Calcutta HC Upholds Joint Excise Licence Settlement Between Rival Brothers, Rejects “First-Come” Reading of Rule 14(6)

A Division Bench of the Calcutta High Court dismissed an intra-court appeal challenging joint settlement of an excise licence between two grandsons of the original deceased licensee, holding that prior experience is not a criterion under Rule 14(6) of the West Bengal Excise Rules, 2003, and that “willingness” cannot mean whoever approaches the authorities first.

The Calcutta High Court's Division Bench of Justice Shampa Sarkar and Justice Smita Das De, writing through Justice Smita Das De, dismissed an intra-court appeal filed under Clause 15 of the Letters Patent against a Single Judge's order that had in turn upheld the joint settlement of a country spirit shop licence between two brothers. The core questions were whether the Principal Secretary, Finance Department was within jurisdiction in reversing concurrent findings of the Collector and Excise Commissioner, and whether prior experience in running a liquor shop is a relevant criterion under Rule 14(6) of the West Bengal Excise (Selection of New Sites and Grant of Licence for Retail Sale of Liquor and Certain Other Intoxicants) Rules, 2003. On both counts, the Division Bench ruled against the appellant.

The Dispute Over the Sheoraphully Country Spirit Shop

The excise licence for the Sheoraphully Country Spirit Shop was originally held by one Prankrishna Saha, who died in 1971. After a series of temporary settlements, the Collector of Hooghly by an order dated 23 July 2014 finally settled the licence in favour of the appellant, Sri Bijay Saha, as the grandson of the original deceased licensee.

Respondent No. 4, the appellant's brother and also a grandson of Prankrishna Saha, challenged that settlement. The Collector on 22 November 2018 upheld the settlement in the appellant's favour. The Excise Commissioner affirmed that decision on 4 September 2019.

On further revision, the Principal Secretary, Finance Department, by an order dated 26 October 2021, set aside these concurrent decisions and directed the licence to be settled jointly in favour of both brothers. The appellant challenged that order before the Single Judge in WPA 19824 of 2021. The Single Judge dismissed the writ petition on 10 May 2023, affirming the Principal Secretary's order. FMA 704 of 2025 was the appeal against that judgment.

What Rule 14(6) Says

Rule 14(6) of the 2003 Rules provides that when a licence lapses on the death of the holder, a licence of the same category shall be granted in favour of “one or more heirs or representatives of the deceased licensee” at the existing site, if such representatives are willing and eligible to hold the licence and if any arrears of the deceased are cleared. The Rule also contains provisos for situations where no representative can be granted the licence, and for fresh selection in that event.

The appellant's case turned on whether the phrase “one or more” permitted joint settlement and whether “willingness” meant whoever approached first. The respondent No. 4's case rested on equal heirship and the plain text of the Rule.

Arguments Advanced by the Appellant

Counsel for the appellant argued that “willingness” under Rule 14(6) must be read as readiness that is prompt and eager. The appellant was the only heir who approached the authorities in 2013, immediately after the salesman Bimal Saha surrendered the licence, and he produced a No Objection Certificate from his father Rabindra Nath Saha at that stage. Respondent No. 4, it was submitted, expressed interest only after 2016 — following his father's death — and that belated claim was an afterthought.

It was further argued that the Principal Secretary could not re-appreciate evidence recorded by the Collector and the Excise Commissioner without finding those findings to be perverse or inconclusive, since the Principal Secretary was not sitting as an appellate authority over findings of fact.

On the “experience” question, the appellant pointed out that he had run the shop for over nine years without complaint, had worked both as a salesman and as a licence holder, and that the enquiry officer's report specifically noted his competence. Importing “experience” into “eligibility,” the appellant argued, gave effect to the purpose of Rule 14(6). It was also argued that a joint settlement between two hostile brothers was impracticable and would jeopardise revenue generation, and that respondent No. 4 was already employed as a medical representative and was not dependent on the shop's income.

Arguments Advanced by Respondent No. 4

Counsel for respondent No. 4 contended that Rule 14(6) in terms contemplates settlement in favour of “one or more heirs or representatives,” leaving no statutory bar on joint settlement. Both parties were grandsons of the original licensee and had equal heirship status.

