Ramji Prasad vs State Of Jharkhand & Ors.

16/10.08.2026 Heard Mr. Anil Kumar, learned senior counsel appearing for the petitioner and Mr. Gaurang Jajodia, learned counsel appearing for the respondent State.

This petition has been filed under Article 226 of the Constitution of India for quashing part of the order dated 18.12.2010 contained in Annexure-15(A) passed by the Court of Member, Board of Revenue, Jharkhand on application filed on behalf of the petitioner in Board Revision Case No.12 of 2009 whereby the learned Court of Member, Board of Revenue has failed to pass an order of quashing the order as contained in Memo No.362 dated 19.02.2009 (Annexure-9) and also the order of distress warrant for recovery of the sum of Rs.47,04,976/- to be a due amount of fees payable under License No.1/08-09 and the Board of Revenue held that the petitioner is not liable for the license fee for the period from 01.08.2008 to 31.03.2009, however, directed to forfeit the security amount of Rs. 5 lacs.

Mr. Kumar, learned senior counsel appearing for the petitioner submits that tender notice was published for grant of exclusive privilege for manufacture and wholesale supply of country liquor in bottles in all the districts falling within the State of Jharkhand for the period from 01.04.2008 to 31.03.2011. The petitioner submitted an application in the prescribed format along with requisite documents as required in terms of the aforesaid notice for grant of exclusive privilege for manufacture and wholesale supply of country liquor in the district of East Singhbhum, Jamshedpur and tender notice is annexed as Annexure-1. He further submits that the tender was to be finalized before 01.04.2008 and the eligible applicants were to be granted exclusive privilege with effect from 01.04.2008 and for one reason or the other, however, the grant could not be finalized by the Excise Department and the entire process was unduly delayed. He then submits that the Excise Department came out with a short re-tender notice on 03.04.2008 by which applications were re-invited for grant of exclusive privilege in the 22 districts falling within the State of Jharkhand for the period 2008-09 to 2010-11 contained in Annexure-2. He next submits that thereafter the petitioner was called for negotiation vide letter dated 25.07.2008 in the office of the Member, Board of Revenue, Government of Jharkhand and the negotiation for grant was to be held on 28.07.2008. He also submits that the petitioner participated in the negotiation for grant of exclusive privilege in the district of East Singhbhum, Jamshedpur and the Member, Board of Revenue was pleased to award the exclusive privilege in favour of the petitioner for the aforesaid period i.e. from 01.08.2008 to 31.03.2011 and an exclusive privilege order dated 30.07.2008 was issued in favour of the petitioner. He next submits that in the said order there is no clause which suggests that failure to deposit the license fee and the security amount is liable to be forfeited. He next submits that in light of above for the aforesaid exclusive privilege order, it is clear that the period of grant was to start from 01.08.2008 and the minimum guarantee quota of country liquor which was assured to be lifted from the warehouse of the petitioner was fixed at Rs.16,77,560/- LPL on which the petitioner was required to deposit a license fee at the rate of Rs.4 per LPL and the petitioner was directed to obtain a license in Form 27 within 7 days on deposit of the appropriate license fee. He next submits that however the retail licensees for purchase of liquor were required to obtain permits from the District Excise Authorities and on production of the said permits and the cost price of the liquor, they were entitled for taking supply of liquor. He next submits that not even a single retail license has been supplied in the district and in view of that there would be no lifting of liquor from the petitioner’s warehouse as a result of which the money deposited was dead and the petitioner requested for extension of time for depositing the license fee by way of Annexure-5.

Learned senior counsel appearing for the petitioner further submits that the petitioner was again directed to deposit the license fee by letter dated 26.09.2008 in which the petitioner again replied on the same line that there is no details licenses in the district till that date by way of Annexure-6 and 6/1. He next submits that in the said reply the petitioner has also pointed out that since 2007-08 the petitioner has already deposited the license fee as well as the security for that period and due non-appointment of the retailer the entire period has been lapsed and the amount of the petitioner has been stuck. He next submits that in this background the petitioner has moved before this Court for the period of 2007-08 in W.P.(C.) No.626 of 2011 whereby the Co-ordinate Bench of this Court has been pleased to allow the writ petition and directed to refund the license fee along with the interest as well as security money. He next submits that the State has preferred L.P.A. being L.P.A. No.329 of 2022 which was dismissed by the Division Bench and thereafter the State has moved before the Hon’ble Supreme Court in Special Leave Petition (Civil) Diary No.22318 of 2024 which was further dismissed by order dated 27.09.2024. He next submits that so far the litigation of 2008-09 is concerned the grant was issued in favour of the petitioner with effect from 01.08.2008 the retail licenses was settled only on 12.11.2008 that is after lapse of three and half months and the petitioner was informed by letter dated 18.11.2008 contained in Memo No.1828 by Assistant Commissioner of Excise, East Singhbhum, Jamshedpur that since the retail licenses have been settled on 12.11.2008 the petitioner is required to deposit license fee amounting to Rs.47,04,976/- for the period 01.08.2008 to 31.03.2009. He next submits that in this background the petitioner was being asked to deposit the license fee for three and half months also and that was harsh for the petitioner and in view of that the petitioner wrote a letter dated 08.12.2008 contained in Annexure-8 and requested the authorities to allow him to withdraw his consent and return the security amount. He next submits that however no order has been passed on that application rather the petitioner has received the order dated 19.02.2009 contained in Annexure-9 whereby the petitioner has been held liable for payment of license fee with effect from 01.08.2008 and direction has been issued to seize the security amount of Rs.5 lacs. He next submits that in this background the petitioner was compelled to file a petition before the Member Board of Revenue challenging the said order. He next submits that by the impugned order dated 18.12.2010 contained in Annexure-15/A the license part was set aside and it has been held by the Board that the petitioner is not liable to pay the license fee as it was the fault on the part of department. He next submits that however by the said impugned order the Board has directed to forfeit the security amount of Rs. 5 lacs. He next submits that in passing of the said order the Board has also held that the petitioner has not become the licensee and therefore the petitioner is not liable to pay the license fee. He next submits that part of the order by which the forfeiture order has been passed by the Board of Revenue is also not in accordance with law. He draws the attention of the Court to the tender notice and submits that in light of Clause झ in which the license fee was issued and the person has not acted in light of that then only security amount can be seized. He next submits that in light of Clause झ once the exclusive privilege granted and cancelled then only the security amount can be forfeited. He next submits that till date there is no cancellation of exclusive privilege granted to the petitioner by the department.

