Hey Hotels and Restaurant Private Limited vs The State Of Maharashtra & Ors.

Rule. Rule made returnable forthwith, and, with the consent of the learned Counsel for the parties, heard finally.

By this Petition under Article 227 of the Constitution of India, the Petitioner takes exception to an order dated 11 August 2025 passed by the Commissioner of State Excise (R4), in Appeal No.204 of 2025, whereby the appeal preferred by the Petitioner against an order dated 18 July 2025 passed by the Collector, Mumbai Suburban District (Excise) (R2), thereby cancelling FL-III licence issued to the Petitioner, under Section 54(1)(e) of the Maharashtra Prohibition Act, 1949, came to be dismissed.

Shorn of unnecessary details, the background facts can be stated as under :

Affidavits in reply were filed on behalf of Respondent Nos.1 to 4 and 5.

I have heard Mr. Suresh Sabrad, learned Counsel for the Petitioner, Mr. P V. Nelson Rajan, learned AGP for Respondent Nos.1 to 4, and Mr. P. G.Lad, learned Counsel for Respondent No.5 – MHADA. With the assistance of the learned Counsel for the parties, I have perused the pleadings and the material on record.

Mr Sabrad, the learned Counsel for the Petitioner, submitted that the impugned orders have been passed on the basis of surmises and conjecture. No Court or Authority has till date declared that the letter dated 5^th December 2019 permitting the amalgamation of the plots allotted to the licensors of the Petitioner is forged. On the contrary, the documents obtained by the Petitioner under the Right to Information Act, especially the extract of the outward register (Exhibit “D”), indicate that such letter was, in fact, issued by Respondent No.5.

Mr. Sabrad would urge that, there was no prima facie material to demonstrate that the photopasses issued in the names of the licensors of the Petitioner, were false and fabricated. Till date, no authority has cancelled the said photopasses.

Mr. Sabrad made an endeavour to place reliance on the letters issued to the licensors of the Petitioner in the year 1996 calling upon them to take possession of the plots near Building No. 54 at Tagore Nagar, Vikhroli. In this view of the matter, Mr. Sabrad would urge, the Authorities were in clear error in cancelling the licence on the ground that the documents, on the strength of which the licence was obtained, were forged and fabricated.

In opposition to this, Mr P. V. Nelson Rajan, the learned AGP for Respondent Nos. 1 to 4, stoutly supported the impugned orders. It was submitted that a clear case of obtaining licence on the strength of false and forged documents was made out. Mr. P. V. Nelson submitted that upon receiving a complaint that subject FL-III licence was granted near Buddha Vihar adjacent to highway, a report was sought from the concerned Authorities. The Mumbai Housing And Area Development Board (R5) submitted a Report dated 21^st March 2025 to the effect that, the reserved Plot between the Building No. 54 and 412, Survey No. 295, village Hariyali was owned by MHADA and the said Plot was never allotted by MHADA either on ownership basis or by way of lease to the licensors of the Petitioner. Further enquiry revealed that the Petitioner had submitted false and forged letter dated 5^th December 2019 purportedly issued by MHADA granting permission for amalgamation. No photopasses have been issued to licensors of the Petitioner. Thus, the Competent Authority was justified in cancelling the FL-III licence.

Mr. Lad, the learned Counsel for the Respondent No. 5, submitted that the claim of the Petitioner, or for that matter, the licensors of the Petitioner that the subject premises were allotted to the licensors is demonstrably false. In the year 2012 itself, the Respondent No. 5 had lodged a report against N. N. Kamble, the Retired Development Officer of MHADA, to the effect that post-retirement by misusing the documents and stamps and seal of MHADA, the said Development Officer had issued certificates of allotment to various persons, including Neil Salian and Joy Salian, and issued ante-dated photopasses.

Mr. Lad further submitted that, the licensors of the Plaintiff instituted a L.C. Suit No. 1924 of 2010 and, during the course of evidence, Neil Salian denied that the structures which Neil Salian and his brother were holding, were on the land beneath Coastal Tawa Hotel. The Respondent No. 5 had initiated steps to evict the licensors of the Petitioner and also FIR has been lodged in connection with the forgery of the documents.

