K.SASIDHARAN NAIR V. THE COMMISSIONER OF EXCISE,TRIVANDRUM

WP(C)/12785/2011

AI Insights

The case revolves around a dispute concerning the ownership and renewal of an FL-3 licence for a Bar Hotel operated by a partnership firm, M/s. Hotel Pankaj, and later by the 3rd respondent individually. The petitioners, K. Sasidharan Nair and S. Unnikrishnan, challenged the renewal of the licence in the name of the 3rd respondent, arguing that the licence should belong to the partnership firm and not to the 3rd respondent individually. The court previously issued a judgment (Ext.R3 (n)) recognizing the 3rd respondent as the licencee, but this was contested due to alleged suppression of facts regarding the partnership. The court found that the Excise Department had not properly considered the partnership's claims and had not followed due process in renewing the licence.

• Counselvise Citation: [2013] 140 COUNSELVISE.COM (IT) 727036 (HC-KERALA)
• Appeal Type: Others
• Pronouncement Date: 18-03-2013
• Assessment Year: misc
• Other Referred Cases: Commissioner of Income Tax V. Hotel New Indraprastha
• Laws Referred To: Partnership Act, Foreign Liquor Rules, Income Tax Act
• Result in Favour of: Partly Allowed
• Court: HIGH COURT
• Department Lawyers: V K RAFEEQ; K P SATHEESAN; K K GOPINATHAN NAIR
• Assessee Lawyers: T M LATHEEF
• Keywords: FL-3 licence; Partnership dispute; Renewal of Licence; Duplicate licence; Excise authority
• Section: 43; 185

Judgement Text

"IN THE HIGH COURT OF KERALA AT ERNAKULAM PRESENT: THE HONOURABLE MR.JUSTICE C.K.ABDUL REHIM MONDAY, THE 18TH DAY OF MARCH 2013/27TH PHALGUNA 1934 WP(C).No. 12785 of 2011 (W) ---------------------------- PETITIONERS: -------------------- 1. K.SASIDHARAN NAIR, AGED 63 YEARS, S/O.LATE SRI.SREEDHARAN NAIR SANTHA BHAVANATHU HOUSE, THALAYOLAPARAMBU.P.O., KOTTAYAM-686 605. 2. S.UNNIKRISHNAN, AGED 58 YEARS, S/O.SREEDHARAN NAIR, SANTHA BHAVANATHU HOUSE, THALAYOLAPARAMBU.P.O., KOTTAYAM-686 605. BY ADV. SRI.T.M.ABDUL LATHEEF RESPONDENTS: ----------------------- 1. THE COMMISSIONER OF EXCISE, THIRUVANANTHAPURAM-695 001. 2. DEPUTY COMMISSIONER OF EXCISE, COLLECTORATE.P.O., KOTTAYAM-686 602. 3. SANTHA MOHANAN, AGED 65 YEARS, D/O.LATE SRI.SREEDHARAN NAIR SANTHA BHAVANATHU HOUSE, THALAYOLAPARAMBU.P.O., KOTTAYAM-686 605. *4. K.S.SAJUMON, SANTHA BHAVAN, THALAYOLAPARAMBU P.O., KOTTAYAM DISTRICT. * ADDL.R4 IS IMPLEADED AS PER ORDER DATED 14.12.2011 IN IA.19187/2011 R1 & R2 BY GOVT .PLEADER SRI. V.K. RAFEEQ R3 BY ADV. SRI.P.K.VIJAYAMOHANAN R3 BY ADV. DR.K.P.SATHEESAN R3 BY ADV. SRI.K.K.GOPINATHAN NAIR R4 BY ADVS. SRI.S.P.ARAVINDAKSHAN PILLAY ADV. SMT.N.SANTHA ADV. SRI.S.A.ANAND ADV. SRI.K.A.BALAN ADV. SRI.PETER JOSE CHRISTO THIS WRIT PETITION (CIVIL) HAVING BEEN FINALLY HEARD ON 18-03-2013, THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING: AMG W.P (c) No.12785/2011 APPENDIX PETITIONERS' EXHIBITS EXHIBIT- P1 TRUE COPY OF THE PARTNERSHIP DEED DATED 05-05-1990. EXHIBIT- P2 TRUE COPY OF THE DEED OF RECONSTITUTION OF PARTNERSHIP DATED 20-03-2003. EXHIBIT- P3 TRUE COPY OF THE BALANCE SHEET AS ON 31-03-2008 EXHIBIT- P4 TRUE COPY OF THE BALANCE SHEET AS ON 31-03-2009 EXHIBIT- P5 TRUE COPY OF THE REPLY NOTICE DATED 21-04-2011 ISSUED BY THE 1ST PETITIONER TO THE 3RD RESPONDENT. EXHIBIT- P6 TRUE COPY OF THE FL-3 LICENCE. EXHIBIT- P7 TRUE COPY OF THE ORDER DATED 10-08-2006 PASSED BY THE COMMISSIONER OF INCOME TAX (APPEALS) KOCHI IN ITA-I/R/CIT-IV/06-07. EXHIBIT- P8 TRUE COPY OF THE JUDGMENT DATED 29-11-2010 PASSED BY THIS HON'BLE COURT IN ITA No.800/2009. EXHIBIT- P9 TRUE COPY OF THE ORDER No.K6-803/10 DATED 23-12-2010 OF THE 2ND RESPONDENT. EXHIBIT- P10 TRUE COPY OF THE NOTICE DATED 21-04-2011 ISSUED TO THE 2ND RESPONDENT. EXHIBIT- P11 TRUE COPY OF THE NOTICE DATED 26-04-2011 ISSUED TO THE 1ST RESPONDENT. EXHIBIT- P12 TRUE COPY OF THE ACCOUNTS STATEMENT PREPARED BY THE PETITIONERS FROM 01-12-2010 TO 31-03-2011. EXHIBIT- P13 TRUE COPY OF THE LETTER No.X.C.7-7214/10 DATED 23-03- 2011 OF THE 1ST RESPONDENT. EXHIBIT- P14 TRUE COPY OF THE LETTER DATED 05-04-2011 SUBMITTED BY THE 3RD RESPONDENT BEFORE THE COMMERCIAL TAX OFFICER, VAIKOM. EXHIBIT- P14 (a) TRUE COPY OF THE LETTER NO.XC7-7214/10 DATED 28-03- 2011 ISSUED BY THE 1ST RESPONDENT TO THE 2ND RESPONDENT. EXHIBIT- P15 TRUE COPY OF THE AGREEMENT DATED 18-03-2003. W.P (c) No.12785/2011 EXHIBIT- P15 (a) TRUE COPY OF THE DEED OF RECONSTITUTION DATED 20-03-2003. EXHIBIT- P16 TRUE COPY OF THE LETTER DATED 1-3-2011 ISSUED TO THE GOKULAM CHIT FUNDS. EXHIBIT- P16 (a) TRUE COPY OF THE DEED OF RECONSTITUTION DATED 20- 03-2003 ATTESTED BY THE STATE BANK OF TRAVANCORE, THALAYOLAPARAMBU. EXHIBIT- P17 TRUE COPY OF THE MINUTES OF HOTEL PANKAJ DATED 20-11-2010. EXHIBIT- P18 TRUE COPY OF THE LETTER DATED 19-11-2010 ISSUED TO THE BANK. EXHIBIT- P19 TRUE COPY OF THE GENERAL POWER OF ATTORNEY DATED 28-03-2003. EXHIBIT- P20 TRUE COPY OF THE CANCELLATION OF GENERAL POWER OF ATTORNEY DATED 26-3-2011. EXHIBIT- P21 TRUE COPY OF THE DISSOLUTION DEED PREPARED BY THE CHARTERED ACCOUNTANT. EXHIBIT- P22 TRUE COPY OF THE AGREEMENT DEED PREPARED BY THE CHARTERED ACCOUNTANT. EXHIBIT- P23 TRUE COPY OF THE PARTNERSHIP DEED DATED 1-4-1994. EXHIBIT- P23 (a) TRUE COPY OF THE LETTER DATED 05-04-2011 SUBMITTED BY THE 3RD RESPONDENT BEFORE THE COMMERCIAL TAX OFFICER, VAIKOM. EXHIBIT- P24 TRUE COPY OF THE LETTER NO.XC7-7214/10 DATED 8-03- 2011 OF THE EXCISE COMMISSIONER, TRIVANDRUM. EXHIBIT- P25 TRUE COPY OF THE RETURN FOR THE PERIOD 2002-2003 DATED 28-04-2003 SUBMITTED BY BEFORE THE SALES TAX DEPARTMENT. EXHIBIT- P26 TRUE COPY OF THE JUDGMENT DATED 30-05-2007 IN W.P (C) NO.11070/2007. W.P (c) No.12785/2011 EXHIBIT- P27 TRUE COPY OF THE RECEIPT DATED 16-02-2011 TOWARDS THE PAYMENT OF KERALA ABKARI WORKERS' WELFARE FUND. EXHIBIT- P28 TRUE COPY OF THE FORM NO.6 DATED 09-05-2008. EXHIBIT- P29 TRUE COPY OF THE RELEVANT PAGE OF THE EXCISE STOCK REGISTER FOR LIQUOR FOR 2004-2005. EXHIBIT- P30 TRUE COPY