1991 PLP 267 (MLD)

11. Now the stage is set to undertake the examination of the contentions of both the parties. I will start with the first contention. It is obvious from Article 18 of the Constitution that fundamental rights pertaining to freedom of trade, business, profession are guaranteed subject to the condition that the Government had the power to prescribe qualifications for the purpose of joining an profession, occupation, or trade and it can also enforce a licensing system. Article 18 is as follows:-- . "Article 18: Subject to such qualification, if any, as may be prescribed by law, every citizen shall have the right to enter upon any lawful profession or occupation and to conduct any lawful trade or business: Provided that nothing in this Article shall prevent (a) the regulation of any trade or profession by a licensing system; or (b) the regulation of trade, commerce or industry in the interest of free competition therein; ,or (c) the carrying on by the Federal Government or a Provincial Government, or by a corporation controlled by any such Government of any trade, business, industry or service, to the exclusion, complete or partial, of other persons. It follows that .the freedom of trade, profession and occupation are inalienable, valuable and basic rights and only clog on this right is the prescription of qualification under some Statute or a licensing system under some law. None of the learned counsel was able to cite any law containing any prohibition on this trade activity or any licensing system relating to manufacture of non-alcoholic beverages. I am, therefore, quite clear that the Company was not in need of any permission for carrying out the disputed commercial activity. The question now remains as to what are the powers of the respondents to regulate the commercial activity being carried on in brewery. The claim of the respondents in this regard rests upon the provisions of section 21 of the Punjab Excise Act (I of 1914) (hereinafter referred to as the Act). It is a well-settled 'principle of law that for the purpose of discovering the purpose and intention of law it is necessary to examine the Statute as a whole and in an organic manner. The preamble of the Statute and various headings of the Chapters ate key to understand the intention, and scope of the Act. The Act was enforced on 1st of February, 1914. It starts with a preamble which is as follows:-- "Whereas it is expedient to consolidate and amend the law in the Punjab relating to the import, export, transport, manufacture, sale and possession of intoxicating liquor and of intoxicating drugs;" The Act has eight Chapters. Chapter I deals with the provisions relating to definition of words embodied in the Act. Chapter II provides the hierarchy dealing with the activities being carried under the Act. At the apex is the Provincial Government while by virtue of notification, superintendence and administration of all matters reside in the Board of Revenue and so on and so forth. Even this Chapter contains the provisions relating to appeal and revision in respect of orders passed under this Act. Chapter III pertains to import, export and transport of intoxicants. For the purpose of this case Chapter IV is important. It deals with the manufacture of. intoxicants, possession and production of these things. It also deals with establishment of distilleries and breweries under the licence and establishment of licensing of warehouses. It, in detail, deals with the possession, prohibition, and restriction in regard to intoxicants, and narcotics. Similarly this Chapter also deals with the sale of intoxicants, grant of lease of manufacture, and sale of liquor in military cantonments and so on and so forth. Chapter V deals with duties, fees while Chapter VI deals with the, conditions relating to conditions and terms of licence. Sections 36, 37 and 41 deal with the power of the Government to cancel, suspend-licences, power to cancel any other licence and power to withdraw licences.

12. From the aforesaid survey, it is, therefore, quite clear that this Act deals with the power of the Government to import, export, transport, manufacture of intoxicants and manufacture/production of alcoholic drinks in breweries as well as distilleries. The power of the Government to grant permission or licence-is exclusively in regard to the aforesaid intoxicants, narcotics, production of alcoholic products. I am, therefore, quite clear that power to permit or carry on the trade activity of manufacturing non-alcoholic beverage cannot be claimed under this Act. The contention of respondents is, therefore, totally unfounded. It is a settled principle of law that the task of judiciary is to interpret the law and not to make the law. Neither the judiciary can read into the Act nor can provide any omission or gap in the Statute on the principle of cassias omissus. On this principle of interpretation I am of considered opinion that the contention of respondents that this commercial activity in Brewery cannot be carried on without their permission under section 20 of the Act is totally untenable and cannot be accepted.

13. Equally ineffective is the argument that the brewery cannot be used for the purpose of manufacture of Malt-79. To begin with Mr. Irfan Qadir, AA.-G., did riot adhere to this argument put forth by Mr. Muhammad Nawaz Abbasi, AA.-G. and then the learned A:-G. Even. otherwise this argument had hardly any merit as the restrictions contained in Brewery Rules cannot be read into the Brewery rules. This contention is, therefore, found to be without any merit.

