Case Note & Summary
The dispute arose from the cancellation of leasehold rights to vend Indian made foreign liquor held by the respondents at Ludhiana under L-2 and L-14 licences for the financial year April 1, 1995 to March 31, 1996. Excise Department officials found illegalities and irregularities during inspection, leading the competent officer to cancel the licences by proceedings dated August 21, 1995. Aggrieved, the respondents filed CWP Nos.12543, 12546 and 12547/1995, impleading Shamsher Singh Dullo, Minister for Excise and Taxation, and alleging mala fides in the cancellation. The Division Bench of the Punjab and Haryana High Court by order dated September 15, 1995 did not decide the mala fides question; instead, it relegated the respondents to the alternative remedy of appeal under the Punjab Excise Act, 1914 and directed the Appellate Authority to decide the appeal within 15 days. On appeal, the Appellate Authority upheld that the respondents had committed illegalities and irregularities in violation of the Act and rules, but instead of cancelling the licence, it treated the period from cancellation until the High Court's stay as substantive suspension. The respondents then filed the present writ petitions CWP Nos.18522-18524/95 challenging the Appellate Authority's order. The Division Bench of the High Court by impugned order dated May 29, 1996 set aside the appellate order and remitted the case to the Excise and Taxation Commissioner to decide the mala fides allegations against the Minister afresh. The State of Punjab appealed by special leave. The Supreme Court found that the High Court in the first round had not decided the mala fides question despite the Minister being impleaded, and had relegated the matter to appeal; the Appellate Authority had decided the merits. The Court held that the words 'might and ought' used in Section 11 of the CPC stood in the way and operated as res judicata to bar raising the same question in the present writ petitions; the High Court could not have gone into that question, much less give direction to the Appellate Authority to consider it. The Court also noted that the merits of the penalty were not considered by the High Court and no appeals were filed by the respondents, so the Court could not go into that question. Accordingly, the appeals were allowed, the writ petitions were dismissed, and no costs were awarded.
Headnote
A) Civil Procedure - Res Judicata - Section 11 Code of Civil Procedure, 1908 - Bar of Re-agitation of Mala Fides in Subsequent Writ Petitions - In the first round, the High Court did not decide allegations of mala fides against the former Excise Minister despite impleadment, but relegated the respondents to the alternative remedy of appeal; the Appellate Authority decided the merits and imposed suspension instead of cancellation; in the second writ petitions, the High Court set aside the appellate order and remitted to the Excise and Taxation Commissioner to decide mala fides afresh - Held that the words 'might and ought' in Section 11 CPC operate as res judicata and barred raising the same question; the High Court could not have gone into that question or directed the appellate authority to consider it (Paras Not Mentioned).
B) Excise Law - Licence Cancellation and Penalty - Punjab Excise Act, 1914 - Appellate Authority's Substitution of Cancellation with Suspension - The High Court did not consider the merits of the alleged irregularities; the respondents did not file appeals; the Supreme Court could not go into the merits of the penalty imposed - Held that the view taken by the Division Bench was unsustainable; appeals allowed and writ petitions dismissed with no costs (Paras Not Mentioned).
Issue of Consideration
Whether the High Court Division Bench could direct the Appellate Authority/Excise and Taxation Commissioner to decide the question of mala fides afresh in the second round of writ petitions when that question had not been decided in the first round and the matter had been relegated to alternative remedy; whether Section 11 CPC res judicata barred re-agitation of the mala fides question.
Final Decision
The appeals were allowed and the writ petitions were dismissed with no costs. The Supreme Court held that the view taken by the Division Bench was clearly unsustainable.
Law Points
- Res judicata under Section 11 CPC
- alternative remedy
- mala fides allegations
- writ jurisdiction
- appellate authority powers
- licence cancellation
- Punjab Excise Act 1914
Case Details
1996 LawText (SC) (12) 62
K. Ramaswamy, G.T. Nanavati
M/s. Surinder Kumar & Co. & Ors.
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Nature of Litigation
Leasehold rights and licences to vend Indian made foreign liquor were cancelled on grounds of illegalities and irregularities; the respondents challenged the cancellation through writ petitions and appeal, and later sought to re-agitate mala fides against a former minister.
Remedy Sought
In the second writ petitions, the respondents sought to set aside the Appellate Authority's order substituting cancellation with suspension and to have the Excise and Taxation Commissioner decide the allegations of mala fides against the former Excise Minister afresh.
Filing Reason
The licences were cancelled on August 21, 1995 due to alleged illegalities and irregularities; the first writ petitions raising mala fides were disposed of with direction to avail alternative remedy; after the Appellate Authority imposed suspension instead of cancellation, the respondents filed second writ petitions, and the High Court remitted the mala fides question to the Commissioner.
Previous Decisions
First writ petitions CWP Nos.12543, 12546 and 12547/1995 were disposed of on September 15, 1995 relegating respondents to appeal; the Appellate Authority decided the appeal, found illegalities but substituted cancellation with substantive suspension; second writ petitions CWP Nos.18522-18524/95 were allowed by the Division Bench on May 29, 1996 remitting the matter to the Excise and Taxation Commissioner to decide mala fides afresh.
Issues
Whether the High Court Division Bench could direct the Appellate Authority/Excise and Taxation Commissioner to decide the question of mala fides afresh in the second round of writ petitions when that question had not been decided in the first round and the matter had been relegated to alternative remedy.
Whether Section 11 CPC res judicata barred re-agitation of the mala fides question in the subsequent writ petitions.
Submissions/Arguments
The State/appellants contended that the Division Bench's direction to the Excise and Taxation Commissioner to go into mala fides was unsustainable because the High Court in the first round had not decided mala fides and the matter was remitted to appeal; Section 11 CPC operated as res judicata.
The respondents contended that they had not committed any serious irregularities or illegalities warranting even suspension of the licence for the period mentioned by the Appellate Authority.
Ratio Decidendi
In writ proceedings, where the High Court in the first round did not decide an issue of mala fides despite the Minister being impleaded, but relegated the party to the alternative remedy, the words 'might and ought' in Section 11 CPC operate as res judicata, barring re-agitation of the same question in subsequent writ petitions; the High Court cannot then direct the appellate authority to consider that issue afresh.
Judgment Excerpts
It is the settled legal position that the High Court could not have been gone in the mala fides and it could not decide the matter on merit on the question of mala fides.
the words "might and ought" used in Section 11 of the C.P.C. stand in the way and, therefore, it operates as res judicata for raising the same question in the present writ petitions.
Thus, we hold that the view taken by the Division Bench is clearly unsustainable. The appeals are accordingly allowed and the Writ Petitions stand dismissed. No costs.
Procedural History
On August 21, 1995, the competent officer cancelled the liquor licences of the respondents due to illegalities and irregularities. The respondents filed CWP Nos.12543, 12546 and 12547/1995 alleging mala fides against the Excise Minister. On September 15, 1995, the High Court disposed of the writ petitions relegating the respondents to the alternative remedy of appeal and directing the Appellate Authority to decide the appeal within 15 days. The Appellate Authority decided the appeal, upheld the illegalities, but substituted cancellation with substantive suspension from August 22, 1995 to September 22, 1995. The respondents then filed CWP Nos.18522-18524/95 challenging the appellate order. On May 29, 1996, the Division Bench set aside the appellate order and remitted the case to the Excise and Taxation Commissioner to decide mala fides afresh. The State of Punjab appealed by special leave, and the Supreme Court allowed the appeals on December 11, 1996, dismissing the writ petitions.
Acts & Sections
- Punjab Excise Act, 1914:
- Code of Civil Procedure, 1908: Section 11