OF THE RELEVANT PAGE OF THE EXCISE STOCK REGISTER FOR LIQUOR FOR 2005-2006. EXHIBIT- P31 TRUE COPY OF THE RELEVANT PAGE OF THE EXCISE STOCK REGISTER FOR LIQUOR FOR 2005-2006. EXHIBIT- P32 TRUE COPY OF THE CERTIFICATE NO.21161322010-11 DATED 10-03-2011 ISSUED BY THE COMMERCIAL TAX OFFICER. EXHIBIT- P33 TRUE COPY OF THE RENEWAL APPLICATION DATED 31-03- 2003. EXHIBIT- P34 TRUE COPY OF THE CONSENT LETTER DATED NIL. EXHIBIT- P35 TRUE COPY OF THE APPLICATION DATED 24-03-2005. EXHIBIT- P36 TRUE COPY OF THE APPLICATION DATED 31-03-2004. EXHIBIT- P37 TRUE COPY OF THE FORM NO.9 DATED 14-02-2002. EXHIBIT- P38 TRUE COPY OF THE APPLICATION FILED UNDER THE RIGHT TO INFORM ACT DATED 19-09-2011. EXHIBIT- P39 TRUE COPY OF THE LETTER NO.A596/11-12 DATED 10-10- 2011. EXHIBIT- P40 TRUE COPY OF THE LETTER NO.XC7-10910/11 DATED 19-08- 2011 OF THE 1ST RESPONDENT. EXHIBIT- P41 TRUE COPY OF THE LETTER NO.AGM/III/K/105 DATED 12-07- 2011 OF THE STATE BANK OF TRAVANCORE, THALAYOLAPARAMBU. EXHIBIT- P42 TRUE COPY OF THE JUDGMENT DATED 30-05-2007 PASSED BY THIS HON'BLE COURT IN W.P (C) NO.11070/2007. W.P (c) No.12785/2011 EXHIBIT- P43 TRUE COPY OF THE BALANCE SHEET FOR THE YEAR ENDED 31-03-2005. EXHIBIT- P44 TRUE COPY OF THE RELEVANT PAGES OF THE LIQUOR ACCOUNT REGISTER FOR THE YEAR 2004-2005. EXHIBIT- P45 TRUE COPY OF THE RELEVANT PAGE OF THE LIQUOR ACCOUNT REGISTER FOR THE YEAR 2005-2006 EXHIBIT- P46 NIL EXHIBIT- P47 TRUE COPY OF THE CHEQUE No.665231 DATED 11-04-2011 OF STATE BANK OF TRAVANCORE, THALAYOLAPARAMBU FOR Rs.42,00,000/-. EXHIBIT- P48 TRUE COPY OF THE AGREEMENT DATED 9TH APRIL 2011. EXHIBIT- P49 TRUE COPY OF THE LETTER No.XC7-7214/10 DATED 21-01-2011 ISSUED BY THE 1ST RESPONENT TO THE 2ND RESPONDENT. EXHIBIT- P50 TRUE COPY OF W.P (c) No.10272/2011 FILED BEFORE THE HON'BLE HIGH COURT DATED 30-03-2011 ALONG WITH EXHIBITS. EXHIBIT- P51 TRUE COPY OF THE POSTAL REGISTRATION SLIP DATED 22-4- 2011 EXHIBIT- P52 TRUE COPY OF THE LAWYER NOTICE DATED 24-02-2011. EXHIBIT- P53 TRUE COPY OF THE LETTER No.A3 101/2011 DATED 15-03-2011 OF THE THALAYOLAPARAMBU GRAMA PANCHAYAT. EXHIBIT- P54 TRUE COPY OF THE LAWYER NOTICE DATED 24-05-2011. EXHIBIT- P55 TRUE COPY OF W.P (c) No.22785/2011. EXHIBIT- P56 TRUE COPY OF THE LETTER DATED 22-1-2011 ISSUED BY THE COMMISSIONER OF COMMERCIAL TAXES, TVPM ALONG WITH ENQUIRY REPORT. EXHIBIT- P57 TRUE COPY OF THE APPLICATION DATED 22-04-2011 SUBMITTED BY THE ADDL.4TH RESPONDENT BEFORE THE COMMERCIAL TAX OFFICER, VAIKKOM. EXHIBIT- P58 TRUE COPY OF THE SECURITY BOND DATED 26-03-2011. W.P (c) No.12785/2011 RESPONDENTS' EXHIBITS EXHIBIT-R2 (a) TRUE COPY OF THE AFFIDAVIT OF SRI. K.S. SAJUMON. EXHIBIT-R2 (b) TRUE COPY OF THE STATEMENT OF SRI. K.S. SAJUMON EXHIBIT-R2 (c) TRUE COPY OF THE ABSTRACT OF THE LICENCE REGISTER KEPT AT EXCISE DIVISION OFFICE, KOTTAYAM FOR THE YEAR 1989-90. EXHIBIT-R3 (a) TRUE COPY OF THE POWER OF ATTORNEY EXECUTED BY THIS RESPONDENT IN FAVOUR OF HER YOUNGEST BROTHER DATED 12-03-1990. EXHIBIT-R3 (b) TRUE COPY OF THE FL-3 LICENSE GRANTED TO THIS RESPONDENT AS PER ORDER DATED 18-04-1990 AS LICENSE No.FL3 No.32/90-91 EXHIBIT-R3 (c) TRUE COPY OF THE CANCELLATION DEED DATED 12-11-2010 EXECUTED BY THIS RESPONDENT IN FAVOUR OF K.S. SAJUMON. EXHIBIT-R3 (d) TRUE COPY OF THE COMPLAINT FILED BY THE 1ST PETITIONER BEFORE THE CIRCLE INSPECTOR OF POLICE, VAIKON DATED 24-11-2010. EXHIBIT-R3 (e) TRUE COPY OF THE ORDER ISSUED BY THE DEPUTY COMMISSIONER OF EXCISE, KOTTAYAM DATED 23-12-2010. EXHIBIT-R3 (f) TRUE COPY OF THE RECEIPT ISSUED BY THE THALAYOLAPARAMBU GRAMA PANCHAYAT DATED 16-02-2011. EXHIBIT-R3 (g) TRUE COPY OF THE CERTIFICATE ISSUED BY THE WELFARE FUND INSPECTOR, KERALA TODDY WORKERS' WELFARE FUND BOARD, KOTTAYAM DATED 28-02-2011. EXHIBIT-R3 (h) TRUE COPY OF THE AFFIDAVIT FILED BY THE PETITIONER BEFORE THE COMMISSIONER OF EXCISE DATED 28-03-2011. EXHIBIT-R3 (i) TRUE COPY OF THE CERTIFICATE ISSUED BY THE ABKARI WORKERS WELFARE FUND INSPECTOR DATED 01-03-2011. EXHIBIT-R3 (j) TRUE COPY OF THE CERTIFICATE GIVEN BY THE EXCISE INSPECTOR, EXCISE RANGE OFFICE, KADUTHURUTHY DATED 04-03-2011. EXHIBIT-R3 (k) TRUE COPY OF THE CERTIFICATE ISSUED BY THE COMMERCIAL TAX OFFICER, VAIKKOM DATED 10-03-2011. EXHIBIT-R3 (l) TRUE COPY OF THE DEMAND DRAFT DATED 21-03-2011 PURCHASED BY THIS RESPONDENT FROM THE STATE BANK OF TRAVANCORE KOTTAYAM. W.P (c) No.12785/2011 EXHIBIT-R3 (m) TRUE COPY OF THE APPLICATION SUBMITTED BY THIS RESPONDENT DATED 29-03-2011 FOR RENEWAL OF THE FL-3 LICENCE. EXHIBIT-R3 (n) TRUE COPY OF THE JUDGMENT DATED 04-04-2011 IN W.P (C) No.10272/2011. EXHIBIT-R3 (o) TRUE COPY OF THE PROCEEDINGS ISSUED BY THE DEPUTY COMMISSIONER OF EXCISE, KOTTAYAM DATED 11-04-2011. EXHIBIT-R3 (p) TRUE COPY OF THE ORDER OF THE EXCISE COMMISSIONER DATED 27-04-2011. EXHIBIT-R3 (q) TRUE COPY OF THE ENDORSEMENT MADE IN THE FL-3 LICENCE DELETING THE NAME OF THE POWER OF ATTORNEY HOLDER DATED 28-04-2011. EXHIBIT-R3 (r) TRUE COPY OF THE NOTICE GIVEN BY THIS RESPONDENT DATED 11-04-2011. EXHIBIT-R3 (s) TRUE COPY OF THE NEWS ITEM PUBLISHED IN MATHRUBHOOMI DAILY DATED 21-04-2011. EXHIBIT-R3 (t) TRUE COPY OF THE ACKNOWLEDGMENT OF THE RETURN SENT THROUGH ELECTRONIC MEANS DATED 9-6-2011 SHOWING THE REMITTANCE OF KERALA VALUE ADDED TAX. EXHIBIT-R3 (u) TRUE COPY OF THE LICENCE GIVEN BY THE THALAYOLAPARAMBU GRAMA PANCHAYAT DATED 16-05-2011. EXHIBIT-R3 (v) TRUE COPY OF THE RECONSTITUTION DEED DATED 20-03- 2003. EXHIBIT-R3 (w) TRUE COPY OF THE SALE DEED DATED 29-07-1978 EXECUTED IN FAVOUR OF THE 3RD RESPONDENT. EXHIBIT-R3 (x) TRUE COPY OF THE OWNERSHIP CERTIFICATE ISSUED BY THE THALAYOLAPARAMBU GRAMA PANCHAYAT DATED 29-12- 2010. EXHIBIT-R3 (y) TRUE COPY OF THE JUDGMENT DATED 16-6-2011 IN W.P (C) NO.13584/2011. EXHIBIT-R4 (a) TRUE COPY OF THE APPLICATION FILED BY THE ADDITIONAL 4TH RESPONDENT TO THE MANAGER, SBT, THALAYOLAPARAMBU ON 19-1-2012. W.P (c) No.12785/2011 EXHIBIT-R4 (b) TRUE COPY OF THE PARTNERSHIP DEED DATED 20-03-2003 GIVEN BY MANAGER OF THE SBT, THALAYOLAPARAMBU BRANCH. EXHIBIT-R4 (c) TRUE COPY OF THE REPLY No.DGM/KTM/CPIO/516 DATED 1-2- 2012 GIVEN UNDER THE RTI ACT WITH ITS ENCLOSURES. EXHIBIT-R4 (d) TRUE COPY OF THE PARTNERSHIP DEED DATED 20-03-2003. EXHIBIT-R4 (e) TRUE COPY OF THE NOTES IN APPEAL No.ITA-11/K/CIT-4/06-07. True copy P.A. To Judge AMG C.K. ABDUL REHIM, J. ------------------------------------------------- W.P.(c) No. 12785 OF 2011 ------------------------------------------------- DATED THIS THE 18th DAY OF MARCH, 2013 J U D G M E N T This writ petition was originally filed seeking directions against respondents 1 and 2 to restrain them from renewing FL-3 licence, No.TSR 23/1990-1991 (herein after referred to as the 'licence',) in the name of the 3rd respondent as an individual licencee, from 2011-2012 onwards, as it was claimed that a Partnership 'M/s. Hotel Pankaj' (herein after referred to as the 'firm') is the licencee who was conducting business of Hotel Pankaj at Thalayolaparambu. Inter alia direction was sought for against respondents 1 and 2 to conduct an enquiry into the matter before renewal of the licence, regarding ownership of the licence. During pendency of this writ petition, by virtue of an amendment, the petitioners are challenging Ext.R3 (o) proceedings issued by the 2nd respondent through which it was directed to issue duplicate copy of the licence to the 3rd respondent, after deleting the name of the 4th respondent. Petitioner is also challenging Ext.R3 (p) order W.P.(c) No.12785/2011 -2- issued by the 1st respondent according sanction to delete the name of 4th respondent from the licence and to continue the licence in the name of the 3rd respondent as a sole licencee, and also challenging the endorsements made in Ext.R3 (q) licence on the basis of Exts.R3 (o) and R3 (p) proceedings. 2. Issue involved has got history of a previous litigation. The 3rd respondent had filed W.P (c) No.10272/2011 before this court seeking direction for issuing duplicate copy of the licence and for renewal of licence for the year 2011-2012. The petitioners herein were not made parties in that writ petition. The 4th respondent herein was the 4th respondent therein. Allegations in that writ petition was that, the 3rd respondent had executed a Power of Attorney in favour of the 4th respondent, inter alia authorising to start the Hotel and Restaurant and to apply for Bar licence in the name of the Attorney and to do all necessary acts to obtain such licence and to conduct of the Bar Hotel. Accordingly the licence was obtained in the name of the 4th respondent as Power of Attorney holder and W.P.(c) No.12785/2011 -3- it was renewed periodically till the year 2010-2011. The Power of Attorney was cancelled on 12-11-2000 and thereafter she had approached the 1st respondent for getting a duplicate copy of the licence, because the original was illegally retained by the 4th respondent. The 3rd respondent herein also requested for renewal of the licence in her name. On the basis of recommendations made by the 2nd respondent, the 1st respondent accorded sanction to issue duplicate copy of the licence to the 3rd respondent with notice issued to all the parties of Hotel, in compliance with the relevant rules. On the basis of the sanction accorded, the 4th respondent had issued with notice calling for his objections. In the meanwhile the licence expired. Respondents 1 and 2 have not renewed the licence after 31-03-2011, in the said writ petition, this court after hearing the respondents 1 and 2 as well as the 4th respondent, observed that Ext.P2 licence was issued in the name of the 4th respondent, only by virtue of the Power of Attorney executed in favour of him by the 3rd respondent. The licence was issued in the name as, “Sri. K.S. Sajumon, W.P.(c) No.12785/2011 -4- Santhabhavan House, Thalayolaparambu, Vaikom Taluk, Kottayam District (P.A. holder of Santha Mohan for Hotel Pankaj, Thalayolaparambu, Kottayam District.” This court also noticed that the 3rd respondent had revoked the Power of Attorney. Taking note of the documents produced to the effect that the property and building belongs to the 3rd respondent and also various authorisations and permissions obtained with respect to conduct of business in the name of the 3rd respondent, direction was issued to the authority concerned to take a decision on the request for renewal of the licence, within a time frame. Operative portion of Ext.R3 (n) judgment in W.P (c) No.10272/2011 is reproduced hereunder.- “9. In the result the writ petition is disposed of directing the 3rd respondent to consider Ext.P9 application submitted by the petitioner for renewal of FL-3 licence, if necessary after affording an opportunity of hearing to the petitioner as well as to the 4th respondent, as early as possible, at any rate, within a period of 5 (five) days from the date of receipt of a copy of this Judgment. 10. The 3rd respondent is also directed to take a decision on the application for issuing duplicate W.P.(c) No.12785/2011 -5- copy of the existing licence, after deleting name of the 4th respondent, as requested by the petitioner, in view of Ext.P7, at the earliest possible, at any rate within 3 (three) weeks from he date of receipt of a copy of this Judgment. 11. The 3rd respondent will also consider the question of granting temporary licence for running the Bar Hotel, pending final decision regarding renewal of the licence.” 3. It is in the above context that the petitioner had filed the present writ petition seeking direction to restrain renewal of licence in the individual name of the 3rd respondent. Averments in this writ petition in brief is as follows. The petitioners are brothers. The 4th respondent is their youngest brother and the 3rd respondent is their sister. Petitioners along with respondents 3 and 4 and their mother have entered into a Partnership. Exhibit P1 is the partnership deed executed which contains the objections of running Bar, Restaurant, Hotel, Motel, lodging and such other activities. By virtue of the recitals in Ext.P1, the 4th respondent was appointed as the Managing Partner and he was authorised to obtain and hold in his name the licence W.P.