14. The question remains whether the respondents had the power to regulate the carrying on the disputed commercial activity within the precincts of brewery under, the inherent power of the Government aimed at the welfare of public. This is commonly known as police powers of the State. No. hard and fast definition of this power can be given. On this concept says Chief Justice Shaw--in Commonwealth v. Alger 7, Cush 53, 84 that: "We think it is settled principle, growing out of the nature of well- ordered civil society, that every holder of property, however absolute and unqualified may be his title, holds it under the implied liability that his use of it shall not be injurious to the equal enjoyment of others having an equal right to the enjoyment of their property, nor injurious to the rights of the community. All property in this Commonwealth, is held subject to those general regulations which are necessary to the common good and general welfare. Rights of property, like all other social and conventional rights, are subject to such reasonable limitations in their enjoyment as shall prevent them from being injurious and to such reasonable restraints and regulations established by law as the legislature, under the governing and controlling power vested in them by the Constitution may think necessary and expedient. This is very different from the right of eminent domain -- the right of a Government to take and appropriate private property whenever the public exigency requires it, which can be done only on condition of providing a reasonable compensation therefor. The power we allude to is rather the police power; the power vested in the legislature by the Constitution to make, ordain and establish all manner of wholesome and reasonable laws, statutes, and ordinances, either with penalties or without, not repugnant to the Constitution, as they shall judge to be for the good and welfare of the Commonwealth, and of the subjects of the same. It is much easier to perceive and realize the existence and sources of this power than to mark its boundaries, or prescribe limits to its exercise. In Chicago etc. R. Co. v. Illinois Ex rel, Grirhwood 200 U. S. 561, 50, Mr. Justice Harlan, says that-- "We hold that the police power of a State embraces regulations designed to promote the public convenience or the general prosperity as well as regulations designed, to promote the public health, the public morals, or the public safety." Another distinguished Justice of the Supreme Court Mr. Justice Holmes in Nobel State Bank v. Haskell 219 U.S. 104, 55, says:-- "It may be said in a general way that the police power extends to all the great public needs. It may be put forth in aid of what is sanctioned by usage, or held by the prevailing morality or strong and preponderant opinion to be greatly and immediately necessary to the public welfare." The police power of the State, states another eminent Judge, namely, Redfield Ch: J. in Thorp v. Rutland & Burlington R.R. Co.., 27 Vt. 140,149 as under: ". . . extends to the protection of the lives; limbs, health, comfort and quiet of all persons and the protection of all property within the State. According to the maxim, Sic-ultere-tuo-ut-alienum-non-laedas, which being of universal application, it must of course, be within the range of legislative action to define the mode and manner in which every one may so use his own as not to injure others." From the Scheme of the Act it is quite clear that the brewery and distillery are being run under the licence under this Act. These are places where alcoholic products are manufactured and are subject to strict control of respondents, on account of the nature of this particular activity which might affect-the health of nation at large. Therefore, the functioning of these palces is within the domain of respondents. If any other activity is to be carried on in these palces that also had to remain under the watchful eye of the respondents.

15. So; I am of the opinion that the power to cancel, suspend, the licence or cancel any other licence under section 37 or the power to withdraw under section 41 of the Act, are not available with respect to disputed activity but this power falls within the domain of police power of the respondents.

16. The next question in this regard is whether the power to regulate can amount to power to prohibit. This question is of significance. Neither the word `regulate' nor the word `prohibit' are defined in the Act. The word is defined in Black s Law Dictionary. "To fix, establish; or control; to adjust by rule, to direct by rule or restriction, to subject to governing principles or laws, to adopt measures to promote its growth and insure its safety. It is also power to prescribe rules by which commerce is to be governed and embraces prohibitory regulations. Regulate means to govern or direct according to rule or to bring under control of constituted authority, to limit and prohibit, to arrange in proper order and to control that which already exists." The word `regulate' has come into consideration in number of cases before the Courts of foreign jurisdiction. These cases are digested in Book `Words & Phrases Vol.36-A, as under: "In Thielen v. Kostelecky 287, N.W. 513, 516,

