AI Structured Summary
Not yet generated for this judgment
Judgment
N.V. Balasubramanian, J.—The writ appeal is preferred against the order of the learned Single Judge in W.P.No. 11165 of 1989 dated
11.9.1998. The appellant was the holder of F.L.II licence in No. 13/F.L.II/88-89 for selling Indian or foreign liquor or both issued by the
Government of Pondicherry for consumption combined with the supply of meals and eatables at the premises mentioned in the licence for the year
1988-89. There was a raid by the Excise Squad of Pondicherry on 11.8.1988 in the premises of the petitioner and the Excise Squad seized certain
amount of illicit arrack and other materials from one Arulraj, the son of the appellant which were found to be in his possession as detailed in the
order cancelling the licence. A case was registered against Arulraj, son of the appellant herein on the ground that he was in illegal possession of the
articles and the said Arulraj also admitted the offence and at his request, the offence was compounded. A show-cause notice was issued to the
appellant stating that the illicit arrack and other materials for the manufacture of illicit liquor were kept in the unlicensed premises of the appellant
with his consent and connivance and illicit liquor was also manufactured in the said premises, and to explain why the licence issued in favour of the
appellant should not be cancelled. The appellant gave a reply and after considering the reply, the Deputy Commissioner (Excise), the third
respondent herein found that Arulraj was the agent of the appellant in liquor business and he was in possession of illicit liquor and the said Arulraj
has also accepted having manufactured illicit liquor and there was every reason to believe that the illicit activities had nexus to the liquor trade
carried on by the appellant under the F.L.II licence granted to him. The plea of ignorance made by the appellant was rejected by the third
respondent and the licence was cancelled u/s 28(1)(b) of the Pondicherry Excise Act 1970 (hereinafter referred to as ''the Excise Act''). The
Excise Commissioner, Pondicherry, on appeal, dismissed the appeal. The appellant preferred a further appeal before the Lieutenant Governor,
Pondicherry and Lt. Governor also dismissed the appeal on the ground that the appellant had knowingly permitted the unlicensed premises to be
used for the purpose of manufacture of illicit liquor and the circumstances showed that it was done only with the knowledge and connivance of the
appellant and thereby, the appellant violated the conditions of the licence. It was also found that it was a case of manufacture of spurious liquor
affecting the health of the people and hence, the cancellation of licence of the appellant was justified. Challenging the order of the Lt.Governor, the
appellant filed the writ petition and the writ petition also came to be dismissed. It is against the order of learned Single Judge, the writ appeal has
been preferred.
Mr. Muralikumaran, learned counsel for the appellant submitted that after Arulraj, son of the appellant had agreed to compound the offence with
the Excise authorities u/s 44 of the Excise Act, no further proceedings shall be instituted against the appellant under the Excise Act for the
cancellation of licence u/s 28(1)(b) of the Excise Act. He referred to the provisions of sub-sections (1) and (2) of section 44 of the Excise Act and
submitted that in lieu of cancellation, the compounding of offence has been done and therefore the Excise authorities had no power to cancel the
licence u/s 28(1)(b) of the Excise Act. We are unable to accept the submission of learned counsel for the appellant for more than one reason. In so
far as section 44 of the Excise Act is concerned, the sub-sections (1) and (2) of section 44 only deal with the compounding of offences, and the
compounding can only be with reference to the proceedings that were instituted against the person who compounded the offence in the criminal
court and it cannot be stated that once compounding has been done, there should be no proceedings u/s 28(1)(b) of the Excise Act. The two
proceedings are distinct and different; one is penal in nature and the other is quasi-judicial. Hence, the compounding of offence by one does not
preclude the licensing authority from initiating proceedings for cancellation of the licence. Moreover, on the facts of the case, there was no
compounding of offence by the appellant. We are of the view, since the offence committed by the appellant u/s 35-A was not compounded u/s 44
of the Excise Act, the submission of learned counsel for the appellant that the licence should not be cancelled u/s 28(1)(b) of the Excise Act, in
view of compounding of the offence by his son, is not legally sustainable.
The second submission of learned counsel for the appellant is that the effect of compounding of offence is acquittal and there is a presumption of
not guilty of offence by virtue of compounding of offence and since no offence has been admitted, the cancellation of licence is not warranted. u/s
44(2) of the Excise Act, acceptance of compensation shall be deemed to amount to an acquittal. Sub-section (8) of section 320 of the Code of
Criminal Procedure provides that the composition of an offence shall have the effect of an acquittal of the accused with whom the offence has been
compounded. We have already held that the compounding of offence was done with reference to his son and not in the case of the appellant and
hence, the compounding of the offence by the son is not a ground to hold that there are no grounds to cancel the licence issued in favour of the
appellant. Further, we are unable to accept the submission of learned counsel for the appellant that the effect of compounding of offence is acquittal
and the compounding of offence does not mean that the accused is absolved of all the charges levelled against him. Moreover, we are of the view
that the acquittal in the criminal court is not a bar for initiating proceedings for cancellation of licence u/s 28(1)(b) of the Excise Act as the
proceedings for the commission of offence under the relevant provision of the Excise Act and the proceedings initiated for cancellation of licence
are entirely separate and the effect of acquittal of the son of the appellant would not in any way preclude the respondents from initiating
proceedings for cancellation of licence u/s 28(1)(b) of the Excise Act.
The third submission of learned counsel for the appellant is that even if there was commission of offence by the son of the appellant, there is no
presumption that the appellant has violated the terms and conditions of the licence. We are unable to accept the said submission. All the authorities
have found on the basis of materials that the appellant has violated the terms and conditions of the licence. It was found during the course of search
in the appellant''s premises that the son of the appellant was manufacturing illicit liquor and also keeping articles and utensils for manufacturing illicit
liquor, and the illicit liquor and the articles which were kept in the unlicensed premises of the appellant were seized. Further, the appellant''s son
from whom the articles were seized in the unlicensed premises has admitted that the illicit liquor was manufactured in the premises. Moreover,
incriminating materials were seized from the appellant''s premises. The son of the appellant who was found to be an agent of the appellant had
admitted the offence. We are therefore of the view that the admission of the son of the appellant and the seizure of incriminating materials in the
appellant''s own premises would constitute materials and they are relevant for the cancellation of licence issued in favour of the appellant. It was
found that the illicit liquor manufactured was seized in the premises of the appellant and it could not have been manufactured without the
knowledge, connivance or consent of the appellant. All the authorities have found on material that the appellant has violated the terms and
conditions of the licence and we find that all the ingredients of section 28(1)(b), namely,
in the event of any breach by the holder thereof, or by any of his servants or by any one acting on his behalf with his express or implied
permission, of any of the terms and conditions thereof
are fully satisfied. We find that the decision of the authorities has been arrived at on the basis of materials on record and it is well settled that this
Court will not go into the question of adequacy or sufficiency of materials and there are materials on the facts of the case for all those authorities to
arrive at the decision which they arrived at. Accordingly, we reject all the submissions made by learned counsel for the appellant. Consequently,
the writ appeal fails and the same is dismissed. No costs.