(c) No.12785/2011 -6- for running the Bar, on behalf of the firm. However, it was made clear that the licence shall be the property of the firm and the 4th respondent shall not cancel/transfer or surrender the licence without prior consent of all the partners. Exhibit P1 deed was re-constituted in the year 2003 on the death of the mother. It was decided to conduct the business of the Hotel in partnership and obtain FL-3 licence by the partnership in the name of the 3rd respondent, being the elder sister. Accordingly the licence was obtained in the name of the 4th respondent as Power of Attorney holder and the business was continued for many years. It is evident from Exts.P3 and P4 accounts of the firm and the balance sheets produced before various authorities like, Sales Tax, Excise, Income Tax etc. that the firm was conducting business of the Bar Hotel. With respect to assessment of Income Tax, there arose a dispute as to whether the firm need be recognised as the assessee who is the licencee conducting business of the Bar Hotel. By virtue of Ext.P8 judgment of this court the question was ultimately settled finding that the Excise Department had accepted in W.P.(c) No.12785/2011 -7- many case that, despite the Bar licence being issued in the name of any one of the partners, the partnership is conducting the business of Bar Hotel. Such a decision was taken on the basis of a judgments rendered in a batch of cases in Commissioner of Income Tax V. Hotel New Indraprastha (2011 (1) KLT SN 102). Question decided therein was that, partnership firm running Bar Hotels with Bar licence issued in the name of only one of the partners where the Excise Commissioner had granted renewal of the licence, will be considered as genuine partnership firms coming under Section 185 of the Income Tax Act, as having the status of a registered firm for the purpose of assessment. Therefore it is contended that the 3rd respondent has no individual right over the licence. 4. It is averred in the writ petition that there arose dispute between respondents 3 and 4 and the 3rd respondent had cancelled the Power of Attorney issued in favour of the 4th respondent. Thereafter by virtue of Ext.P9 the 3rd respondent issued authorisation in favour of the petitioners facilitating them to get the liquor permit and to W.P.(c) No.12785/2011 -8- transport the liquor. In the context of the dispute, the 3rd respondent had issued Ext.P5 notice intimating her intention to dissolve the firm, under Section 43 of the Partnership Act. The said notice was received by the 1st petitioner and he had caused a reply to the same contending that the partnership is not 'at will' and it cannot be dissolved. It is alleged that, while such dispute is pending the 3rd respondent made application for getting the name of the 4th respondent deleted from the licence and to obtain the licence in her sole name. She had also applied for renewal of the licence for the year 2011-2012. Those applications were submitted without knowledge of the petitioners. W.P (c) No.10272/2011 was filed without impleading the petitioners as parties. When the petitioners came to know about Ext.R3 (n) judgment and the directions issued thereunder, they submitted Exts.P10 and P11 before respondents 1 and 2 objecting renewing the licence in the name of the 3rd respondent. It was intimated that the licence can be issued only in the name of the firm. It was also pointed out that the payment of licence fee was made only W.P.(c) No.12785/2011 -9- from the account of the firm, as evidenced from Ext.P12. But respondents 1 and 2 have taken a decision, without considering such objections and without hearing the petitioners to renew the licence and to issue duplicate copy in the sole name of the 3rd respondent. Exhibits R3 (p) (q) and (n) are challenged as unsustainable in the above context. The petitioners specifically point out that, the Excise authorities were having knowledge about the partnership and that the firm was conducting the Bar Hotel on the strength of the licence. Attention of this court was drawn to Ext.P13, which is a letter issued by the 1st respondent to the 2nd respondent. It is directed therein that the duplicate licence can be issued in favour of Hotel Pankaj in accordance with the Foreign Liquor Rules, after hearing all persons connected with Hotel Pankaj. According to the petitioners ignoring such directions renewal was granted and duplicate licence was issued in favour of the 3rd respondent, without issuing any notice to the petitioners. It is contended that the authorities of the Excise Department was estopped from granting licence in the individual name W.P.(c) No.12785/2011 -10- of the 3rd respondent, after having knowledge about the partnership firm and after being accepted and attorned the conduct of business by the partnership firm, since the last so many years. The petitioners also pointed out that Ext.P14 letter issued by the 3rd respondent to the Commercial Tax Department, in which a request was made to cancel the KVAT registration granted to the partnership firm and to allot new registration in the individual name of the 3rd respondent, will indicate that the firm was holding the licence and conducting the business. The renewed licence now granted to the 3rd respondent as sole licencee is unsustainable. Respondents 3 and 4 had committed fraud on this court in misrepresenting the factual situations and in obtaining a judgment as that of Ext.R3 (n). 5. Contentions of the petitioners were resisted through detailed counter affidavit filed by the 3rd respondent. It is contended that the land in question where the Hotel is situated was purchased by the 3rd respondent while she was working at Abu Dhabi. Exhibit R3 (a) power of attorney was executed in favour of the 4th respondent for W.P.