STATE OF MAHARASHTRA AND ANR. versus POOJA BREW-CHEM INDUSTRIES P. LTD. AND ANR.

Citation: [1995] SUPP. 3 S.C.R. 739 · Decided: 15-09-1995 · Supreme Court of India · Bench: K. RAMASWAMY, B.L. HANSARIA · Disposal: Appeal(s) allowed

Judgment (excerpt)

STATE OF MAHARASHTRA AND ANR. 
A 
v. 
POOiA BREW-CHEM INDUSTRIES P. LTD. AND ANR. 
SEPTEMBER 15, 1995 
[K. RAMASWAMY AND B.L. HANSARIA, JJ.) 
B 
Bombay Denatured Spilit Rules 1959 : 
R. 26--Grant of Licenc,e-Company's application f o~eld, though it 
is open to subordinate:.' of the Govemment to examine desirability to grant C 
licence, but auth01ity concerned has necessarily to put on notice the adverse 
mate1ial in its possession and to supply necessary copies thereof to the 
company alongwith its prim a f acie view thereon so that the Company may 
have an opportunity to justify its claim. 
Constitution of India 1950 : 
D 
Article 226--Company's application for grant of licence under r.26 of 
Bombay Denatured Spirit Rules, 1959-State authorities examining 
desirability of granting licence-Meanwhile company filed writ petition before 
High Court which directed State to issue licence-Held, appropriate authority E 
is entitled to examine desirability to grant licence, and on considering relevant 
materials supplied by company justifying its claim, it is open to the authority 
to refuse or to grant licence for reasons to be recorded-Since this exercise 
had not been peifomted High Court was not justified in directing the State to 
issue licence. 
The respondent company applied to the Commissioner, Prohibition 
F 
and Excise for grant of permit tQ manufacture Ethyle Acetate. Later, the 
Company intended to manufacture Diethyle Oxalate and Diethyl 
Phthalage. The State on 4.4.1991 assured the respondent company of 
supply of alcohol quota of 14.40 lakh bulk litres, for one year, provided 
that if the company did not start manufacturing the products, assurance · G 
for alcohol quota would be cancelled The Company by its letter 1. 4. 1994 
intimated the Commissioner that it had completed the project to manufac-
ture the products and was ready to start the production, and requested 
him to issue the licence under r.26 of the Bombay Denatured Spirit Rules, 
1959. Since licence was not g~anted, the company filed a writ petition H 
739 
740 
SUPREME COURT REPORTS [1995] SUPP. 3 S.C.R. 
A 
before the High Court praying for a direction to the State to issue to the 
Company D,S.V. Liceni::e under r.26 of the Rules and also to release 14.40 
lakh bulk litres of alcohol/specially denatured spirit annually. The High 
Court allowed the Writ Petition. Aggrieved, the State Government filed the 
appeal by special leave. 
B 
It was contended on behalf of the State that the order of the High 
Court was not sustainable in as much as though the Government had 
decided to grant D.S.V. Licence but subsequently it was noticed that some 
sensitive materials were required to be examined and the matter was being 
examined, but meanwhile the High Court, issued the direction; that unless 
C the licence was issued under r .26 of the Rules, the Company was not 
entitled to start manufacturing ; and that with effect from 21.6.1993, due 
to decontrol of allocation and supply from the Government, it had lost 
control over the allotment and the respondent-Company was free to ap-
proach the appropriate authority for supply of alcohol. 
D 
Allowing the appeal and setting aside the order of the High Court, 
this Court 
HELD : 1.1. While considering the request of the respondent-com-
pany, for grant of licence under r.26 of the Bombay Denatured Spirit 
E Rules, 1959, if certain material as regards the desirability to grant the 
licence is to be examined by the subordinates of the Government, then 
necessarily the concerned authority has to put on notice as to what adverse 
material is in its possession and it has to supply necessary copies thereof 
and also their prima facie views on that material so that the respondent-
company would have an opportunity to place all the material to justify its 
F 
seeking for the licence. Thereaflt!r, it is open to the appropriate authority 
to consider and refuse or grant the licence for the reasons to be mentioned 
in the order. Since this exercise had not been performed, the High Court 
was not justified in directing the appellants to issue the licence. (744-E-F] 
G 
1.2. The State should issue notice to the respondent- Company on 
grounds on which they propose to take action in case they feel that it is not 
feasible to issue the licence to the respondent-Company, together with the 
material in their custody on the basis of which they formed that opinion. If 
it is felt that certain material is confidential and supply of

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