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Case Number

Crl. M.C Nos. 4557 & 4678 of 2003

Advocates

For the Appellant: P.V. Madhavan Nambiar

Judges

G. Sasidharan, J.

Acts

Foreign Liquor Rules. R. 16 of the Foreign Liquor Rules
S. 55(a) and (i) of the Abkari Act.
rule in Foreign Liquor Rules,
Act.8. S. 55(a)

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Smart Summary

Structured Summary of the Opinion (G. Sasidharan, J.)

Factual and Procedural Background

Two criminal miscellaneous petitions were filed challenging the first information report in Crime No. 654/2003 registered at the Central Police Station, Ernakulam:

Crl. M.C. 4557/2003 by the third accused (one of the petitioners), and
Another criminal miscellaneous case (Crl. M.C. 4678/2003) by Accused Nos. 2 and 4.

The petitioners include partners of the partnership firm that runs Hotel Embassy, Ernakulam, and an employee of that hotel. The FIR alleges that on 1.9.2003 (the first day of an English calendar month, on which licensed premises are required to remain closed under the rules), liquor was sold in Room No. 27 on the first floor of the hotel. The crime was registered under Sections 55(a) and 55(i) of the Abkari Act. The petitioners state that they hold an F.L. 3 licence for conducting sale of liquor at the hotel.

The petitioners contend they were falsely implicated because the investigating officer held a grudge after they did not accede to alleged illegal demands. They filed a complaint (referred to as Annexure 2) alleging false implication and sought, through counsel, that this Court obtain and consider a police inquiry report on Annexure 2.

The Court refused to quash the FIR on the basis of a police enquiry report and proceeded to consider the legal character of the offences alleged in the FIR.

Legal Issues Presented

Whether the first information report (FIR) in Crime No. 654/2003 should be quashed on the facts alleged and the legal character of those allegations.
Whether the allegations (sale/possession of liquor on the first day of an English calendar month and keeping licensed premises open) constitute offences under Sections 55(a) and 55(i) of the Abkari Act or amount only to an offence under Section 56(b) of the Act (i.e., a breach of licence conditions).
Whether the Court should obtain and rely upon a police enquiry report on the petitioners' complaint (Annexure 2) before deciding the petitions for quashing the FIR.
Whether keeping a room (Room No. 27) on the first floor of the hotel open and/or storing/selling liquor there falls within the scope of rules that give rise to offences under Sections 55(a) and/or 55(i) of the Abkari Act.

Arguments of the Parties

Petitioners' Arguments

The petitioners pleaded false implication: they alleged the investigating officer acted vindictively because they refused illegal demands made by him.
They requested that the Court obtain and consider the police enquiry report relating to Annexure 2 (their complaint alleging false implication) and that that report be taken into account for quashing the proceedings.
They argued that the facts, if established, only disclose violation of licence conditions or rules and therefore would attract prosecution only under Section 56(b) of the Abkari Act (breach of licence conditions), not under Sections 55(a) and 55(i).

The opinion does not set out detailed arguments advanced on behalf of the prosecution or any other respondents; only the petitioners' submissions (as summarized above) are specifically described.

Table of Precedents Cited

Precedent	Rule or Principle Cited For	Application by the Court
Mariamma & Anr. v. State of Kerala & Ors., 1998 (1) KLT 286	Observed by a learned Judge that the accused had violated licence conditions and rules and that would be an offence under S.56(b) of the Abkari Act.	The Court held that the observations in that decision cannot be treated as a binding proposition of law that rule violations will always result only in S.56(b) offences because that question was not specifically and consciously considered in that single-judge decision.
Sabu & Others v. State of Kerala, 2003 (2) KLT 173 : 2003 (1) KLJ 462	The decision observed that the words "imports, exports, transport, transit or possession of liquor" indicate applicability to “illegal” or “illicit” liquor; thus S.55 applies to such conduct.	The Court explained that this case stands for the proposition that import/possession of illicit liquor can be charged under S.55; the Court found that this authority does not assist the petitioners in asserting that the FIR can only constitute an offence under S.56(b).

