Ramaswami, J.:— In this case the petitioner Ramnath Prasad has obtained a rule from the High Court asking the respondents to show cause why a writ in the nature of certiorari should not be issued to call up and quash an order of the Collector of Darbhanga dated 4-9-1953, cancelling a licence of a country ??? shop and forfeiting the security deposit in respect thereof. Cause has been shown by the Advocate-General on behalf of the Collector of Darbhanga and the other respondents.
2. The petitioner is a licensee of a country shop located at Samastipur in the district of Darbhanga. The petitioner had obtained licence for the period from 1-4-1953 to 31-3-1954. On 11-6-1953 the Superintendent of Excise, Mr. S.K Sinha, made a surprise visit to the country liquor shop and upon inspection found thirty-three bottles containing diluted liquor and in short measure. Nine of these bottles were kept on the counter and twenty-four bottles of liquor were in two baskets on the verandah of the liquor shop. It appears that these baskets were being attempted to be removed from the shop by a man called Sadhu Saran during the course of the inspection but the Excise peon, Umakant Jha, prevented Sadhu Saran from taking away the baskets and upon inspection the two baskets were found to contain twenty-four bottles of liquor. The Superintendent of Excise found also that all the 33 bottles bore the label of the shop and contained diluted liquor in short measure. The petitioner was absent at the time of inspection but his employees, Ganesh Prasad and Nagina Prasad were present at the time. The Superintendent of Excise called upon the petitioner to show cause why the licence should not be cancelled. On 20-7-1953, the petitioner showed cause but his explanation was not accepted by the Superintendent of Excise who reported to the Collector that the licence should be cancelled and the security deposit of the petitioner should be forfeited. On 29-7-1953, the petitioner filed an application before the Collector alleging that the liquor bottles were planted in his shop by his enemies and praying that he should be permitted to cross examine the Superintendent of Excise. The Collector did not permit the petitioner to cross-examine the Superintendent of Excise or other witnesses in the case. On 31-8-1953 the Collector heard the submissions of the petitioner through his lawyer. On 4-9-1953, the Collector passed orders that the licence of the country liquor shop should be cancelled and the security deposit of Rs. 7,750 made in respect thereof should be forfeited to the Government.
3. The petitioner took an appeal to the Commissioner of Excise from the order of the Collector but the appeal was dismissed and the Commissioner of Excise confirmed the order passed by the Collector. The petitioner then moved the Board of Revenue in revision. The Board of Revenue dismissed the revisional application and confirmed the order of the Collector subject to the modification that instead of Rs. 7,750/- only a sum of Rs. 5000 was forfeited to Government. It is alleged on behalf of the petitioner that the Collector of Darbhanga should have given an opportunity to the petitioner to cross-examine the Superintendent of Excise and other witnesses in the case. It is stated on petitioner's behalf that there has been denial of natural justice and that the order of the Collector of Darbhanga dated 4-9-1953 is illegal and void for this reason. It is further alleged on behalf of the petitioner that the amount of Rs. 5,000 which is forfeited was not a deposit in respect of the licence of the country liquor shop of Samastipur and neither the Collector nor his superior authorities were entitled to forfeit that amount under Section 42 of the Bihar and Orissa Excise Act.
4. Two counter-affidavits have been filed on behalf of the respondents controverting the allegations made by the petitioner. It is specifically stated in the counter-affidavits that the amount of Rs. 7,750/- was security deposit in respect oi: the country liquor shop of the petitioner at Samastipur and the Excise authorities were competent to forfeit this money under the provisions of Section 42 of the Bihar and Orissa Excise Act. It is also stated on behalf of the respondents that the petitioner was given a fair opportunity to meet the allegations both before the Superintendent of Excise and before the Collector of Darbhanga. The petitioner had made a request to the Superintendent of Excise for cross-examination of the Excise peon and other witnesses, viz., Sadhu Saran, Ganesh Prasad and Nagina Prasad. The Superintendent of Excise granted permission to the petitioner to cross-examine the peon but the petitioner did not avail himself of the opportunity. As regards the other three persons the Superintendent was of opinion that their cross-examination was not necessary as their statements were more or less in favour of the petitioner. It is contended therefore on behalf of the respondents that the order of the Collector of Darbhanga was a legal and valid order and cannot be quashed in this proceeding.
