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B.P. Dharmadhikari, J.—Looking to the nature of controversy, We have heard Advocate Shri Dhorde, for the petitioners and AGP Shri Ghatge, for respondents. Heard finally with consent by issuing Rule & making it returnable forthwith. The challenge is to the retrospective recovery of supervision charges and sole basis is Hon. Apex Court has already held it bad in Kopargaon S.S.K. Ltd. Vs. State of Maharashtra and Others, . Petitioner Sugar Factory urges that Government of Maharashtra and Others Vs. Deokar''s Distillery, has no application here as in said matter the merits of the controversy were not open. AGP for respondents contends that challenge is covered by the judgment of the Hon. Apex Court in Government of Maharashtra v. Deokar''s Distillery (supra) and later order of this Court dated 17.1.2012 dismissing WP 3914 of 2011 & other three matters while appreciating similar issue.
Only facts pointed out to us are service of a demand dated 17.5.2011 for recovery of the supervision charges of Rs. 16,29,711.00/- on account of arrears of Vith wage revision with effect from 1.1.2006 till 31.3.2011. Demand is u/s 58A of the Bombay Prohibition Act, 1949, referred to as Bombay Act hereafter. The petitioner has a license to manufacture rectified spirit and under the conditions of license, petitioner has to deposit the amount towards salary & wages of the staff appointed by the State for supervision of its manufacture, that too three months in advance. Shri Dhorde contends that as commodity manufactured is controlled one, its sale price is always pre-decided and all expenses known or within knowledge are then included in such sell-price. The entire expenditure incurred for manufacture including the amount being deposited for salary & wages form part of such price and are passed on to the customers who purchase the rectified spirit. If such retrospective levy or recovery is permitted, it will be expecting the petitioners to pay from its own pocket but not permit it to recover as the customers can not be coerced to pay any additional price for purchases already effected by them. Thus it is exposing the petitioner to grave uncertainties and action of the respondents is unilateral, arbitrary & violative of the Art. 14 of the Constitution of the India.
Learned AGP Shri Ghatge submits that the pay revisions have been consistently retrospective & petitioner can not assail recovery on the ground that it is retrospective. He urges that order of this Court dated 17.1.2012 dismissing WP 3914,4898,8155 & 8963 all of 2011 squarely covers this controversy. He relies upon the provisions of S. 58A of the Bombay Act and on license given to petitioner at Exhibit "A" with the petition.
Unreported order of this Court dated 17.1.2012 in four writ petitions (supra) considers challenge to identical demand notices seeking retrospective recovery of the supervision charges under S. 58A of the Bombay Act. This Court has evaluated the both the judgments of Hon. Apex Court (supra) and upheld the recovery in paragraph 6 of its order.
Shri Dhorde however has attempted to distinguish the judgment in Government of Maharashtra v. Deokar''s Distillery (supra) by submitting that there the issue did not arise as petition filed before the High Court was found lacking in material particulars. The issue is answered in favour of the petitioner by Hon. Apex Court inKopargaon S.S.K. Limited v. State of Maharashtra,(supra). Maharaja Chintamani Saran Nath Shahdeo Vs. State of Bihar and Others, - "Maharaja Chintamani Saran Nath Shahdeo v. State of Bihar"--para 22 & 23 is pressed into service by him to argue that "The golden rule of construction is that, in the absence of anything in the enactment to show that it is to have retrospective operation, it cannot be so construed as to have the effect of altering the law applicable to a claim in litigation at the time when the Act was passed." Learned AGP has attempted to show that consideration by Hon. Apex Court in later judgment is not on the merits of the matter & emphasis there is on principles of the res-judicata.
We find that the observations of Hon. Apex Court in its earlier judgment in Government of Maharashtra v. Deokar''s Distillery (supra-Hon. 3 Judges) & later judgment in Kopargaon S.S.K. Limited v. State of Maharashtra,(supra) are sufficient to answer the contentions raised. We point out the findings of majority in this earlier judgment below:--
In the background of the above decided cases, we shall now consider the case on hand. We have already extracted the relevant provisions, the rules, the regulations and the circular letters issued by the State Government. As per the well-settled rule of interpretation that the words in a provision are to be given their normal meaning as understood by the common man or by the trade as well as the widest meaning unless there is any limitation in that provision itself. The words "the cost of such staff shall be paid to the State Government" used in Section 58A of the Prohibition Act, in our view, would include in their meaning all the costs incurred by the State Government for the purpose of disbursing pay and other allowances to the government employees posted for supervision, whether recovered in advance or in due course the additional amounts which become recoverable on account of upward revision of pay scales with retrospective effect, because there is no limitation of any kind in Section 58A of the Prohibition Act to the effect that the costs are to be recovered only in advance, and that too only such costs as could be worked out on the date of demand or to the effect that the burden of additional amounts on account of revision of pay scales with retrospective effect should not be recovered from the liquor licensee. In our view, there exists full power u/s 58A of the Prohibition Act itself to levy and recover all costs of supervision and, therefore, no limitation can be read into the power to recover all costs present, future and past which are or were actually incurred by the State Government in view of payments made/to be made to its employees posted for excise supervision, in spite of provisions of sub-rule (12) of Rule 17 of the Rules of 1966 and sub-rule (12) of Rule 6 of the Rules of 1973.
