Doongaji
and Co. Vs. State of Madhya Pradesh & Ors [1991] INSC 182 (9 August 1991)
Ramaswamy,
K. Ramaswamy, K. Kasliwal, N.M. (J)
CITATION:
1992 AIR 488 1991 SCR (3) 492 1991 SCC Supl. (2) 324 JT 1991 (3) 356 1991 SCALE
(2)288
ACT:
Madhya
Pradesh Excise Act, 1915--Sections 13 and 14--Licence to distil rectified
spirit or denatured spirit or liquor--Clause 50--Interpretation of. Valuation
of the materials such as plants & machinery etc. of the distillery and
payment thereof to outgoing licensee before handing over possession to the
incoming licensee--Held to be neither mandatory nor a condition precedent.
HEAD NOTE:
The
appellants and its predecessors continuously held licences under Sections 13
and 14 of the Madhya Pradesh Excise Act to distil rectified spirit or denatured
spirit or liquor. The last of such licence which the appellant had related to
the period from 1.4.1977 to 31.3.1981. The next licensing period commenced from
1.4.1981 to 31.3.1986 and the respondent Rajdhani Distilleries Corporation became
the successful tenderer in respect thereof which the appellant impugned by
means of a writ petition before the High Court but failed both before the High
Court as also in this Court in a special leave petition. Thereupon the
appellant was called upon twice to be present to deliver the possession of the
distillery to the respondent but the appellant did not co-operate. Likewise the
appellant did not co-operate in fixing the value of the plant and machinery of
the distill- ery and warehouses as a result of which a committee was appointed
in terms of the licence which fixed a sum of Rs.10,53,016.45 p. as the total
value payable to the appel- lant. Due to the non-cooperation of the appellant,
the Excise Department took over the possession of the distillery after making
inventory of stock in hand in the presence of the witnesses and the same was
handed over to the respond- ent. The appellant thereafter demanded redelivery
of the distillery and on his failure to get the same it filed a writ petition
in the High Court praying for a writ of manda- mus seeking inter alia
restitution of the distillery and the warehouses etc., challenging the quantum
of valuation fixed.
The
High Court dismissed the writ petition. The High Court found that the appellant
had no exclusive possession which always remained with the excise Department;
the appellant worked out the contract of manufacturing rectified spirit etc.
and that due to non-cooperation of the appellant, possession was taken and
delivered to the incoming licensee as per rules and the 479 480 appellant was
not entitled to restitution. Hence this appeal by special leave. It is
contended on behalf of the appellant that clause 50 enjoins the State to fix
the valuation of all the materials belonging to the appellant and pay the same
to it as an outgoing licensee, before taking over possession and handing over
the distillery and the attached warehouses to the respondents. According to it,
it is a condition precedent under clause 50 to dispossess the appellant and
start the operation of the contract by the respondent which admittedly were not
done. This is a contravention of the mandatory conditions of the licence and
the rules. The respondents on the other hand contend that the appellant is not
entitled to restitution as it was due to its non-cooper- ation, possession was
taken. According to them prior valua- tion and payment are not condition
precedent to work out the licence.
Partly
allowing the appeal, this Court,
HELD:
In the light of the scheme of valuation of the plant and machinery of the
distillery, or the apparatus in the warehouses and the stock in trade, the
Court held that strict construction (of clause 50) would lead to innumerable
complications and loss of public revenue. We are inclined to hold that before the
expiry of the licence, if the outgoing licensee cooperates, the value can be
fixed with consensus, payment should also be made within the time stipulated.
In all other cases it could be done even after the expiry of the stipulated
period. In that perspective the Court had no hesitation to hold that prior
valuation of plant and machin- ery in the distillery, stock in trade therein or
the value of the machinery in the warehouses and stock of the liquor stored
therein and payment thereof before taking possession and handing them over to
the incoming licensee is not a mandatory, nor a condition precedent. Therefore,
taking over possession from the appellant on August 28, 1981 and handing over the plant and machinery, etc. to the
respondent is not illegal. [490C-E] In this case admittedly the conditions of licence
are not questioned, but expressly given up in the High Court.
