LexDOONGAJI AND CO. versus STATE OF MADHYA PRADESH AND ORS.
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DOONGAJI AND CO. v. STATE OF MADHYA PRADESH AND ORS. AUGUST 9, 1991 [N.M. KASLIWAL AND K. RAMASWAMY, JJ.] Madhya Pradesh Excise.Act, 1915-Sections 13 and 14-Licerice to distil rectified spirit or. denatured spirit or liquor-Clause 50'- lnterpretation of. Valuation of the materials such as plants & machinery A B etc. of the distillery and payment thereof to outgning licensee before handing over possession to the incoming licensee-Held to be neither C mandatory nor a condition precedent. " The appellants and its predecessors continuously held licences under Sections 13 and 14 of the Madhya Pradesh Excise Act to distil rectified spirit or denatured spirit or liquor. The last of such licence which the appellant had related to the period from 1.4.1977 to 31.3.1981. The next licensing period commenced from 1.4.1981 to 31.3.1986 and the respondent Rajdhani Distilleries Corporation became the successful tenderer in respect thereof which the appellant impugned by means of a writ petition before the High Court but failed both before the High Court as also in this Court in a special leave petition. Thereupon the appellant was called upon twice to be present to deliver the possession of the distiller) to the resp\lndent but the appel- lant did not co-operate. Likewise the appellant did not co-operate in fixing the value of the plant and machinery of the distillery and warehouses as a result of which a committee was appointed in terms of the licence which fixed a sum of Rs. 10,53,016.45 p. as the total value payable to the appellant. Due to the non-cooperation of the appellant, the Excise Department took over the possession of the distillery after m?.king inventory of stock in hand in the presence of the witnesses and ' the same was banded over to the respondent. The appellant thereafter demanded redelivery of the distillery and on his failure to get the same it filed a writ petition in the High Court praying for a writ of mandamus seeking inter alia restitution of the distillery and the warehouses etc., challenging the quantum of valuation fixed. The High Court dismissed the writ petition. The High Court found that the appellant had no exclusive possession which always remained with the excise Depart- ment; the appellant worked out the contract of manufacturing rectified spirit etc. and that due to non-cooperation of the appellant, possession was taken and delivered to the incoming licensee as per rules and the 479 D E F .... G H 480 SUPREME COURT REPORTS [ 1991] 3 S.C.R. A appellant was not entitled to restitution. Hence this appeal by special leave. It is contended on behalf of the appellant that clause SO enjoins the State to fix the valuation of all the materials belonging to the appel- lant and pay the same to it as an outgoing licensee, before taking over .... .. possession and handing over the distillery and the attached warehouses to the respondents. According to it, it is a condition precedent under B clause SO to dispossess the appellant and start the operation of the contract by the respondent which admittedly were not done. This is a contravention of the mandallory conditions of the licence and the rules. The respondents on the other hand contend that the appellant is not entitled to restitution as it was due to its non-cooperation, possession was taken. According to them prior valuation and payment are not .. ;-. c condition precedent to work out the licence. Partly allowing the appeal, this Court, HELD: In the light of the scheme of valuation of the plant and machinery of the distillery, or the apparatus in the warehouses and the D stock in trade, the Court lileld that strict construction (of clause SO) would lead to innumerable complications and loss of public revenue. We are inclined to hold that before the expiry of the licence, if the ' .. outgoing licensee cooperat1!S, the value can be fixed with consensus, payment should also be made within the time stipulated. In all other cases it could be done even after the expiry of the stipulated period. In E that perspective the Court had no hesitation to hold that prior valuation of plant and machinery in the distillery, stock in trade therein or the value of the machinery in the warehouses and stock of the liquor stored therein and payment thereof before taking possession and handing ~ them over to the incoming licensee is not a mandatory, nor a condition ,. • precedent. Therefore, ta
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