Mr. Lad forcefully canvassed a submission that a bare perusal of the letter dated 5^th December 2019 would indicate that the letter is ex-facie fraudulent. The said letter does not bear the signature of the then Executive Engineer, even the contents of the letter are scribed on a letter-head of the Respondent No. 5. At any rate, there was no permission of the planning authority to amalgamate the said plots. In this backdrop, the Authorities, having recorded a finding that the licence was obtained on the basis of false and fabricated documents, were fully justified in canceling FL-III licence of the Petitioner. Thus, no fault can be found with the impugned order.

Section 52 of the Maharashtra Prohibition Act, 1949 (“the Act, 1949”) empowers the authorised officer to grant licences. Section 54 of the Act, 1949 vests power in the licensing authority to cancel or suspend the licence for reasons to be recorded in writing. Sub-Clauses (a) to (e) of sub-Section (1) of Section 54 enumerate the contingencies in which a licence can be cancelled or suspended. Under Clause (e), the Authority may cancel or suspend the licence, if the licence, has been obtained through wilful misrepresentation or fraud. In addition to grounds of non-user or breach of the terms and conditions of the licence, the legislature has provided a specific ground for cancellation of licence, if it transpires that the licence was obtained by wilful misrepresentation or fraud.

The necessity to record reasons for suspension or cancellation of the licence, is impregnated with an obligation to give an opportunity to the person concerned to make representation against the cancellation and consider such representation. An inbuilt mechanism of opportunity of hearing before the cancellation of licence is thus implicit in the provisions of Section 54(1) of the Act, 1949.

In exercise of writ jurisdiction, this Court is more concerned with the decision making process rather than the correctness of the decision. Whether the Authorities followed the principles of natural justice and fundamental principles of judicial process? Whether the Petitioner had an efficacious opportunity of hearing? Whether the submissions and representations against the proposed action, made by the Petitioner, were considered by the Authorities? Whether there is an element of proportionality in the impugned action to the infraction?, are few of the questions which are germane for the determination of the challenge to an order of cancellation of licence by the Competent Authority.

In the case at hand, the Court finds that the Collector, Excise, Mumbai Suburban as well as the Appellate Authority gave an efficacious opportunity of hearing to the Petitioner. The case sought to be put-forth by the Petitioner was considered by the Authorities and, eventually, the Authorities have come to the conclusion that the documents, especially the letter dated 5^th December 2019 which was submitted along with the Application for grant of licence, appeared to be forged.

The Collector, Excise, thus proceeded to cancel the licence on the said count and also in view of the express stipulation in the Affidavit filed on behalf of the licensee that in the event it was found that the construction of the premises wherein the licence was operated was found to be unauthorised, the licence would be cancalled.

As noted above, the thrust of the submission of Mr Sabrad was that there is no determination by the competent Court or Authority that the documents on the basis of which the licence was obtained are forged and fabricated and, till such conclusive finding is recorded, the licence could not have been cancelled. Thus the question as to whether there was adequate material before the Authorities to arrive at such finding, wrenches to the fore.

Evidently, in the wake of the complaints that the subject FL-III licence was obtained in breach of the norms, and on the strength of false and forged documents, the Collector, Excise conducted an enquiry and reports were called from the concerned Authorities. In response thereto, vide communication dated 21^st March 2025, Respondent No. 5 has reported that the letter dated 5^th December 2019 purportedly permitting amalgamation of the four plots of the licensors was fabricated.

Firstly, there was no entry in record of Respondent No. 5 about the issuance of such letter on 5^th December 2019. Secondly, there was a clear discrepancy in the signature of the concerned Executive Engineer who had purportedly signed the said letter. Thirdly, the said letter was not issued on the letter head of Mumbai Housing and Area Development Board (R5). It was further informed that no photopasses were issued in the name of the licensors of the Petitioner. Thus, Respondent No. 5 appraised the Collector, Excise, that FL-III licence was obtained on the basis of the false and forged documents.

