P L D 1960 (W (PLP)

M. YAQUB ALI, J.‑This is an application by Messrs Nisar‑ul- Haq B. Billimoria of Multan for issuance of a writ of mandamus to the Government of West Pakistan (Respondent No. 1) to refrain from implementing its decision not to renew the L‑2 lincence of the applicant for sale of liquor in Multan Canton ment beyond the 30th of June 1960. Two other ancillary reliefs were also claimed viz. :‑ (1) That the Collector should endorse on the licence form of the petitioner the renewal of the licence up to the 30th of June 1961. (2) To restrain the Deputy Excise and Taxation Commissioner (Collector) Multan Region Multan (Respondent No. 2) from demanding surrender of the applicant's stock on the expiry of the existing licence on the aforementioned date.

2. The facts are few and simple :‑-

3. In 1958 the applicants were granted an L‑2 licence by the Excise and. Taxation Department for sale of foreign liquor in Multan Cantonment for a period of one year ending with the 31st of March 1959. Thereafter it was renewed up to the 31st of March 1960 and in normal course would have been renewed for another year ending with the 31st of March 1961, but on account of the change in the financial year it was extended up to the 30th of June 1960 only. On the 4th of June 1960 the Deputy Excise and Taxation Commissioner (Collector) Multan (Respondent No. 2) wrote the following letter to the applicant :‑ "In conveying the decision of the Government, the Director, Excise and Taxation, West Pakistan, has directed me to inform you that your L‑2 licence will not be renewed beyond 30‑6‑1960. Moreover your representation dated 28‑5‑1960 has been con sidered and rejected by him. You should carefully observe the provisions of rule 5.39 (30) of the Punjab Excise Manual, Volume II, under which you have to surrender to me as a Collector, the quantity which you are unable to dispose of by 30‑6‑1960. The stock thus surrendered will be disposed of according to law." On the receipt of this letter the applicant on the 8th of June 1960 made a representation to the Respondent No. 1 drawing its attention to the relevant rules and provisions of the Punjab Excise At (I of 1914) (hereinafter referred to as the Act) to show that its decision not to renew their licence beyond the 30th of June 1960 was illegal and that the licence already granted was to take effect up to the 30th of June 1961. A copy of the Government's decision conveyed in the letter dated the 4th of June 1960 was also applied for, but no reply was sent till the 21st of June 1960 whereupon the present application for issuance of the various writs mentioned above was made to this Court.

4. The respondents have put in appearance through the Additional Advocate‑General and submitted a written statement contesting the applicant's right to invoke the writ jurisdiction of this Court on the ground that under section 4s of the Act, 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. The plea is supported by a decision of this Court in Muhammad Asghar v. Excise and Taxation Commissioner, Punjab Lahore (P L D 1955 Lah. 167).

5. On the construction which we place on the provisions of section 43 and of rule 5.12 so far as they are relevant to the facts of the present case, we have with the utmost respect to the learned Judges who are parties to the decision in the afore‑mentioned case, come to a contrary conclusion and to appreciate our point of view it is necessary to reproduce in extenso their reasoning which appear at page 169 of the report. After setting out the facts on which the petitioner's claim in that case was based which are somewhat similar to the facts of the present case, Rahman, C. J. proceeded to observe as follows :‑ "The main question that falls for decision in this case is whether rule 5.12 of the Punjab Liquor Licence Rules creates a legal obligation on the authorities to give a notice and hear the objections, if any, of the licensee before passing an order refusing to renew his licence. If there is such a legal obligation it would connote a corresponding legal right inherent in the petitioner to a hearing before an order can be passed to his prejudice. Mr. Mohsin Shah has urged that the rule being a statutory one, creates such a right in favour of his client and the decision not to renew his licence could not have been taken without affording an opportunity to the petitioner to put forward his point of view. On the contrary, Mr. C. M. Sharif on behalf of the respondent has drawn our attention to section 43 of the Punjab Excise Act, 1914, the provisions of which may be set out in extenso with advantage :‑

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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." He contends that the statute makes it clear beyond all doubt that no licensee can as of right claim to have his licence renewed and consequently the rule on which reliance has been placed on behalf of the petitioner, must be regarded merely in the nature of a direction to the subordinate officers of the Government while dealing with such cases, and does not do away with discretion of Government in withholding renewal of any particular licence at their will. This position seems to us to be unassailable in law. If there is any conflict between the rules framed under the Act and the statutory provisions themselves it is obvious that the statute must prevail and the rule must give way to it. It is unnecessary for us to say whether the rule in question is ultra vires the statute, for it is enough for our purposes to hold that even if the rule is allowed to stand, it should be interpreted as a mere direction which does not create legal obligation on the part of the Government, to hear a licensee before deciding against the renewal of his licence and correspondingly no right has been created of getting a hearing by the licensee."

6. As seen, the learned Chief Justice has after noticing that' section 43 lays down that no one can claim renewal of a licence inferred from it that rule 5.12 is a mere direction a breach of which will not furnish a cause of action to the aggrieved licensee to institute an action in a Civil Court or to invoke the writ jurisdiction of this Court. Though it was considered unnecessary to decide that rule 5 12 was ultra vires of section 43 and it was observed that both of them may stand side by side, but in order to come to the conclusion that infraction of the rule 5.12 did not confer any right on the licensee, the rule had to be relegated to the form of a "mere direction", and it leads to no legal consequence whether it was observed or not. In our humble opinion by making this approach the learned Chief Justice has to all intents and purposes rendered the rule quite nugatory and this militates against the well settled proposition that statutory rules so far as they are intra vires of the Act have the force of law and can confer rights and create corresponding obligations.

