Manish S. Pardasani vs Inspector State Excise

CIVIL APPEAL Nos.126­156 OF 2019 [Arising out of SLP (C) Nos. 27980­28010 of 2018]

Manish S. Pardasani (M/s Wine Kornder) etc.etc. ... Appellant(s)

Versus

Inspector State Excise, P­1, Division, Mumbai(Suburbs) & Ors. etc.etc. … Respondent(s)

WITH CIVIL APPEAL No.157 OF 2019 [Arising out of SLP (C) No. 29169 of 2018]

Dr.(Mrs.)Ashwini Joshi ... Appellant(s)

Versus

Signature Not Verified

Digitally signed by ANITA MALHOTRA Date: 2019.01.07 Manish S. Pardasani & Ors. … Respondent(s) 17:40:11 IST Reason:

1 JUDGMENT

Abhay Manohar Sapre, J.

1) Leave granted.

2) These appeals are filed against the final

judgment and order dated 05.10.2018 passed by the

High Court of Judicature at Bombay in Writ Petition

(Loding) Nos.3255, 3166, 3169, 3170, 3171, 3179,

3205, 3227­3233, 3235­3237, 3254, 3256­3258,

3263/2018, Writ Petition Nos.10649­10657/2018.

3) In order to appreciate the factual and legal

controversy involved in these appeals which lie in a

narrow compass, it is necessary to set out the

relevant facts hereinbelow.

4) The appellants [Writ Petitioners (15)] claim to be

the holders of licences issued by the Licensing

Authority under the provisions of the Maharashtra

2 Prohibition Act, 1949 (hereinafter referred to as “the

M.P. Act”) in their respective names. The appellants’

claim that they are engaged in the business of selling

liquor from their retail shops, which are situated in

Mumbai suburb.

5) On 10.08.2018, an FIR (Criminal Case No.408

of 2018) was registered by the State Excise

Department against the appellants inter alia for

undertaking home delivery of liquor on telephonic

orders being placed, and for commission of other

offences punishable under Sections 23, 24, 65(a) (e),

73, 74, 81, 83 and 90 of the M.P. Act.

6) This led to the sealing of the appellants’ liquor

shops on 11.08.2018 by the State Excise officials.

7) The Collector (Excise) issued show cause notices

on 27.8.2018 to the appellants setting out therein the

breaches of the licence conditions and violation of

certain provisions of the M.P. Act. The appellants

3 were directed to show cause as to why their licences

be not suspended/cancelled under Section 54 of the

M.P. Act.

8) The appellants filed their respective replies to

the show cause notices.

9) On 05.09.2018, the Collector (Excise) (licensing

authority) after hearing the appellants, passed an

interim order and directed de­sealing of the

appellants’ shops on conditions contained therein.

10) The Superintendent of State Excise, Mumbai felt

aggrieved by the order dated 05.09.2018 of the

Collector (Excise), and filed appeal before the

Commissioner State Excise, Maharashtra State for

Mumbai being Appeal No.212/2018 under the M.P.

Act and questioned its legality and correctness.

11) The Commissioner State Excise in exercise of

her appellate powers on 05.09.2018 stayed the

4 operation of the interim order dated 05.09.2018

passed by the Collector (Excise).

12) The appeal is pending for final adjudication

before the Commissioner State Excise.

13) On 10.09.2018, the Collector (Excise) passed

the final order, whereby he directed the licencees to

pay Rs.50,000/­ as compounding fees for the

breaches committed by the appellants.

14) Aggrieved by the order dated 10.09.2018, the

Superintendent State Excise filed an appeal before

the Commissioner State Excise being Appeal No.

221/2018 challenging the validity and correctness of

the order dated 10.09.2018 passed by the Collector

(Excise).

15) The Commissioner State Excise vide ex­parte

order 17.09.2018 stayed the operation of the order

dated 10.09.2018.

5

16) This appeal is also pending for its final disposal

before the Commissioner State Excise.

17) In this background of facts, and at this stage of

the proceedings, the appellants felt aggrieved by the

order dated 17.09.2018, and filed Writ Petitions

before the Bombay High Court.

18) In the two Writ Petitions, i.e., W.P.

No.3255/2018 and W.P. No.10650/2018, the

challenge was mainly to the sealing orders dated

11.08.2018, passed on oral directions of the 4th

respondent to the 2nd respondents (see prayer clause

(b) of W.P. No. 10650/2018 at page 169); and the

second Order dated 17.09.2018 passed by the

Commissioner State Excise. The other reliefs claimed

in the Writ Petitions were essentially consequential to

the main reliefs.