69. N.D. 410, 124, ALR 820 the word `regulate' as used in the provisions of the Liquor Control Act conferring on Governmental bodies of cities the authority to `regulate' the retail sale of alcohol and alcoholic beverages, has a broad meaning." `In U.S. v. Gregg. D.C. Tex

5. F. Snpp. 848, 953. "To regulate `interstate. commerce' means to foster, protect, control and restrain with appropriate regard for welfare' of those immediately concerned and of general public. In Great Northern Utility Co. v. Public Service Commission (293 P: 294 .301, 88 Mont. 180) "To regulate" in the sense intended is to foster protect, and control the commerce with appropriate regard to the welfare of those who are immediately concerned as well as the public at large, and to promote its growth and ensure its safety. In State ex.rel. Saperstein v. Bass 152S.W. 2d 236, 238, 177 Tenn. 609 "Regulate" means to adjust by rule or method, to direct, to rule, to govern, to methodize, to arrange. Every element of his definition involves restraint, the exercise of a power over a thing by which its activities are ruled or adjusted, or directed to certain ends. In Phelps Inc. v. City of Hastringtons (42, N.W. 2d. 300, 303, 152, Neb. 651) `Generally, power to `regulate', means that manner of conducting business, may be controlled, and in so doing, the regulatory body may ordinarily consider character of those operating business places and hours of operation, type of building and sanitary condition thereof, licences, and any other reason regulation that is not prohibitory. 17.' After the survey of the aforesaid meaning of the words `Regulate' and `prohibit' I am quite clear in my mind that the respondents can control this activity being carried on in the brewery but they have no power to prohibit this activity. It will simply amount to total ruination of activity sought to be regulated.

18. At this stage, it will be pertinent to note that the brewery rules as well as distillery rules provide elaborate detailed machinery for carrying on the trade activity within the brewery and the distillery respectively. The Brewery Rules, in detail provide the manner of its functioning, the time of working of machinery, conditions of manufacturing, the days on which the products are to be manufactured, the place of storage of beverages and the comprehensive mechanism for the checking of functioning of brewery.

19. It will be pertinent to notice that all the necessary conditions were incorporated in the order granting permission. It will be appropriate to reproduce the conditions. These are as follows:-- (i) The permission hereby accorded shall not be used to circumvent the Punjab Brewery Rules in any manner whatsoever and non-adulteration of both alcoholic beer and non-alcoholic beverage shall be ensured to the satisfaction of the Excise Officer Incharge of the brewery. (ii) The non-alcoholic finished beverage may be collected in the specified strike out vessel on the 4th floor of the brewery and conveyed therefrom to the feeding tank through welded metallic pipeline. No additions or alterations to the existing lay-out will be made except with the order of approval of the competent authority. The joints of the conveyer pipeline shall be sealed to the satisfaction of the Collector or the Excise Officer, incharge of the brewery. (iii) The vessels meant for the storage of Malt-79 shall be kept quite separate, will not be utilised for purposes other than the storage of the non -alcoholic beverage and clearly marked to show that these are meant for the non-alcoholic beverage. (iv) Separate account of the worts indicating the material used will be maintained on the lines of worts meant for the manufacture of beer. These accounts will be open for inspection by the Collector and excise staff working in the Brewery. (v) The manufacture and bottling will be restricted to the number of days on which no beer is manufactured and bottled. The company may undertake the process of manufacturing and bottling of Malt-79 upon giving prior notice of their intention to do so as in the case of manufacturing of beer. The issues of Malt-79 from the vessels for the bottling shall also be obtained by the management after giving prior notice to the brewery staff and the fermenting hall will be locked with excise ticketed lock immediately after the stuff is passed on the cold room through plastic pipes. The bottled stock of `Malt-79' shall immediately be removed from bottling hall. The bottled stock will neither be sold nor issued from the bottling hall. (vi) The company shall permit the excise staff to inspect the manufacturing and bottling of `Malt-79' and to obtain samples thereof for chemical analysis to ensure that the worts converted into `Malt-79 are non alcoholic ones. The samples will be drawn whenever, deemed necessary by the Collector but at least once in a quarter. (vii) The bottling shall be carried out in the brewery bottling hall. But before starting the bottling of `Malt-79' all stocks of beer shall be removed from the bottling hall. All utensils, vessels, pipes etc. shall be cleaned to the satisfaction of Excise Staff before the bottling of `Malt-79' is taken up: (viii) The Government and the Excise Commissioner reserves the right to cancel the permission or to provi4e for additional conditions in the light of working experience, if it is found that this permission, adversely affects the security and working of the brewery or excise revenue. (ix) The Existing brewery/distillery staff will look after the work relating to the manufacture of `Malt-79' in addition to their existing duties but this condition may be reviewed after noticing factual working of the scheme for some time and the Management will agree to the posting of a whole -time Excise Sub-Inspector and a constable at their cost if the workload so required. ' (x) The issue of levy of Central Excise Duty will be settled by the management with the Central Excise Department to their satisfaction. The Management, may not be allowed to carry on the manufacturing of Malt-79' if the duty involved, if any, is not paid by the management. (xi) The overall capacity of the plant shall remain the same as originally sanctioned, if any, by the Government. (xii) Additional plant and machinery shall not be imported for the proposed change in line of production from beer to non-alcoholic beverage. (xiii) `Malt-79' shall be based on indigenous concentrate and import entitlement for raw materials will remain the same as for the present arrangement.