5. The first question argued in this case was whether the Collector of Darbhanga could legally forfeit the amount of Rs. 7,750 which was security deposit made by the petitioner. It was submitted on behalf of the petitioner that the amount of Rs. 7,750/- was deposited by the petitioner when the country liquor shop was held under the auction system. After the sliding scale system was introduced the petitioner had permitted the deposit of Rs. 7,750/- to continue to remain with the Excise authorities. The case of the petitioner is that under sliding scale system he was obliged to deposit a sum equivalent to one month's fee. It is pointed out that this amount would roughly work out to be about Rs. 1,500/- and the argument of the petitioner is that the Excise authorities had no legal right to forfeit any sum exceeding Rs. 1,500/-. I am unable to accept the argument of the petitioner on this point.
6. In the counter-affidavit dated 22-12-1954 the respondents state that the amount of Rs. 7,750/- which was deposited by the petitioner under the auction system on 4-4-1949 was wholly appropriated against the total annual licence fee demand from the country liquor shop for the year 1949-1950. Annexure ‘X’ to the counter-affidavit shows in detail that advance payment of Rs. 7,750 was appropriated against the licence fee demand for the months of February and March 1950. For the year 1950-1951 the shop was settled under the sliding scale system and on 14-3-1950 the excise Superintendent of Darbhanga issued a general notice requiring all the persons who had taken settlement to deposit as security the amount equal to two months' licence fee and also to execute an agreement that the licensee would run their shops from 1-4-1950. In compliance with the terms of this notice the petitioner deposited a sum of Rs. 7,750 on 16-3-1950 in Samastipur Sub-treasury. This amount of Rs. 7,750 was equivalent to two months' licence fee and the amount was carried forward as security deposit from year to year till it was forfeited by the Collector of Darbhanga by his order dated 4-9-1953. These facts are stated in the counter-affidavit of the respondents and it is clear that the amount of Rs. 7,750 was deposited by the petitioner after the country liquor shop was settled on the sliding scale system.
7. In this connection para. 579(7)(g) of the Standing Order of the Commissioner of Excise, Bihar, is important. This paragraph states—
“The existing licence with whom his licence will be renewed will not be required to make any fresh deposit of advance fees but the advance ices already deposited by him in the previous year will ran on from year to year as security for the observance of conditions of licence until he ceases to hold his shop. The security will be finally adjusted or refunded when they cease to hold their shops unless the amounts are forfeited under law.”
8. In view of the facts stated in the counter-affidavit I think that the amount of Rs. 7,750 deposited by the petitioner was made in respect of the licence of the country liquor shop for the relevant period and that the Collector of Darbhanga had legal authority to forfeit this deposit of money under Section 42(3) of the Excise Act.
9. On 24-1-1955, however, petitioner filed a reply to the counter-affidavit of the state of Bihar and counsel on his behalf argued that the Collector could not in any case forfeit an amount which is equivalent to more than two months consumption of liquor. Counsel also referred to a Resolution of the Board of Revenue dated 13-1-1955 in this connection and submitted that the point may not be finally decided. Counsel said that the petitioner does not press his application on this point.
10. The next question presented for determination is whether the petitioner was given a fair hearing before the Collector of Darbhanga. It was argued by Mr. Baldeva Sahai that the petitioner was not given an opportunity to cross-examine the Superintendent of Excise or the Excise peon Umakant Jha or the other witnesses, viz., Sadhu Saran, Ganesh Prasad and Nagina Prasad. It was submitted by the learned counsel that the petitioner was denied a fair hearing by the Collector of Darbhanga and there has been a violation of the principle of natural justice. Counsel therefore submitted that the order of the Collector of Darbhanga cancelling the licence of the petitioner and forfeiting the security deposit must be held to be illegal and must be quashed by a writ in the nature of certiorari.
11. In my opinion the argument of the learned counsel is not well founded. After the inspection of the country liquor shop was made the Superintendent of Excise issued a notice upon the petitioner to show cause why the licence of the country liquor shop should not be cancelled. On 20-7-1953 the petitioner submitted his explanation before the Superintendent of Excise. On the same date he produced statements on affidavit of Ganesh Prasad and Nagina Prasad sworn before a First Class Magistrate. The Superintendent of Excise also gave the petitioner an opportunity to cross-examine the Excise peon Umakant Jha but the petitioner declined to take advantage of the offer. As regards Sadhu Saran the Superintendent was of opinion that there was no point in cross-examining him since his statement was more or less in favour of the petitioner. The Superintendent of Excise also rejected the statements of Ganesh Prasad and Nagina Prasad as false. On 24-7-1953 the Superintendent of Excise made a report to the Collector stating that in his opinion the petitioner had committed a breach of the conditions of the licence.