(c) No.12785/2011 -11- facilitating to obtain the Bar licence and to complete formalities for starting the Hotel. The said power of attorney was executed on 12-03-1990. Exhibit R3 (b) is the licence issued in favour of the 3rd respondent, in the name of the 4th respondent as power of attorney holder. The licence was issued on 18-04-1990. Thereafter only Ext.P1 agreement was executed. According to the 3rd respondent Ext.P1 was not a deed of partnership and it was only an agreement executed between the family members for the purpose of conducting business in the Hotel. In Ext.P1 agreement it is specifically stated that the partnership will be one “at will”. Exhibit P1 was not executed with permission of the Excise authorities. The land was purchased in 1978 and the Hotel was constructed in the year 1988. The licence was obtained on 18-04-1990 and thereafter only Ext.P1 was executed on 15-05-1990. Therefore it cannot be contended that the licence was obtained on behalf of the partnership and that the firm is the owner of the licence. Exhibit P2 re-constitution was also executed without permission of the Excise authorities and W.P.(c) No.12785/2011 -12- Ext.P2 was produced only before the Income Tax authorities. According to 3rd respondent the dispute arose when the petitioners have returned from Gulf countries and attempted to interfere with functioning of the 4th respondent in conduct of the Bar Hotel. The power of attorney was cancelled through Ext.R3 (c) only on the persuasion of the petitioners. But after cancellation of the power of attorney the 4th respondent attempted to interfere in the business activities. The original FL-3 licence was also retained him illegally. When the 4th respondent objected the petitioners and the 3rd respondent from entering into the premises, Ext.R3 (d) compliant was submitted before the police authorities. When the 4th respondent raised further obstructions, the 3rd respondent submitted authorisation before the Excise authorities in favour of the petitioners to obtain liquor permit and for transportation of liquor. The authorisation granted was accepted by the Excise authorities as per Ext.R3 (e). For the purpose of renewal of the licence the 3rd respondent obtained consent and permissions from various authorities. She had remitted W.P.(c) No.12785/2011 -13- licence fee to the panchayat as evident from Ext.R3 (f). The authorities of the Kerala Toddy Workers Welfare Fund Board had issued Ext.R3 (g) clearance certificate showing that the 3rd respondent is not in arrears of payment of any contribution. So also the Excise Inspector had issued Ext.R3 (j) certificate stating that there is no Abkari case registered against the 3rd respondent. Exhibit R3 (i) is the certificate issued by the Abkari Workers' Welfare Fund Inspector to the effect that there is no dues from the 3rd respondent. The Commercial Tax officer had issued Ext.R3 (k) certificate of 'no dues' with respect to the business conducted by M/s. Hotel Pankaj. On the basis of the above documents renewal of the licence was applied and the 3rd respondent had submitted Demand Draft for payment of renewal fee, as evident from Ext.R3 (l). Since the licence was not renewed and duplicate copy of the licence was not issued on the basis of the requests made, the 3rd respondent had approached this court and obtained Ext.R3 (n) judgment. 6. According to the 3rd respondent after Ext.R3 (n) judgment the respondents 1 and 2 had considered the W.P.(c) No.12785/2011 -14- matter and an opportunity of personal hearing was afforded to the 4th respondent. The 4th respondent submitted before the 2nd respondent that he has no objection in renewing the licence in favour of the 3rd respondent. The 4th respondent had filed a written 'no objection' in this regard. Accordingly necessary proceedings directing renewal of the licence and for issuance of duplicate copy were issued, as per Exts.R3 (o) and R3 (p). Exhibit R3 (q) is the copy of the licence which contains endorsement made on the basis of Exts.R3 (o) and R3 (p). 7. Contention of the 3rd respondent is that she was conducting business of the Bar Hotel as a proprietary concern and there was no partnership. The licence in question was issued in her sole name and the name of the 4th respondent was shown only as power of attorney holder on her behalf. The dispute was only between the 3rd respondent and 4th respondent regarding ownership of the licence. This court in Ext.R3 (n) judgment held that the 3rd respondent is the owner of the licence. The petitioners were aware about all these developments and they never raised W.P.(c) No.12785/2011 -15- any objection against the licence being renewed in the name of the 3rd respondent. According to the 3rd respondent Ext.P1 document was produced before the Income Tax authorities only to get benefit in tax payment, on the basis that the assessee is a partnership firm. According to the 3rd respondent, by virtue of Ext.P1 and P2 no legal partnership has came into existence. However in abundant caution the 3rd respondent has issued Ext.R3 (r), notice under Section 43 of the Partnership Act, intimating dissolution of the partnership. It is further stated that publication was also made in Newspapers about dissolution of the partnership, as per Ext.R3 (s). Therefore it is contended that the firm is not in existence in view of the dissolution effected. Contention of the 3rd respondent is that she is conducting business of the Bar Hotel on the strength of licence issued in her name and nowhere in the licence it is stated that the partnership is conducting the business. According to the 3rd respondent she is the sole licencee fully entitled to conduct business of the Bar Hotel on the strength of the licence. W.P.