19) The appellants challenged the afore­mentioned

orders on legal grounds, including violation of the

6 statutory rules, which require a hearing being

granted to the licence holders. The writ petitioners

also contended that the conduct of the Commissioner

State Excise gave rise to apprehensions of bias. In

these circumstances, a prayer was made for the

appeals to be heard by another officer of equal rank.

20) The respondents (State and the Excise

Authorities) contested the Writ Petitions, and

defended the proceedings initiated against the

appellants, including the passing of interim ex­parte

orders in the prevalent circumstances. The plea of

bias was denied as being baseless and unwarranted.

21) By the impugned order, the High Court quashed

the order dated 11.08.2018, which directed sealing of

the liquor shops. The High Court also quashed the

ex­parte interim order dated 17.09.2018 passed by

the Commissioner. The Commissioner State Excise

7 was directed to decide the appeals on merits in

accordance with law.

22) The High Court, however, while disposing of the

Writ Petitions has made serious observations and

passed adverse remarks in the manner in which the

Commissioner State Excise had dealt with the

appellants’ case, particularly the manner in which

ex­parte interim orders were passed, and oral

directions issued to the subordinate officers. The

High Court went to the extent of issuing directions to

the Commissioner State Excise to act properly, and

in accordance with law in future, and refrain from

acting with high handedness, and exercise restraint

in the exercise of her judicial and administrative

powers/authority.

23) The High Court further issued a direction in

anticipation that if the Commissioner State Excise

eventually passes adverse orders against the

8 appellants with respect to the subject matter of the

appeal, then such order should not be given effect to

by the State Authorities for a period of four weeks

from the date of its communication to the appellants.

24) The Writ Petitioners being aggrieved by the

operative part of the impugned order which directed

the same Commissioner to hear their appeals, have

filed S.L.P. (C) Nos. 27980­28010/2018 before this

Court. Their main grievance is that the High Court

after having passed the adverse remarks and

strictures against the Commissioner State Excise on

her manner of functioning and passing ex­parte

interim orders, should have directed transfer of the

pending appeals (212/2018 and 221/2018) to

another appellate authority or the Commissioner

competent to hear such appeals rather than to allow

the same Commissioner to decide the appeals. The

appellants submitted that they have an apprehension

9 that they would not get a fair trial if the same

Commissioner State Excise hears the appeals.

25) The Commissioner State Excise was aggrieved

by the observations and adverse remarks made in the

impugned order against her personally, and has filed

S.L.P. (C) No. 29169/2018 in this Court. The

Commissioner State Excise has prayed for

expungement of the adverse remarks and strictures

passed by the High Court against her.

26) It was inter alia submitted that the ex­parte

interim orders were required to be passed in the

emergent situation, which had arisen by sale of

liquor by home delivery on telephonic instructions,

and purchase of liquor orders being placed through

the Internet. This according to the State was found in

flagrant violation of the statutory rules and the

conditions of the licence which inter alia stipulated

10 that the licencee shall carry on business of selling

liquor only at the licensed premises.

27) It was further submitted that Rule 6 of the

Bombay Prohibition (Appeal) Rules, 1953 only enjoins

upon the appellate authority to grant a reasonable

opportunity of hearing before the order is passed by

the appellate authority in the appeal which according

to Commissioner State Excise is yet to be passed for

its disposal.

28) In this backdrop, it was submitted that the

observations made by the High Court in the facts of

this case were not called for and, therefore, they be

expunged from the impugned order.

29) The aforesaid appeals were clubbed together for

their disposal.

30) The questions which arise for consideration in

these two appeals are:

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31) First, whether the High Court was justified in

not directing transfer of the two appeals from the

Commissioner State Excise to some other

Commissioner State Excise or any other competent

appellate authority under the M.P. Act for their

disposal on merits ?

32) Second, whether the High Court was justified on

the facts arising in the case in making adverse

remarks and passing strictures against the

Commissioner State Excise ?

33) Third, whether the High Court was justified in

issuing directions in anticipation, ordering stay of the

operation of an adverse order against the Writ

Petitioners, even prior to it being passed by the

Commissioner State Excise in the pending appeals ?

34) We have heard learned Senior Counsel for all

the parties.