Mr. Sabrad attempted to salvage the position by canvassing a submission that the copy of the outward register obtained under the Right to Information Act, does reveal that such a letter was indeed issued to the licensors of the Petitioner vide Outward No. 939. Mr. Lad countered the submission of Mr. Sabrad, by submitting that the purported copy of the outward register also appeared to be forged. A true copy of the extract of the outward register was filed along with an Affidavit in Reply which does not find mention of the said letter addressed to the licensors of the Petitioner.

This Court is not expected to embark upon a fact-finding exercise, when legality and correctness of the orders passed by the quasi-judicial Authorities is to be decided. Nonetheless, the intrinsic evidence of the letter dated 5^th December 2019 puts the Court on guard. First and foremost, the said letter has been addressed on the letter-head of the MHADA and not Mumbai Housing and Area Development Board (R5). Second, there is no reference to the description of the properties which were allegedly permitted to be amalgamated and jointly used for a commercial purpose. Third, the said letter appears to have been issued by the then Executive Engineer, Kurla Division, Mumbai Circle. Ex-facie the letter dated 5^th December 2019 does not contain the contents which are usually associated with the permission or amalgamation of the different plots of land issued by the planning authority.

In the Development Control and Promotion Regulations for Greater Mumbai, 2034, in Part IV under the caption “Requirement of Site and Layout” elaborate provisions have been made under Regulation 26 for the amalgamation of plot. It does not appear that, the procedure envisaged therein was followed.

Absence of reference to even the plot numbers and the fact that the letter was jointly addressed to the licensors of the Petitioner, without any reference to their respective holdings, prima facie, militates against the veracity of the said letter. Ordinarily, it is the planning authority which is empowered to grant amalgamation of two or more plots. It defies comprehension as to how the Executive Engineer could grant such permission without the requisite particulars.

In addition, Respondent No. 5 has registered a first information report against retired Development Officer of Respondent No. 5 for issue of false and forged photopasses, including to the licensors of the Petitioner. Notices were issued to the licensors of the Petitioner again in the year 2022. In the wake of the said proceedings when Neil Salian, one of the licensors of the Petitioner was examined in LC Suit No. 1924 of 2010, he categorically denied that the structures belonging to him and his brother, where standing on the land underneath Coastal Tava Hotel. Cumulatively, the Respondent had placed on record of the Authorities below adequate material to form an opinion that, prima facie, the documents appeared to be false and forged.

In my considered view, a conclusive determination by a Court or the Competent Authority regarding the documents, alleged to be false and fabricated, is not absolutely warranted. If the Authority under the Act, 1949, comes to such a conclusion on the basis of adequate material, this Court would not be justified in substituting its views for the one taken by the Authority below, unless it suffers from perversity and non application of mind.

This Court is persuaded to take a view that, if on the basis of the positive material, the Competent Authority comes to the conclusion that the licence was obtained by wilful representation or fraud, then the insistence on a conclusive finding by the competent Court or Authority may not be sustainable, especially in view of the nature of the business which was to be carried out under the subject licence. A citizen has no fundamental right to trade in liquor.

A useful reference in this context can be made to the Constitution Bench Judgment of the Supreme court in the case of Khoday Distilleries Ltd. and Ors. V/s. State of Karnataka & Ors,^{11.(1995) 1 SCC 574.} wherein the legal position was expounded as under:

In the case of Rajendra P Singh, Proprietor of M/s Jai Hotel Vs State of Maharashtra & Ors,^{22.2008 3 MhLJ 860.} a learned Single Judge of this Court observed as under:

Applying the aforesaid tests to the facts of the case at hand, I am impelled to hold that there was more than adequate material for the Authorities under the Act,1949 to cancel the FL-III licence granted in favour of the Petitioner, on the count that the documents on the basis of which the licence was obtained appeared to be forged. The Court does not find there was either a jurisdictional error or patent legal error or such perversity which stares in the face, to interfere with the impugned order.

Hence, the following order: