SHIV KUMAR BHAGATversusSTATE OF BIHAR AND ORS.

A                          SHIV KUMAR BHAGAT
                                        V.

                        STATE OF BIHAR AND ORS.

                             SEPTEMBER 12, 200..i

B               [N. SANTOSH HEGDE AND B.P. SINGH, JJ.]

         Bihar and Orissa Excise Rules:

         R.45-Additional licence-Requirements for granting-Compliance
C of-Indian Made Foreign Liquor-Wholesale vending- Collector
  recommending to Excise Commissioner for sanction of one additional
  wholesale liquor licence for sale ofIMFL-Existing licensee filing petition
  before Excise Commissioner, who held that recommendation for an
  additional licence was justified-Existing licensee's revision before Board
D of Revenue dismissed, but his writ petition allowed by High Court on the
  ground that the additional licence granted was illegal inasmuch as the
  Collector while making the recommendation to Excise Commissioner had
  not complied with the requirement of r.45-Held, in sum and substance
  bath the Collector as well as the Commissioner while granting licence for
  the retail sale or wholesale vend of IMFL must keep in mind the needs of
E the people of the area concerned-The true test with reference to r.45 is
  whether the additional licence has been granted having regard to the needs
  of the people of that area and with a view to counteract supply through
  illicit sources-The use of the words "to meet an ascertained demand for
  such article" only means that the authorities must make an assessment as
F to whether the demand for the excisable article in question has increased
  and whether supply ofsuch excisable article, in the instant case JMFL, can
  be met with the existing licensees-On facts, the requirements of the
  provisions of the Act and r.45 have been complied with-Under the
  circumstances and on the material as were placed before the Commissioner,
G his conclusion that the grant of an additional licence was justified cannot
   be found fault with-Even assuming that there was some technical defect
  by reason of some omission on the part of the Collector, inasmuch as he
  did not mention all the relevant facts in the letter ofrecommendation itself,
  the same cannot in view of the provisions of Section 41 of the Act,
H invalidate the licence granted by the Excise Commissioner-The submission
                                        654
               S. K. BHAGAT v. STATE [B.P. SINGH, J.]                655

that since the period of licence having run out there was nothing left to A
be decided in this appeal, which also has become infructuous, is also
misconceived--So far as the grant of wholesale licence to vend IMFL is
concerned, under the Rules the same may be granted for any number of
years not exceeding five years, as the Board may decide in each case-
Bihar Excise Act,1915-S.4/.                                               B
      Words and Phrases:

    Expression "to meet an ascertained demand for such article"-
Meaning of in the context ofr.45 of the Bihar and Orissa Excise Rules.
                                                                           c
     CIVIL APPELLATE JURISDICTION : Civil Appeal No. 7269 of
2003.

     From the Judgment and Order dated 13.8.2002 of the Patna High
Court in C.W.J.C. No. 7075 of 2002.
                                                                           D
     R.K. Jain, Satyabir Bharti and Mrs. Rachna Gupta for the Appellant.

     A. Sharan, Arup Banerjee, S.A. Khan, Deba Prasad Mukherjee, B.B.
Singh and Ms. Sunita R. Singh for the Respondent.
                                                                           E
     The folk>wing Order of the Court was delivered :

     B.P. SINGH, J. : Special Leave granted.

       We have have heard counsel for the parties at length. In this appeal F
the appellant has impugned the judgment and order of the High Court of
 Judicature at Patna dated 13.8.2002 in CWJC No. 7075 of2002. The High
Court while allowing the writ petition filed by respondent No. 5 herein
quashed the letter of the Collector dated 13 .2.2002 recommending the grant
of one additional licence for wholesale vending of Indian Made Foreign
Liquor (hereinafter referred to as "IMFL") for the district of Begusarai on G
the ground that the same was not made in accordance with Rule 45 of the
Bihar and Orissa Excise Rules (hereinafter referred to as the "Rules")
framed under Section 89 of the Bihar Excise Act, 1915 (hereinafter referred
to as "the Act). It held that since the recommendation made by the Collector
was not in accordance with the Rules, the recommendation could not be H
    656                   SUPREME COURT REPORTS [2003) SUPP. 3 S.C.R.

