RAJENDRA SINGH versus THE STATE OF MADHYA PRADESH AND ORS.

Citation: [1996] SUPP. 4 S.C.R. 393 · Decided: 08-08-1996 · Supreme Court of India · Bench: B.P. JEEVAN REDDY · Disposal: Dismissed

Judgment (excerpt)

RAJENDRA SINGH 
A 
v. 
THE STATE OF MADHYA PRADESH AND ORS. 
AUGUST 8, 1996 
[B.P. JEEVAN REDDY AND SUHAS C. SEN, JJ.] 
B 
M.P. Excise Act, 1915: Section 31(1-A) and 31(4)(b). 
Liquor shops-Auction-Grant of licenc<>-f'ai/ure to pay licence 
fe&-Show-cause notice to licensee-Licensee not availing opportunity of C 
personal heaiing-Notification by Depaitmellt that on licensee's failure to pay 
aJTeUIJ shops would be put to reauction-Notification sent to licensee a11d 
published in daily 11ewspape1-An-ears 11ot paid by license&-Reauction of 
shops-Loss of reve11ue resulting from reauction-Recove1y from licensee held 
valid. 
Constitution of India, 1950 : Article 22~Wiit jurisdiction-Power to 
i11te1fere writ co11tractua/ obligations-Scope of 
Article 19(J)(g)-Right to carry on trade and business-17iere is no 
D 
fundamental right to trade in liquor. 
E 
Statutory provisions-Violation of-Power of Court to intelfer,,-Test 
lvhetlter provision is directo1y or 111andatory. 
Excise Laws-Object of 
The appellant, a licensee for a number of liquor shops, failed to pay 
the monthly rental for two consecutive months. A show cause notice was 
issued to him but he failed to avail of the opportunity of personal hearing 
afforded to him. Thereafter a notification was issued to a number of Excise 
F 
and other Departments stating that on appellant's failure to pay the 
arrears by the specified date the shops would be sold by reauction~ The G 
said notification was not only sent to the appellant but was also published 
in the daily newspaper. On his failure to pay the licence fee the shops were 
sold by reauction and a demand notice was issued to him under Section 
31(4)(b) of the Madhyd Pradesh Excise Act 1915 for the loss of revenue 
resulting from r.eauction. 
393 
H 
A 
B 
c 
D 
E 
F 
394 
SUPREME COURT REPORTS [1996] SUPP. 4 S.C.R. 
The appellant challenged the demand by filing a writ petition in the 
High Court contending that (i) he was not given due opportunity before 
cancelling the licence as re11uired by section 31(1-A); (ii) there was no 
l!rder of cancellation of licence; and (iii) there was no proper publicity for 
the reauction conducted as a result of which only one bidder was present 
at the reauction and therefore the shops were sold at a low price. 
A single Judge of the High Court allowed the writ petition. State of 
Madhya Pradesh preferred appeal before a Division Bench of the High 
Court which dismissed the appellant's petition and rejected all his conten-
tions. Hence this appeal. 
Dismissing the appeal, this Court 
HELD: I. The Division Bench rightly held that the Single Judge was 
in error in allo\\ing the \vrit petition. In this case the Court is dealing nith 
parties to a contract, \vhich is a business transaction, no doubt governed 
by statutory provisions. While examining complaints of violation of 
statutory rules and conditions, it must be remembered that violation of 
each and every provision does not furnish a ground for the Court to 
interfere. The provision may be a directory one or a mandatory one. In the 
case of directory provisions, sulistantial compliance would lie enough. Un-
less it is estalilished that violation of a directory provision has resulted in 
loss and/or prejudice to the party, no interference is warranted. Even in the 
case of violation of a mandatory provision interference does not follow as 
a matter of course. A mandatory provision conceived in the interest of a 
party can be waived by that party, \\1hereas a mandatory provision con-
ceived in the interest of pulilic cannot lie waived by him. [398-A-E] 
2. It is true that before cancelling the licence, an opportunity of 
hearing should lie given as pravided liy section 31(1-A). While the oppor-
tunity to be given· should be reasonable, the reasonableness or othenvise 
of the opportunity given must be judged keeping in view the time-frame 
available. In this case, the default was for h.\'o consecutive months. The 
G authorities evidently did not act in haste. Even after one month's default, 
they waited hoping that the licensee would pay. But when he defaulted for 
the next month also, they issued the notice proposing cancellation. The 
opportunity contempated by sub-section (1-A) cannot be operated in a 
leisurely manner. A realistic view has to be taken while determining 
H whether the opportunity given was reasonalile or not. The oliject of all 
RATENDRASINGH v. STATE[B.l'.JEEVAN REDDY.J.] 
395 
excise law is two-fold yiz. t

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