It was submitted on behalf of the appellants that for administrative convenience only the costs are calculated and recovered in advance from the licensee and therefore, sub-rule (12) of Rule 17 of the Rules of 1966 or sub rule (12) of Rule 6 of the Rules of 1973 could not be construed as an effective representation that no further cost would be recovered when provision u/s 58A of the Prohibition Act is clearly to the effect that the licensee has to bear the entire cost of the supervisory staff and, therefore, the question of application of the principle of promissory estoppel, as argued by the learned counsel for the respondents, would not arise. The Full Bench of the Bombay High Court also ruled accordingly. Further, Rule 17(12) of the Rules of 1966 and Rule 6(12) of the Rules of 1973 providing for recovery of supervision charges in advance, do not direct that differential amounts are not to be recovered, if pay scales are revised. On the other hand, the aforesaid Rules are to be read with other provisions giving residuary powers in both the sets of Rules viz. Rule 17(43) of the Rules of 1966 and Rule 6(36) of the Rules of 1973, which direct that the licensee shall comply with all orders issued under the Prohibition Act and Section 11 of the Prohibition Act clearly provides that the State Government may permit business in liquor subject to the manner and to the extent provided by the provisions of this Act or any rules, regulations or orders made or in accordance with the terms and conditions of the licence, permit, pass or authorization granted thereunder.
These are the findings of Hon. Apex Court on law ie interpretation without any bearing on facts and therefore can not be distinguished or departed from by picking up any factual or procedural aspect. Effort of petitioner to do so can not be countenanced. The petitioner has produced its "license for constructing & working a distillery for manufacture of spirit" issued under Rules 3(3) & 7(3) of the Maharashtra Distillation Of Spirits & Manufacture Of Potable Liquor Rules, 1966 and it casts similar obligations upon the petitioner vide its clauses 2(2) & Rule 3.
In its dissenting /minority view Hon. Apex Court in Government of Maharashtra v. Deokar''s Distillery,(supra) observes that the interpretation of a statute must be made on a conjoint reading of the Act, rules made thereunder as also the terms and conditions of the license. Section 58A of the Act does not provide for the mode and manner for recovery of cost of excise supervision & same is provided for in the rules as also the conditions of license, which forms part of a statute. A statutory rule can''t be ignored on the ground that the same was made only for administrative purposes. The conditions of the license cannot be interpreted in such a manner so as to impose upon the licensee a burden which was not contemplated at the time when license had been granted and/or during the currency thereof. The option of the licensee to take or not to take a license, would, thus depend upon the price which was to be fixed. The risk involved in the matter may be reasonably certain. A licensee before entering into a contract is entitled to know what price he has to pay for the grant of exclusive privilege or what are the risks involved in it. A price, thus, must be predetermined and cannot be redetermined and/or demanded after a period of four years of the expiry of the license. The reason why a manufacturer must have a fair knowledge about his liability for obtaining a license would be that he may during the currency of the license fix the price of liquor in such a manner so that all charges are payable by him may be passed on to the consumers. It would not be correct to contend that such costs can be recovered after the demands are made long after the contract has been worked out. Hon. Judge finds that it will be preposterous to suggest that the liability in respect of the increased costs of excise supervision for one licensing year can be passed on to his consumers after four years or more. A party to a statutory contract is bound to discharge his obligations in terms of the provisions of the Act, Rules or conditions of license as they stood. He is also entitled to enforce his rights. No executive order, can be issued after a long time to fasten a new liability upon the licensee particularly when grant of license for each year would result in a separate contract which may not only provide for a different price but also different terms and conditions as well as the mode and manner in which the rights of the parties thereto are required to be exercised and/or the obligations are to be discharged; more so when one contracting party has no say therein. It is well-settled that by reason of an executive act a liability cannot be created with retrospective effect. The said rule shall squarely apply also in relation to a statutory contract. Furthermore, the statutory authority has been enjoined with a duty to follow the mode as regards recovery of the costs of excise supervision. The mode and manner thereof having been fixed, the statutory authorities ordinarily must follow the procedure laid down therefor. State in pursuance of its welfare activities