STATE OF WEST BENGAL Vs. RUTTONJEE AND COMPANY
LAWS(CAL)-1970-3-25
HIGH COURT OF CALCUTTA
Decided on March 16,1970

STATE OF WEST BENGAL, THROUGH ADDL. SECY. DEPT. OF EXCISE Appellant
VERSUS
RUTTONJEE AND COMPANY Respondents

JUDGEMENT

Sabyasachi Mukhakji, J. - (1.) This is an appeal over right to brew intoxicants in a brewery at Kalyani. There is a registered firm hereinafter referred to as the firm carrying on business under the name and style of Ruttonjee and Company. Its partners are Hirjoo Ruttonjee Bhesania and Feroze Man-chershaw Bhesania. There is also a limited Company bearing the name Ruttonjee & Company Ltd., hereinafter referred to as the limited Company. The company was incorporated in 1960 including two partners of the firm in its Board of Directors. It appears that the firm whose original business was sale of liquors, applied in 1957 to the appropriate authority for permission to start a brewery in West Bengal and obtained such permission from the State of West Bengal and also obtained the permission of the Government of India for the establishment of a new industrial undertaking for the manufacture of beer. In 1959 the brewery was established and the partners of the firm decided to promote a limited company. The brewery licence under the Rules framed under the Bengal Excise Act, 1909, hereinafter referred to as the Act, was granted for the period from the 2nd August, 1965 to the 31st March, 1966, jointly in favour of the company and the firm, subject to certain conditions mentioned in the letter of the Government of West Bengal dated 24th July, 1965. For the next year, commencing from the 1st April, 1966, an application for renewal of the licence was submitted to the Collector on the 25th of February, 1906, jointly by the firm and the company for the renewal of the licence granted for the previous period. The firm further alleged that on the 5th of April, 1966, the firm received a copy of the letter which is Annexure 'I' and appearing at page 1 of the Supplementary Paper Book, and which is dated 30th March, 1966, written by the Assistant Secretary, Excise Department, Government of West Bengal, to the Excise Commissioner by which the Government expressed its approval for the grant of the brewery licence in respect of the said company alone, to the exclusion of the firm for the year 1966-67 commencing on the 1st of April, 1966. The firm thereafter made an application to this Court under Article 226 of the Constitution challenging the decision to issue Excise Licence for the brewery at Kalyani for the year 1966-67 in the sole name of the Company, on the ground, inter alia, that the application for renewal jointly made has not been dealt with by the Collector or the Commissioner of Excise who is alone entitled to deal with the application according to law and the State Government has no jurisdiction to pass the impugned order or direction. It was stated in the petition that no licence had then been granted pursuant to the impugned order, the petitioner therefore prayed for appropriate writs to quash the impugned order and command the respondents, the State Government, the Commissioner of Excise, West Bengal and the Collector of Excise to cancel or not to give effect to the impugned order and then to deal with the joint application for renewal according to law.
(2.) There was dispute among the Directors of the Company and there were certain proceedings under the Companies Act, 1956. The company was separately represented in respect of two contending groups before the learned trial Judge and they have been so represented before this Court. There is one group represented by the Bhesania Group o Directors and Mr. R. C. Deb, learned Advocate, appeared for them before us, another group representing Mr. A. K. Thakur and others was represented by Mr. Somnath Chatterjee. It appears that the proceeding under Companies Act has come to an end. We were however told that further proceedings have started challenging the internal management of the Company. Be that as it may, it is not necessary for adjudication of the disputes between the parties in this appeal to advert to the same any more.
(3.) After the application under Article 226 of the Constitution was moved before this Court, a rule nisi was issued. It was contended in the petition that after the joint application filed by the firm and the company for the renewal of the licence for the aforesaid period 1966-67, a separate application on behalf of the company was also made. Thereafter it appears the then Minister for Excise, Mr. I. D. Jalan considered the matter and recorded certain decisions and directions, which are appearing at pages 150-155 of the Paper Book. It was further contended that on the 12th May, 1965, there was a letter which is at page 101 of the Paper Book written by the firm, inviting the Minister and the Government to arrive at a decision regarding the renewal of the licence. By that letter the firm undertook, it has been asserted, to abide by whatever decision that is arrived at by the Minister or the Government regarding the renewal, i.e., whether it is decided to renew the licence in favour of the Company alone or in favour of the Company and the firm jointly. It was further asserted on behalf of the Government as well as on behalf of one group of directors representing the company that the lease of the premises in which the brewery is carried on as well as the industrial licence stand in the name of the limited company. Therefore, it was asserted that the limited company is alone entitled to grant or renewal of the licence. It was further asserted that in view of the amendments made to the pal Excise Act by the Act of 1965 the State Government has jurisdiction and authority to issue directions of the type that it has done in this case. On the other hand, on behalf of the company represented by the Bhesania group of Directors, and the firm, it was contended that the application for grant of licence or renewal of licence solely in the name of the company said to have been made by Mr. A. K. Thakur on behalf of the Company, was without authority. It was asserted that the letter of the 12th May, 1965, was given for a specific purpose and in view of the facts and circumstances of the case it cannot be relied on by the government. The circumstances and the purposes for which the undertaking was given have been sought to be explained in paragraph 13 of the affidavit of Hirjoo Buttonjee Bhesania affirmed on 14th May, 1966, appearing at p. 263 of the Paper Book. It was asserted that the State Government has no authority to direct the Collector as to how a particular application should be dealt with and it was submitted that from its very nature brewery licence is of permanent nature, than vending licence and when conditions arc similar when the grantee of a previous licence apply for renewal, it is entitled to such renewal. It was further submitted that the State Government has no authority to direct the renewal in the manner it has done.;


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