12. On 29-7-1953 the petitioner also filed an application before the Collector alleging that liquor bottles had been planted in his shop by his enemies and the statement of the Excise peon should not be accepted as true. The affidavits of the servants of the liquor shop, Ganesh Prasad and Nagina Prasad were also submitted to the Collector along with the report of the Superintendent of Excise. On 31-8-1953 the Collector gave a hearing to the petitioner who was represented by a lawyer. The Collector ultimately took the view that the statement of the Excise peon was true and there was no time or opportunity for the Excise peon to plant the liquor bottles. The Collector reached the conclusion that the report of the Superintendent of Excise must be accepted and the explanation of the petitioner was not correct. The Collector therefore ordered that the licence of the petitioner should be cancelled and the security deposit should be forfeited. In my opinion the Collector was not bound in the circumstances of this case to give an opportunity to the petitioner to cross-examine the Superintendent of Excise or the other witnesses, viz., Sadhu Saran, Umakant Jha, Ganesh Prasad and Nagina Prasad.
13. Mr. Baldeva Sahay on behalf of the petitioner has made a grievance on this point: but I do not think the grievance has any substance. The question must be examined from the stand point of legal principle. Section 42(1)(c) of the Excise Act empowers the Collector to cancel or suspend a licence in the event of any breach by the holder thereof or by any of his servants, of any of the terms or conditions of the licence. Section 42(3) states that
“the holder of a licence shall not be entitled to any compensation for its cancellation or suspension under this section, or to the refund of any fee paid or deposit made in respect thereof.”
14. Section 42 therefore grants power to the Collector or to the prescribed authority to cancel or suspend a licence. But the statute does not prescribe what is the procedure that the Collector has to adopt before passing final order. In a case of this description when the statute is silent what procedure will the law imply? Even if the statute is silent there is an obvious implication that some form of enquiry must be made for the section requires the Collector to satisfy himself that there has been a breach of the conditions of the licence by the holder or any of his servant. The Collector is bound as a matter of principle to give a fair opportunity to the licensee of presenting his case. The Collector is under a duty to hoar the matter in a judicial spirit for the question at issue is a matter of proprietary or professional right of an individual. The Collector should for instance give a fair opportunity to the licensee to make a relevant statement or to controvert any relevant statement made to his prejudice. Apart from this, the Collector is not required to decide the question at issue as if he were sitting as a Court of law. He is not bound to follow all the procedural requirements of a formal trial. It is sufficient if the Collector gives a fair opportunity to the licensee to present his case and to state his viewpoint. On the question whether a fair opportunity has been given no general test can be formulated which would be applicable to all conditions. The question would depend very much on the particular facts of each case.
15. The principle is clearly enunciated by Lord Selborne in — ‘Spackman v. Plumstead District Board of Work’, (1885) 10 AC 229 at p. 240 (A):
“No doubt, in the absence of special provisions as to how the person who is to decide is to proceed, the law will imply no more than that the substantial requirements of justice shall not be violated. He is not a judge in the proper sense of the word; but he must give the parties an opportunity of being heard before him and stating their case and their view. He must give notice when he will proceed with the matter, and he must act honestly and impartially and not under the dictation of some other person or persons to whom the authority is not given by law. There must be no malversation of any kind. There would be no decision within the meaning of the statute if there were anything of that sort done contrary to the essence of justice. But it appears to me to be perfectly consistent with reason, that the statute may have intentionally omitted to provide for form, because this is a matter not of a kind requiring form, not of a kind requiring litigation at all, but requiring only that the parties should have an opportunity of submitting to the person by whose decision they are to be bound such considerations as in their judgment ought to be brought before him. When that is done, from the nature of the case, no further proceeding as to summoning the parties or as to doing anything of that kind which a judge might have to do, is necessary.”
16. In — ‘Board of Education v. Rice’, (1911) AC 179 (B), the question at issue was whether the Board of Education had properly exercised their statutory duty to decide on appeal a question between parties. At page 182 Lord Lorebum makes the following statement of principle:
“In such cases the Board of Education will have to ascertain the law and also to ascertain the facts. I need not add that in doing either they must act in good faith and fairly listen to both sides, for that is a duty lying upon every one who decides anything. But I do not think they are bound to treat such a question as though it were a trial…………They can obtain information in any way they think best, always giving a fair opportunity to those who are parties in the controversy for correcting or contradicting any relevant statement prejudicial to their view.”