Even
before us the validity of the valuation has not been questioned. It cannot cut
the branch on which appellant sits to assail the constitutional validity of the
conditions of the licence. Accordingly we have no hesitation to hold that the
appellant is not entitled to the restitution of the plant and machinery of the
distillery at Ujjain and the attached warehouses.
[491A-B] It is open to the appellant to make a representation to Government and
any officer not below a Secretary preferably of the concerned 481 Department
would go into the matter and decide the value as per the material on record. It
is open to the appellant to place all its material. It is also open to the
respondent to place its material and the authority would consider after giving
an opportunity of hearing through counsel, if asked for, and decide the value
accordingly. [491D] Godhra Electricity Co. Ltd. and Anr. v. State of Gujarat and Ors., [1975] 2 SCR 42; Hat Shankar
& Ors. v. Dy. Excise of M. P.v. Nandial Jaiswal, [1987] 1 SCR 1, Referred
to. & CIVIL APPELLATE JURISDICTION: Civil Appeal No. 5483 of 1983.
From
the Judgment and Order dated 7.10. 1982 of the Madhya Pradesh High Court in
M.P. No. 169 of 1982.
R.F. Nariman
and P.H. Parekh for the Appellants.
V.N. Ganpule,
V.M. Tarkunde, S.K. Agnihotri, S.K. Sinha, Rajinder Narain, R.S. Singh, and Rameshwar
Nath for the Respondents.
The
Judgment of the Court was delivered by K. RAMASWAMY, J-This appeal by special
leave arises against the judgment of the Division Bench of the Madhya Pradesh
High Court, Indore Bench dismissing M.P. No. 169 of 1982 dated October 7, 1982. The appellant, a partnership firm
filed the writ petition seeking writ of mandamus and other direction to remove Rajdhani
Distilleries Corporation, the 7th respondent in the writ petition in the High
Court and 6th respondent in this appeal for short 'respondent' or his
'servants' or 'agents' and to deliver vacant and peace- ful possession of U j jain
Distillery and warehouses at- tached to it and the plant and machinery
mentioned in the schedule Annexure P-3 to the writ petition. It also sought for
mandamus or other order to have the valuation of the plant and machinery in
Annexure P-3 assessed or direction to return the goods or things described in
Annexure P-7 or on its failure to pay a sum of Rs.8,48,179.28 and a mandamus
directing the State Govt. to terminate the licence granted on August 25, 1981
to the respondent and to issue licence to the appellant under s. 13 of the M.P.
Excise Act, 19 15, for short 'the Act', etc. Thus this appeal.
The
material facts, to dispose of the point arose in this appeal, lie 482 in a
short compass as stated hereunder:
In the
State of Madhya Pradesh nine distilleries for the
manufacture of spirit were established and one of which was situated at Ujjain. The appellant and its predecessors
continuously had licence under ss. 13 and 14 of the Act in form D-2 to distil
rectified spirit or denatured spirit or liquor and D-I licence for wholesale
supply of country made liquor in the distillery to retail vendors in the area
attached to the distillery. The licence was for a period of 5 years. The last licence
of which was for the period from April 1, 1977 to March 31. 1981. The normal procedure in vogue was to
call for tenders and the lowest was being accepted, though sometimes highest
was also preferred. Next licensing period commenced from April 1, 198 1 to March 31, 1986 and the respondent became the successful tenderer which the
appellant impugned in Misc. Petition No. 701/81 and obtained stay of
dispossession from the distillery and the attached warehouses, The interim stay
was later vacated and the petition was dismissed on August 20, 198 1. We may also mention here that the writ petition was also
dismissed and the special leave petition was dismissed by this court. Thus
grant of licence to the respondent under D-1 and D-2 li- cences became final.
On August 21, 1981 the Officer-in- Charge of the
distillery wrote a letter to the appellant calling upon them to be present on August 22, 1981 to deliv- er the distillery, plant,
machinery, etc. to the respondent.