Court's Reasoning and Analysis

The Court examined the statutory provisions and the relevant rules and applied them to the allegations in the FIR. The reasoning proceeds in key steps drawn from the text of the opinion:

Statutory framework:
- Section 55(a) punishes import, export, transport, transit or possession of liquor in contravention of the Act or any rule or order made under the Act.
- Section 55(i) punishes sale or storing for sale of liquor in contravention of the Act or any rule or order made under the Act.
- Section 56(b) punishes willful breach by a licence-holder or his employee of any condition of the licence or permit “not otherwise provided for in the Act.”
Relevant rules in the Foreign Liquor Rules were considered:
- R. 28A: licensed premises for sale of liquor under all licences shall remain closed on the first day of every English calendar month — keeping premises open and selling liquor on that day is a breach of R. 28A.
- R. 34: infraction of rules/conditions of licence may attract (i) a fine of Rs. 5,000, or (ii) cancellation of licence, or (iii) both.
- R. 35: imposition of a fine or cancellation under R.34 does not relieve the licensee or agents from liability to be prosecuted for any specific offence under the Abkari Act or the Rules.
- R. 16: no premises shall be used for sale/possession/use of liquor unless approved by the Excise Commissioner.
- R. 29: possession or sale on any licensed premises of liquor other than that to which the licence relates is prohibited.
Application to the alleged facts:
- The allegation that liquor was kept in Room No. 27 on the first floor may constitute possession in contravention of the Foreign Liquor Rules (e.g., R.16 and R.29) — thus attracting Section 55(a).
- Sale of liquor on a day when licensed premises must remain closed (R.28A) would be conducting sale in contravention of a rule, and that conduct falls within Section 55(i).
- While a breach of licence condition (for example, Condition 20A(vii) that premises shall remain closed on the first day of the month) may attract proceedings under Section 56(b) and the penalties in R.34, R.35 makes clear that imposition of those penalties does not preclude prosecution under the Act for offences arising from rule violations.
Treatment of precedents and submission to quash on basis of police enquiry:
- The Court declined the petitioners' invitation to obtain and base a quashing order on the police's enquiry report into Annexure 2; the Court stated it is not proper to quash the FIR on the basis of such a report.
- The Court considered earlier decisions cited by petitioners but concluded they do not establish that rule violations can only be prosecuted under S.56(b). In particular, Mariamma was held not to have consciously considered and decided the question; Sabu was read as holding that S.55 applies to illicit liquor but does not support the petitioners' contention that S.55 cannot apply where a licence-holder is alleged to have broken rules.
Final analytical conclusion:
- On the allegations made in the FIR (possession and sale of liquor in circumstances contravening the Foreign Liquor Rules and licence conditions), the offences punishable under Sections 55(a) and 55(i) are prima facie made out.
- Accordingly, there was no reason to quash the FIR on the grounds advanced in these petitions.

Holding and Implications

Holding: Petitions dismissed.

Implications (direct consequences as stated in the opinion):

The Court refused to quash the FIR in Crime No. 654/2003; the criminal proceedings remain extant against the petitioners on allegations that, prima facie, attract Sections 55(a) and 55(i) of the Abkari Act.
The Court held that violation of rules or licence conditions can give rise to offences under Section 55 (when conduct is in contravention of rules made under the Act) and is not limited to prosecution under Section 56(b) alone; however, the Court did not state that it was laying down a novel precedent beyond the application to the facts before it.
No order was made quashing the FIR on the basis of the police enquiry report the petitioners sought to rely upon; the Court explicitly stated it is not proper to quash an FIR on that basis in this matter.

The opinion does not state or purport to create a binding new legal principle beyond the application of the statutory provisions and rules to the facts; it resolves the petitions by finding prima facie offences under S.55(a) and S.55(i) and dismissing the petitions.

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George Issac v. State Of Kerala

G. Sasidharan, J.:— Crl. M.C 4557/2003 is filed by the third accused and the other criminal miscellaneous case is filed by Accused Nos. 2 and 4 in Crime 654/2003 of Central Police Station, Ernakulam for quashing the first information report. The petitioner in Crl. M.C 4557/2003 and the first petitioner in the other Crl. M.C are partners in the partnership firm which runs Hotel Embassy in Ernakulam. The second petitioner in Crl. M.C 4678/2003 is an employee in Hotel Embassy. Crime 654/2003 was registered in Central Police Station, Ernakulam under S. 55(a) and (i) of the Abkari Act. The allegation is that on 1.9.2003, a day on which the licensed premises for sale of liquor in respect of all the licences issued shall remain closed being the first day of an English calendar month, liquor was being sold in Room No. 27 in the first floor of Hotel Embassy and thereby petitioners committed offences under S. 55(a) and (i) of the Act. It is stated that there was F.L 3 licence issued for conducting sale of liquor in the above hotel.

