Holding

A licencee is entitled to remission or compensation of licence fee for closures under Section 24 of the Madhya Pradesh Excise Act unless a specific provision expressly bars it; the claim for delay in licence grant is not covered and is dismissed.

Summary

The respondent, Sun Bright Marketing Pvt. Ltd., was awarded a contract to operate Indian‑Made foreign liquor shops but received its licence three days after the contract’s commencement. The shops were forced to close for three days each due to municipal elections, political agitation, and a three‑day delay in licence issuance. The respondent sought remission or compensation of the licence fee for these periods and obtained relief from the Chhattisgarh High Court. On appeal, the State argued that the Excise Act and the Sale Memo expressly barred any remission, especially under Condition 18 and Clause VII. The Supreme Court held that the Madhya Pradesh Excise Act, 1915 is a self‑contained code and that a licencee is entitled to remission or compensation for closures unless a specific provision expressly prohibits it; Condition 18 does not bar such claims and Clause VII only excludes rebates for closures listed in Clauses I‑VI. Consequently, the licencee was entitled to remission for closures due to elections and political agitation, but the claim for remission due to the three‑day licence‑grant delay was not covered by the Act or the Sale Memo and was set aside. The appeal was therefore partly allowed.

Issues considered

Whether a liquor contractor is entitled to remission or compensation of licence fee for periods of shop closure caused by municipal elections, political agitation, or delay in licence issuance under the Madhya Pradesh Excise Act, 1915 and the Sale Memo.
Whether Condition 18 of the Sale Memo or Clause VII of Schedule‑4 bars the claim for remission/compensation.
Whether the provisions of Section 24(1) and 24(2) of the Act, together with the General Licence Conditions and Sale Memo, permit remission for closures not expressly prohibited.

Legislation cited

Madhya Pradesh Excise Act, 1915s. 24(1), s. 24(2), s. 28, s. 32
U.P. Excise Acts. 59

Subjects

licence fee remissionexcise lawshop closureSection 24Sale Memopolitical agitationmunicipal electiondelay in licence issuanceself‑contained code

Judgment

SECRETARY, DEPARTMENT OF EXCISE & COMMERCIAL TAXES A
AND ORS.
v.
M/S. SUN BRIGHT MARKETING PVT. LTD., CHHATTISGARH AND
ANR.

FEBRUARY 12, 2004 B

[V.N. KHARE, CJ., S.B.SINHA AND S.H. KAPADIA, JJ.]

.. MP. Excise Act, 1921:
c
Scope and nature of - Held: Is a self-contained Code.
Sections 24(2) and 62(2)(g)-Licence fees-Remission/compensation-
Entitlement to-liquor shop was ordered to be compulsorily closed-Held:
Liquor contractor entitled to remission/compensation in payment of licence
fee unless the same was expressly barred. D
Section 24(1)-Licence fee-Remission/compensation-Entitlement to-
Col/ector, having regard to sub-para 3, Ch. 13 of the Handbook for the
Returning Officers issued by State Election Commission, ordered compulsory
closure of liquor shops due to Municipal election-Held: Such an order was
passed under Clause (viii) of Schedule 4 of Sale Memo and not under Clause E
(v) thereof-Hence, liquor contractor entitled to proportional rebate/
compensation in auction money.

Sections 24(2), 28 and 62(2)(g), (h) & (j)-Licence fee-Remission!
compensation-Entitlement to-Liquor shop was closed· due to political
agitation and demonstration-Held: In view of Clause (vii) of the General F
condition of Sale licensee entitled to claim remis$ionlcompensation in licence
fee.

Section 28-Licence fee-Payment of-Exemption from-Delay in grant
of licence-Excise Department issued liquor licence a few days after
commencement. of contract-High Court granted exemption from payment of G
.. licence fee-Correctness of-Held: Liquor contractor not entitled to exemption
from payment of licence fee in view of the Act, General licence Conditions or
the conditions ofSale Memo-Hence, High Court's order set aside-However,
licensee could avail of other remedies, if any.
313 II
A
314 SUPREME COURT REPORTS

Section 24(2) proviso-Nature of-Held: Mandatory.
[2004] 2 S.C.R.

The respondent was awarded a contract for running Indian Made
-
Foreign Liquor shops. However, the licence was handed over to the
respondent a few days after the date of commencement of the contract.