Mr. Kumar, learned senior counsel appearing for the petitioner further submits that in light of Annexure-4 which is letter dated 30.07.2008 clearly stipulates that special exclusive privilege will not be exercised till the issuance of license. He submits in light of this clause also the order is bad in law and in light of exclusive privilege granted to the petitioner by Annexure-4 there is no condition to be imposed for forfeiture of the security amount. In this background that part of the order may kindly be quashed and appropriate order may kindly be passed to the department to refund the said amount of Rs.5 lacs which has been forfeited on account of security deposit.

Mr. Jajodia, learned counsel appearing for the State submits that Member Board of Revenue has rightly passed the order. He refers to Clause झ and submits that there is provision in a tender notice itself to forfeit the security amount. He further submits in view of the said clause, if the petitioner fails to apply license under Form 27 within 15 days of grant of privilege, the provisions are there to forfeit the security amount. He then submits that relying on the said provision Member Board of Revenue has rightly passed the order. On these grounds, he submits that writ petition may kindly be dismissed.

In view of the above submission of learned counsel appearing for the parties and after going through the annexures which has been referred by learned senior counsel appearing for the petitioner annexed with the writ petition, it transpires that pursuant to the tender inviting notice contained in Annexure-1, the petitioner has applied for grant of privilege for the period with effect from 03.04.2008 thereafter the second notice was issued and petitioner was called upon to negotiate and after negotiation the petitioner was granted privilege by way of Annexure-4, however, it is an admitted position in light of impugned order itself that the department was at fault of not acting in light of tender notice and the retailers license that has not been allotted only after lapse of three and half months and thereafter the petitioner was called upon to deposit the license fee from retrospective with effect from 01.08.2008 and in light of that the petitioner has filed the petition before the authority concerned contained in Annexure-8 and pointed out that he will not be able to deposit the license fee as it will be unviable to deposit the license fee for the period from which no license was issued by the department in which the reason was also provided in the said reply by the petitioner and for the previous year also 2007-08 the petitioner has already deposited the license fee along with security amount and retailers have not been appointed and the entire amount was stuck and that action was challenged before this Court in W.P.(C.) No.626 of 2011 which has been allowed by learned Single Judge of this Court, confirmed by the Division Bench in the aforesaid LPA and finally affirmed by the Supreme Court in Special Leave Petition (Civil) Diary No.22318 of 2024 and identical is the situation of the present proceeding.

Clause झ on which heavy reliance has been placed by learned counsel appearing for the State as well as learned senior counsel appearing for the petitioner is stipulated herein under :-

In light of above and carefully reading the said clause, it transpires that once the exclusive privilege is cancelled then only the question of forfeiture of security amount will come.

It is an admitted position that till date there is no cancellation order and that is also fortified in light of first part of the impugned order and in view of that argument of learned counsel appearing for the respondent State is not being accepted by this Court.

Further Annexure-4 by which the privilege was granted to the petitioner clearly suggests that till the issuance of the license in Form 27 special privilege will not be affected till the license is issued by the Excise Commissioner in Form 27. Admittedly, no license has been issued in favour of the petitioner and this aspect has been held wrong by the learned Board of Revenue itself.

In light of Section 42 of the Excise Act, 1915 and in light of Section 42F, the power of cancellation is there once it is issued in light of Section 22 of the Act, however, there is no license in light of Section 22 till date and in light of that there is no cancellation order till date. Further in identical situation in the litigation of the year 2007-08 the matter has travelled up to the Hon’ble Supreme Court and the order of learned Single Judge has been affirmed up to the Supreme Court.

In view of the above facts, reasons and analysis, the Court finds that so far as order of Revenue Board to forfeit the security amount of Rs.5 lacs is concerned that is not in accordance with law, as such that part of the order dated 18.12.2010 contained in Annexure-15(A) passed by the Court of Member, Board of Revenue, Jharkhand is hereby set aside.

Accordingly, respondent No.3 is directed to refund the said amount of Rs.5 lacs along with interest of 7% to the petitioner within eight weeks from the date of receipt/production of this order.

This petition is allowed in above terms and disposed of.