20. I have no doubt in my mind that these conditions are lawful and the, company can manufacture `Malt-79' subject to the conditions incorporated in the said order. Notwithstanding the fact, that permission, is not necessary. It is clear that these conditions are essential for carrying the trade and are lawful and are designed to protect the public health at large.

21. Now I take the question that the order is contrary to the elementary principle of justice that nobody should be condemned unheard. It is a settled H principle of law that this basic principle of natural justice is to be read into every statute irrespective of the fact that it is not incorporated therein. This rule was laid down in Commissioner of Income Tax, East Pakistan v. Fazal-ur-Rahman PLD 1964. SC '

410. This point was again examined in the University of Dacca, through its Vice-Chancellor and another v. Zakir Ahmad PLD 1965 SC

90. His Lordship Mr. Justice. Hamood-ur-Rahman (as he then was) on this question rendered an opinion in the following words-- "From a careful review of the decisions cited before us it appears that wherever any person or body of persons is empowered to take decisions after ex post facto investigation into facts which would result in consequences affecting the person, property or other right of another person then in the absence of any express words in the enactment giving such power excluding the application of the principles of natural justice, the Courts of law are inclined generally to imply that the power so given is coupled with the duty to act in accordance with such principles of natural justice as may be applicable in the facts and circumstances of a given case. What these principles of natural justice are it is not possible to lay down with any exactness, for, they have been variously defined in various cases, as was pointed out by the Judicial Committee in the case of the University of Ceylon v. Fernando Tuker, L.J, said in Russel v. Duke of Norfolk (1949) 1 All E R 109, the requirements of natural justice must depend on the circumstances of the case, the nature of the enquiry, the rules under which the Tribunal is acting, the subject-matter that is being dealt with and so forth." Nevertheless, the general consesus of judicial opinion seems to be that in order to ensure the "elementary and essential principles of fairness" as a matter of necessary implication, the person sought to be affected must at least be made aware of the nature of the allegations against him, he should be given a fair opportunity to make any relevant statement putting forward his own case and "to correct or controvert any relevant statement brought forward to his prejudice." Of course, the person, body or authority concerned must act in good, but it would appear that it is not bound to treat the matter as if it was a trial or to administer oath or examine witnesses in the presence of the persons accused or give him facility for cross-examining the witnesses against him or even to serve a formal, charge-sheet upon him. Such a person or authority can obtain information in any way it thinks fit, provided it gives a fair opportunity to the person sought to be affected to correct or contradict any relevant statement prejudicial to him. In other words "in order to act justly and to reach just ends by just means" the Courts insist that the person or authority. should have adopted the above "elementary and essential principles" unless the same had been expressly excluded by the enactment empowering him to so act:'

22. Applying this ratio to the facts of the case Dave no hesitation in coming to conclusion that the impugned order/action, cannot be sustained--being flagrantly in violation of this basic principle of natural justice i.e. `audi alteram

23. The only remaining question to answer is as to whether the impugned action/order suffers from element of bias. This question is essentially a question of fact. It is one of the most difficult allegations to prove and onus is entirely on the person alleging it to establish. It is also one of the presumptions that official actions are regular until and unless they are proved otherwise. This question came up for consideration in The Federation of Pakistan through the Secretary, Establishment Division, Government of Pakistan, Rawalpindi v. Saeed Ahmad Khan and others PLD 1974 SC

