STATE OF KERALA Vs. PANAMOOTTIL INVESTMENTS

JUDGEMENT

(1.) These appeals are filed by the writ petitioners, feeling aggrieved by the omission of the learned Single Judge, to declare that sub-rule (ii) and the second proviso to sub-rule (iv) of R.19 of the Foreign Liquor Rules, are ultra vires and unauthorised. By the Judgment under appeal, certain directions were issued in favour of the writ petitioners. The State has filed Writ Appeals against those directions. But, in these appeals, we are concerned, only with the correctness of the Judgment, to the extent, it is impugned by the appellants.

(2.) WA No. 1637/09 This Writ Appeal is treated as the main case for the purpose of referring to the parties and exhibits. The brief facts of the case are the following:

(3.) Shri. C. C. Thomas, learned Senior Counsel, who appeared for the appellant submitted that S.29 of the Abkari Act, which enables the Government to make Rules, does not authorise framing of Rules, in the nature of the Rules impugned in this case. Special reference was made to Clause (r) of sub-section (2) of S.29 of the Abkari Act, which enables the Government to frame Rules, concerning forfeiture, notwithstanding any contrary provisions contained in the Indian Contract Act, 1872 or in any other law, of the whole or any portion of the kist amount deposited by the licensee, for breach of conditions of sale. The learned Senior Counsel pointed out that sub-rule (ii) of R.19 of the Rules has the effect of modifying or varying the provisions of the Indian Partnership Act and the Companies Act. In the absence of any specific authorisation, as found in S.29(2)(r) of the Abkari Act, the State cannot frame any rule, which will have the effect of modifying the provisions of the aforementioned Acts. Regarding the second proviso to sub-rule (iv) of R.19, it is pointed out by the learned Senior Counsel that the retirement of a partner or the induction of a partner in a partnership firm, will not have the effect of sale, transfer or sub-renting of a licence of the existing partnership firm to a new partnership firm. In the case of a Company, it is submitted that it is a legal person and whatever be the change in the constitution of the shareholders or the Board of Directors, the Company remains the same and therefore, the change in the personnel, managing the company, cannot be described as having the effect of sale, transfer or sub-renting of the licence. It is further submitted that the Government have saved all the existing licences in the existing premises without insisting for Two - star facilities. In the case of death of a partner also, the legal heirs can step in as partners without the burden of providing Two - star facilities. But, in the case of retirement of a partner, such a condition is imposed, invoking the provisions of the second proviso to R.19(iv) mentioned above. The same is highly arbitrary and irrational. The learned Senior Counsel also relied on the decision of the Apex Court in K.S.C.T.U. v. State of Kerala, 2006 KHC 536 : 2006 (2) KLT 270 : 2006 (4) SCC 327 : ILR 2006 (3) Ker. 65 : JT 2006 (5) SC 41 : 2006 (3) LLN 124 : 2006 (2) CLR 15 : 2006 SCC (L&S) 796 : AIR 2006 SC 3480 , to support the first point mentioned above, that is lack of power of the State Government to modify the provisions of the Indian Partnership Act and the Companies Act. Special reference was made to paragraphs 16 to 20 of the said decision.