On willingness, it was argued that the Rule prescribes no cut-off date. Willingness is to be assessed at the time of consideration of the settlement, not by who filed first. Additionally, the appellant's own father had lodged a police complaint alleging that the appellant obtained the No Objection Certificate by fraud, deceit and misrepresentation. An FIR was registered as Serampur Police Station Case No. 16 of 2016 under Sections 468, 406 and 506 of the Indian Penal Code against the appellant, and the trial was pending. These were relevant considerations, counsel submitted.

It was also explained that at the time of the original settlement in the appellant's favour, respondent No. 4 and his younger brother were minors, which is why the father could not apply for transfer in respondent No. 4's name. After attaining majority, respondent No. 4 expressed his willingness and preferred an appeal.

Reliance was placed on a judgment in Narayan Prasad Gupta and Another v. The State of West Bengal decided in WPA 241 of 2019, where the Calcutta High Court held that prior experience is not a criterion under Rule 14(6), and that the Collector misdirects himself by importing such a requirement.

The State submitted that the dispute was inter se between private parties and that its concern was uninterrupted revenue generation and smooth running of the shop for local consumers.

How the Division Bench Reasoned

The bench began by reading Rule 14(6) on its own terms. The phrase “one or more” plainly permits grant of a licence to multiple heirs. Joint settlement is therefore not per se illegal, and the Principal Secretary did not act without jurisdiction by directing it.

On the reversal of concurrent findings, the bench accepted that the Principal Secretary re-appreciated the same set of documents but held this was permissible. The criminal case and the father's FIR alleging fraud against the appellant were relevant considerations that the Collector and Excise Commissioner had not fully weighed. The bench found no perversity in the Principal Secretary's conclusion that both brothers were willing. It placed reliance on U.P. v. Johuri Mal, reported at 2004 (4) SCC 714, where the Supreme Court observed that when a statute provides for a hierarchy of authorities, the last fact-finding authority has primacy and a writ court will not interfere merely because another view is possible.

On the “willingness” question, the bench referred to its earlier decision in Alpana Saha v. The State of West Bengal and Others, WP No. 1158(2) of 2008, which held that Rule 14(6) prescribes no time limit for expressing willingness and that willingness is to be assessed by the authority at the time of consideration of settlement. The expression cannot be confined to mean whoever approaches first.

On “experience,” the bench agreed with the Single Judge that Rule 14(6) does not stipulate prior experience as a criterion. The Rule requires only willingness and eligibility. The Collector erred in importing experience as a decisive factor. The bench affirmed the view in Narayan Prasad Gupta that the word “or” in “one or more heirs or representatives” is disjunctive and the phrase expressly permits joint settlement, with no bar if multiple heirs are willing and eligible.

The bench also addressed the argument that hostility between the brothers made joint settlement unworkable. It held that the possibility of future disputes between the parties cannot be a reason to deny respondent No. 4 his right as an heir of the original licensee. If disputes arise, the licensing authority is empowered to act in accordance with law. The statute permits joint licensing and the court would not pre-empt that by foreclosing the respondent's right.

On the scope of judicial review, the bench referred to Tata Cellular v. Union of India, reported at (1994) 6 SCC 651, reiterating that judicial review is concerned with the decision-making process, not the merits of the decision, and that a court cannot sit as an appellate authority over findings of fact unless they are perverse or mala fide. Applying that standard, the bench found the Principal Secretary's decision-making process free from illegality, irrationality or procedural impropriety.

Outcome

The Division Bench found no infirmity in the order dated 26 October 2021 passed by the Principal Secretary, Finance Department, directing joint settlement of the licence of the Sheoraphully Country Spirit Shop in favour of the appellant and respondent No. 4. The impugned judgment dated 10 May 2023 in WPA 19824 of 2021 was held to suffer from no error of law or fact warranting interference in appeal.

FMA 704 of 2025 was dismissed. No order as to costs was made. The bench directed that urgent photostat certified copies of the judgment be supplied to the parties upon fulfilment of requisite formalities.