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T.K.SAMBASIVAN, JYOTHI NILAYAM versus STATE OF KERALA REPRESENTED BY ITS

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T.K.SAMBASIVAN, JYOTHI NILAYAM v. STATE OF KERALA REPRESENTED BY ITS - WA No. 754 of 2007 [2007] RD-KL 6496 (28 March 2007)

IN THE HIGH COURT OF KERALA AT ERNAKULAM

WA No. 754 of 2007()

1. T.K.SAMBASIVAN, JYOTHI NILAYAM,
... Petitioner

Vs

1. STATE OF KERALA REPRESENTED BY ITS
... Respondent

2. THE COMMISSIONER OF EXCISE,

3. THE ASSISTANT EXCISE COMMISSIONER,

4. THE DISTRICT COLLECTOR,

For Petitioner :SRI.D.KISHORE

For Respondent : No Appearance

The Hon'ble the Acting Chief Justice MR.K.S.RADHAKRISHNAN The Hon'ble MR. Justice M.N.KRISHNAN

Dated :28/03/2007

O R D E R

K.S. RADHAKRISHNAN, AG. C.J. & M.N.KRISHNAN, J.

WA. Nos. 754, 760, 763, 771, 772, 773, 774, 775, 779, 782 & 790 of 2007

Dated this the day of March, 2007



J U D G M E N T

Radhakrishnan, Ag. C.J. All these appeals arise out of the interim order passed by the learned single Judge on 20th March, 2007 relating to the Abkari Policy of the Government for the year 2007-08. Learned single Judge interfered with the Abkari Policy in so far as it identifies certain Co-operative Societies with reference to the Abkari Ranges for being given the preference, which according to the learned single Judge, is irrational and unconstitutional. Learned single Judge also felt that the yardstick on the basis of which SRO 227 and the provisions in clause 2(iii) of GO(MS) 40 were issued is illusory. Learned single Judge also held that petitioners have demonstrated a very strong prima facie case that GO(MS) 34 as amended by GO(MS) 40 is unconstitutional and the decision reflected in SRO 227 is contrary even to the amendments sought to be made as per SRO 224. With regard to the preference for those licensees who had conducted shops for the previous three years, learned single Judge felt that is not open for the petitioners to contend that persons who may not have experience for the three immediately preceding years but who may have such experience during the years that preceded that period should also be considered. Contention WA. 754/07 etc. raised on that ground was rejected. Learned single Judge therefore stayed the operation of the decision contained in SRO 227 and the similar decision in GO(MS) 34 as amended by GO(MS) 40. State of Kerala and Commissioner of Excise have filed appeals to the extent they are aggrieved by the order of the learned single Judge. WA. Nos. 754 and 763 of 2007 were preferred challenging that part of the order rejecting their contention of giving preference to those who had conducted shops for the previous three years. Learned Advocate General appearing for the State submitted that the learned single Judge was not justified in interfering with the Government's Abkari Policy and holding that GO(MS) 34 as amended by GO(MS) 40 is unconstitutional and the decision reflected in SRO 227 is contrary even to the amendments sought to be made as per SRO 222. Learned Advocate General submitted that the learned single Judge was not justified in holding that State did not have sufficient materials before formulating the Abkari Policy for the year 2007-08. Learned Advocate General submitted that the Government have taken a Policy decision to give privilege for conducting toddy shops in various districts to Toddy Workers and Toddy Tappers Co-operative Societies in the State in a phased manner. Learned Advocate General referred to the policy decision of the Government announced for the year 2001-02 whereby the exclusive privilege for conducting toddy shops was entrusted to Toddy Shop Workers WA. 754/07 etc. and Toddy Tapers Co-operative Societies in the State. Policy was challenged before a Division Bench of this court in OP. Nos. 5962 of 2001 and connected matters. Division Bench repelled that challenge. Learned Advocate General also submitted that the privilege for conducting toddy shops was entrusted to Co-operative Societies in the whole of Kannur and Kozhikode Districts and also in three Ranges each in Kasaragode and Ernakulam Division. Further, learned Advocate General submitted that while giving that exclusive privilege to Co-operative Societies, the State Government wanted to give it to societies which functioned well during the year 2001-02 and made profit. In order to substantiate his contention reference was made to Ext.R1(b). Learned senior counsel appearing for some of the respondents Sri.Kurian George Kannamthanam and Sri. George Poonthottam supported the finding of the learned single Judge and stated that the Government had framed norms for the Abkari Policy without making any study or any other materials. Counsel submitted, the materials were collected only after challenge was made about the illegality of the Abkari Policy. Learned counsel also submitted that though two letters dated 2-3-2007 and 6-3-2007 were issued by the Excise Commissioner to the Government and referred to in GO(MS) 34, those letters would not be any assistance and totally unrelated to the subject matter of GO(MS) 34. Learned counsel also submitted that Government had not made study or WA. 754/07 etc. considered any material as to whether other societies had made profit during the year 2000-01.Counsel also submitted that some of the societies are involved in various crimes under the Abkari Act as well as under the NDPS Act and therefore there is justification in granting privilege for conducting toddy shops to those societies. Counsel submitted, Government have acted arbitrarily and mala fide and societies at Kannur, Calicut as well as some of the Ranges of Ernakulam and Kasaragod Districts were included with ulterior motives. Learned counsel also referred to the Kerala Abkari Shops Disposal (Amendment) Rules, 2007 as well as the definition clause Rule 2(na) and submitted that the definition clause has a goby vide SRO 227/07 by reserving right to Co-operative Societies constituted with membership of 51 members of Toddy Shop Workers and Toddy Tappers and registered with the Toddy Workers Welfare Fund Board. Senior counsel also submitted that the Rules have come into force only from 1st April, 2007 and even before that societies were identified with illegal and mala fide intention. According to the Government, grant exclusive privilege for conducting toddy shops in the State of Kerala to Toddy Shop Workers and Toddy Tappers Co-operative Societies for the Abkari year 2001-02 was considered by a Division Bench of this Court in a a batch of writ petitions vide OP. Nos. 5962 of 2001 and connected matters. This court upheld the policy of the Government for the year 2001- WA. 754/07 etc.