B The respondent filed a writ petition before the High Court claiming
deduction by way of remission and/or compensation from the amount of
licence fee payable by him (i) for three days when the liquor shops
-
remained closed due to political agitation and demonstration; (ii) for three
days when the shops were directed to be closed for municipal election and
C (iii) for three days due to delay in handing over the licence. The High Court
allowed the writ petition. Hence the appeal.
-
On behalf of the appellant, it was contended that the respondent was
not entitled to any compensation and/or remission in view of Section 24(1)
of the M.P. Excise Act, 1915 and in view of Condition No. 18 of the Sale
D . Memo as also general Licence Condition No. 8 and Rule viii(3) thereof.
On behalf of the respondent, it was contended that the respondent
was entitled to ~ompensation and/or remission in view of Clause (V) of •'
Schedule 4 of the Sale Memo.

E Allowing the appeal in part, the Court

HELD: 1. The M.P. Excise Act, 1915 is a self-contained Code.

2. The scheme of the Act, the General Licence Conditions and the ..
conditions contained in the Sale Memo postulate that, in the event, the
F licensee is required to close a shop in terms of an order passed by the
statutory authority or otherwise, he would be entitled to claim remission
in licence fee u.nless the same is expressly barred. (322-D]

3. Condition No. 18 of the Sale Memo does put an embargo on
remissiOn in payment of licence fees in the event of the closure of the shop
G due to any reason authorised by law. The said provision furthermore
cannot restrict the operation of the provisions of the Act. The provision f

contained in Clause 42 of the Sale Memo in this behalf had been deleted. \_
..:#<
(324-C]

4. In terms of Clause (VII) of the Sale Memo, the licensees are not
H entitled to any rebate/concession for the days of closure of such shops in
- SECY .. DEP1T. OFEXCISE & COMMERCIAL TAXES 1·. SUN BRIGHT MKTG. PVT.LTD ..

terms of Clauses (I) to (VI). Clauses (VII), therefore, does not prohibit
315

A
remission in licence fee and/or grant of compensation if the closure is
directed for any reason other than those mentioned in Clauses (I) to (VI)
of the said Memo. (324-H; 321-AI

5. It is also not in dispute that the power of the Collector to direct

-- closure of any shop may emanate from a direction by a Competent
Authority in terms of the provisions of the other statutes. [325-B]

6. The closure of the shop due to municipal elections was ordered
B

by the Collector in exercise power under Section 24(1) of the Act having
regard to sub-para 3 of Chapter 13 of the Handbook for the Returning
Officers issued by the M.P. State Election Commission and not in terms c
of Clause (V) of the Sale Memo. (324-G-H; 325-A)

7. Section 24 of the Act does n t militate against the claim of
remission in the licence fee, in the event a closure is effected thereunder.
[325-G)

8. It is a well-settled principle of law that a subordinate legislation
D
either by way of rules framed in terms of the provisions of the Act or the
"" General Conditions issued by the Excise Commissioner in exercise of its
statutory power or the conditions of Sale Memo framed would be subject
to the provisions of the Act. For proper interpretation of the statutory
provisions, the Act and the Rules are required to be harmoniously read. E
Political agitation resulting in unlawful assembly would clearly attract the
proviso to Section 24(2) of the Act. In case of a riot or unlawful assembly,
a licensee is statutorily enjoined to close his shop. The proviso to Section
24(2) is mandatory in nature. (325-G-H; 326-A-B)

- 9. Rule VIII also contemplates a situation where Section 24(2) would
be attracted. The proviso to Section 24(2) will have to be read as a part
of the main enactment and not an exception thereto. Thus, Rule VIII of
the General Conditions also refers to a temporary or permanent closure,
as has been authorised by the Collector and, thus, the same having regard
F

to the principles of purposive construction would include an order passed
by a Magistrate in terms of Section 24(2). Therefore, if a Magistrate is G
not available when a riot or unlawful assembly occurs, the licensee having
a statutory duty to close the shop, the same shall stand at par in view of
the fact that in both the situations maintenance of public peace is
mandatory. (326-C-E)
I. H
316 SUPREME COURT REPORTS [2004] 2 S.C.R.

A 10.1. Rule VIII(3) stands on a different footing. Proviso to Rule
Vlll(3) refers to closure under the said Rule, viz., Rule VIII. The said
proviso does not cover Clause (3) of Rule VIII alone but also brings within
its fold a case falling under Clause (I) also. Therefore, in a situation of
this nature, the licensee is entitled to claim remission in licence fee and/or
B damages. (326-F-G)

10.2. Furthermore, it has rightly been opined by the High Court that
having regard to the fact that Condition No. 42 of the Sale Memo stood
deleted, a mischief covered thereby was sought to be removed. To that
extent Clause 18 of the ·purported excise policy has not been given effect
C to, presumably because the same may be held to be violative of Section
24 of the Act. (326-H)

11. If an unlawful assembly takes place in course of a political
movement, having regard to Se.etion 24 of the Act, it might not even be
possible to sustain the validity or· Condition No. 42. Unlawful assembly
D owing to political movement was Within the purview of Condition No. 42
of the Sale Memo having regard to Clause 18 of the excise policy. By
deleting the said condition, a misc~ief is sought to be remedied thereby.
[327-C)

Ameer Trading Corporation Ltd v. Shapoorji Data Processing Ltd, JT
E (2003) 8 SC 108; Ashok Leyland Ltd v. State of Tamil Nadu, (2004) 1 SCALE
224 and Reema Agarwal v. Anupam, (2004) 1 Supreme 3555, relied on.