A acted upon and accepted by the Commissioner by his order dated 18.3.2002.
          The facts of the case in so}ar as they are relevant for the disposal
    of this appeal are as follows : ·

          The Collector ofBegusarai sent a proposal to the Excise Commissioner
B for sanction of one additional wholesale liquor licence in favour of the
  appellant herein vide his proposal dated 22.1.2002. The said proposal of
  the Collector was turned down by the Commissioner and returned to him
  since in the opinion of the Commissioner the Collector was not justified
  in making a recommendation for an additional licence for any particular
C person. He directed that a proposal may be made for sanctioning an
  additional wholesale licence looking to the demand and public need
  justifying such additional wholesale licence. Thereafter, the Collector,
  Begusarai made another recommendation dated 13.2.2002 for the sanction
  of one additional wholesale licence for the sale of IMFL for the district
D ofBegusarai. In his letter addressed to the Excise Commissioner, he stated
  that by grant of one additional wholesale licence there will be augmentation
  of licence revenue in the district of Begusarai and the same was also
  conducive to promote competition which could increase the collection of
   revenue in view of the increase in the consumption of IMFL. The
E respondent No. 5 herein was the only wholesale licence holder for IMFL
   in the district of Begusarai. The husband of the aforesaid respondent was
   granted such a licence in the year 1984 which licence stood transferred to
   respondent No. 5 upon his death. The respondent No. 5 filed a petition
   before the Excise Commissioner, which was registered as Excise Case No.
   16 of 2002, against the proposal of the Collector for sanction of one
F additional wholesale licence for IMFL. The Excise Commissioner by his
   order dated 18.3 .2002 rejected the objection of respondent No. 5 which is
   annexed as annexure P-2. It appears from the said Order that he called for
   the comments of the Collector, Begusarai, as also the relevant administrative
   file from the excise office and after hearing the parties came to the
G conclusion that in the facts and circumstances of the case the grant of an
   additional licence for wholesale trade in IMFL was justified, keeping in
   view the provisions of Rule 45 of the Rules. He observed that under the
   aforesaid Rules an additional licence may be granted considering the
   demand of the area in question. It appears that before the Excise
H Commissioner respondent No. 5 contended that since she had the sole
               S. K. BHAGAT v. STATE [B.P. SINGH, J.]                     657
wholesale licencee for the district of Begusarai since 1984 and had been A
working with dilignce and executing her work satisfactorily giving huge
amount to the State by way of excise revenue, there was no need to grant
an additional wholesale licence.

       The Excise Commissioner after perusing the records produced before B
him by the Collector, Begusarai and the comments of the Collector found
that since 1984 there was only one wholesale licencee operating in the
district. Since then there had been considerable increase in the demand of
IMFL. He also noticed the report of the Collector about the monopoly
which had been created in this regard. Having regard to the fact that there
was increase in demand for IMFL consequent to the increase iri the C
population and economic potentiality, he found justification in the
recommendation made by the Collector for the grant of an additional
wholesale licence for the district ofBegusarai. After taking into consideration
all relevant considerations the Excise Commissioner disposed of excise
case before him with, inter alia, the following directions :                    D
         "(i) In the district of Begusarai now there is only one wholesale
         license and in addition to this one additional license is sanctioned.

         (ii) It is made clear that the additional licence is not sanctioned
         for any individual person. The Collector will consider the principle    E
         of equality before granting the licence and will follow the
         prescribed procedure.

         (iii) For this he will make publication in the newspaper and will
         consider the applications independently and with equality. I am         p
         making clear here that in this procedure the Collector, Begusarai
         will not make any special condition in favour of an individual and/
         or at the same time he will not consider the case of other
         applicants without previous biasness."

      Prusuant to the order of the Excise Commissioner, the Collector G
issued a general notice in the newspapers on 28.3.2002 inviting applications
from interested parties for the settlement of sanctioned wholesale licence
for the sale of IMEL for the district of Begusarai for the year 2002-2003.
The conditions for the settlement and the documents required to be
submitted along with the application have been detailed in the notice.       H
    658                   SUPREME COURT REPORTS [2003] SUPP. 3 S.C.R.