151. It was laid down that-- "Mala fides" is one of the most difficult things to prove and the onus is entirely upon the person alleging mala fides to establish it, because, there is, to start with, a -presumption of regularity with regard to all official acts, and until that presumption is rebutted, the action Cannot be challenged merely upon a vague allegation of mala fides. As has been pointed out by this Court in the case of the Government of West Pakistan v. Begum Agha Abdul Karim Shorish Kashmiri PLD 1969 SC 14, mala fides must be pleaded with particularity, and once one kind of mala fides is alleged, no one should be allowed to adduce proof of any other kind of mala Fides nor should any inquiry be launched upon merely on the-basis of vague and indefinite allegations, nor should the person alleging mala fides be allowed a roving enquiry into the files of the Government for the purposes of fishing out some kind of a case. "Mala fides" literally means "in bad faith". Action taken in bad faith is usually action taken maliciously in fact that is to say, in which the person taking the action does so out of personal motives either to hurt the person against whom the action is taken or to benefit oneself. Action taken in colourable exercise of powers, that is to say, for collateral purposes not authorised by the law under which the action is taken or action taken in fraud of the law are also mala fide. It is necessary, therefore, for a person alleging that action has been taken mala fide to show that the person responsible for taking action has been motivated by any one of the considerations mentioned above. A mere allegation that an action has been taken wrongly is not sufficient to establish a case of mala fides, nor can a case of mala fides be established on the basis of universal malice against a particular class or section of the people. Thus, action taken for instance to acquire lands or take over industries or banks on the basis of a policy intended for introducing a more socialist system cannot be characterised as an action taken mala fide. But in order to make out a case of mala fides, an individual must establish that his land was taken not for the purposes authorised by the law but for the personal aggrandisement of the person empowered with the power to make the order of acquisition, or because the person so authorised to take action bore any personal grudge against the person in respect of whose lands or properties action has been taken. Similarly, if the acquisition of land or the taking over of industries is authorised in certain specified circumstances and for certain specified purposes then the taking of action in such a case for purposes not so specified or in circumstances not provided for by the law would amount to colourbale exercise of power or a fraud upon the law. In order to establish a case of mala fides, some such specific allegation is necessary and it must be supported by some prima facie proof to justify the Court to call , upon the other side to produce evidence in its possession. It is true that in the case of Abdul Baqi Baluch v. Government of Pakistan PLD 1968 SC 323, it had been pointed out that in the case of detention of a person the initial onus is on the detaining authority to prove that detention was lawful but this principle does not apply in other cases where the onus is initially upon the person alleging mala fides to prove mala fides. It would be wrong, therefore, in such cases to call upon the authority to produce evidence in its possession, to justify its action merely on the basis of a vague allegation that the action has been taken mala fide. In such cases the party making the allegation should first be called upon to adduce proof and after he has led evidence to make out a prima facie case, then and only then should be other side against whom the allegation of mala fides is made be called upon to justify the action. If the Court keep this in view, we venture to think, that the difficulties to which the learned counsel appearing on behalf of the Government have referred will not arise." The same principle was reiterated in Muhammad Din and others v. The State PLD 1977 SC 52.

24. Applying this principle to the facts and circumstances of the case I do not find any strength in this contention. No cogent material or substantial evidence has been placed on record to show the nexus between the authorities who passed the action and the then Chief Minister of Punjab. Even the allegation is vague. No particulars of mala fides have been given. It has become usual to embody such allegations in Constitution petitions regarding the impugned action. I do not find any substance in this contention. Accordingly the same is repelled.

25. The case-law cited by both the sides on proceeds on distinguishable facts and is hardly of any assistance in this case.

26. In result this petition succeeds. The impugned order/actions are found to have been passed without any lawful authority. They are declared as such. The petition alongwith requested reliefs is accepted.

27. Before parting with this case it is to be clarified that the Department shall have the right to regulate the production/manufacture of `Malt-79' in accordance with the conditions embodied in the permission order dated 11-7 1979. In view of the complexity of questions involved in this petition, I do not feel the necessity of burdening either party with costs. A.A./M-2500/L Petition accepted.