12.l. In terms of Schedule 4, a remission in licence fee ,is
impermissible if the closure occurs f(}r a reason mentioned in any of the
clauses referred to therein. Tbe shops which are situated outside the area
F where election is being held would not; therefore, come within the purview
of Clause (V) and, thus, would attract Clause (VIID aforementionec!, in
terms whereof, the Contactor becomes entitled to grant proportionate
rebate/concession in auction money as pre~cribed for the concerned shop.
(327-F-G)
G 12.2. This view also finds support from the fact that Clause (VII)
excludes thos~ contractors who had to ke~p their shops closed owing to
the declaration of dry day as provided for in Clauses (I) to (VI). If a shop
falling outside the area has to be kept closed in terms of an order passed
under Section 24(1) of the Act, Clause (VIII) of the Sale Memo shall be
H attracte<l. [327-G-H; 328-A)
SECY., DEPTI. OF EXCISE & COMMERCIAL TAXES r. SUN BRIGHT MKTG. PVT.LTD .. [SINHA, J.] 3 ] 7

State of UP. v. Jagjeet Singh, JT (2003) 8 SC 40, referred to. A
13. However, the respondent's claim for delay in the grant of licence
does not come within the purview of the Act, the General Condit.ions or
the Conditions of Sale Memo. The respondent must avail other remedies,

_ _,
if any, in relation thereto. The judgment of the High Court to that exteot
cannot be sustained. (328-H; 329-A) B
CIVIL APPELLATE JURISDICTION : Civil Appeal No. 6425 of
2002.

From the Judgment and Order dated 4.4.2001 of the Chhattisgc:rh High
Court at Bilaspur in W.P. No. 6021 of 2000. C
Prakash Shrivastava for the Appellants.

P.N. Mishra, P.K. Bansal, Pankaj K. Singh, Dr. Vinod Tiwari and K.L.
Janjani for the Respondents.
D
The Judgment of the Court was delivered by

S.B. SINHA, J. The judgment of the Chhattisgarh High Court dated
4.4.200 l passed in Writ Petition No. 6021 of 2000 granting exemption
from payment of licence fee is in question before us in this appeal.
E
The respondent herein was awarded a contract for running Indian
Made Foreign Liquor shops in the district of Raipur for the period commencing
l.4.2000 to 31.3.200 l. Although the contract was to commence from
l.4.2000, he had been handed over the licence on 3.4.2000.

I
~
The respondent claimed deduction by way of remission and/ or F
compensation from the amount of licence fee payable by him for three
periods for different reasons which are:

(i) For closure qf shop due to holding of municipal election at several
places wherefor the liquor shops situated within a radius of 25
kilometers from the Municipal Corporation of Durg and Bhilai G
were directed to be closed.
(ii) For closure of shop for five days consisting of - three days due
to agitation on account of constitution of Chhattisgarh State, one
day owing to strike with regard to constitution of High Court
~ H
318 SUPREME COURT REPORTS [2004] 2 S.C.R.

A Bench at Raipur and one day on account of strike on Kargil
issue.
(iii) For non-grant of the licence from 1st April, 2000 to 3rd April,
2000. )·
I

The High Court in its judgment held that the respondent was entitled I
B for compensation and/ or exemption from payment o'f licence fee for
three days when the liquor shops remained closed due to political agitation
and demonstration. He was also found to be entitled for compensation
and/ or exemption from payment of licence fee for a period of three days
for the period when the shops were directed to be closed for municipal
C election. The High Court further held that the respondent was also entitled
to exemption from payment of licence fee for three days, i.e., for the
period from 1st April, 2000 to 3rd April, 2000 on account of delay in
handing over the licence.

Mr. Prakash Shrivastava, learned counsel appearing on behalf of the
D State would urge that the respondent herein was not entitled to any
compensation and/or remission in licence fee for closure of his shops
owing to holding of election of municipal corporation at Raipur in view
of the provisions contained in Sub-Section (I) of Section 24 of the Madhya
Pradesh Excise Act, 1915 (for short ''the Act") as in terms thereof the .
E District Collector is empowered to direct closure of such shops for maintenance
of public peace.