(c) No.12785/2011 -16- 8. Contentions in the counter affidavit of the 3rd respondent was refuted through a detailed reply affidavit filed by the petitioners. It is denied that the property and building in question belongs to the 3rd respondent. According to the petitioners the partnership is the owner of such properties by virtue of various provisions contained in the deed of partnership. It is further contended that there is amble documents and evidences to show that the authorities of the Excise Department had accepted that the partnership is continuing the business. It is stated that the 4th respondent had submitted no objection for renewing licence in the name of the 3rd respondent, only because of payment of an amount of Rs.50,00,000/- towards compensation for retirement of the 4th respondent from the partnership. It is alleged that the liability of the 4th respondent was settled. But instead of obtaining a Retirement Deed the 3rd respondent prepared a Deed of Dissolution of the partnership, through her Chartered Accountant. Exhibits P21 and P22 were produced as copies of the dissolution deed and agreement prepared. But it is W.P.(c) No.12785/2011 -17- stated that the petitioners have not signed those documents. According to the petitioners the partnership is not 'at will' and no dissolution can be effected. The 3rd respondent cannot take a stand that the partnership is not in existence by virtue of Ext.R3 (r) and Ext.R3 (s) documents. Hence the contention that the business is a Proprietary concern cannot be sustained, is the contention. 9. In the counter affidavit filed by the 2nd respondent it is stated that, as per the records of the Excise Department, Hotel Pankaj, Thalayolaparambu is not a partnership firm. But it is a Proprietary concern in the name of the 3rd respondent. It is stated that the Excise Department was not aware about the partnership and the licencee had never submitted any application before the authorities for constituting any such partnership. The licencee of Hotel Pankaj has never obtained prior sanction for constituting any partnership and hence the partnership is not binding to the Excise Department. As per condition No.13 of the FL-3 licence, there is prohibition against leasing out, sale or otherwise transferring of the licence, W.P.(c) No.12785/2011 -18- without prior consent of the Excise Commissioner. So the partnership has no validity in view of the relevant Rules. It may be an internal arrangement among the family members, about which the Department was in no way informed. Execution of such partnership is in violation of the Foreign Liquor Rules and also the conditions governing conduct of the licencees. According to the 2nd respondent the FL-3 licence in question was issued on 18-04-1990 in the name of the 4th respondent as power of attorney holder of the 3rd respondent, on the basis of a general power of attorney executed on 12-03-1990. The 3rd respondent submitted an application before the 2nd respondent stating that the power of attorney stands cancelled with effect from 12-11-2010 and requesting to give authorisation in favour of the petitioners for obtaining the liquor permit. On the basis of such request, authorisation was issued in favour of the petitioners. Such an authorisation was issued only on behalf of the 3rd respondent and it cannot be considered as a recognition or acceptance of the partnership. The circumstances under which licence was renewed in favour W.P.(c) No.12785/2011 -19- of the 3rd respondent and the duplicate copy with endorsement was granted in favour of her, is explained in the counter affidavit. 10. The 3rd respondent had filed an additional counter affidavit on 13-06-2011 based on the amendment in the pleadings in the writ petition. Documents were also produced to show that the 3rd respondent had submitted returns and compounded tax payment under the Kerala Value Added Tax Act. The licence obtained from the Grama Panchayat in the name of the 3rd respondent for the year 2011-2012 is also produced. 11. The 3rd respondent had also raised a pertinent contention that, Ext.P2 is not the true copy of the re- constituted partnership deed. The copy produced along with the writ petition is a forged document, is the allegation. Exhibit R3 (r) is produced alleging as true copy of its original. A comparative tabulation is given in the additional counter affidavit with respect to the differences between the two documents. Basic difference pointed out is that in clause 8 of Ext.R3 (r) it is specifically stated that the 3rd W.P.(c) No.12785/2011 -20- respondent is the sole owner of the licence. But it was seen omitted in Ext.P2 document produced by the petitioners. Further contentions are to the effect that the petitioners were having clear knowledge about the proceedings before the respondents 1 and 2, with respect to renewal of the licence for the year 2011-2012 and with respect to issuance of duplicate copy of the licence. The contention that filing of the earlier writ petition as well as renewal of the licence were not within their knowledge, is absolutely incorrect. 12. Both parties have produced various other document through subsequent pleadings inorder to substantiate their respective contentions on the disputed question regarding ownership of the licence. Since an elaboration of all such documents is not necessary to decide the issue involved, I am not going into details of those documents. It is pertinent to note that, during pendency of this writ petition, interim order was issued to the effect that renewal of licence if any granted for the year 2012-2013 will be subject to result of this writ petition. So also the petitioners have now filed another interim application W.P.(c) No.12785/2011 -21- seeking to restrain renewal of the licence for the year 2013- 2014. Since the writ petition was finally heard and taken up for disposal, no orders was issued on the said application. 