17. There is a similar statement of principle in — ‘Local Government Board v. Arlidge’, (1915) AC 120 (C). In this case the question arose whether the respondent had a fair hearing. In the public inquiry, which had been held in accordance with the statute, he and his witnesses had been heard orally, but after the inquiry the board's inspector submitted his report to the board who decided the matter after examining the facts and the evidence given at the inquiry and the Inspector's report. The respondent claimed that he should have been given an opportunity to see the report and should have been heard orally by the officer of the board who actually decided the case. The respondent had been offered the opportunity of submitting a written statement but had not availed himself of it. The House of Lords reversing the decision of the Court of Appeal held that the Parliament must have intended that the ordinary procedure of the board would be followed and that the case had been decided in a judicial and fair manner in the sense indicated by Lord Loreborn. At page 132 Viscount Haldane stated:
“When the duty of deciding an appeal is imposed, those whose duty it is to decide it must act judicially. They must deal with the question referred to them without bias, and they must give to each of the parties the opportunity of adequately presenting the case made. The decision must be come to in the spirit and with the sense of responsibility of a tribunal whose duty it is to mete out justice. But it does not follow that the procedure of every such tribunal must be the same.”
18. Counsel on behalf of the petitioner referred to the case — ‘General Medical Council v. Spackman’, 1943 AC 627 (D), in support of his argument that the Collector of Darbhanga ought to have heard all the evidence which the petitioner chose to furnish. But the ratio of that case has no application to the present case. The respondent in that case was a registered medical practitioner who was found by the Divorce Court to have committed adultery with a patient. The General Medical Council gave him notice that a meeting of the council would be held to decide whether his name should be removed from the medical register for infamous conduct. At the hearing the medical practitioner desired to call on the issue of adultery evidence which had not been called in the Divorce Court. The council declined to hear the fresh evidence, but accepted the decree nisi as prima facie proof of adultery, and directed that the practitioner's name should be erased from the register. It was held by the House of Lords that the council was bound to hear any evidence tendered by the practitioner, and that, having refused to hear such evidence, the council had not made ‘due enquiry’ under Section 29 of the Medical Act of 1858. It should be noticed that Section 29 of the Medical Act of 1858 imposed a duty of making “due inquiry” before the name of any medical practitioner is removed by a general council from the register. Paragraph 9(b) of the rules set out in chapter XIV of the standing orders of the council also provides as follows:
“The practitioner will then be called on by the President to state his case, and to produce the evidence in support of it.”
19. In view of the express language of this rule and of Section 29 of the Medical Act of 1858 the House of Lords held that the general council was bound to hear all the evidence tendered by the medical practitioner before removing his name from the medical register for infamous conduct. In the present case the material facts are obviously different for there is no procedure expressly provided by the statute.
20. For the reasons I have already expressed I hold that the petitioner has been given a fair opportunity of presenting his case before the Collector of Darbhanga and there has been no violation of any rule of natural justice in this case. It follows that the argument of the petitioner on this point must be rejected.
21. The next question argued on behalf of the petitioner is that the Collector of Darbhanga is disqualified on account of bias from conducting the inquiry or passing lie order of the cancellation of the licence. It was submitted by the learned counsel that the Collector was head of the Excise administration of the district and that the Collector was vitally interested in preventing the loss of Excise revenue and cheeking malpractice on the part of the licensees. It was argued that the petitioner had a reasonable apprehension that the Collector would not decide the case with an open mind. It was contended therefore that the Collector was disqualified from acting on the ground of bias or likelihood of bias. I am unable to accept this argument as correct. The petitioner had not made any allegation of concrete character against Mr. Dutt, the Collector of Darbhanga, who ordered cancellation of the licence. The petitioner has only made a vague allegation that because the Collector is head of the Excise administration there was apprehension on the petitioner's part that a fair inquiry cannot be obtained. It is well settled that there must be a real likelihood of bias and not mere suspicion of bias before proceedings can be quashed on the ground that the person conducting the proceeding is disqualified by interest. The principle has been laid down in clear terms by Lord Justice Blackburn in — ‘Rex v. Rand’, (1866) 1 QB 230 (E):
“Wherever there is a real likelihood that the judge would, from kindred or any other cause, have a bias in favour of one of the parties, it would be very wrong in him to act; and we are not to be understood to say that, where there is a real bias of this sort, this Court would not interfere.”