The learned counsel would argue that closure of shops due to political
agitation and demonstration cannot give rise to any claim for compensation
in view of condition No. 18 of the Sale Memo as also General Condition
No. 8.

So far as the judgment of the High Court directing payment of
compensation for the period 1st April, 2000 to 3rd April, 2000 is concerned,
Mr. Shrivastava would argue that the same is iJJJpermissible under the
provisions of the Act.

Mr. P.N. Mishra, learned counsel appearing on behalf of the respondent,
on the other hand, would urge that from a perusal of the note appended
to Clause (V) of the conditions laid down in Schedule-4 of the Sale
Memo, it would be evident that there was no embargo for claiming payment
of compensation as in terms thereof only those shops, which fall within
e
SECY.,DEPIT.OFEXCISE&COMMERCIAL TAXES''- SUNBR!GHTMKTG.PVT.LTD.,[SINHA,l.] 3 J9

the area of the local bodies, where election was to be held, were required A
to be compulsorily closed.

Mr. Mishra would further submit that having regard to the proviso
appended to Sub-Section (2) of Section 24 of the Act, a statutory duty
was cast upon the licensee to close down his shop in the event of any riot
or unlawful assembly takes place and in that view of the matter, the B
licensee was entitled therefor to claim exemption and/ or remission from
payment of licence fee.

The learned counsel would submit that Rule VIII (3) of the General
Licence Conditions· whereupon the learned counsel for the appellant has C
relied upon will have no application in the instant case. He would urge
that Rule VIII of the General Licence Conditions will have no application
in a case where closure is forced upon the shop by reason of a political
agitation which would be apparent from the fact that a similar embargo
contained in Condition No. 42 of the Sale Memo had been deleted. Mr.
Mishra would, therefore, submit that the finding of the High Court cannot, D
thus, be faulted as while granting relief to the respondents herein all the
relevant provisions of the Act, the General Licence Conditions and the
conditions laid down in Sale Memo had been taken into consideration.

Mr. Mishra would further contend that as the respondent was not
legally entitled to run the shop for the period 1st April, 2000 to 3rd April, E
2000, as no licence was granted to him, it must be held that the licence
remained suspended for the said period and in that view of the matter the
High Court must be held to have correctly arrived at the conclusion that
the respondent was entitled to grant of remission in payment of licence
fee for the said period. F
STATUTORY PROVISIONS:

Section 24 of the Act reads as under:

"24. Closing of shops for the sake of public peace - (1) The District
Magistrate, by notice in writing to the licensee, may require, that any G
shops in which any intoxicant is sold shall be closed at such times or
for such period as he may think necessary for the preservation of the
.. public peace.

(2). If a riot or unlawful assembly is apprehended or occurs in the H
vicinity of any shop, a Magistrate of any class, who is present, may
•

320 SUPREME COURT REPORTS [2004] 2 S.C.R.

A require such shop to be kept closed for such period as he may think
necessary:

Provided that, when any such riot or unlawful assembly occurs,
a licensee shall, in the absence of the Magistrate, close his shop
without any order.
B
(3). When any Magistrate issues an order under sub-section (2), he
shall forthwith inform the Collector of his action and his reasons
thereof."

Rules II and VIII of the General Licence Conditions read as under:
c "II. Payment of fees - (I) the licence fees for all intoxicant shall be
payable at the treasury or, in outlying tahsils, at the sub-treasury, on
or before the first working day of each month.

(2) The licence fees for intoxicating drugs and country liquor shall be
paid in twelve equal monthly instalments. If a licence fee be not
D exactly divisible by 12, the remainder left over after division by 12
shall be paid with the first instalment.

(3) No remission or abatement shall be claimable except in accordance
with the provisions of Section 32 of the Act, or of rule VIII below.
An advance deposited as security shall be credit to fees due in the
E
closing months of the year."

"VIII. Shops to be kept open and adequately stocked. - (I) Shops
shall be kept open svery day throughout the year unless their temporary
or permanent closure has been authorised by the Collector. Such
supply of liquor or intoxicating drugs as the Collector may consider
F
sufficient to meet the local requirement shall be maintained. Subject
to the provisions of section 38 of the Act, and to the exceptions
specified in rule XIV, sales be made to all.comers on payment at the
current rate of sale. Shops for the sale of tari may be closed during
the rains, i.e. from 1st June to the 14th October.
G
(2) Shops shall remain closed for the whole day on such days as the
Collector may announce at the time of auctions:

Provided that the Collector, or District Excise Officer, or in their
absence a Deputy Collector, duly authorised by the Collector, may
H require foreign liquor licensees holding licenses in Forms F.L. 1 and
- SECY.,DEPTT.OFEXCISE&COMMERCIAL TAXES 1•. SUNBRIGHTMKTG.PVT.LTD.,[SINHA,J.) 32}

F.L. 2 to open the shops on such days for sale of foreign liquor to A
bona fide foreign visitors.