2. According to the petitioners, it is only for the purpose of wreaking vengeance upon them because they did not meet the illegal demands made by the investigating officer that they were falsely implicated in the crime. Annexure 2 is the copy of a complaint filed by the petitioner before the Police Commissioner stating that the petitioners were falsely implicated in the crime. One of the grounds the petitioners would urge for quashing the proceedings is that they were falsely made accused in the crime because the investigating officer is having grudge towards them since they did not pay heed to the illegal demands made by him.

3. The submission made by the learned senior counsel appearing for the petitioners is that a report about the enquiry conducted on Annexure-2 complaint may be obtained by this Court and that report also may be taken into consideration for quashing the proceedings. It is not necessary that such a report has to be obtained for deciding these petitions. It is not proper on the part of this Court to quash, the first information report on the basis of a report obtained from the police on the enquiry conducted on Annexure-2 complaint.

4. Another ground urged is that the offences under S. 55(a) and (i) of the Act are not made out. The learned senior counsel appearing for the petitioners submits that the allegation against the petitioners is only in respect of violation of conditions of licence issued by the authorities and hence, the offence will only be under S. 56(b) of the Act.

5. S. 55(a) of the Act deals with import, export, transport, transit or possession of liquor or any intoxicating drug in contravention of the provisions of the Act or any rule or order made under the Act. S. 55(i) deals with sale or storing for sale of liquor or any intoxicating drug in contravention of the provisions of the Act or any rule or order made under the Act. It is in R. 28A of the Foreign Liquor Rules that it is seen that the licensed premises for sale of liquor in respect of all the licences issued under the Rules shall remain closed on the first day of all English calender months. Keeping open licensed premises and selling liquor from there is violation of R. 28A of the Foreign Liquor Rules. The investigating agency has a case that it was not in the licenced premises that the liquor was sold on 1.9.2003 even though sale was done in Room No. 27 in the first floor of the hotel. The submission is that Room No. 27 in the first floor of the hotel cannot be said to be a licensed premises. Even if the sale is conducted in licensed premises on the first day of an English calender month, that will be violation of R. 28A of the Foreign Liquor Rules.

6. Pointing out R. 34 of the Foreign Liquor Rules it is maintained by the learned senior counsel appearing for the petitioners that infraction of any of the rules or conditions of licences issued under the Rules either by the licensee or by a person in his employment shall entail on the licensee or his agent or both (i) a fine of Rs. 5000/-, or (ii) cancellation of the licence, or (iii) both. According to the petitioners, even if there is violation of rules, they could be proceeded against under R. 34. In R. 35 of the Foreign Liquor Rules it is said that the imposition of a fine or the cancellation of a licence under the Rules shall not however relieve the licensee or his agents from liability to be prosecuted for any specific offence committed against the Abkari Act or under the Rules. The above rule makes it clear that in spite of the fact that fine is imposed or licence is cancelled as provided in R. 34 for infraction of any of the rules or conditions of licence, the licensee or his agents can be prosecuted for violation of offences under the Abkari Act or under the Rules.

7. S. 56(b) of the Act provides that whoever, being the holder of a licence or permit granted under the Act or being in the employment of such holder and acting bn his behalf, wilfully does or omits to do anything in breach of any of the conditions of his licence or permit not otherwise provided for the Act, shall be punishable as provided in that Section. The above clause deals only with breach of any of the conditions of licence or permit. Condition 20A(vii) is that the licensed premises shall remain closed on the first day of all English calender months. Keeping open the licensed premises on the first day of an English calender month is violation of Condition 20A(vii) of F.L 3 licence. Violation of that condition in the licence can be punishable under S. 56(b). That does not mean that keeping open the licensed premises and conducting sale of liquor on the first day of an English calender month is violation only of a condition in F.L 3 licence. It is also violation of R. 28A(vii) of the Foreign Liquor Rules. When it becomes the violation of a rule in Foreign Liquor Rules, there will be infraction of rules as provided in R. 34 of the Rules. By virtue of R. 35 of the Rules, he can be prosecuted for commission of the offence under the Act.