The
appellant neither received it nor cooperated to deliver possession of the distillery,
etc. to the respondent. In- stead it locked the distillery and went away. In
the mean- while the Excise Department also put their locks on the distillery
etc. On August 27. 1981 the District Excise Officer again called upon the
appellant to be present on August 28, 1981
to deliver possession of the distillery, etc. to the respondent. But the
appellant remained absent.
Consequently
possession was taken of the distillery and warehouses, after taking inventory
of stock in hand in the presence of the witnesses and the same were handed over
to the respondent on August
28, 1981. The
appellant sent a letter on February 23, 1982
valuing the goods taken posses- sion of at Rs.8,36,988.61. On August 8, 1982 the appellant demanded redelivery
of the distillery, plant and machinery and warehouses and the value of the
stock in trade or pay the amount. On March 16, 1982 the appellant filed the writ
petition in the High Court but was dismissed.
The
appellant contended in the High Court that it had been in exclusive possession
of the distillery, plant and machinery at Ujjain and the attached warehouses
and dispossession was unlawful and that, 483 therefore, the appellant was
entitled to restitution of the plant and machinery and also to the grant of licence
after cancellation of the licence granted to the respondent. The High Court
found that the appellant had no exclusive posses- sion which always remained
with the Excise Department. The appellant worked out the contract of
manufacturing rectified spirit or spirit (country made liquor) in the
distillery and wholesale supply to the retail vendors within the area attached
to the distillery. Due to non-cooperation of the appellant possession was taken
and delivered to the incoming licensee, the respondent, as per rules and the
appellant was not entitled to restitution. The other findings are not necessary
as they are not pressed before this court. The appellant had given up the reliefs
of valuation of the plant and machinery and stock in trade. During the pendency
of the appeal on an application made by the appellant this court directed the
state to make over payment of a sum of Rs. 10 lacs deposited by the respondent
with the State Govt. and also further directed the respondent to deposited sum
of Rs.5 lacs in the Registry of this court and directed the Registry to keep
that amount in fixed deposit to earn inter- est thereon subject to adjustment
at the final hearing.
Despite
issuance of several notices by the department, the appellant did not cooperate
in the estimate of the value of the plant and machinery of the distillery and
warehouses.
the
Committee appointed in terms of the conditions of the licence, fixed a sum of Rs.
10,53,016.45 as total value payable to the appellant. Since a sum of Rs. 10 lacs
had already been paid, the appellant is still entitled to the balance amount of
Rs.53,016.45.
Sri.
R.F. Nariman, learned counsel for the appellant, in his thorough and analytical
arguments based on record made a shift in the stand and now contended that on a
read- ing of several clauses in the licence Ex. P-2, in particu- lar, clause 50
enjoins the state to fix the valuation of all materials like buildings, still,
machinery, etc. belonging to the appellant as an outgoing licensee; should be pur-
chased by the respondent before the expiry of the contract and commencement of
the succeeding contract of the respond- ent; the Committee appointed by the
Excise Department in this behalf should estimate fair valuation and payment
thereto be made to the appellant before taking over posses- sion and handing
over the plant and machinery of the dis- tillery and the attached warehouses to
the respondents as a condition precedent to dispossess the appellant and start
the operation of the contract by the respondent which admit- tedly were not
done. This is in contravention of the manda- tory conditions of the licence and
the rules. The 484 appellant, therefore, is entitled to restitution of the
plant and machinery of the distillery and the attached warehouses illegally
taken possession of by the respondent and the state. In support thereof he
placed strong reliance in Godhra Electricity Co. Ltd. & Anr. v. State of Gujarat & Ors., [1975] 2 SCR 42. He
also referred to us in support of his contention various documents. In our view
it is not necessary to dwelve deep into them. Sri Ganpule and Sri Tarkunde, the
learned senior counsel for the State and the respondent. contended that the
appellant was requested twice to-be present for delivery of the plant and
machinery in the distillery and warehouses to the respondent and due to its
non-cooperation possession was taken. Even for the assess- ment of the
valuation, before the expiry of the contract.
the
appellant was given several notices requesting it to furnish the evidence of
the value of the plant and machinery stock in trade, etc., and due to its
non-cooperation. the valuation could not be made. Prior valuation and payment
are not condition precedent to work out the licence. The appel- lant has no
right to the restitution after the expiry of the licence. Sri Tarkunde, in
particular, emphasised that the restitution prayed for became infructuous on
account of the subsequent events, namely, pursuant to December 1984 Govt.
policy the respondents established their distillery at U j jain at their own
expenses.
