarely apply insofar as the relevance of R.19, as found by the learned Single Judge, insofar as the challenge against the refusal of transfer of ownership in the buildings, which is the licensed premises and not the license as such. In Mariamma (supra) this Court dealt with an appeal from a suit for account and recovery of the plaintiffs share of profit and assets of a dissolved partnership. Therein plaintiff together with the defendants had entered into a partnership to bid for the privilege of vending toddy in four shops in Kothamangalam. The bid in auction was made jointly by defendants 1,2 - 18 - and 6 of whom defendants 1 & 2 represented the one-half share and the other half of the plaintiff and defendants 3 to 6, was represented by the 6 th defendant. The license was issued in the joint names of the defendants 1, 2 and 6. The clear distinction on facts comes out from paragraph 6 of the aforesaid judgment which is extracted herein below:
“ 6. It will be seen that the parties entered into an agreement before the bid though it has been recorded after the bid. There is no provision for transfer of the licence in the name of the partnership. There is no provision for non licensee attending to the business of the firm. That has to be attended to only by the licensees. In this view the question for consideration is whether the provisions of the Abkari Act and the conditions of licence are violated.” The learned Judges on the above facts held that “The Act and the
Rules and conditions of the licence referred to above do not prohibit a partnership to share the profits and loss without a transfer of the licence. It is not correct to say that if the licensee enters into a partnership with another, in all cases there is a transfer of licence from one person to another.”(sic)
11. In DGRG Ramakrishna &Co. (supra) the restrictive
provision under the AP Abkari Act was a prohibition against any lessee from declaring any other person to be its partner, without the previous permission of the Government. Therein the individual partners of the - 19 - lessee partnership firm entered into sub-partnership merely for the purpose of financing the business of a partner of the main firm which was doing abkari business. There was only sharing of profits and losses and there was no declaration of any other person to be the partner in the abkari business.
12. We are afraid that both the aforesaid decisions does not
apply to the facts of the present appeals. We need only refer to the partnership deed between Sudarsanan Pillai and others produced as Ext.P2 in WP(C) No.18343/2013. Sudarsanan Pillai is the first party who is stated to have obtained valid license from the Excise Department for running a bar attached hotel in the name and style 'Alakananda'. The partnership agreement was to tide over financial difficulties and to run the business more efficiently and profitably for which purpose the first party decided to convert the business into a partnership along with parties 2 to 14. Clause (4) of the deed specifically indicates that the business of the firm shall be the running of the hotel, bar and restaurant. Clause (6) specifically speaks of taking over all the assets and liabilities of the business of the first party and more particularly described in the schedule annexed to the deed. Clause (7) made the 2 nd party the Managing Partner and the 1st party the Joint Managing Partner. Both these persons were jointly authorised to represent the firm in all legal - 20 - proceedings and authorised to sign on all documents filed before the statutory authorities, including the Excise authorities. The specific terms of the contract spoken off by us, herein above, clearly distinguishes the above case from the cited decisions of the Hon'ble Supreme Court and the Division Bench of this Court.
13. Arguments were also addressed on the basis of the
findings by the sole arbitrator in the arbitration proceedings. We would not refer to the various paragraphs pointed out by both parties, but suffice it to look at the operative portion. In paragraph 32 the partnership was held liable to be dissolved and it was declared as dissolved. In paragraph 34 the valuation of the fixed assets of the firm was done and it was also directed that the individual shares as determined by the arbitrator shall be paid to the other partners. These are quite incongruous to the findings in paragraph 33, wherein Ext.A5, the partnership deed was declared as null and void along with Exts.A6 and A7 sale deeds; probably a printers devil. We would not refer further to the award passed which is independently challenged. We make it clear that whatever we observed after looking at the operative portion is not a finding rendered by us, especially since we are not as of now called upon to decide on the partnership or sale of the premises. We are only concerned with the renewal of license which was claimed by the licensee and also by the - 21 - other partners; the former in the name of himself and latter in the name of a partnership firm. Admittedly there was a transfer of ownership of the business of hotel, restaurant and more pertinently, the Bar carried on under the FL-3 license issued in the name of the first party to the partnership deed.
14. We see from the impugned judgment that the learned
Single Judge had directed consideration of the renewal application after interfering with impugned orders. The renewal application itself was of the year 2012-13 and we are a decade removed from that period. Before us, the partners excluding Sudarsanan Pillai, and Sudarsanan Pillai on his own behalf sought for considering their application for renewal at least in the present year. We have to notice that admittedly the FL-3 license was issued in the individual name of Sudarsanan Pillai and Sudarsanan Pillai on his own volition, whatever be the reason, entered into a partnership deed for the purpose of carrying on the business which included the Bar for which licence was obtained in his individual name. The finding of the Excise Commissioner in the impugned order that under the proviso to R.13B(3) for reason of the change in nature, content or scope of the license, by transfer of the license to a partnership firm, that too without the sanction of the Excise authorities, there can be no renewal is unimpeachable; especially when that prohibition is available in R19. - 22 -
15. The learned Counsel for the appellants; the other partners,
have a contention that they could now apply under S.67 of the Abkari Act. S67 of the Abkari Act empowers the Commissioner to impose fines for contravention of any rule made under this Act. The specific reliance placed is on sub-section (3) where a partnership firm or a company holding a licence under the Act, without the previous permission of the Commissioner reconstitutes alters or modifies the partnership; could seek for regularisation on payment of such fees as may be prescribed by the Rules. The contention raised on behalf of the partnership firm is that though the partnership was formed without the consent of the Excise authorities they could still regularise it. Reading S.67(3) along with R.19 it has to be found that a sale, transfer or sub rental without the previous sanction of the Excise Commissioner is prohibited and there is no scope for any regularisation. However when a partnership is the licensee, if a reconstitution, alteration or modification is made of the firm, without the prior sanction of the Excise authorities, the same can be regularised on payment of such fee as prescribed under the Rules. On a reading of S.19(ii) and S.67(3), we find that it contemplates the existence of a partnership firm who holds a valid license and the reconstitution, alteration or modification of that firm alone can be regularised, if carried out originally without prior sanction of the Excise authorities . A transfer - 23 - of FL-3 license by a sole individual licensee to a partnership firm does not qualify for regularisation within the ambit of S.67(3) of the Abkari Act.
16. While rejecting the contentions of the parties, we find no
reason to sustain the direction issued by the learned Single Judge for reconsidering the application for renewal for either 2012-13 or the coming year. However we make it clear that the parties can work out their remedies and also on settlement of the lis between them, an application for fresh license could be filed subject to the consideration being made under the Abkari Act and Rules.
17. We hence dismiss the appeals, however with interference
caused to the order directing reconsideration and with the limited reservation regarding a fresh renewal application, left to be considered by the appropriate authority. Parties are left to suffer their respective costs. Sd/- K.VINOD CHANDRAN, JUDGE Sd/- C.JAYACHANDRAN, JUDGE jma