7. In order to appreciate the view which we have formed about the scope and operation of section 43, it will be advantageous to set out at this stage the provisions of rule 5.12. It reads as follows :‑

"Whenever it is proposed not to renew a licence granted on a fixed or assessed 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 20th in respect of the licensee for the following financial year." The above provisions are not "mere directions" to guide the subordinate while dealing with such cases. If the Government proposes not to renew a licence, it must give a notice to the licensee before the 20th of January, by which date the Government must take a final decision after taking into consideration objections, if any, lodged by the licensee. The object of the rule is twofold :‑

(1) That the licensee has a sufficient notice to wind up his business after the expiry of the existing licence, and (2) that he is entitled to make objections on consideration of which the Government may be persuaded to come to a contrary conclusion and renew the licence.

8. Let us now see whether the provisions of rule 5.12 reproduced above are in conflict with the provisions of section 43, i.e., whether they derogate from the absolute discretion of the Government not to renew a licence. If there is ,a conflict the rule must yield to the statute. But on proper analysis we find thai both of them not only stand side by side, but in fact the latter supplements the former by laying down the procedure for the exercise of the discretion vested in the Government not to grant or renew a licence, permit or pass. A person may have no right to claim renewal of a licence, but it does not follow that rule cannot provide for regulating the exercise of the discretion vested in the Government to refuse to grant the renewal. If a statute confers on the Government any power and rules provide for the manner in which that power is to be exercised, the rules cannot be said to conflict with that power. In the present case the applicant may not be entitled to claim renewal of the licence beyond the 30th of June 1960, but it does not mean that his right to lodge objections to the proposed decision or the "right of hearing", as Rahman, C. J. puts it, is negatived by the provisions of section

43. In case the provisions of rule 5.12 are not com plied with before the Government decides not to renew a licence, it may not be within our jurisdiction to issue a writ directing the respondent Government to renew the applicant's licence, but we can certainly‑ enforce compliance of the rule for, in our opinion, the duty cast upon the Government to invite objections before making a final order not to renew the licence confers a legal right on the. licensee which can be enforced in a proper legal action. To put it in other words the Government has the right not to renew a licence, but it does not take away the right of the licensee to make a representation against the proposed decision, which might on merits persuade the Government to change its determination. The "right of hearing" in such a case is, therefore; quite distinct from the right to obtain renewal of the licence and section 43 does not come into conflict with rule 5.12. On this view we are unable to agree with the reasonings in Muhammad Asghar v. Excise and Taxation Commissioner, Punjab, Lahore and with utmost respect beg to differ with the decision in that case.

9. On the above interpretation of section 43 and rule 5.12 the impugned order not to renew the applicant's L‑2 licence after the 3oth of June 1960, is vitiated and the applicant is entitled to the issuance of a writ of mandamus restraining the respondent Government from implementing it. The learned Additional Advocate General wanted us to make it clear as to what would be the effect of the order which we propose to give in this case on the future action of the Government in this matter. Earlier we have mentioned that the applicant asked for three separate reliefs :‑

(1) That the respondent Government should be directed not to implement the aforementioned order. (2) To direct the respondent No. 2 to endorse on the licence of the applicant its renewal up to the 30th of June 1961. (3) To restrain the respondents from demanding the surrender of the applicant's stocks as mentioned in the letter dated the 4th of June 1960 (annexure B). In view of the provisions of section 43, the applicant has no right to claim renewal of their licence up to the 30th of June 1961 nor to the issuance of a writ that after the expiry of their licence the respondent should be restrained from demanding the surrender of their stocks as provided in the rules. The legal position on this point is so obvious that Syed Muhammad Zafar, learned counsel for the applicant, himself did not press reliefs Nos. 2 and 3 set out above.

10. The matter is, however, not resolved satisfactorily because though the scope of our order is confined to the infraction of rule 5.12 and goes no further than that, yet it creates a vacuum. On the one hand, as a result of our findings, the order passed by the respondent Government not to renew the applicants licence beyond the 30th of June 1960, no longer exists in law. On the other the applicant's licence has not been renewed beyond that date. What then is the effect of the omission on the part of the Government to make a valid order not to renew the applicant's licence within the prescribed period. There is no provision in the Act or the rules which applies to such a situation, unless it may be inferred by necessary implication that if the Government omits to decide not to renew a licence it amounts to a decision to renew it. In that view the applicant may be entitled to pay the requisite vend fee and continue selling liquor in accordance with the terms of the existing licence as long as the renewal is not refused in accordance with rule 5.12.

11. In the result we direct the issuance of a writ of mandamus to the respondent No. I to refrain from implementing its decision not to renew the applicant's L‑2 licence beyond the 30th of June 1960, for sale of foreign liquor in the vended premises situated in Multan Cantt. In the circumstances of the case, there will be no order as to costs.

12. Learned Additional Advocate General asks us to grant a certificate for filing an appeal from this order to the Supreme Court. Since interpretation of section 43 and rule 5.12 is involved in this case and we have differed from a Division Bench Authority of this Court, the prayer is granted. A. H. Order accordingly.