The
second period of licence also expired in 1991. There was further change in the
policy of the Govt., namely each District was made a supply area under a
separate licence for two years. Under these circumstances the appellant is not
entitled to any reliefs. It is also further contended that the conditions in
the licence in Ex. P-2 marked in the High Court should be read harmoniously. It
is clear that prior fixation of the valuation and the payment of the price is
not a condition precedent. The ratio in Godhra Electricity Co. Ltd. case is
inapplicable to the facts of this case.
The
sole question is whether fixation of the price of the plants and machinery at Ujjain and the attached ware- houses and
stock in trade and payment thereof to the appel- lant is a condition precedent
to take possession and deliv- ery thereof to the respondent on August 28, 1981. At the outset we may make it clear
that, though Sri Nariman con- tended that the grant of licence to the
respondent was in gross violation of the conditions of the tender as the
respondent did not comply with any of the mandatory condi- tions stipulated
therein and the delivery of the possession of the distillery in pursuance of
the illegal contract is without jurisdiction, we decline to go into this
question, though prima facie may be plausible to be countenanced, for the 485
reasons that the grant of licence for the period of 1981 to 1986 to the
respondent became final and expired by efflux of time. It was also contended by
Sri Nariman that the valua- tion made at Rs. 10,53,0 16.45 was not proper and
contrary to the tender's conditions which stipulated deposit of a minimum of Rs.
19 lacs by the respondent as a condition to grant licence, and that, therefore,
the appellant is enti- tled to valuation of at least Rs. 19 lacs. We decline to
go into that question also since the relief of valuation was given up in the
High Court. It is also clear from the record that the appellant had not
cooperated in estimating the value and the Committee of designated officers,
namely the Addl. Collector, the District Excise Officer, Astt. Commis- sioner
of Excise and Accounts Officers was compelled to go into the question and made
an assessment of the value on January 5, 1984. That valuation was also not
questioned in the writ petition.
To
find whether it is a condition precedent to fix the valuation of the plants and
machinery of the distillery and the warehouses and the stock in trade and
payment thereof before taking over possession and handing over the same to the
incoming licencee, the material clause 50 to be looked into reads thus:
"All
the materials like buildings, still, machinery, drums, wood fuel, coal, mahua,
bottling, machinery, bottles, spices, red sealing wax, coaltar, pilfer proof
seals, crown corks, alongwith alu capsules, etc.
belonging
to the outgoing licensee purchased for the use of distillery and warehouses
attached thereto, shall be valued before the expiry of the old contract and the
commence- ment of the new one by a committee appointed by the Excise Department
in this behalf. The committee aforesaid shall be appointed by the Excise
Commissioner under the previous sanc- tion of the Government (Separate Revenue
Department) and it shall consist of five members, namely
(1)
Collector or Additional Collector-convenor,
(2)
Assistant Commissioner of Excise of the Division concerned member
(3)
Executive Engineer--Technical member,
(4)
Accounts Officer of the Excise Department--Member, and
(5)
Representative of the licensee--Member.
If the
representative of the licensee remains absent in the committee at the appointed
time, the remaining four members shall begin their work in his absence and no
objection of the licensee in this respect shall be heard. The valuation made
and agreed upon by the Committee shall be sanc- tioned by the Excise Commis-
486 sioner with such necessary changes as he deems fit and in case of
difference of opinion amongst the members, the Excise Commissioner shall pass
orders relating to disputed valua- tion. The orders of Excise Commissioner
shall be final and binding upon the licensee.