(3) Shops shall also remain close~ in any area or areas for such
period as the State Government may in public interest deem necessary
so to do. An intimation to the effect shall be given to the 'licensee

-- through the Collector of the district well in advance as far as possible:

Provided that, when a shop is closed under this rule, the Collector
B

may, with the previous sanction of the Excise Commissioner, award
compen•;ation to the licensee for Joss of profits."

The relevant clauses of Schedule-4 appended to Sale Memo are as C
under:

"(IV) In addition to this, the Collector shall have power in
administrative and public interest to issue orders for closure of any
one or more shops of any place or all the shops of Tehsil or Distt. for
additional 3 days and the shops shall remain closed accordingly. D
(V) During Lok Sabha and Assembly General Elections/ by elections,
the shops shall remain closed for 48 hours before the time fixed for
closure of election/ voting i.e. on the date of election and one day
before the date of election and so far the question o{ declaring the
days as dry days after the election and counting days is concerned, E
the concerned Collector shall be empowered to take decision in view
of local circumstances as to whether there is a need from administrative
point of view or not to declare dry days after the election and counting
days. Similarly, shops shall also remain closed during i.e. for general/
by elections of local bodies.
F
Note: The local bodies includes Municipal Corporation, Municipal
Committee, Nagar Panchayat and Distt. Panchayat. During their
elections, shops of only those areas will remain closed where elections
are being held.

(VI) In addition to above festivals/ occasions, every Collector shall G
decide and fix the boundaries of the industrial area situated within
their district separately for each area and the shops shall remain closed
for two days, i.e., days for disbursement of salary and expenses of
workers/ labourers, which shops are situated within the boundary so
fixed by them. The Collector shall fix/ decide these days in such a H
322 SUPREME COURT REPORTS [2004] 2 S.C.R.

A manner that these days are same for all the mills and industrial
establishments of one Town.

(VII) For the dry days as mentioned in the above para (I) to (VI), the
concerned contractors shall not be allowed any rebate/ concession
whatsoever in the auction money for those days and nor they will be
B entitled to any compensation whatsoever.

(VIII) If in .addition to the abovesaid fixed dry days, shops are
remained closed on the written .order of Collector, then in case of
closure of such shops, the Contractor shall be entitled to proportionate
rebate/ concession in auction money as prescribed for the concerned
C shop."

The Act is a self-contained code.

The licensees indisputably are bound by the provisions of the said
Act, the general conditions framed thereunder as also the tenns and conditions
D. of the sale memo. It is also not in dispute that remission in licence fee
would be permissible provided the claim of the licensee is covered by one
or the other provisions contained therein.

The scheiie of the Act, the General Licence Conditions and the
conditions .contained in the Sale Memo postulate that, in the event, the
E licensee· is required to close a shop in terms of an order passed by the
statutory authority or otherwise, he would be entitled to claim remission
in licence fee unless .the same is expressly barred.

Section 24 of the Act is in two parts. Sub-section ( l) of Section 24
F empowers the District Magistrate to direct closure of any shop in which
any intoxicant is sold for such time or for such period as he may think
necessary for preservation of the public peace. Sub-section (2) of Section
24, however, deals with a specific situation in tenns whereof in the event
of apprehension or occurrence of a riot or unlawful assembly in the vicinity
of a shop, a Magistrate of any class may require such shops to keep
G closed for such period as he may think necessary. In the event, however,
no magistrate is available, the proviso appended thereto mandates that the
licensee shall close the said shop without any order.

A bare perusal of the provisions contained in Sub-section (2) of
Section 24 read with the proviso appended thereto makes the legal position
H absolutely clear that closure of a shop in the event of occurrence of a riot
SECY,DEYIT.OFEXCISE&COMMERCJAL TAXES 1•. SUNBRIGHTMKTG.PVf.LTD.,[SINHA,J.) 323

or unlawful assembly is mandatory whether at the instance of a Magistrate A
or at the instance of a licensee himself; the only difference being that the
Magistrate can pass an order where a riot or unlawful assembly is apprehended,
the licensee is enjoined with a duty to close his shop whence a riot or
unlawful assembly occurs.