may increase the pay of its employees with retrospective effect but such burden cannot be passed on to a licensee by an unilateral act on its part. For enforcing the same, there must be a contract to the contrary. It is held that an act on the part of the State to increase wages of its employees is a welfare act. When such increase takes place with retrospective effect the validity thereof can be upheld only because it is for the benefit of the employees. Such a beneficial act on the part of the State, however, would not bind a third party. An increase in wages by the State with a retrospective effect was an unilateral act on the part of the State. If, it will bear repetition to State, if it was intended to be passed on by the State to the licensee the same ought to have been the subject-matter of a specific contract so as to avoid the uncertainty of the terms of contract as contemplated u/s 29 of the Indian Contract Act. The rule of construction of a contract is that if the terms of the agreement are so vague and indefinite that it may not be ascertained with reasonable certainty as regard intention of the parties, the same would not be enforceable at law. Meaning of a contract must be clear on its face. The dissenting view concludes by holding that in any event, in that case, the contract had been worked out & once the contract had been worked out, a fresh liability cannot be thrust upon a contracting party. This dissenting view is projection of the arguments advanced before us by Adv. Dhorde on behalf of the petitioner. In the light of majority conclusions reproduced above, the same need to be rejected. We, therefore, do not find it necessary to dwell upon his arguments on mechanism of price fixation built with the aid of Rule 2(d) of the Maharashtra Potable Liquor ( Fixation Of Maximum Retail Prices) Rules, 1996 defining maximum retail price, along with its explanations.
In Kopargaon S.S.K. Limited v. State of Maharashtra,(supra), the claim of the respondent was based on the notification implementing recommendations of the Fifth Pay Revision Commission, pursuant whereto and in furtherance whereof, the pay of the employees stood revised with retrospective effect from 1-1-1996. According to the appellants, there could not have been such retrospective revision & recovery. They had also relied upon the earlier adjudication upholding their contention which became final. High Court rejected their writ petition. Appellants therefore approached the Hon. Apex Court & Hon. Court in this background observed:--
The appellant in Writ Petition No. 4092 of 2000, indisputably questioned the right of the respondents to recover the supervision charges with retrospective effect. It was furthermore contended therein that in any event no interest was payable on the said charges, particularly in view of the fact that although the notification was issued in the year 1998 the demand was made in the year 2000. The said writ petition was allowed opining that the difference in payment of supervision charges was not recoverable. The said order of the High Court dated 7-12-2005 attained finality. It would, therefore, operate as res judicata.
The submission of Mr Khaladkar that the demands were for different charges, namely, one in respect of pay and the other in respect of leave, salary, etc. cannot be accepted. The basis for both the claims was the same. If the principle of res judicata applies in a writ proceeding, no fresh demand could have been raised by the respondents. We may notice that even the Commissioner of Excise, keeping in view only that aspect of the matter, issued a circular only in respect of those distilleries from whom the charges were yet to be realised. The said circular had not and, in fact, could not have any application in respect of those cases where the dispute between the parties had attained finality.
It is no longer res integra that the principles of res judicata apply in writ proceedings. It was so held in Ishwar Dutt v. Collector (L.A.) 3, wherein this Court noticed:- (not reproduced)
We are unable to find any inconsistency in these two judgments & law as settled by Hon. Apex Court in Government of Maharashtra v. Deokar''s Distillery (supra) has not been altered. The later view is not on this controversy & does not advance the case & cause of petitioner at all.
Because of authoritative interpretation of the statutory provisions including Section 58A of Bombay Act by the Hon. Apex Court in its earlier judgment in Government of Maharashtra v. Deokar''s Distillery (supra), it follows that "Maharaja Chintamani Saran Nath Shahdeo v. State of Bihar" wherein Hon. Apex Court holds that in the absence of anything in the enactment to show that it is to have retrospective operation, it cannot be so construed pressed into service by petitioner has no application in present matter. On the contrary, the interpretation above by the Hon. Apex Court expressly shows retrospective properties of Section 58A and hence, this precedent can be used against petitioner. With the result, there is no merit in the arguments as advanced & case presented. No case is made out warranting interference. Writ Petition is accordingly dismissed. Rule discharged. No costs.