13. A preliminary issue raised for decision is as to whether the petitioners are entitled to seek the reliefs in view of the findings contained in Ext.R3 (n) judgment. This court in Ext.R3 (n) judgment found that the licence was issued in the name of the 4th respondent only as power of attorney holder on behalf of the 3rd respondent and hence the 3rd respondent is the owner of the licence. According to learned counsel for the 3rd respondent, unless the said findings is set aside or reviewed, no relief can be granted in this writ petition. Per contra, learned counsel for the petitioners contended that the 3rd respondent had committed fraud on this court by suppressing material facts of existence of a partnership, and the fact that the partnership was conducting business of the Bar Hotel on the strength of the licence. It is by clear fraud and misrepresentation on the part of respondents 3 and 4 that those facts were suppressed, and no benefit out of any W.P.(c) No.12785/2011 -22- findings rendered by this court on the basis of such fraud and misrepresentation cannot be permitted to be used in favour of a party who is guilty of such suppression. In support of the above preposition learned counsel for the petitioner had placed reliance on various decisions of the hon'ble Supreme Court like, Venture Global Engineering V. Satyam Computer Services Ltd. and others (2010) 8 SCC 660, V.J. Thomas V. Pathrose Abraham and others (2008) 5 SCC 84 and Meghmla and others V. G. Narasimha Reddy and others (2010) 8 SCC 383. Considering the fact situation prevailing it is evident that the disputed issue regarding existence of partnership was not brought to notice of this court when the 3rd respondent filed the earlier writ petition. The petitioners who are admittedly parties to Exts.P1 and P2 deed were not arrayed as parties in the said writ petition. Findings contained in Ext.R3 (n) judgment is only to the effect that, in view of the specific endorsement contained, the licence was issued in favour of the 4th respondent only as a power of attorney holder on behalf of the 3rd respondent, and the licence W.P.(c) No.12785/2011 -23- stands in the name of the 3rd respondent. But question as to whether the 3rd respondent is holding the licence on behalf of the partnership or not, has neither been discussed nor settled in Ext.R3 (n) judgment. The factual aspect regarding existence of a partnership was not brought to notice of this court. Therefore, I am of the view that even if the findings contained in Ext.R3 (n) is not set aside or reviewed the same will not stand as binding in deciding the issue with respect to ownership on the licence. Dehors any findings contained in Ext.R3 (n) the parties at liberty to agitate the issue, because it is only a judgment rendered without adjudicating of the disputed issues regarding entitlement of the licence. Hence it is held that even without seeking to set aside or reviewed Ext.R3 (n) judgment, the petitioners herein are at liberty to agitate the issue regarding right over the FL-3 licence and the rights and liabilities arising out of the partnership on the basis of Exts.P1 and P2 Deeds. 14. Issue agitated in this writ petition is based on the partnership constituted by virtue of Exts.P1 and P2. As narrated above, the 3rd respondent is disputing the very W.P.(c) No.12785/2011 -24- existence of the partnership itself. According to her Exts.P1 there is legally valid partnership and Deeds never conferred any right on the petitioners or anybody else with respect to the properties which stand in the sole name of the 3rd respondent. She also contends that the property in the licence stands in her individual ownership and it is not the property of the partnership. On the other hand, petitioners are raising various legal contentions to the effect that, by virtue of constitution of the partnership and by virtue of the terms and conditions enumerated in the deed of partnership the properties of the Hotel and the property in the licence stand vested in the partnership, and the partnership firm alone is in ownership of such properties. The petitioners have produced various documents to show that the business was conducted by the partnership and it was registered before various authorities. Accounts of the firm and its balance sheets were produced to show that the business was conducted by the firm and the firm was remitting fee for renewal of the licence. Various judicial precedents are cited from the side of the petitioners to show that, by virtue W.P.(c) No.12785/2011 -25- of various provisions contained in the Partnership Act, the properties will stand vested in the partnership and the 3rd respondent who had conceded for such vesting has no individual rights remaining in such properties except the right as a partner. 15. On evaluating the contentions as above, the basic issues arising for consideration is the dispute regarding existence of a partnership and with respect to rights and liabilities of the parties with respect to the property and building, business conducted therein and the rights over the FL-3 licence. Basically those are disputes of pure civil nature and the rights and liabilities of the persons on the basis of the partnership cannot be agitated in a writ petition filed under Article 226. The parties have to seek common law remedy to settle such disputes or to establish their rights. Hence I am of the view that, questions as to whether there existed any partnership or as to whether the immovable property of the Hotel stands vested in the partnership or as to whether the partnership was conducting business etc. are matters which can be left open W.P.(c) No.12785/2011 -26- for agitation by the parties in appropriate proceedings. 