It is not disputed that .the shops of the respondent remained closed B
for three days owing to agitations as regard creation of State of Chhattisgarh
etc.

In terms of Clause (3) of Rule II of the General Licence Conditions,
a remission or abatement in the licence fee cannot be claimed save and
except in the cases which would come within the purview of Section 32 C
of the Act or Rule VIII of the General Licence Conditions. It is also not
in dispute that Section 32 of the Act has no application in the instant case.

Rule VIII aforementioned mandates the licensee to keep his shop
open everyday throughout the year. Such a statutory obligation on the D
part of the licensee, however, is subject to temporary or permanent closure
which is authorised by the Collector. Clause (2) of Rule Vlll states that
the shops would remain closed for the whole day on such days as the
Collector may announce at the time of auctions. Clause (3) of Rule VIII,
however, authorises the State Government to "direct closure of any shop
in public interest, intimation wherefor is required to be given to the licensee E
through the Collector of the district well in advance as for as possible.
The proviso appended to Rule VIII, however, empowers the Collector to
award compensation to the licensee for loss of profits.

The provisions of the sale memo, so far as they are not inconsistent
with the provisions of the Act or the Rules also provide for closure of the F
shop on one ground or the other.

Condition No. 18 contains the liquor prohibition policy which as
has been noted by the High Court reads as under:

"(18) Liquor Prohibition Policy and closure of shops due to natural G·
calamities:-

As a result of Liquor Prohibition Policy of any neighbouring
State or of the State, any shop/ shops are closed, then no compensation
on this account shall be payable by the State to the contractor.
Similarly, due to Liquor Prohibition in neighbouring State or for any H
324 SUPREME COURT REPORTS [2004] 2 S.C.R.

A other reason, ifthe decision to reaction any shop of the Stat~s is taken
or in case State consider it necessary to open any shop during the
year 2000-2001, then the Excise Commissioner shall have power to
do so and no objection whatsoever from the contractor shall be
entertained and accepted and no compensation whatsoever or any
rebate/ concession whatsoever shall be payable objector. If during the
B period of contract, contractor suffers from any loss or damage
whatsoever as a result.of natural calamity, celestial problem or political
demonstrations, public demonstration, movements, law and order
I
problems, the contractor shall not be entitled to any compensation
whatsoever. All the licenses shall be subject to the Madhya Pradesh
\
c Excise Act, 1915 and Rules framed thereunder and rules as amended
from time to time and orders/ instructions passed and issued by the
State Government, Exc.ise Commissioner, Collector from time to time."

The said provision does not put an embargo on remission in payment
of licence fees in the event the closure of shop due to any reason authorised
D by law. The said provision furthermore cannot restrict the operation of
the provisions of the Act. As would appear from what has been stated
hereinbefore, the provision contained in Clause 42 of the Sale Memo in
this behalf had been stood deleted.

Schedule-4 appended to the Sale Memo provides for the proposed
E dry days for 2000-2001.
Clause (IV) of the Sale Memo empowers the Collector to direct
closure of anyone or more shops for three days in addition to the days
which have been noticed in Clause (I) of the Schedule-4 in administrative
F and public interest. Clause (V) provides for closure of shops for 48 hours
during the time fixed for holding of election. The provisions contained in
Clause (V) also applies in case of general/by elections of local bodies.
The note appended to the same, however, provides that during holding of f
election inter alia of local authoritie~, shops of only those areas would
remain closed where election is held. It is, however, not in dispute that
G the Collector of Raipur district had issued an order purported to be in
terms of Sub-Section (I) of Sectio.n 24 for keeping the shops closed for
48 hours which would fall within a radius of 25 kilomet'ltl s from the
boundary of Municipal Council, Bhilai-III of Charoda lliagar. Such an
order, therefore, was outside the purview of Clause (V).

H Clause (VI) of the said Memo provide for closure of the shop in
SECY.,DEPTI.OFEXCISE&COMMERCIALTAXES 1•SUNBRIGHTMKTG.PVT.LTD.,(SINHA,J.] 325

- addition to the days specified in Clauses (I) to (V) for two days within or
nearabout the industrial area.
A

In terms of Clause (VII) of the Sale Memo aforementioned, the
licensees are not entitled to any rebate/ concession for the days of closure
. of such shops in terms of Clauses (I) to (VI) aforementioned. Clause
(VII), therefore, does not prohibit remission in licence fee and/or grant of B
- compensation if the closure is directed for any reason other than those
mentioned in Clauses (I) to (VI) of the said Sale Memo.