A         Respondent No. 5 herein, the existing wholesale licencee preferred
    a revision before the Board of Revenue being Board Revision Case No.
    57 of 2002 challenging the order of the Commissioner dated 18.3.2002
    sanctioning an additional wholesale licence for wholesale vending of
    IMFL. The said Revision Petition was admitted, but the stay prayed for
B   was refused. Respondent No. 5 purported to file a Title Suit on 29.3.2002
    but the same was not entertaind by the Court of Munsif, Begusarai for non-
    compliance with Section 80 of the Code of Civil Procedure.

         Respondent No. 5 then filed a writ petition before the High Court of
C   Judicature at Patna on 8.4.2002 being CWJC No. 4607 of2002 challenging
    the order of the Excise Commissioner aforesaid, but in view of the
    pendency of the Revision before the Board of Revenue, the High Court
    disposed of the writ petition with a direction to the Board of Revenue to
    dispose of the Revision, and further directed that till disposal of the
    Revision no further action may be taken parsuant to the order of the Excise
D   Commissioner dated 18.3.2002.

        The Revision Petition came up before the Board of Revenue for
  consideration and by order dated 21.6.2002, Ex. P-5, the learned Member,
  Board of Revenue dismissed the Revision Petition. Though it was contended
E on behalf of the appellant herein that Rule 45 was not applicable to the
  case in hand, the Board of Revenue dicided the Revision Petition on the
  assumption that Rule 45 applied to the facts of the case, and further held
  that the said Rule was complied with. The Board of Revenue by a detailed
  order considered the submissions urged before it by the appellant and the
F respondent No. 5 herein as also the Government pleader who appeared on
  behalf of State of Bihar and its authorities. He also perused the comments
  of the Collector which had been called for giving year-wise break-up of
  the consumption of IMFL. He also considered the report of the Excise
  Superintendent, Begusarai dated I 0.6.2002. From the material placed
G before it, the Board of Revenue found that while in the year 1985-1986
  the demand of IMFL was only 12655.76 L.P.L., the same increased to
  265643.32 L.P.L. in the year 2001-2002, and till May, 2002 the consumption
  was as high as 35286.25 L.P.L. Based on these figures the learned
  Government Pleader in view of the increased demand for IMFL, submitted
  that there was justification to grant an additional licence for the district of
H Begusarai. The report of the Collector also disclosed that while there were
               S. K. BHAGAT v. STATE [B.P. SINGH, J.)                 659

7 wholesale IMFL licencees in the district of Patna, 5 in the district of A
Muzaffarpur, 3 in the districts of Saran, Bhagalpur, Darbhanga and Purnea,
4 in East Champaran and 2 in the districts of West Champaran, Samastipur,
Madhubani and Sitamarhi, there was only one wholesale licencee in the
district of Begusarai. The Board was, therefore, satisfied that having regard
to the tremendous increase in the consumption of IMFL, there was B
justification for the grant of one additional wholesale licence for the sale
of!MFL for the district of Begusarai. There was, therefore, no justification
for interference with the order of the Excise Commissioner. On these
findings the Revision Petition preferred by the respondent No. 5 was
rejected.
                                                                            c
      Respondent No. 5 thereafter filed a writ petition before the High
Court of Judicature at Patna which was allowed by the High Court giving
rise to the instant appeal.

      Before the High Court the appellant herein contended that the sole D
purpose of objecting to the grant of an additional licence by respondent
No. 5 was to maintain her monopoly. In view of the increased demand over
the years, there was justification for grant of an additional wholesale
licence for the district of Begusarai and that more than one wholesale
licence had been granted in the adjacent and surrounding districts. The
respondent No. 5 in her writ petition also challenged the grant of a E
wholesale licence in favour of appellant herein, since the Collector in the
meantime had granted a wholesale licence in favour of the appellant herein
on 29.6.2002 after dismissal of the Revision Petition by the Member, Board
of Revenue. The High Court found that though the authorities in granting
the licence to the appellant had acted fairly and had followed the procedure p
therefor, and the charge of unfairness etc. made against the Authorities was
not justified, the grant utimately made in favour of the appellant was illegal
inasmuch as the Collector had not complied with the requirement of Rule
45 of the Rules while making a recommendation to the Excise Commissioner
for the grant of an additional wholesale licence. Consequently, such a G
recommendation could not be accepted by the Excise Commissioner.