02. This court held as follows:

"We must notice members of the co-operative societies are toddy tappers and workers who are registered with the Kerala State Toddy Workers Welfare Fund Board which was constituted under the scheme framed under the Kerala Toddy Workers Welfare Fund Act. In other words, members of the societies are manual workers who are engaged in the traditional process of tapping toddy and also engaged in the sale of toddy. The decision of the State Government to entrust privilege of vending toddy to them with effective State control cannot be said to be arbitrary". We notice that that later in 2004-05 the policy has been changed and the State revert back to grant privilege of vending toddy to individuals as well which has been continued till 2006-07. Government while announcing the policy for the year 2007-08 thought that in a phased manner the policy of entrusting toddy shops to Co-operative Societies. Abkari Policy announced by the Government vide GO(MS) No.34/07/TD dated 1-3-2007 stated that toddy shops will be disposed in groups consisting of 5 to 7 shops by licensing system. Unsold shops will be sold in Range/Taluk wise. Toddy shops as decided by the Government, will be entrusted to Co-operative Societies as well. It is stated in the policy that the Government is committed to provide quality toddy through toddy shops. Government will encourage co-operative societies in Toddy Sector. It is ordered that toddy being traditional industry, individuals, individual groups, workers committee and co-operatives will be given sufficient priority to run the toddy shops. It is also ordered that in order to ensure prompt payment of Government dues, WA. 754/07 etc. welfare fund and wages of employees sufficient bank guarantee/solvency by way of treasury savings deposits will be insisted except co-operative societies and workers committees. Government later decided to modify the policy and issued GO (MS) No.40/2007/TD dated 8-3-2007. It was ordered that toddy shops in the Ranges of Neeleswaram, Hosdurg, Bandaduka in Kasaragod District, Mamala, Peprumbavoor and Piravom in Ernakulam District and all the Ranges of Kannur and Kozhikode District be entrusted to Workers Co-operative Societies. Therefore GO(MS) 34 of 2007 dated 1- 3-2007 and GO(MS) 40 of 2007 dated 8-3-2007 Government declared the Abkari Policy for the year 2007-08. On the basis of the above mentioned Abkari Policy Government found it necessary to amend the Kerala Abkari Shops Disposal Rules, 2002. Consequently a notification GO(P) No.43/2007/TD dated 13th March 2007 was issued framing the Kerala Abkari Shops Disposal (Amendment) Rules 2007 which will come into force from 1st April, 2007. Rule 2 was amended after clause (n) and clause (na) was added which says that Toddy Shop Workers and Toddy Tappers Co- operative Society means a society formed at range level/taluk level by Toddy Shop Workers and Toddy Tappers who are members of the Toddy Workers Welfare Fund Board and registered under the Kerala Co-operative Societies Act, 1969 (21 of 1969). In rule 3, after the existing proviso, a proviso was added stating that the Government reserves the right to WA. 754/07 etc. earmark, by notification, any number of Toddy Shop in any Range/Taluk for any period by notification to the Toddy Shop Workers and Toddy Tappers Co-operative Society in any manner as it deems fit. Another notification SRO. No. 227/07 was issued by the Government in exercise of the powers conferred by section 18A of Abkari Act 1 of 1077 and sub-rule (1) and its first proviso of Rule 3 of the Kerala Abkari Shops Disposal Ruels, 2002 notifying that the privilege of vending toddy int he toddy shops of Neeleswaram, Hosdurg and Bandaduka Ranges in Kasaragod Division, all Excise Ranges in Kannur Division, all excise Ranges in Kozhikode Division and Mamala, Perumbavoor and Piravom Ranges in Ernakulam Division are reserved for Toddy Tappers and Toddy Workers Co-operative Societies constituted for the purpose, with a membership of at least 51% of the toddy tappers and workers registered with the Kerala Toddy Workers Welfare Fund Board and attached to the toddy shops in the respective Ranges/Taluks. We find in the proviso added to rule 3 in the Kerala Abkari Shops Disposal Rules 2002 Government reserves the right to earmark by notification, any number of Toddy Shop in any Range/Taluk for any period by notification to the Toddy Shop Workers and Toddy Tappers Co- operative Society in any manner as it deems fit. By amendment toddy shops in the Ranges of Kasaragod, Kannur, Kozhikode and Ernakulam District will be entrusted to Workers Co-operative Societies though WA. 754/07 etc. announced prior to the coming into force of the Kerala Abkari Shops Disposal (Amendment) Rules 2007. This policy would get support on the basis of the amended rules for the entrustment of the toddy shops in the Ranges of Kasaragod, Kannur, Kozhikode and Ernakulam