22. In another case, — ‘Reg v. Mcyer’, (1876) 1 QBD 173 (F), Blackburn J. stated as follows:
“In (1866) I QB 230 (E) we held that there was no ground for quashing the certificate of the justices. The effect of our judgment in that case was that, though pecuniary interest in the subject-matter of dispute, however small, disqualifies the justices, yet the mere possibility of bias did not ‘ipso facto’ avoid the justices' decision; and we thought that, though there was a possibility of bias in that case, yet it was not real. But we expressly excepted a real bias, saying ‘that we must not be understood to say, that where there is a real bias, this Court would not interfere’. In the present case there is such a real bias.”
23. The principle laid down by Lord Justice Blackburn, has been followed with approval in a long chain of authorities. For example, in — ‘Rex v. County Cork JJ.’, (1910) 2 Ir R 275 (C), Lord O'Brien C.J said:
“A passage has been cited from the judgment of a distinguished judge, Lord Esher, in — ‘Eckersley v. Mersey Docks and Harbour Board’, (1894) 2 QB 667 (II) ………That, in my opinion, goes too far. It makes the mere suspicions of unreasonable persons a test of bias. I think that the judgment was not a considered one, and that Lord Esher made use of some loose expressions. We decline, on a consideration of the cases, to go so lar as that very eminent judge. There must; in the words of Blackburn J., be ‘a real likelihood’ of bias: (1866) 1 QB 230 (E). In — ‘R. v. Queen's County JJ.’, (1908) 2 Ir R 285 (1), I expressed myself as follows: ‘By “bias” I understand a real likelihood of an operative prejudice, whether conscious or unconscious. There must, in my opinion, be reasonable evidence to satisfy us that there was a real likelihood of bias’. I do not think that the mere vague suspicions of whimsical, capricious, and unreasonable people should be made a standard to regulate our action here. It might be a different matter if suspicion rested on reasonable grounds—was reasonably generated—but certainly mere flimsy, elusive, morbid suspicions should not be permitted to form a ground of decision.”
24. The principle was applied recently by the Court of Appeal in — ‘Rex v. Cambrone Justices, Ex. Parte Pearce’, (1954) 2 All ER 850 (J). It was held by the Court of Appeal in that case that a real likelihood of bias must be shown in order to disqualify a person from acting in a judicial or a quasi-judicial capacity on the ground of interest. The Court of Appeal also held that the right view was the view expressed by Lord Justice Blackburn in — ‘Rex v. Rand’, (1866) 1 QB 233 (K). At p. 855 Slade J. states:
“In the judgment of this Court the right test is that prescribed by Blackburn J., in (1866) 1 QB 233 (K), namely, that to disqualify a person from acting in a judicial or quasi-judicial capacity on the ground of interest (other than pecuniary or proprietary) in the subject-matter of the proceeding, a real likelihood of bias must be shown……The frequency with which allegations of bias have come before the courts in recent times seems to indicate that the reminder of Lord Hewart C.J in — ‘R. v. Sussex JJ., Ex. Parte McCarthy’, (1924) 1 KB 256 (L), that it is ‘of fundamental importance that justice should not only be done, but should manifestly and undoubtedly be seen to be done’ is being urged as a warrant for quashing convictions or invalidating orders on quite unsubstantial grounds, and indeed in some cases, on the flimsiest pretexts of bias. While indorsing and fully maintaining the integrity of the principle reasserted by Lord Hewart C.J, this Court feels that the continued citation of it in cases to which it is not applicable may lead to the erroneous impression that it is more important that justice should appear to be done than that it should in fact be done. In the present case this Court is of the opinion that there was no real likelihood of bias and it was for this reason that the Court dismissed the application on 21-7-1954.”
25. In the present case also the petitioner has not produced materials to suggest that there was real likelihood of bias on the part of Mr. Dutt, Collector of Darbhanjja, and the argument of the petitioner on this point must be rejected as baseless. In view of all these considerations I hold that there is no case made out for the issue of a writ in the nature of certiorari to quash the order of the Collector of Darbhanga or of the Commissioner of Excise or of the Board of Revenue. In my opinion the application fails and must be dismissed with costs: hearing fee Rs. 100.
Misra, J.:— I agree.
D.R.R
26. Application dismissed.