-
It is also not in dispute that the power of the Collector to direct
closure of any shop may emanate from a direction by a Competent Authority
in terms of the provisions of the other statutes. C

Sub Para 3 of Chapter 13 of the Handbook to the Returning Officers
issued by the State Election Commission provides:

"3. Ban on sale of liquor:- (a) During public election in every
Municipal Corporation area and within the radius of 25 Kilometers of D
its limit all the liquor shops will be closed from 48 hours before
closing of the voting and during this period the sale and purchase of
liquor will be totally prohibited."

The power, in terms of Sub-Section (1) of Section 24 of the Act,
was, therefore, exercised by the Collector, Raipur having regard to the E
aforementioned provision and not in terms of Clause (V) of the Sale
Memo.

Condition No. 42 of the Sale Memo which stood deleted read thus:

"(42) Loss arising from celestrial/ natural calamities and for other F
reasons: - No contractor shall be entitled to get compensation
whatsoever from the State for the loss suffered as a result of loss in
contract business, damages to crop or political movements, transfer
of markets or natural calamities."

· Keeping in view the aforementioned provisions, the correctness of C
the impugned judgment would have to be considered.

Section 24 of the Act does not militate against .the claim of remission
in the licence fee, in the event a closure is effected thereunder.

It is a well-settled principle of law that a subordinate legislation f
326 SUPREME COURT REPORTS [2004) 2 S.C.R.

A either by way of rules framed in terms of the provisions of the Act or the
General Conditions issued by the Excise Commission in exercise of its
statutory power or the conditions of Sale Memo framed would be subject
to the provisions of the Act. For proper interpretation of the statutory
provisions, the Act and the Rules are required to be harmoniously read.
Political agitation resulting in unlawful assembly would clearly attract the
B proviso appended to Sub-Section (2) of Section 24. As noticed hereinbefore,
in case of a riot or unlawful assembly, a licensee is statutorily enjoined
to close his shop. The proviso appended to Sub-Section (2) of Section 24
is mandatory in nature.

C Rule VIII of the General Licence Conditions also enjoins upon the
licensee to keep the shop open everyday throughout the year unless their
temporary or permanent closure has been authorised by the Collector.
Rule VIII aforementioned also in our considered opinion contemplates a
situation where Sub-Section (2) of Section 24 would be attracted. The
proviso appended to Sub-Section (2) of Section 24 will have to be read
D as a part of the main enactment and not an exception thereto. Sub-sections
(1) and (2) of Section 24 as also the proviso appended thereto refer to the
closure of shop for the reasons stated therein. Whereas in terms of Sub-
section (1) of Section 24 the Collector may pass an order, in a case
falling within the purview of Sub-Section (2) thereof, even a Magistrate
E can pass such an order. Thus, Rule VIII of the General Conditions also
refers to a temporary or permanent closure, as has been authroised. by the
Collector and, thus, the same having regard to the principles of purposive
construction would include an order passed by a Magistrate in terms of
Sub-Section (2) of Section 24. In that view of the matter, if a Magistrate
is not available when a riot or unlavyful assembly occurs, the licensee
F having a statutory duty to close the shop; the same shall stand at par in
view of the fact that in both the situations maintenance .of public peace
is mandatory.

Clause (3) of Rule VIII stands on a different footing. Proviso appended
to Clause (3) of Rule VIII refers to closure under the said rule, viz., Rule
G VIII. The said proviso does not cover clause (3) of Rule VIII alone but
also brings within its fold a case falling under Clause (1) aforementioned.

Therefore, in a situation of this nature, the licensee is entitled to
claim remission in licence fee and/ or damages.

H Furthermore, it has rightly been opined by the \.iigh Court that
SECY.,DEPTI.OFEXCISE&COMMERCJAL TAXES 1•. SUNBRIGH1"MKTG.PVf.LTD.,[SINHA,J.] 327

having regard to the fact that Condition No. 42 of the Sale Memo stood A
deleted, a mischief covered thereby was sought to be removed. To that
extent Clause 18 of the purported excise policy has not been given effect
to, presumably because the same may be held to be violative of Section
24 of the Act.

To us it appears that such a decision was taken consciously. In a B
case of occurrence of natural calamity, riot or unlawful assembly, the
licensee cannot discharge his obligation to keep his shop open. A riot or
an unlawful assembly may take place for any reason including political
agitation.

