M P PURUSHOTHAMAN Vs. GOVT OF A P

JUDGEMENT

(1.) The appellant herein submitted an application to the Commissioner of Excise, Andhra Pradesh, Hyderabad, requesting him to issue a letter of intent in Form B-5 for setting up a factory for manufacture of beer. In pursuance thereof, the Commissioner of Excise issued a letter of intent by his order dated 11/1/1993 mentioning therein the condition that the appellant should furnish a security deposit of Rs. 50,000. 00 to the Commissioner of Excise within one month from the date of issue of letter of intent. Accordingly, the appellant submitted a demand draft in favour of the Commissioner of Excise, Andhra Pradesh, Hyderabad for a sum of Rs. 50,000. 00 payable by Union Bank of India on 5/2/1993. It appears that instead of delivering the said demand draft at the counter meant for the Commissioner of Excise, Andhra Pradesh, Hyderabad, the appellant's representative delivered it at the counter of the Director of Distilleries and Breweries, Andhra Pradesh, which was adjacent to the said counter. Since the demand draft was not received by the Commissioner of Excise till 4/3/1993, the State Government by order dated 4/3/1993 cancelled the letter of intent issued to the appellant. The appellant herein filed a petition under Art. 226 of the Constitution which was dismissed by the High Court. It is against the said judgment, the appellant is in appeal before us.

(2.) Shri Harish N. Salve, learned Senior Counsel appearing for the appellant urged that in view of the fact, which is not disputed, that the appellant's demand draft in favour of the Commissioner of Excise, Andhra Pradesh, Hyderabad, was delivered at the counter of the Director of Distilleries and Breweries who is subordinate to the Commissioner of Excise, there is a substantial compliance with the requirement of the relevant Rules and the letter of intent issued in favour of the appellant ought not to have been cancelled. We find substance in this argument.

(3.) Rule 4 (2) (c) of the Andhra Pradesh Brewery Rules, 1970 runs as under: "4. (2) (c) When the Government are satisfied of the proposed scheme of the applicant, they may accord the sanction and communicate it in the form of letter of intent in Form B-5, stipulating a condition that the applicant should furnish security deposit to the Commissioner of Excise in the shape of a demand draft for Rs. 50,000. 00 (Rupees fifty thousand only) obtained in favour of the Commissioner of Excise from a scheduled bank within one month from the date of issue of letter of intent failing which the letter of intent stands cancelled. The letter of intent shall be valid initially for a period of two years from the date of issue. The security deposit will be forfeited to the Government in case the holder of letter of intent fails to convert it into a licence. In case the applicant desires to construct and work the brewery on the same letter of intent, another security deposit for Rs. 50,000. 00 has to be deposited with the Commissioner. On receipt of such security deposit, the Government can extend the validity of letter of intent for further period of two years, within which the holder should convert the letter of intent into the licence, after securing the land, buildings, plants, machinery and equipment required for construction and working of a brewery as per the scheme notified to the Government or as modified by the Government as the case may be under clause (a). "