Rangar Breweries Ltd. vs State of Haryana

Iqbal Singh, J.—PetitionerCompany is engaged in manufacture, sale and transportation of potable alcohol fit for human consumption, commonly known as Indian Made Foreign Liquor (IMFL), which includes whisky, rum and other products. Petitioner sells the liquor throughout the country and because of its geographical situation, most of its consignments sent outside the State of Himachal Pradesh have to pass through the State of Haryana. The State of Haryana introduced prohibition in the State w.e.f Ist July, 1996 vide Notification Annexure P5. After coming into force the prohibition in the State of Haryana, respondent No. 2 issued a circular dated 4th September, 1996, vide annexure P7 to various distilleries in the State of Punjab, Rajasthan, Uttar Pradesh and Madhya Pradesh and to the Sugar Mills in the States of Punjab and Uttar Pradesh only. Unaware of this circular Annexure P 7, the petitioner on 20th October 1996 sent a truck carrying 614 cases of Double Dog whisky. This truck was intercepted by the police and liquor confiscated and F.I.R. No. 468 was registered at Police Station Butana, District Karnal for the alleged noncompliance of circular dated 4th September, 1996, Annexure P7 and challan was put in the Court. Similarly, another circular was issued by respondent No. 2 on 15th October, 1996 to the Excise Commissioners of the State vide Annexure P8. It relates to escorting to the consignments by Excise and Police Officers/officers in order to ensure their safe passage across the border. Another circular dated 15th October, 1996, Annexure P9 was issued relating to regulate the entry and movement of such consignments in Haryana State. It further provides for giving escort party on demand to carry out the transportation of the goods from the State of Haryana. Accordingly, the petitioner has challenged the circulars Annexures P7 to P9 and Notification dated 18th December, 1996 Annexure P10 as unreasonable and violative of Articles 301 and 304 of the Constitution of India.

Notice of motion in this petition was issued on 20th February, 1997 for 27th February, 1997, on which date an order was passed by this Court for preparation of inventory of liquor bottles seized from truck No. HP310778 stated to be containing 614 cases (12 bottles in each case) to be prepared by Mr. Sanjay Bansal, Advocate. Accordingly Mr. Sanjay Bansal, Advocate, submitted his report dated 11th March, 1997 in this Court according to which 12 bottles of whisky were missing and 5 bottles were found broken.

The respondents in their return have justified the issuing of notification and the circulars in order to enforce and carry out the prohibition in Haryana and to prevent the breach of the excise policy.

The challenge in this petition is to circulars Annexures P7, P8 and P9 and notification Annexure P10.

The circulars Annexures P7 to P9 were also challenged in C.W.P. No. 1232 of 1997 (M/s Khoday India Ltd. and another v. State of Haryana and others decided 17th March, 1997) in which the Government conceded that these Annexures need to be modified because they cause undue restrictions in interState trade and, accordingly, a statement was made by Mr. H.S. Hooda, Advocate General, Haryana, on 17th March, 1997, which is as under :

"Mr. H.S. Hooda, learned Advocate General, Haryana, though made a statement that consensus has been arrived at between the parties, as referred to above, but has prayed that the old arrangement should be continued for one month during which time the new procedure will be made workable. We, therefore, permit the old procedure to continue for one month from today. If there be some practical difficulties in implementing the new procedure, the respondents may ask for extension of time by filing an application, giving reasons therein for such extension. At that stage, the Court shall consider the application for extension of time."

It seems that the difficulty being faced by the petitioner in transporting liquor from Himachal Pradesh to other States after passing through the State of Haryana has not ceased even after the above statement was made by the learned Advocate General, Haryana, in the abovesaid writ petition and no procedure has been prescribed regarding transportation of liquor and that seems to be the reason for the filing of the present writ petition.

It has not been disputed that the liquor seized by the police was not meant to be offloaded or utilised in the State of Haryana. The allegation is that the petitioner had not complied with circular Annexure P7. But Circular Annexure P7 was not sent to the General Managers of Distilleries/Breweries situated in Himachal Pradesh and Delhi, therefore, it could not be complied by the petitioner. In fact, undue hardship was caused to the petitioner on account of seizure of the liquor, the petitioner being not aware of the circular Annexure P7. Therefore, there is no contravention of circular Annexure P7 by the petitioner. Moreover, Annexure P7 is merely a circular having no legal entity. The learned Advocate General, Haryana, when confronted with this, had nothing to say and rightly.

For the foregoing reasons, we hold that Annexure P7 is not binding on the petitionerCompany and the entry of consignment in the State of Haryana for the purpose of crossing its boundaries cannot be said to be illegal or in contravention of the excise policy. Consequently, the seizure of liquor by the respondents is held to be illegal. As a result thereof, respondents are directed to return the liquor seized along with other goods, if any, to the petitioner forthwith.

Annexure P8 relates to providing for escort party along with one Excise Inspector and one Head Constable/Constable in case of transit of liquor/molasses through the Haryana State. Annexure P9 is regarding transportation of liquor/beer/molasses through Haryana by getting an escort party. In regard to these circulars, the learned Advocate General, Haryana has produced before us today a letter issued by the Prohibition and Excise Commissioner, Haryana, to all the Deputy Excise and Taxation Commissioners (P) in the Haryana State on 17th April 1997, a copy of which has been endorsed on 28th April, 1997 to various authorities. The relevant portion of this letter reads as under :

"In order to comply with the directions of the Hon''ble Punjab and Haryana High Court dated 17th March, 1997, the system providing escort party is to be replaced by erectingcheck posts in the State. The system of providing of escort party to these consignments is dispensed with immediate effect.

In order to set up check posts as per directions of the Hon''ble Punjab and Haryana High Court, more time is required for which request is being made to the Hon''ble High Court and the decision of the Court will be intimated to you in due course.

However, you must ensure that there is no unauthorised unloading of consignments in your district. You are, therefore, directed to strictly follow the above instructions and report compliance."

This letter was shown to the learned counsel for the petitioner, who feels satisfied for the present.

In view of the letter dated 17th April, 1997, the relevant portion of which has been reproduced above and the fact that it satisfies the counsel for the petitioner for the present, we quash the circulars Annexures P8 and P9 as well.

Regarding the Notification dated 18th December, 1996, Annexure P10, the same is of a later date and therefore not binding on the petitioner.

The perusal of the report of the Commissioner dated 11th March, 1997, submitted to this Court shows that 12 bottles of liquor were missing and 5 bottles were found broken. How is it that these bottles could be found missing which were seized by the police of Police Station Butana District Karnal. We take a serious note of it and order registration of a criminal case in this regard and direct that after registration of the case, it be thoroughly investigated by an officer not below the rank of Deputy Superintendent of Police so as to bring to book the police official(s) responsible for the missing bottles. It is further ordered that the investigation be completed within one month after registration of the case and challan put in the Court.

This petition stands disposed of accordingly.