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Judgment
S. Siri Jagan, J.—This case has a checkered history. The appellant is the State of Kerala. The respondents herein filed an application for licence to start a distillery to manufacture alcohol. At the relevant time, the Molasses Control Order, 1961 was in force. Therefore, nobody could manufacture alcohol from molasses without appropriate licence in that regard. The respondents obtained Ext. P1 licence from the appellant for the manufacture of spirit. But, the State imposed a condition that the respondent shall manufacture spirit only from non-molasses or such base as may from time to time be permitted by the Commissioner of Excise. Subsequently, the Molasses Control Order was withdrawn by the Central Government. There upon the appellant filed an application before the Government for permission to manufacture alcohol from molasses using Ext. P1 licence. That was rejected by the Government. The respondents filed O.P. No. 21259/1999, in which a learned Single Judge of this Court directed the Government to consider the representation filed by the respondent in that regard. The Government again considered the application of the respondent and rejected the same by Ext. P6 order. The respondents again challenged Ext. P6 order by filing O.P. No. 721/2000. A learned Single judge of this Court again directed the Government to reconsider the request of the respondent by Ext. P7 judgment. The Government again reconsidered it and passed Ext. P8 order again rejecting the request. The respondents filed O.P No. 24103 of 2013 challenging Ext. P8 order seeking the following reliefs:
1) by the issuance of a writ of certiorari or any other appropriate writ or order quash Exhibit P8 order;
2) declare that the petitioner company is entitled to manufacture spirit using molasses;
3) by the issuance of a writ of mandamus direct the respondents to grant permission to the petitioner company to use molasses also as a base for the manufacture of spirit in their distillery; and
4) Pass any further order or direction which this Hon''ble Court may deem fit and proper in the circumstances of the case.
The learned Single Judge, after considering the rival contentions of the parties held that the Government cannot now reject the request of the respondent after having suffered Ext. P7 judgment, wherein inter alia it has been held thus:
According to me, Ext. P5 has to be reconsidered. Ext. P5 cannot be justified, because the application is not for fresh licence. Respondents cannot deny the fact that the petitioners are even now entitled to manufacture alcohol from non-molasses. Hence, it is not a fresh application. It is only an application for permission to use molasses as base. That was not considered by the respondents. The justification in Ext. P5 on the basis of the policy of the Government is not applicable to the petitioners, because they are already licensees. Further, I am of the view that the terms and conditions of licence do not prohibit the Commissioner from allowing the petitioners to use molasses as base.
Consequently, the learned Single Judge allowed the original petition declaring that the respondents are entitled to manufacture spirit by using molasses and directed the appellants herein to pass necessary orders in that regard. That was challenged by the State in the present appeal. Originally the Division Bench of this Court by judgment dated 23.03.2005 dismissed the appeal. The State filed Civil Appeal No. 5829/2006 before the Supreme Court. The Supreme Court allowed the appeal on the ground that the Division Bench has not considered the contention of the parties giving reasons and remanded the matter to the High Court for fresh decision after setting aside the judgment earlier passed in this appeal. It is under these circumstances, now the writ appeal again comes up for hearing before us.
The contention of the learned Government Pleader is that, at a time when the Government had taken a policy decision not to issue any licence to start a distillery for manufacturing alcohol in the State, the respondents came up with an application for licence supported by a project report to manufacture alcohol from tapioca. Since the Government wanted to promote the sale of tapioca in the State, on the basis of that project report, Ext. P1 licence was issued to the respondent, deviations from the policy, with a specific condition that, they shall use only tapioca to manufacture alcohol as per the licence. It is submitted that, if the permission to use molasses is now issued to the appellant, that will actually amount to granting him a new licence, against the policy of the State. Therefore, the respondents cannot now contend that the respondents are entitled to use molasses as the base for manufacturing alcohol is the contention raised.
