KARNAL DISTILLERY COMPANY Vs. STATE OF PUNJAB

JUDGEMENT

(1.) THIS is a writ petition by the Karnal Distillery Co. Limited, Karnal against the state of Punjab now State of Haryana and the Financial Commissioner and the excise and Taxation Commissioner, Punjab now Haryana, respectively impleaded as respondents Nos. 1 to 3 under Arts. 226 and 227 of the Constitution impugning the validity of notice dated December 14, 1964 served on the petitioner-company to determine its license on December 21, 1965 after the expiry of period of one year commencing from the date of service of the notice under Section 21 (b) of the punjab Excise Act, 1914 (hereinafter called the Act) read with Rule 7 of the Punjab distillery Rules, 1932 framed thereunder (hereinafter called the Rules) and condition No. 9 of the license issued under Section 20 (2) of the Act. Considering the importance of the questions raised, the case has been referred by Pandit, J. to a Division Bench.

(2.) FACTS leading to the writ petition are as follows:-The petitioner-company is a limited company registered under the Indian companies Act. Its Managing Director is Shri S. P. Jaiswal. Shri Kishori lal Jaiswal, father of Shri S. P. Jaiswal set up in 1903 distillery in the town of Karnal at the site at which it is being worked now. Shri Kishori Lal Jaiswal died in 1928. His sons have since his death been continuing to run the distillery under the name of the petitioner-company. On representations made by the residents of the locality, in which the distillery is situate, there was passed a resolution by the Municipal committee of Karnal in 1939 saying that the distillery, which was situate in the heart of the town of Karnal, was a nuisance to the inhabitants of the locality, in which it was situate and that it was not desirable on grounds of sanitation to continue the distillery in the town and it should be removed to some other distant and suitable site. In 1939, the petitioner-company was given a notice for as long a period of time as 51/2 years to shift the distillery from the town of Karnal to some other place. A notice was also served on the petitioner-company that its license would be determined, if it failed to comply with the direction of shifting of the distillery. The petitioner-company was granted on November 5, 1941 a fresh license in Form D-2 under Section 20 (2) of the Act now sought to be cancelled by the impugned notice. Having failed to shift the distillery within the period of time granted to the company the company was again given period of three years to shift by letter dated November 5, 1947 addressed on behalf of the respondents to the petitioner but to no avail. The period of three years was further extended by one year.

(3.) BY letter dated January 21, 1949 addressed by respondent No. 3 to the Deputy excise and Taxation Commissioner, Ambala with a copy to the petitioner, it was communicated that the management of the petitioner-company be directed to shift the distillery outside the municipal limits of Karnal to some suitable site to be suggested by them and that they be informed that the notice for determination of the license already issued would expire on September 30, 1950. The petitioner-company proposed a site but it was not approved by the Collector, Karnal. The company was intimated that the site selected for approval should be at least 10 miles away from the municipal limits of Karnal and should be one, which is not likely to developed into residential area in the near future. In response to a suggestion made on behalf of the petitioner-company for acquisition of land by respondent No. 1, it was communicated to the petitioner-company by respondent No. 3, by letter dated September 18, 1952 that land could not be acquired by respondent No. 1 for a private purpose and that the petitioner-company should itself procure land for the purpose. Finding that the petitioner-company had not made available suitable site for approval, respondent No. 3, by letter dated March 7, 1955 intimated to the Deputy Excise and Taxation commissioner that the petitioner-company should shift the distillery by November 16, 1955 and that no further extension would be granted. The petitioner-company having taken no action to comply with the above direction, respondent No. 3 addressed another letter to it on June 23, 1956 suggesting that the petitioner-company should purchase a new site for shifting the distillery from Karnal and apply for a fresh license for the factory to be established there.