1. In this case the petitioner holds licence for a country spirit shop, called the Tinkonia Country Spirit Shop, in the town of Chapra, since the year 1946. The Licencing Board of Chapra recommended that the petitioner should be required to shift his shop to Mahalla Khanjartoll in the same town. On the 30th March, 1959, a notice was served by the Collector upon the petitioner requiring him to shift his shop within one month, that is, by the 30th April, 1959, in default of which the licence of the petitioner would be withdrawn. Against this order the petitioner took the matter in appeal before the Commissioner of Excise. The appeal was dismissed on the 13th July, 1959. The petitioner then took the matter in revision before the Board of Revenue, but on the 17th August, 1959, the Board of Revenue dismissed the revision application. The petitioner has now obtained a rule from the High Court calling upon the respondents to show cause why the order of the Board of Revenue dated the 17th August, 1959, should not be X quashed by a writ in the nature of certiorari under Article 226 of the Constitution.
2. Cause has been shown by the learned Standing Counsel on behalf of the respondents to whom notice of the rule was ordered to be given.
3. The submission of learned Counsel for the petitioner is that the order of the Board of Revenue is not in valid exercise of the statutory discretion conferred by Section 43 of the Bihar and Orissa Excise Act, which is in the following terms:—
“43. Power to withdraw licences. (1) Whenever the authority who granted any licence under this Act considers that the licence should be withdrawn for any cause other than those specified in section 42 it shall remit a sum equal to the amount of the fees payable in respect thereof for fifteen days and may withdraw the licence either—
(a) on the expiration of fifteen days' notice in writing of its intention to do so or
(b) forthwith, without notice.
(2) If any licence be withdrawn under clause (b) of sub-section (1), the said authority shall, in addition to remitting such sum as aforesaid, pay to the licencee such further sum (if any), by way of compensation, as the Excise Commissioner, may direct.
(3) If any licence be withdrawn under Cl. (a) of sub-section (I) the Excise Commissioner may, in special circumstances, direct the payment of such compensation as he may consider fit, in addition to the remission of the fee as aforesaid.
(4) When a licence is withdrawn under sub-section (1), any fee paid in advance, or deposit made by the licencee in respect thereof shall be refunded to him, after deducting the amount (if any) due to the State Government.
(5) For the purpose of calculating the amount due to the State Government mentioned in sub-section (4), the amount of fee payable on account of the license for the period during which it was in force shall be taken to be the sum bearing the same proportion to the total fee for the whole period for which the license was settled as the period during which the license was actually in force bears to the full period for which the license was settled.”
4. It was pointed out by learned Counsel that the order of the Collector, dated the 30th March, 1959, requiring the petitioner to remove his shop to the new site in Mahalla Khanjartoli, and in case of default withdrawing the licence of the petitioner with effect from the 30th April, 1959, was the subject-matter of appeal before the Commissioner of Excise, and the operation of the order of the Collector dated the 30th March 1959 was stayed during the pendency of the appeal.
5. It was also submitted by learned Counsel that there was a stay of the operation of the order of the Collector during the pendency of the revision application before the Board of Revenue, which finally dismissed the revision application on the 17th August, 1959. It appears that before the revision application was dismissed by the Board of Revenue there was a civil suit filed on the 4th August, 1959 by certain residents of Mahalla Khanjartoli acting in their representative capacity under Order I, Rule 8, Code of Civil Procedure, praying for relief by way of permanent injunction restraining the defendants, the State of Bihar from-opening a liquor shop in the premises belonging to Ramchandra Prasad, or at any other place in the said Mahalla in the neighbourhood of the temples and mosques situated in the said Mohalla.
6. On the same date there was a prayer for an ad interim injunction made by the plaintiffs on the ground that there was an ancient temple of Sri-Ram-Lakshmanji and there were two mosques also in the vicinity of the Premises of defendant No. 2, and that a liquor shop should not be opened in that Particular site. The Munsif of Chapra issued a temporary injunction in the terms prayed for by the plaintiffs. A copy of the order of injunction was served upon the petitioner on or about the 4th August, 1959.
7. In view of this order of injunction by the Civil Court it was submitted by the petitioner before the Board of Revenue that he was not in a position to comply with the order of the Excise authorities for removal of the shop to the premises belonging to Ramchandra Prasad. The Board of Revenue rejected this argument on the ground that
“it is not proper to link up the matter of his shifting the shop indefinitely with the disposal os the case in the Civil Court”.
8. It appears that an undertaking was given by the-petitioner to the Board of Revenue on the 27th July, 1959, that he would shift the shop by the 6th September, 1959. The Board of Revenue Considered that the petitioner should be compelled to abide by the undertaking and shift his shop by the 6th September, 1959, in default of which the licence of the petitioner will be withdrawn. It was contended by learned Counsel for the petitioner that the order of the Board of Revenue is arbitrary because the Board of Revenue has not taken into account the order of injunction made by a proper civil court against the petitioner prohibiting him from opening the liquor shop in the premises belonging to Ramchandra Prasad.