If an unlawful assembly takes place in course of a political movement, C
having regard to Section 24 of the Act, it might not even be possible to
sustain the validity of Condition No. 42. Unlawful assembly owing to
political movement was within the purview of Condition No. 42 of the
Sale Memo having regard to Clause 18 of the excise policy. By deleting
the said condition, a mischief is sought to be remedied thereby. (See [
Ameer Trading Corporation Ltd. v. Shapoorji Data Processing Ltd., JT
(2003) 8 SC 109, Ashok Leyland Ltd. v. State of Tamil Nadu and Anr.,
(2004) 1 SCALE 224 and Reema Aggarwal v. Anupam and Ors., (2004)
1 Supreme 355).

So far as the closure of the shop in terms of the direction of the I
Collector dated 21.6.2000 is concerned, the same is not in dispute. The
validity of the order of the Collector is not in question. Schedule-4 specifies
the dry days and also specifies the date on which the shops are required
to remain closed. The note appended to Clause (V) specifically directs
closure of shops of only those .areas falling within the area where elections
are being held. The area refers to the cases in respect whereof the election
is being held and not which is outside the said area.

In terms of Schedule-4, a remission in licence fee is impermissible
if the closure occurs for a reason mentioned in any of the clauses referred
to therein. The shops which are situated outside the area where election '"
is being held would not, therefore, come within the purview of Clause (V)
and, thus, would attract Clause (VIII) aforementioned, in terms whereof,
the Contractor becomes entitled to grant proportionate rebate/ concession
in auction money as prescribed for the concerned shop.

The above view also find supports from the fact that Clause (VII)
328 SUPREME COURT REPORTS [2004] 2 S.C.R.

A excludes those contractors who had to keep their shops closed owing to
the declaration of dry day as provided for in Clauses (I) to (VI). If a shop
falling outside the area has to be kept closed in terms of an order passed
under Sub-Section (I) of Section 24 of the Act, Clause (VIII) of the Sale
Memo shall be attracted.

B We may notice that recently in State of U.P. v. Jagjeet Singh, JT
(2003) 8 SC 40: [2003] 8 SCC 270 a 3-Judge Bench of this Court [in
which one of us (the Chief Justice of India) is a party] on interpreting
Section 59 of the U.P. Excise Act which is in pari materia with Section
24 of the said Act held:
c "Section 59 empowers the district magistrate to close any liquor shop
at such time or for such period which he may consider necessary for
preservation of peace. In cases where some riot or unlawful assembly
is apprehended in vicinity of such a shop a magistrate or any police
officer above the rank of constable, who is present may order for
D closure of the shop. The proviso to Section 59 casts a duty on the
licensee to close the shop without any order by any authority, ·where
a riot or unlawful assembly occurs at the place where the shop is
situated. Apart from providing for closure of the shop to maintain
peace, Section 59 does not provide for anything either way for
awarding compensation or remission on account of such a closure."
E
In that case it was inferred that if awarding of compensation is not
specifically barred, the same may be granted.

While interpreting Rule 34(ii) of the U.P. Excise Licenses (Tender-
cum-Auction) Rules, 1991, it was further observed:
F
"The position which finally ernerges out is that an application for
remission I damages for closure of shops in entirety auctioned in a
group as .is the case in the appeals in hand would be maintainable.
But it is for the authorities concerned to _!;onsider the merit of the
. claim for remission/ damages and pass any appropriate order looking
G to the facts and circumstances of the case in accordance with law. It
would be the position as it relates to cases prior to the amendment of
Rule 34 in 1998."

However, so far as the claim of the respondent for the period l st
H April, 2000 to 3rd April, 2000 for non-grant of licence is concerned, in
SECY.,DEPTI.OFEXCISE&COMMERCIAL TAXES'" SUNBRIGHTMKTG.PVf.LID.,[SINHA,J.) 329

our opinion, the same does not come within the purview of the Act, the i
General Conditions or the conditions of Sale Memo. The respondent for
the aforementioned purpose must avail other remedies, if any, in relation
thereto. We, therefore, are of the opinion that the judgment of the High
Court to that extent cannot be sustained.

Ordinarily, we would have referred the matter back to the appropriate 11
authority for passing an appropriate order in accordance with law but
herein we find that the respondents had filed representations which had
~been rejected. The period of licence is also long over. Furthermore, the
licence had been granted by the State of Madhya Pradesh. The writ petition
filed by the respondent, however, on creation of the High Court at Chhattisgarh,
was heard by it.

We, therefore, do not intend to interfere with that part of the judgment
of the High Court wherein, having regard to the interpretation of the
provisions of the Act, general conditions and the conditions of Sale memo,
a part of its claim has been allowed.

For the reasons aforementioned, the appeal is allowed in part and to
the extent mentioned hereinbefore. However, in the facts and circumstances
of this case, there shall be no order as to costs.

V.S.S. Appeal partly allowed.

~·