Note:
The valuation of sanctioned plant at the warehouses may be done by a committee
consisting of some of the members of the above referred committee, subject to
the orders of the Excise Commissioner, which shall be final and binding on the
licensee.
Prima
facie, if the clause by itself is read in isola- tion, it would indicate that
prior fixation of the value and payment is a condition precedent. But in our
view all the conditions of the licence, policy of the Act and Rule of the
possession, manufacture, supply, sale and distribution of the rectified spirit
or denatured spirit or liquor from the stage of manufacture in Distillery till
retail sale to the consumer be viewed as an integrated whole and the human behaviour
of the outgoing licensee also has to be kept in view. Any other view would
disrupt smooth transition from the outgoing to the incoming licensee; hampers
the continui- ty of supply and sale of intoxicants and cause collosal loss of
public revenue. So let us consider the relevant proposi- tions from this
background.
Section
13 of the Act requires a licensee to manufacture intoxicants:
(a) Licence
is required for manufacture, etc. of intoxicants;
(b) No
intoxicant shall be manufactured or collected ...........
(f) No
person shall induce, keep in his possession any material............ for the
purpose of manufacture of intoxicants, other than tari, except under the
authority and subject to the terms and conditions of the licence granted in
that behalf.
Section
14 provides that:
(a) establish
a distillery in which spirit may be manufactured under licence granted under s.
13 on such conditions as the Govt. may impose......
487
(C) license on such conditions as the State Govt. may impose the construction
and working of the distillery and brewery;
(c) establish
or licence warehouses wherein any intoxicant may be deposited and kept without
payment of duty, subject to payment of such fee as the State Govt. may
direct.....
Section
17 provides inter alia that no intoxicant shall be sold except under the
authority and subject to the terms and conditions of licence granted in that
behalf.
Thus
it is clear that establishment of a distillery or a warehouse; manufacture of
intoxicants, spirit (country made liquor), the possession and distribution and
sale thereof are regulated under the Act.
The
Govt. in exercise of its power under s. 62 of the Act made rules regulating the
control of distilleries and warehouses by Officers of the Excise Department,
especially appointed by the Excise Commissioner for that purpose.
Therefore,
any licensee, under the Act and the Rules, be it incoming or outgoing, should
have D-2 and D-I licences for establishment of distillery and warehouses,
possession of raw materials, manufacture of liquor or rectified spirit or
denatured spirit and supply to the retail vendors of the area attached to the
distillery. Any infraction is an of- fence.
It is
settled law by several decisions of this court that there is no fundamental
right to a citizen to carry on trade or business in liquor. The state under its
regulatory power, has power to prohibit absolutely any form of activity in
relation to an intoxicant, its manufacture, possession, import and export.
No-one can claim, as against the state, the right to carry on trade or business
in any intoxicants, nor the state be compelled to part with its exclusive right
or privilege of manufacture, sale, storage of liquor. Fur- ther when the state
has decided to part with such right or privilege to the others, then state can
regulate consistent with the principles of equality enshrined under Art. 14 and
any infraction in this behalf at its pleasure are arbitrary violating Article
14. Therefore, the exclusive right or privilege of manufacture, storage, sale,
import and export of the liquor through any agency other than the state would
be subject to rigour of Article 14. Vide Har Shankar & Ors. v. Dy. Excise
& Taxation Commissioner & Ors., [1975] 2 SCR 254 and State of M. P.v. Nandial Jaiswal., [1987] 1 SCR 1. 488 When the state
was dealing with the grant of the privi- lege of establishing or manufacturing
intoxicants, rectified spirit or denatured spirit, spirit (country made liquor)
in a distillery owned or regulated by it, and invites tenders in this regard it
should conform to the rigour of Art. 14 of the Constitution. Admittedly, the licence
of the appellant expired on March 31, 1981
and thereafter it had no right to manufacture and store at distillery in Ujjain and distribu- tion as wholesaler of
the country made liquor from the attached warehouses to the retail vendors
within that area granted to the respondent. But for the stay granted by the
High Court the operation of the respondent's licence was to begin on April
1,198 1. The outgoing licensee, the appel- lant, had to hand it over to the
respondent on that date.