9. In our opinion the argument advanced on behalf of the petitioner is well founded and must prevail. It is manifest that the making of the Order of injunction in the civil suit is very important matter which the Board of Revenue should have-taken into account before holding that the petitioner must be compelled to abide by the undertaking given on the 27th July, 1959, and that in default of compliance the licence of the petitioner should be withdrawn under section 43 of the Bihar and Orissa Excise Act. It is well established that a statutory authority must address himself properly in law in the exercise of the statutory discretion.
10. He must, for example, direct his attention to matters which he is bound to consider. He must also exclude from his consideration matters which are irrelevant to what he has to consider. If he does not obey these rules, then the order of the statutory authority is ultra vires and illegal and is liable to be set aside by grant of a writ under Article 226 of the Constitution. The law has been elaborately discussed by Lord Greens in Associated Provincial Picture Houses Ltd. v. Wednesbury Corporation, (1948) 1 KB 223 in the following passages:—
“It is true the discretion, must be exercised reasonably. Now what does that mean? Lawyers familiar with the phraseology commonly used in relation to exercise of statutory discretion often use the word ‘unreasonable’ in a rather comprehensive sense. It has frequently been used and is frequently used as a general description of the things that must not be done. For instance, a person entrusted with a discretion must, so to speak direct himself properly in law. He must call his own attention to the matters which he is bound to consider. He must exclude from his consideration matters which are irrelevent to what he has to consider. If he does not obey those rules, he may truly be said, and often is said to be acting ‘unreasonably’. Similarly, there may be something so absurd that no sensible person could ever dream that it lay within the powers of the authority. Warrington, L.J, in Short v. Poole Corporation, (1926) Ch 60 (90, 91) gave the example of the red-haired teacher, dismissed because she had red hair. This is unreasonable in one sense. In another sense it is taking into consideration extraneous matters.”
11. There is a similar statement of principle by Lord Esher, in Reg v. Vestry of St. Pancras, (1890) 24 QBD 371 (375) as follows:—
“I have no doubt that vestry should take his application into their fair consideration, and do what they think fair to the man under the circumstances, and if they do this, I have equally no doubt that the legislature has entrusted the sole discretion to them, and that no mandamus could go to them to alter their decision. But they must fairly consider the application and exercise their discretion on it fairly and not take into account any reason for their decision which, is not a legal one. If people who have to exercise a public duty by exercising their discretion take into account matters which the Courts Consider not to be proper for the guidance of their discretion, then in the eye of the law they have not exercised their discretion.”
12. These statements of principle are quoted with approval by a Division Bench of this High Court in Sukhnandan v. State of Bihar, ILR 35 Pat 1 at p. 27: ((S) AIR 1957 Pat 617 at p. 829) and it was pointed out in that case that if a person using his discretion does not properly apply himself in law that is, if he does not apply his mind to matters which he is bound to consider, then in the eye of law he does not exercise his discretion and the order of the authority is a nullity and a writ under Article 226 of the Constitution will go for quashing the impugned order. In Smith v. East Elloe Rural District Council, 1956 AC 736 the principle of law laid down by Lord Greens, in (1948) 1 KB 223 has been quoted with approval by Lord Reid in his speech at page 702. The matter is put as follows by Lord Reid in the course of his speech:—
“The Court is entitled to investigate the action of the local authority with a view to seeing whether they have taken in account matters which they ought not to take into account, or, conversely, shave refused to take into account or neglected to take into account matters which they ought to take into account. Once that question is answered in favour of the local authority, it may still be possible to say that although the local authority have kept within the four corners of the matters which they ought to consider, they have nevertheless come to a conclusion so unreasonable that no reasonable authority could ever have come to it. In such a case, again, I think the Court can interfere. The power of the Court to interfere in each case is not an appellate authority to over ride a decision of the local authority, but as a judicial authority which is concerned, and concerned only, to see whether the local authority have contravened the law by acting in excess of the powers which Parliament has confided in them.”
13. In our opinion the principle of these authorities applies to the present case and the order of the Board of Revenue dated the 17th August, 1959, must be held to be ultra vires on the ground that the Board of Revenue had not applied its mind to the relevant consideration, namely, the order of injunction issued by the Civil Court on the 4th August, 1959, prohibiting the petitioner from shifting his shop to the site of Ramchandra Prasad in Mohalla Ebanjartoli.
14. For these reasons we hold that the order of the Board of Revenue dated the 17th August, 1959, is illegal and ultra vires and a writ in the nature of mandamus should be issued commanding the respondents not to enforce the order against the petitioner for the removal of the shop, or, in default, for withdrawal of his licence under section 43 of the Bihar and Orissa Excise Act.
15. We desire, however, to make it clear that it is open to the Board of Revenue to make a fresh order for withdrawal of licence against the petitioner in accordance with law, provided the injunction issued by the Civil Court against the petitioner for removal of the shop is withdrawn or has ceased to be in force. We accordingly allow this application and grant a writ in the nature of mandamus under Article 226 of the Constitution commanding the respondents not to enforce the order of the Board of Revenue dated the 17th August, 1959, for the removal of the shop or, in default, for withdrawal of his licence. We accordingly allow this application. There will be no order as to costs.
DE/J.D
16. Application allowed.
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