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35) Having heard the learned counsel for the parties

and on perusal of the record of the case and written

submissions, we are inclined to dismiss the appeals

filed by the writ petitioners i.e. SLP Nos.27980­

28010/2018 and allow the appeal, i.e., SLP

No.29169/2018 filed by Commissioner State Excise

(Dr. Smt. Ashwini Joshi).

36) In our considered opinion, the High Court has

rightly declined to transfer the pending appeals from

the Commissioner State Excise to any other

Commissioner State Excise or any other competent

appellate authority under the Act.

37) The High Court, however, having found that the

orders impugned in the writ petitions were not legally

sustainable, it should have only assigned the legal

reasoning in support of their conclusion and quashed

the impugned orders. In our view, the reasoning

assigned by the Courts to strike down or uphold the

13 action/order impugned in the lis must always be

confined to legal grounds, and none else. There was,

therefore, no need nor any occasion, much less

necessity for the High Court to have travelled beyond

their legal reasoning assigned and made adverse

remarks, and pass strictures against the appellate

authority i.e. the Commissioner State Excise and

direct her to act and behave in a particular manner

in discharge of her duties and dealing with the case.

38) The Commissioner State Excise being an

appellate authority under the M.P. Act had exercised

the appellate powers and had passed an ex­parte

interim stay order. The exercise of such appellate

power was required to be tested only in the light of

relevant legal parameters and not beyond it.

39) Merely because the writ petitioners made

allegations of personal bias to impugn the orders,

apart from raising legal grounds, the High Court

14 ought to have seen as to whether in the facts of this

case, it was really necessary to examine the plea of

“bias” for striking down the impugned orders, and, if

so, whether there is adequate material to sustain

such a plea.

40) The plea of bias, as is clear from the pleadings,

was founded essentially on an inference, which the

Writ Petitioners were trying to draw by pointing out

the manner in which the Commissioner State Excise

is alleged to have issued some oral directions to her

subordinates and had passed two ex­parte interim

stay orders in the appeals against the appellants in

relation to the subject­matter.

41) A litigant in order to seek relief in a court of law

is entitled to raise several grounds. These grounds

are usually based on facts and law governing the

subject, out of which, some are relevant and some

are vexatious. It is for the Court to decide as to which

15 ground is legally tenable, and it be made the basis to

decide the lis between the parties one way or the

other.

42) The grounds founded on law are always

preferred for deciding the lis arising between the

parties. Any discussion or/and the reasoning

assigned in support of the conclusion other than the

legal reasoning is otiose.

43) The plea of alleged “bias” against the appellate

authority is a plea permissible in law to impugn the

action/order. However, such a plea has to be founded

on substantial material qua the officer concerned

who acts in a quasi­judicial capacity.

44) Such a plea, if raised, must therefore be based

on adequate substantial material against such an

authority. If the lis can be decided on other legal

16 grounds, such plea should not be entertained, much

less upheld.

45) Every adverse order passed against a litigant is

injurious to a losing party. However, that does not

give him a right to attack the adverse order by

attributing bias against authority/Court qua him.

An adverse order, if it is found bad in law, is liable to

be set­aside on legal grounds. However, when there is

also an allegation of bias, it has to be supported by

adequate substantial material.

46) Coming now to the facts of the case at hand, we

find that the appellants (Writ Petitioners) in support

of their plea of bias against the Commissioner State

Excise had mainly placed reliance on three

circumstances: ­

47) First, the Commissioner State Excise dealt with

the appellants’ case by issuing oral orders to the

17 subordinate authorities, which according to them

was not permissible.

48) Second, the Commissioner passed two interim

ex­parte stay orders against the appellants in the

pending appeals, which it is alleged was indicative of

her adversity and bias against the appellants.

49) Third, the High Court had made some adverse

remarks in the past in some other writ petition

against the Commissioner State Excise when she was

in charge of a different post.

50) Insofar as the first circumstance relating to

giving of alleged oral directions by the Commissioner

State Excise to the subordinates is concerned,

though it was vehemently pressed by the Writ

Petitioners, the same does not warrant any

interference.

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51) It is not possible to record a finding on such

factual issues on the basis of mere allegations made

in the pleadings.

52) The writ court does not hold an inquiry on

disputed facts. Such issues, in our opinion, could be

decided properly and in accordance with law by a fact

finding body where the parties would have got an

opportunity to lead evidence and explain the reasons.

53) It is for these reasons, we are of the view that

the High Court should have refrained from recording

any finding, much less make adverse remarks

against the Commissioner State Excise and her

subordinates.