The
conditions in the licence P-2 postulate of mutual rights and obligations
between the outgoing licensee to sell and the incoming licensee to purchase the
plant and machinery of the distillery, stock in trade and also the machinery in
the warehouse including the apparatus, etc. enumerated in the conditions either
at the price fixed or agreed directly between the parties or fixed by the
committee of the desig- nated officers. In case of any difference in the
valuation between the members, the Commissioner of the Excise or the State
Govt. would fix the valuation, which was made final.
The
Committee designated was to be constituted with prior approval of the Govt. as
per condition 50 to evaluate the plant and machinery of the distillery and some
of them of the warehouses. Outgoing licensee also is entitled to repre- sent in
the Committee. On his non-cooperation the rest of the four members of the
Committee are empowered to determine the value.
Clause
23(iii) provides that any dispute relating to valuation of the sanctioned plant
shall be referred to the State Government and the decision of the State Govt.
shall be final and binding on the parties to the dispute. Clause 2 thereof
refers that the licensee shall made over the said distillery and warehouses
buildings on the termination of the licence in as good condition as they were
at the com- mencement hereof excluding reasonable wear and tear. Clause 36(4)
provides that any dispute relating to the sale of spirit or plant by the
licensee or the valuation of the plant shall be referred to the State Govt. and
the decision of the State Govt. shall be final and binding. Clause 39(1) in
particular, mentions that at the commencement of the term of this licence, the
licensee shall buy all sanctioned plant at the U j jain distillery including
spare parts, furniture, motor trucks and fittings at a price to be fixed by the
State Government. Licensee shall pay the price thereof within 30 days of the
communication. Similarly, clause 41, 42(1) and clause 44 provide that the
incoming licensee shall take on lease all 489 other buildings structures
attached to the distillery at Ujjain on such conditions and terms as per Public
Works Department Manual Vol. II within a period of one month of the intimation
of the acceptance of the tender. Then comes clause 50 quoted hereinabove. The
incoming licensee shall make payment within 30 days from the date of
communication of the value.
Therefore,
the courts should adopt realism, pragmatism, practicality and the purpose
envisaged under the Act and the rules in construing the relevant clauses in the
licence. The purpose of the Act the rules made therein is to regulate the
manufacture, distribution sale of the intoxicants, rectified spirit or
denatured spirit, liquor, sale to consumers within the state of Madhya Pradesh.
It is an on going process conducted through the licensing system, an exclusive privi-
lege of the state through the licences granted under form D-1 and D-2 in this
behalf. The duration of the licence is fixed one. On expiry of the licence the
outgoing licensee shall be bound to handover the distillery plant and machin- ery
therein, and warehouses attached thereto, the stock in trade and other apparatus
and goods used for the manufac- ture, storage and distribution. The outgoing
contractor is entitled continue his business activity till the last date of the
licence, namely March 31, of the ending year. The succeeding licensee would
take over the business from the outgoing licensee on April 1 of the year of licence.
Thus there should be no hiatus between taking over and handing over the
manufacture, possession. storage of the wholesale business of the spirit
(country made liquor) or rectified spirit or denatured spirit. Under these
circumstances it will well-nigh be impossible to assess the valuation of the
entire stock in trade or plant and machinery in the distill- ery or the
warehouses till the last date. In addition the cooperation of the outgoing
licensee is also necessary and expected as he would be in possesssion of the
records of the previous purchases of the materials, or plant or machinery if
any new additions are made etc. Unless they are made available, it is not
possible to assess the value after giving due rebate or depreciation, etc. to
the incoming licensee. The human nature and conduct would be such that the
outgoing licensee, being the unsuccessful tenderer, would not cooperate in
handing over possession of the dis- tillery and stock in trade and would
approach the High Court under Art. 226 of the Constitution as was done in this
case.
