P L D 1964 Supreme Court 593 (PLP)

S. M Bashir Advocate Supreme Court (Additional Advocate -General West Pakistan) instructed by Ijaz Ali Attorney for Appellants. Muhammad Zafar Advocate Supreme Court instructed by Yaqoob Hussain Zaidi Attorney for Respondents. Date of hearing: 13th May 1964. S. A. RAHMAN, J.‑This appeal comes before this Court on the strength of a certificate of fitness granted by the High Court of West Pakistan. The relevant facts are these. The respondents Messrs Nisarul Haq B. Billimoria were granted a licence in form L. 2, by the Excise and Taxation Department of the Province of West Pakistan, for the retail sale of foreign liquor, in Multan Cantonment, for a period of one year ending with the 31st of March 1959. The licence was renewed up to the 31st of March 1960, and then up to the 30th of June 1960. The latter date is explained by the fact that there had been a change in the financial year which now ended with the 30th of June. A notice was received on the 4th of June 1960, by the respondents from the Deputy Excise and Taxation Commissioner Multan, intimating that the Government had decided not to renew the licence of the respondents beyond the 30th of June 1960. It appears that a representation bearing the date, the 28th May 1960, had been submitted earlier by the respondents, asking for renewal of their licence. The respondents were further informed by this notice that their representation had been considered and rejected, later, by the Director, Excise and Taxation, West Pakistan. The respondents were called upon to surrender to the Collector any quantity of liquor which may have remained undisposed of, by the 30th of June 1960. The respondents made another representation on the 8th of June 1960, against the orders conveyed and challenged the legality of the orders passed, without affording them an opportunity of being heard, as required by rule 5.12 ,of the Punjab Liquor Licence Rules. No reply having been received to this representation, the respondents approached the High Court of West Pakistan in writ jurisdiction and asked for the issuance of a writ of mandamus, to the Government of West Pakistan, directing it to refrain from implementing its decision not to renew the respondents' licence beyond the 30th June 1960. Two other reliefs were also rayed for, namely, that the Collector should endorse on the licence form of the respondents, the renewal of the licence up to the 30th of June 1961, and that the Deputy Excise and Taxation Commissioner, Multan Region, should be restrained from demanding surrender of the applicants' stock on the date mentioned above. The petition of the respondents was resisted in the High Court on behalf of the Government of West Pakistan on the ground that by virtue of section 43 of the' Punjab Excise Act, 1914 (hereinafter referred to as the Act) the respondents could not claim renewal of their licence as of right or claim any damages for such non‑renewal. Reliance was planed on behalf of the Provincial Government in this respect on a decision reported as Muhammad Asghar v. Excise and Taxation Commis sioner, Punjab, Lahore (1). In that case Kaikaus, J. and I, sitting in Division Bench in the High Court, had taken the view that rule 12 of the Punjab Liquor Licence Rules, should be inter preted as a mere direction to the subordinate officers of Government, which created no legal obligation on them to hear the licensee before deciding against the renewal of his licence. In the instant case, the High Court observed that though a person may have no right to claim renewal of a licence, the rules could still provide for regulating the exercise of discretion vested in the authorities to refuse such renewal. Such rules could stand together with the provisions of section 43 of the Act and consequently the learned Judges thought that compliance with the rule framed under the Act, could be insisted upon. They, therefore, issued a writ of mandamus, restraining the Provincial Government from implementing their decision. At the same time, it was observed that if the Government omitted to decide not to renew a licence, it amounted to a decision to renew it and in that view, the applicants before the High Court were entitled to pay the requisite vend fee and to continue selling liquor in accordance with the terms of the existing licence, as long as the renewal was not refused, in accordance with rule 5.12 of the Punjab Liquor Licence Rules. Section 43 of the Act is in the following terms;‑ "43. No person to whom a licence, permit or pass may have been granted shall be entitled to claim any renewal thereof, and no claim shall lie for damages or otherwise in consequence of any refusal to renew a licence, permit or pass on the expiry of the period for which it remains in force." Section 58 of the Act gives power to the Provincial Government to make rules for the purpose of carrying out the provisions of the Act or any other law for the time being in force relating to excise revenue. It was presumably under this provision that rule 5‑12 of the Punjab Liquor Licence Rules was framed, which reads as follows:‑ "5‑12. Whenever it is proposed not to renew a licence granted on a fixed fee, the authority competent to renew it shall give notice to the holder of such licence, record objections, if any, put forward by the licensee and pass a definite order in writing. The licensee may be given on application, an authenticated copy of such order. Except