54) Be that as it may, since the two impugned

interim orders passed by the Inspector Excise and

the Commissioner State Excise were otherwise held

legally unsustainable, and set­aside by the High

Court on other grounds, there was no need to go into

19 the question of “bias” and “oral instructions”. It had,

in our view, become academic.

55) So far as the second circumstance is concerned,

in our view, it has also no substance. One cannot

dispute that the Commissioner State Excise had

exercised her appellate powers under the Act for

passing an ex­parte interim order to stay the

operation of the order of the Collector (Excise)

impugned in the appeal.

56) An appellate authority/Court is empowered in

law to grant or refuse ex­parte stay, or/and set aside

or/and affirm the order impugned in the appeal. In

such an eventuality, an aggrieved person, in the first

instance, has a remedy to apply to the same appellate

authority/Court for setting aside the ex­parte grant of

interim stay passed against him, or approach to the

higher judicial fora to challenge its legality. The

appellate authority or higher forum is empowered to

20 either vacate the interim stay or continue or modify

as the case may require. It depends upon the nature

of reliefs claimed, injury pleaded, urgency shown,

damage likely to suffer if the ex­parte interim stay is

not granted etc. It would, therefore, vary from facts of

each case.

57) We are, therefore, unable to find any material

relied on by the appellants to infer the existence of

bias against the Commissioner State Excise, except

placing reliance on the manner in which she passed

the ex­parte interim orders and oral instructions

against the appellants.

58) In our view, the passing of an ex­parte order

would not constitute a plea of bias attributable

against the Commissioner State Excise qua the

appellants. It is a trite law that merely because an

order is adverse to a litigant, it would not by itself

21 constitute a plea of bias against the authority/Court

qua the aggrieved.

59) In the light of the foregoing discussion, we do

not find any merit in the two circumstances relied

upon by the appellants to sustain the plea of bias

against the Commissioner State Excise qua them.

60) Insofar as the third circumstance relied on by

the appellants is concerned, suffice it to say, it has

absolutely no substance. First, merely because some

observations were made by the High Court in the

past in some other case against the Commissioner

State Excise, when she was holding a different post,

can hardly be a ground to sustain a plea of bias qua

the appellants. Second, as rightly argued by the

learned Senior Counsel appearing for the

Commissioner State Excise, the case relied on was

22 entirely a different case and is still pending in appeal

before this Court.

61) In the light of the foregoing discussion, we are of

the considered opinion that the appellants (writ

petitioners) have failed to make out any case of bias

against the Commissioner State Excise qua them. In

this situation there is no justification in transferring

of the pending appeals from the Board of the

Commissioner State Excise to any other appellate

authority.

62) In view of the foregoing discussion, we find no

merit in the appeals filed by the Writ Petitioners.

Their appeals thus fail and are hereby dismissed with

cost of Rs.50,000/­ payable to the State of

Maharashtra.

63) This takes us to decide the appeal arising out of

S.L.P.(C) 29169/2018 filed by Dr. Mrs. Ashwini

Joshi, Commissioner State Excise, seeking

23 expungement of the adverse remarks and strictures

passed against her in the impugned order.

64) At the outset, we consider it apposite to take

note of the law laid down by this Court on the issue

which is the subject matter of this appeal.

65) The question as to what should be the role of

the higher judiciary in making adverse remarks and

passing strictures against the judicial/administrative

authorities, whose order/action is under challenge

has been the subject matter of several decisions of

this Court. This Court in these decisions has held

that the higher judiciary must avoid as far as

possible from making any disparaging harsh remarks

and strictures against any judicial/administrative

officer while examining their action/order impugned

in the judicial proceedings.

66) It is apposite to refer to a passage from the

decision of this Court in Awani Kumar Upadhyay vs.

24 High Court of Judicature of Allahabad & Ors.,

(2013) 12 SCC 392, wherein this Court has laid down

a rule of caution in following words:

“11. It is made clear that we are not undermining the ultimate decision of the High Court on merits. However, we are constrained to observe that the higher courts every day come across orders of the lower courts which are not justified either in law or in fact and modify them or set them aside. Our legal system acknowledges the fallibility of the Judges, hence it provides appeals and revisions. Inasmuch as the lower judicial officers mostly work under a charged atmosphere and are constantly under psychological pressure and they do not have the facilities which are available in the higher courts, we are of the view that the remarks/observations and strictures are to be avoided particularly if the officer has no occasion to put forth his reasonings. Further, if the passage complained of is wholly irrelevant and unjustifiable and its retention on the records will cause serious harm to the persons to whom it refers and its expunction will not affect the reasons for the judgment or order, request for expunging those remarks are to be allowed. We, once again, reiterate that harsh or disparaging remarks are not to be made against judicial officers and authorities whose conduct comes into consideration before the courts of law unless it is really for the decision of the case as an integral part thereof.”