The
incoming licensee has time of thirty days in case of stock in trade or three
months in the case of plant and machinery from the date of communication to him
to pay the value to the outgoing licensee. Keeping those circumstances at the
back of our mind we decline to adopt lexographic strict construction of clause
50 which 490 would thwart continuity; create hiatus in smooth operation of
manufacture, storage, distribution and sales of the intoxicants. Moreover,
after the assessment is made and in case of any difference of opinion in the
valuation or the outgoing licensee claims higher value the final arbiter would
be in some cases like stock in trade, the Commissioner of Excise and in case of
plant and machinery or warehouses the State Govt. After the decision of the
Commissioner or the State Government, it shall be communicated to the suc- ceeding
licensee, who has been given maximum period of three months to make payment to
the outgoing licensee. In the light of the scheme of valuation of the plant and
machinery of the distillery, or the apparatus in the warehouses and the stock
in trade, we hold that strict construction would lead to innumerable complications
and loss of public reve- nue. We are inclined to hold that before the expiry of
the licence, if the outgoing licensee cooperates, the value can be fixed with
consensus, payment should also be made within the time stipulated. In all other
cases it could be done even after the expiry of the stipulated period. In that
perspective we have no hesitation to hold that prior valua- tion of plant and
machinery in the distillery, stock in trade therein or the value of the
machinery in the ware- houses and stock of the liquor stored therein and
payment thereof before taking possession and handing them over to the incoming
licensee is not a mandatory, nor a condition precedent. Therefore, taking over
possession from the appel- lant on August 28, 1981 and handing over the plant and
machinery, etc. to the respondent is not illegal.
Undoubtedly
this court, in Godhra Electricity case held that it is mandatory that a person
who is deprived of his property, before its taking over, the value should be esti-
mated and the payment made or else it is illegal. But the ratio would be
considered in the light of the setting there- in. The licence granted under s.
6 of the Indian Electricity Act. 1910 as amended in 1959 to produce electrical
energy was acquired by the Electricity Board. Section 6(6) provides that where
a notice exercising the option of purchasing the undertaking has been served
upon the licence, the licensee shall deliver the undertaking to the State
Electricity Board on expiry of the relevant period referred to in s. 6(1). In
that case the constitutional validity of s. 6(6) was ques- tioned which did not
provide for payment before taking over of the undertaking as offending Article
19(1)(f) and (g) and Art. 14 of the constitution. While considering the constitu-
tional validity of s. 6(6) this court held that valuation and payment is a
condition precedent since the Act did not envisage any payment of interest
subsequent thereto. Accord- ingly this court directed redelivery of the
undertaking 491 to the licensee subject to follow the procedure as per law laid
down therein. In this case admittedly the conditions of licence are not
questioned, but expressly given up in the High Court. Even before us the
validity of the valuation has not been questioned. It cannot cut the branch on
which the appellant sits to assail the constitutional validity of the
conditions of the licence. Accordingly we have no hesitation to hold that the
appellant is not entitled to the restitu- tion of the plant and machinery of
the distillery at Ujjain and the attached warehouses.
The
appellant though claimed that the value of the plant and machinery was too low,
contrary 'to the specification in this behalf in tender condition and though we
decline to go into the question, the appellant appeared to have smarted under
apprehension that it had to face the plea of acquies- cence, if it were to
cooperate earlier. So it is open to the appellant to make a representation to
the Govt. and any officer not below a Secretary preferably of the concerned Department
would go into the matter and decide the value as per the material on record. It
is open to the appellant to place all its material. It is also open to the
respondent to place its material and the authority would consider after giving
an opportunity of hearing through counsel, if asked for, and decide the value
accordingly. As regards deposit now made in the Registry of this Court, the
Registry is directed to make payment of a sum of Rs.53,016.45 and inter- est
accrued thereon to the appellant and the balance amount and the interest
accrued on the residual to the respondent and the respondent's liability would
be subject to the decision by the Secretary as indicated in the judgment. The
appeal is accordingly allowed to the above extent and since the appellant
substantially failed there would be no order as to costs.
Y.L.
Appeal partly allowed.
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