16. But question remains as to whether the renewal of FL-3 licence granted in the sole name of the 3rd respondent from the year 2011-2012 onwards is sustainable or not. As well as question arises as to whether issuance of the duplicate licence, as if the 3rd respondent is the sole licencee, is correct or not. Eventhough the 2nd respondent in his counter affidavit has contended that the authorities of the Excise Department are totally unaware about the partnership, there are various documents produced to show that the existence of the partnership was within the knowledge of the Excise authorities. It is true that the Excise authorities have never accepted or attorned that the licence in question is in the name of the partnership. In other words, at no point of time the Excise authorities have accepted that the licencee is the partnership firm. At the same time it is evident that all along during the past years various statements and accounts were furnished with respect to conduct of business. It is not decernable as to whether such documents were produced on behalf of the W.P.(c) No.12785/2011 -27- partnership or on behalf of the 3rd respondent. Even if it is presumed that accounts and statements were submitted by the firm, question remains as to whether that by itself will render the property in the licence became vested in the partnership. There are instances where FL-3 licence was issued only in the name of one of the partners, despite the fact that the business of the Bar Hotel is conducted by a partnership. But in the case at hand, contention of the petitioner is to the effect that by virtue of recitals contained in Exts.P1 and P2 and by operation of the provisions contained in the Partnership Act, the firm became vested with ownership over the property in the FL-3 licence. Even with respect to the recitals contained in Exts.P1 and P2 there exists stiff difference of opinion among the parties. The genuineness of the copy of the deed itself is in dispute. However, it remains undisputed that, while ordering to issue the duplicate licence in favour of the 3rd respondent, and while renewing the licence for the year 2011-2012, the petitioners were not given any opportunity to object. Despite specific directions contained in Ext.P13 the 2nd W.P.(c) No.12785/2011 -28- respondent has not issued any notice to the petitioners, nor they were called upon to submit objections, if any. The directions in Ext.R3 (n) judgment happed to be issued only on the basis that the existence of any partnership was not brought to notice of this court. Even going by contentions raised on behalf of the 3rd respondent that she had already taken steps to dissolve the partnership, the existence of the partnership is clearly brought out. 17. Question to be adjudicated by the Excise authorities is only with respect to rights and liabilities between the parties with respect to the property in the licence. Even the claims with respect to such rights may require adjudication in an appropriate civil forum. But fact remains that the respondents 1 and 2 have taken Exts.R3 (o) and R3 (p) decisions without intervention of the petitioners, without notice to them. Considering principles of natural justice it was obligatory on the part of respondents 1 and 2 to have afforded with an opportunity to the petitioners. It is always left open to the petitioners to contend before the authorities concerned that the licence in W.P.(c) No.12785/2011 -29- question is not an exclusive property of the 3rd respondent, but it is the property of the partnership. Before taking any decision to grant a duplicate copy endorsing the sole name of the 3rd respondent and before granting renewal of the licence in the sole name of the petitioners, it is obligatory for respondents 1 and 2 to take note of such objection and to consider the same. Therefore, I am of the considered opinion that an elaborate consideration and a fresh decision is required with respect to Exts.R3 (o) and R3 (p). 18. Under the above mentioned circumstances, the writ petition is disposed of on the following terms:- (i) Exhibit R3 (o) and Ext.R3 (p) proceedings and the consequent endorsement made in Ext.R3 (q) will stand quashed. Renewal of licence granted on the basis of such decisions will also be subject to fresh decision which will be taken on the matter. (ii) The 1st respondent is directed to re-consider the request made by the 3rd respondent for issuance of duplicate copy of the FL-3 licence in question, after deleting the name of the 4th respondent and for renewal of the W.P.(c) No.12785/2011 -30- licence in her name, taking into consideration of the contentions of the petitioners that the licence was obtained by the 3rd respondent only on behalf of the partnership firm and that the partnership firm is the owner with respect to the property in the licence. (iii) A fresh decision as directed above shall be taken after issuing notice to the petitioners and the respondents 3 and 4, and after affording them an opportunity of hearing and for production of evidence and materials, at the earliest possible, at any rate within 2 months from the date of receipt of a copy of this judgment. (iv) Renewal of licence for the year 2013-14 shall not be granted in favour of the 3rd respondent, if the same is not already granted. However, licence can be renewed on a provisional basis, in favour of the 3rd respondent, subject to final decision in the matter, for required period till a decision as directed above is taken. (v) It is made clear that despite the above directions and despite any decision which will be taken by the 1st respondent on the basis of the above directions, all the W.P.(c) No.12785/2011 -31- parties will be at liberty to approach appropriate civil court to get their rights if any on the basis of the partnership established. If any suit or other proceedings is instituted in this regard the same shall be decided independently untrammelled by any of the observations contained in this judgment or in Ext.R3 (n) judgment, and dehors the decision which will be taken by the 1st respondent as directed above. Sd/- C.K. ABDUL REHIM, JUDGE. AMG True copy P.A to Judge "