N DURAIKANNU Vs. UNION OF INDIA

JUDGEMENT

(1.) THE writ appeal is preferred against the order of the learned Single Judge in W. P. No. 11165 of 1989 dated 11. 9. 1998. THE appellant was the holder of F. L. II licence in No. 13/f. L. II/88-89 for selling Indian or foreign liquor or both issued by the Government of Pondicherry for consumption combined with the supply of meals and eatables at the premises mentioned in the licence for the year 1988-89. THEre was a raid by the Excise Squad of pondicherry on 11. 8. 1988 in the premises of the petitioner and the Excise Squad seized certain amount of illicit arrack and other materials from one Arulraj, the son of the appellant which were found to be in his possession as detailed in the order cancelling the licence. A case was registered against Arulraj, son of the appellant herein on the ground that he was in illegal possession of the articles and the said Arulraj also admitted the offence and at his request, the offence was compounded. A show-cause notice was issued to the appellant stating that the illicit arrack and other materials for the manufacture of illicit liquor were kept in the unlicensed premises of the appellant with his consent and connivance and illicit liquor was also manufactured in the said premises, and to explain why the licence issued in favour of the appellant should not be cancelled. THE appellant gave a reply and after considering the reply, the deputy Commissioner (Excise), the third respondent herein found that Arulraj was the agent of the appellant in liquor business and he was in possession of illicit liquor and the said Arulraj has also accepted having manufactured illicit liquor and there was every reason to believe that the illicit activities had nexus to the liquor trade carried on by the appellant under the f. L. II licence granted to him. THE plea of ignorance made by the appellant was rejected by the third respondent and the licence was cancelled under section 28 (1 ) (b) of the Pondicherry Excise Act 1970 (hereinafter referred to as'the Excise Act'). THE Excise Commissioner, Pondicherry , on appeal, dismissed the appeal. THE appellant preferred a further appeal before the lieutenant Governor, Pondicherry and Lt. Governor also dismissed the appeal on the ground that the appellant had knowingly permitted the unlicensed premises to be used for the purpose of manufacture of illicit liquor and the circumstances showed that it was done only with the knowledge and connivance of the appellant and thereby, the appellant violated the conditions of the licence. It was also found that it was a case of manufacture of spurious liquor affecting the health of the people and hence, the cancellation of licence of the appellant was justified. Challenging the order of the Lt. Governor, the appellant filed the writ petition and the writ petition also came to be dismissed. It is against the order of learned Single Judge, the writ appeal has been preferred.

(2.) MR. Muralikumaran, learned counsel for the appellant submitted that after Arulraj, son of the appellant had agreed to compound the offence with the Excise authorities under section 44 of the Excise Act, no further proceedings shall be instituted against the appellant under the Excise act for the cancellation of licence under section 28 ( 1 ) (b)of the Excise Act. He referred to the provisions of sub-sections (1) and (2) of section 44 of the Excise Act and submitted that in lieu of cancellation, the compounding of offence has been done and therefore the Excise authorities had no power to cancel the licence under section 28 (1) (b) of the Excise Act. We are unable to accept the submission of learned counsel for the appellant for more than one reason. In so far as section 44 of the Excise Act is concerned, the sub-sections (1) and (2) of section 44 only deal with the compounding of offences, and the compounding can only be with reference to the proceedings that were instituted against the person who compounded the offence in the criminal court and it cannot be stated that once compounding has been done, there should be no proceedings under section 28 (1 ) (b)of the Excise Act. The two proceedings are distinct and different; one is penal in nature and the other is quasi-judicial. Hence, the compounding of offence by one does not preclude the licensing authority from initiating proceedings for cancellation of the licence. Moreover, on the facts of the case, there was no compounding of offence by the appellant. We are of the view, since the offence committed by the appellant under section 35-A was not compounded under section 44 of the Excise Act, the submission of learned counsel for the appellant that the licence should not be cancelled under section 28 ( 1 ) (b)of the Excise Act, in view of compounding of the offence by his son, is not legally sustainable.