In answer, the learned counsel for the respondents would point out that in Ext. P1, the condition is that the spirit must be manufactured from non-molasses or such base as may from time to time be permitted by the Commissioner of Excise. Therefore, the question of the so called policy decision of the Government, not to issue any licences does not come into the picture at all, since the name tapioca is not even mentioned in Ext. P1. It is further submitted that, these issues had already been considered by this Court in Ext. P7 judgment, which has become final. That being so, the State is estopped from now contenting that the State will not issue permission to the petitioner to use molasses as a base for manufacturing alcohol. It is the further contention of the counsel for the respondents that, under the Industries (Development and Regulation) Act 1951, the alcohol manufacturing industry had been brought under the direct control of the Central Government and only the Central Government can issue licences or permits to manufacture alcohol in the whole country. As such, the appellants cannot take a policy decision in respect of manufacturing alcohol as claimed by them and consequently, in view of the first condition of Ext. P1 licence, it is perfectly open to the appellant to seek the permission of the commissioner to use molasses as the base for manufacturing alcohol. The appellant relies on the decision of the Supreme Court in Synthetics and Chemicals Ltd. and Others Vs. State of U.P. and Others, and the judgment of learned Single Judge of this Court in W.P.(C) No. 25535/2007 upholding the absolute jurisdiction of the Union of India in the matter of controlling the alcohol industry in the country. Therefore, there is no merit in the contention of the appellants that they have taken a policy decision not to issue any licences at all for manufacturing alcohol in the State and consequently, they cannot now deny the appellant permission to use molasses as the base for manufacturing alcohol in accordance with Ext. P1 licence, is the contention of the respondents.
We have considered the rival contentions in detail.
From Ext. P1 it is abundantly clear that the licence was issued only for the purpose of manufacturing spirits from non-molasses or such base as may from time to time be permitted by the commissioner. In the counter affidavit filed by the State in the O.P., it has been specifically stated that, at the time when the respondents applied for licence to start a distillery a policy decision was taken by the Government not to issue any fresh licences to manufacture alcohol in the State. It is specifically stated therein that, it is enamoured by the project submitted by the respondents for manufacturing alcohol from tapioca, the Government decided to issue the licence for manufacturing alcohol from tapioca, so as to promote the sale of tapioca in the State. But for the project report submitted by the respondent for manufacturing alcohol from tapioca, Ext. P1 licence would not have been issued at all is the contention. The respondents have not chosen to controvert the specific averments in the counter affidavit regarding the policy decision by filing a reply affidavit.
In view of the said contention regarding the policy decision, as rightly pointed by the learned Government Pleader, if now the respondents are permitted to use molasses as the base for manufacturing alcohol, that would be a round about way of obtaining a fresh licence which the State had decided not to issue, which cannot be permitted under law.
The contention of the respondents that, in view of the Industries (Development and Regulation) Act 1951, the State cannot take such a stand does not appeal to us. In the decision of Synthetics and Chemical''s case (supra) itself the Supreme Court had specifically detailed the powers still remaining with the State Government for regulating the manufacture of alcohol, not withstanding the Industries (Development and Regulation) Act 1951. That position has been reiterated by the Supreme Court in the judgment in Civil Appeal No. 1642/2013, a copy of which has been made available to us by the learned Government Pleader. If the State Government has such powers to issue such a licence/permit/concession, what ever be the name by which it is called, the State has certainly the power not to issue the same as a general policy decision without discriminating between applicants. Here the Government has filed a counter affidavit to the effect that, they have in fact taken such a policy decision not to issue any fresh licences for manufacturing the alcohol and but for the project of the respondents for manufacturing alcohol from tapioca, Ext. P1 licence would not have been issued at all, which has not been controverted by the respondents. Therefore, if the respondents are now permitted to manufacture alcohol from molasses, that would amount to issuing a fresh licence violating the policy decision, in a round about way, which cannot be permitted under law. That being so, we are of opinion that the respondents cannot now, after obtaining Ext. P1 licence on the promise that they will manufacture alcohol from tapioca, turn around and contend that they are entitled to a permission to manufacture alcohol from molasses. Accordingly, we find no merit in the original petition, consequently, the judgment of the learned Single Judge is set aside and the original petition is dismissed.
The appeal is allowed as above.
We posted the writ appeal for "to be spoken to" at the instance of the counsel for the petitioner, since the counsel for the petitioner wanted to argue that the Government of India and the Kerala Government have changed their policies in the matter of issuing licence for manufacture of alcohol from molasses.
We have heard both sides on that question.
We are not inclined to change our view on the basis of alleged subsequent change of policy. But, we make it clear that if there is actually a change of policy by the Government in the matter of granting licence to manufacture alcohol from molasses, it would be open to the petitioner to approach the Government and the Government shall consider the same in accordance with the policy of the Government. On all points raised in the writ appeal our judgment would stand.