with the special sanction of the Financial Commissioner no such order for renewal or non‑renewal shall be made after January 20, in respect of licences for the following financial year." It is conceded that in the present case, the authority that could grant the licence in L. 2 form, was the Financial Commis sioner, Revenue, and the renewing authority was the Collector. The scheme of the Act seems to be that every order passed by an (1) P L, D 1955 Lah. 147 excise officer under the Act shall be appealable to such authority as the Provincial Government shall by notification declare, under section 14 of the Act. If the order had been passed in the normal course, by the Collector, in this case, refusing renewal, an appeal would have been competent to the relevant authority by virtue of this provision and a revision would have further been competent to the Financial Commissioner under section 15 of the Act. It is stated that as the order impugned was passed by the Provincial Government itself, the respondents were deprived of the opportunity of appealing against such an order. It is regrettable that such a situation should have been allowed to arise and the normal process of law as envisaged in the Act, was not allowed to take its course. It is true that section 8 of the Act gives power of control to the Provincial Government over the highest functionary charged with duties under the Act, namely, the Financial Commissioner. This does not imply, however, that the Government should arrogate to itself all powers of passing original orders, under the Act and thus upset the scheme of the Act, which visualises a hierarchy of officers who can be approached .for redress ‑by persons con cerned. Mr. Bashir Ahmad, the Additional Advocate‑General of the Province, contended before us that rule 5.12 on which reliance was placed on behalf of the respondents, was ultra vires of the Act in, the face of the provisions of section 43 thereof and in the alternative, that the rule should be interpreted as a directory rather than a mandatory provision. He argued that it conferred no right on the respondents to insist on being heard before their request for renewal of licence was turned down. If a rule can stand with the provisions of the Act on a reasonable interpretation, the Courts would be slow to declare it as ultra vires of the statute. In our opinion, it is reasonable possible to construe the rule in the sense that it contains direction to the relevant officers to observe the procedure mentioned in the rule, before passing final orders, on an appli cation for renewal of a licence. This procedure is not inconsistent with the provisions of section 43 of the Act, which merely declares that a licensee cannot claim renewal of licence, as of right and refusal to renew, would not entitle hi to claim damages from Government. The rule consequently must be held to confer a procedural right on the licensee though not a substantive right to the renewal of a licence. There should be no difficulty in giving effect to the rule, therefore, in these circumstances. In the case reported as Muhammad Asghar v. Excise and Taxtion Commissioner, Punjab, my brother Kaikaus and I, had declined to issue a writ of mandamus as it was felt by us that it would be useless to ask Government to give a hearing to the licensee, if they had complete discretion to refuse the request. There were some peculiar features of that case which may be noticed. The Provincial Government had not even been made a party to that case in the High Court and the petition for a writ could have been dismissed on that ground alone. We have now considered the matter afresh and have come to the conclusion that although a mandamus would not be the appropriate relief to be granted in the present case, the impugned order passed by the Government, contravening as it does, a rule framed by itself, which is not inconsistent with the provisions of the Act, is liable to be quashed in certiorari. The order takes away an important procedural right vested in the licensee and to that extent, therefore, the High Court would have been justified in declaring that the order in question was vitiated, for failure to follow the terms of rule 5.12 of the Punjab Liquor Licence Rules. The learned Judges were, however, in error in thing that a mere omission to pass an order of renewal, would ‑justify the carrying on of the liquor vending trade, by the ex‑licensee. It is obvious that under the provisions of the Act and the rules framed thereunder, the ex‑licensee could not go on selling liquor, unless his licence was duly renewed. With respect, therefore, it seems to us that the High Court misdirected itself when it ordered that the respon dents could go on selling liquor after paying the prescribed vend fees, during the time that they held no licence, on the expiry of their previous licence, in the circumstances of this case. We, therefore, modify the order passed by the High Court in this case by recalling the writ of mandamus issued by the High Court and replacing it by a writ of certiorari, quashing the impugned order. We further make it clear that the respondents would have no right to sell liquor unless their licence is renewed or a fresh licence is granted to them. The previous order of refusal to renew having been quashed, the respondents are left' to such remedies as may be open to them under the law. There will be no order as to costs in this Court. A. H. Order accordingly.