District to the Workers Societies. Counsel for the revision petitioner submitted that even before entrusting those shops in the above mentioned Ranges in the Kannur, Kasargod, Kozhikode and Ernakulam District Government have not conducted any study and they have no sufficient materials. We may indicate, so far this case is concerned the entrustment is to the workers co- operative societies. Co-operative Societies are registered under the Kerala Co-operative Societies Act and members of those societies are Toddy Workers Welfare Fund Board. Co-operative Societies under the Welfare Fund Act will have effective control over the Co-operative Societies. All the registered members of the Toddy Workers Welfare Fund Board would be members of the Scheme framed under the provisions of the Kerala Toddy Workers Welfare Fund Act and that the societies will have to register themselves with the Kerala Co-operative Societies Act. On registration the excise officers will have more effective control over their functioning. We are therefore of the view that the Government Policy in entrusting toddy shops in certain Ranges to Co-operative Societies cannot be faulted. We may point out all these writ petitions were preferred not by Co-operative WA. 754/07 etc. Societies in various Ranges but by some of the individuals questioning the policy of entrusting the privilege of vending toddy exclusively to the Co- operative Societies in certain districts and few Ranges in certain other Districts. We are of the view, individuals cannot question the Government Policy of entrusting the privilege of vending toddy to the Co-operative Sector. Counsel also challenged the Government Policy in excepting Co- operative Societies from furnishing bank guarantee/security. We are of the view it is entirely a matter for the Government to decide depending upon various circumstances and individual competitor in the field cannot question that policy. We therefore find force in the Government Policy in entrusting toddy shops of all the Ranges in Kannur and Kozhikode to Workers Co- operative Societies and also few other Ranges at Kasaragod and Ernakulam District. Counsel appearing for the writ petitioners submitted that Government had not conducted any study before entrusting those Ranges to the Co-operative Societies. We are of the view, the mere fact that those shops are entrusted to Co-operative Societies itself would not indicate that the Government have worth to achieve in the sense that the Government will have effective control in the functioning of those shops at the Co-operative level. Learned Advocate General submitted that Government have got materials about various societies functioning in the Districts of Kannur and Kozhikode and noticed that those societies had WA. 754/07 etc. made profits in the year 20002, so also the societies in the Ranges of Ernakulam and Kasaragod Districts. Learned single Judge in our view has taken the view that Government did not have sufficient materials on record before it come to any such policy decision at the time when GO(MS) 40 was issued. We are of the view since entrustment is to the Workers Co- operative Societies and it is a declared policy this court is not justified in substituting its wisdom with that of the Government in the matter of Abkari Policy. We are not impressed by the argument of the counsel for the petitioners that Government is trying to pick and choose societies according to whims and fancies due to political consideration. In the absence of any cogent this court is not justified in accepting the contention raised by the petitioners. We are also not impressed by the arguments of the counsel appearing for the appellants in WA. Nos. 763 and 754 of 2007 challenging the policy of the Government with regard to the preference for those persons who had conducted shops for the previous three years. Learned single Judge already repelled that contention holding that this court is not justified in substituting its wisdom to that of the Government. We also fully concur with the view of the learned single Judge that it is not open to the petitioners to contend that persons who may not have experience for the three immediately preceding years but who may have such experience during the years that preceded that period should also be WA. 754/07 etc. considered. Experience can always be taken as a criteria in the matter of abkari shops. This court is not justified in sitting judgment over that policy framed by the State Government. Under such circumstance we are inclined to allow all the writ appeals preferred by the State Government and dismiss WA. Nos. 763 and 754 of 2007. K.S. RADHAKRISHNAN, (Ag. Chief Justice)

M.N.KRISHNAN, JUDGE

ksv/


Copyright

Reproduced in accordance with s52(q) of the Copyright Act 1957 (India) from judis.nic.in, indiacode.nic.in and other Indian High Court Websites

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