8. S. 55(a) says that whoever in contravention of the Act or of any rule or order made under the Act, imports, exports, transports, transits or possesses liquor or any intoxicating drug shall be punishable as provided in the Section. It is alleged that foreign liquor was kept in Room No. 27 in the first floor of the hotel. That can be said to be possession of the liquor in contravention of the Foreign Liquor Rules. R. 16 of the Foreign Liquor Rules says that no premises shall be used for the sale or for possession and use of liquor unless they have been approved by the Excise Commissioner. R. 29 days that possession or sale upon any licensed premises of any liquor other than that to which the licence relates, is prohibited. Keeping of liquor in a premises unless use of that premises for sale or keeping of liquor is permitted, is violation of R. 16. Possession or sale in a licensed premises of any liquor other than to which the licence relates is violation of R. 29. When the above rules are violated by a person in whose favour licence is issued, that will be an offence punishable under S. 55(a) of the Act.

9. S. 55(i) of the Act says that when in contravention of the provisions of the Act or any rule or order made under the Act sale or storing for sale of liquor or any intoxicating drug is done, that will be an offence punishable under the Act. Here, the allegation is that sale of liquor was done on a day on which the licensed premises had to be kept closed. Conducting sale even if it is in licensed premises on the first day of English calender month is in violation of R. 28A of the Foreign Liquor Rules and that will be an act done in contravention of the provisions of the Rules. When a licensee conducts sale of liquor in contravention of any rule, that will be an offence under S. 55(i) of the Act.

10. In Mariamma & Anr. v. State Of Kerala & Ors. (1998 (1) KLT 286) a learned Judge of this Court said that the accused in that case had violated the licence conditions and rules which would be an offence under S. 56(b) of the Act. There it was said that the learned Advocate General conceded that on the basis of the earlier judgments of this Court the offences in that case would come only under S. 56(b) of the Act. The above observations made by the learned Judge cannot be treated as proposition of law laid down that when violation of rules is alleged the offence will only be under S. 56(b) of the Act. That question has not been specifically considered by the learned Single Judge and, hence it cannot be said that there was a conscious consideration of that question and a decision was rendered on such consideration. S. 56(b) deals with doing or omitting to do anything in breach of any of the conditions of licence or permit not otherwise provided for in the Act by the holder of a licence or permit granted under the Act. When there is violation of rules it will come under S. 55 of the Act because the above section starts by saying “whoever in contravention of the Act or any rule or order made under the Act” and that would indicate that violation of rule by a person even if he is a licence holder will be an offence under the Act.

11. In Sabu & Others v. State Of Kerala, (2003 (2) KLT 173 : 2003 (1) KLJ 462), the very same learned Judge of this Court, who rendered the other decision, said that the words, imports, exports, transport, transit or possession of liquor read with the heading to the section show that it is applicable to “illegal liquors”. That was a case in which liquor was purchased from the Kerala State Beverages Corporation for own consumption and hence there was no question of illegal import or transporting or possessing of “illicit liquor”. That decision has to be understood as one by which it was held that import, export, transport, transit or possession of “illicit liquor” will also be an offence which would come under S. 55 of the Act. In S. 55 the word “illegal liquor” is not used and the term used is “liquor”. Liquor is defined in S. 3(10) of the Act. The above decision relied on by the learned counsel appearing for the petitioners will not in any way help the petitioners to say that the allegations in the first information report will constitute only an offence under S. 56(b) of the Act. On going through the allegations in the first information report regarding the commission of the offences, the offences punishable under Ss. 55(a) and (i) are prima facie made out. There is no reason for quashing the first information report in the crime.

12. There is no merit in the petitions. Petitions are dismissed.

George Issac v. State Of Kerala

Structured Summary of the Opinion (G. Sasidharan, J.)

Factual and Procedural Background

Legal Issues Presented

Arguments of the Parties

Petitioners' Arguments

Table of Precedents Cited

Court's Reasoning and Analysis

Holding and Implications

George Issac v. State Of Kerala

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