25

67) Keeping in view the aforementioned law laid

down by this Court in the case of Awani Kumar

Upadhyay (supra), and further in the light of our

detailed discussion made above, which has resulted

in dismissal of the appeals filed by the writ

petitioners, we are inclined to expunge all the adverse

and disparaging remarks made, and strictures

passed by the High Court against Dr. Ashwini Joshi

(appellant in Civil Appeal @ SLP (C) No. 29169/2018)

in the impugned order.

68) In our view, these disparaging

remarks/strictures coupled with the directions of

how one should behave and pass orders was

unnecessary in the facts of this case, and nor they

were germane for deciding the lis between the parties.

Such remarks/strictures, therefore, should not have

26 been made. They are accordingly expunged and stand

deleted from the impugned order.

69) In view of the foregoing discussion, the appeal

filed by Dr. Mrs. Ashwini Joshi is allowed. The

impugned order is modified accordingly as indicated

above.

70) This takes us to examine one more question,

which arises in this case, but was not argued by any

of the parties in these proceedings.

71) We find that the High Court while disposing of

the Writ Petitions also passed the following

writ/directions in Para 20 which reads as under:

“Since an apprehension is expressed and a serious one by the petitioners, we direct that in the event the fourth respondent passes any orders adverse to the petitioners, then such orders shall not take effect for a period of four weeks from the date they are communicated to the petitioners. Since we have set aside the fourth respondent’s interim order and for the present not expressed any opinion on the contentions raised before us, interest of justice demands that the sealing of the premises by the

27 authorities should be set aside. Therefore, the Superintendent or other functionary is directed to remove the seal, lock and key placed on the premises forthwith. This order will ensure to the benefit of such of the petitioners whose licenses are subsisting and are not cancelled. The other licences, which are no longer in operation on account of their termination, the holders thereof cannot avail the benefit of this order. However, we do not express any opinion on the remedies that are available to them and they can avail them as observed and held in the above paragraphs.” (Emphasis Supplied)

72) In our considered view, the High Court ought

not to have issued directions of this nature. It was

legally not permissible to do so. Indeed, the High

Court by issuing such directions which are

essentially passed in anticipation of the order being

passed by an appellate authority, interfered with the

judicial independence of an appellate authority in

deciding the appeals in accordance with law.

73) It is the sole discretion of the appellate authority

under the Act to decide the appeal based on the facts

involved in the appeal, and legal provisions which

28 eventually result in passing a judicial order. No

higher court can pass such directions merely on

anticipation of an order being passed by an appellate

authority. It is only after the order is passed, that

the aggrieved person has a legal right to take

recourse to a legal remedy available in law against

such order by approaching to a higher forum and

pray for grant of appropriate relief against such

order.

74) This stage in this case is yet to arrive. The High

Court should not have, therefore, pre­empted the

passing of any order of the appellate authority, while

deciding the Writ Petition. It is a settled law that the

Court can stay or quash only those orders, which are

impugned in the lis before it. A fortiori, the Court

cannot stay or/and quash the orders in anticipation,

before they are passed. We cannot, therefore, uphold

such writ/directions issued by the High Court.

29

75) In view of the foregoing discussion, the

writ/direction issued by the High Court in Para 20

quoted above is set aside.

76) Before parting, we hasten to observe that we

have not made any observation on the merits of the

controversy, which is the subject matter of two

appeals (212/2018 and 221/2018) pending before

the Commissioner, State Excise.

77) Indeed, we had made it clear to the learned

senior advocates, who argued the case with fairness

that we would confine our discussion and reasoning

only to the issues urged in support of the two appeals

and would not touched the merits of the case which

are subject­matter of pending appeals.

78) The effect of the impugned order and this

Court’s order is that two pending appeals (212/2018

and 221/2018) will now be heard and decided by the

Commissioner State Excise on merits, in accordance

30 with law and without being influenced by any

observations made by this Court and the High Court

in the impugned order. The appeals will finally be

adjudicated preferably within three months from the

receipt of the order passed by this Court.

………………………………..J. (ABHAY MANOHAR SAPRE)

..………………………………J. (INDU MALHOTRA)

New Delhi, January 7, 2019

31