     The short question which arises for our consideration in this appeal
is whether the sanction of one additional wholesale licence for wholesale
trade in IMFL for the district of Begusarai by the Commissioner on the
                                                                            H
    660                  SUPREME COURT REPORTS (2003] SUPP. 3 S.C.R.

A basis of the recommendation made by the Collector is bad for non-
  compliance with Rule 45 of the Rules. Counsel for the appellant submitted
  before us that the High Court fell into an error in holding that Rule 45 was
  not complied with. The facts of this case would disclose that before the
  Commissioner of Excise sanctioned one additional wholesale licence, he
B had satisfied himself one the basis of the comments of the Collector and
  the material placed before him that the requirement of Rule 45 were fully
  complied with. Since, the recommendation of the Collector required the
  approval of the Commissioner for gaining finality, before a final order was
  passed by the Commissioner all the relevant material had been placed
  before him which he took into consideration and on being satisfied that
C the recommendation was justified, he sanctioned one additional wholesale
  licence for trade in IMFL for the district ofBegusarai. He further submitted
  that in view of the provisions of Section 41 of the Act, even if, there was
  any technical defect, or ommission in the proceedings taken prior to the
  grant of the wholesale licence, such technical defect or irregularity or
D omission did not invalidate the licence.
          It is necessary at the stage to notice some of the relevant provisions
    of the Act. Sub-section (I) of Section 5 of the Act provides that the Board
    of Revenue may by Notification declare with respect either to the whole
E   of the State or to any specified local area, what quantity of any intoxicant
    shall, for the purpose of the Act be the limit of a retail sale. Sub-section
    (2) provides that the sale of any intoxicant in any quantity in excess of the
    quantity declared in respect thereof under sub-section ( 1) shall be deemed
    to be a wholesale.

F        Chapter 6 of the Act deals with Licences, Pennits and Passes.
    Sections 34 and 35 of the Act are relevant which provide as folows :

             "34. Grant of licences by Collector and submission of list,
             objections and opinions in Excise Commissioner. - (I) After the
G            date prescribed for the receipt of objections and opinions submitted
             under Section 33, the Collector shall consider the same, and shall,
             if necessary, revive the said list, and shall decide for what places
             licences for the retail sale of spirit shall be granted, and may, in
             his discretion, grant licences accordingly.
H
              S. K. BHAGAT v. STATE [B.P. SINGH, J.]                    661

        (2) The Collector shall then forthwith submit the said list, as so A
        revised, and the said objections and opinions, and his own opinion
        to the Excise Commissioner.

        35. Finality of decision of Excise Commissioner. - The Excise
        Commissioner shall consider the list, objections and opinions so B
        sent to him, and may modify or annul any order passed or licence
        granted by the Collector and, notwithstanding anything contained
        in Section 8, his order shall be final."

        Section 41 of the Act reads as under :

        "41. Technical defects, irregularities and omissions. -     (1) No
                                                                               c
        licence granted under this Act shall be deemed to be invalid by
        reason merely of any technical defect, irregularity or omission in
        the licence or in any proceedings taken prior to the grant thereof.

        (2) The decision of the Excise Commissioner as to what is a D
        technical defect, irregularity or imission shall be final.

    It is also necessary to notice some of the Rules which are relevant
namely Rules 44, 45 and 46 which are as follows :
                                                                               E
        "44. Licences for the wholesale or rrtail vend of excisable articles
        may be granted for one year, from the I st April to the 31st March,
        subject to the following provisions :

        (i) Licences for the retail vend of country spirit, foreign liquor and
        spiced country spirit may be granted for any number of years up F
        to three years, beginning on the I st April, in cases where the
        Excise Commissioner considers this advisable.

        (2) If any licence be granted during the course of the financial
        year, it shall be granted only up to the 31st March, next following. G

        (3) Season licences for the sale of either fresh or fermented tariff
        may be granted for periods fixed by the Collector.

        (4) Temporary licences may be granted to provide for the supply
        of excisable articles on temporary and special occasions e.g., fairs, H
    662                SUPREME COURT REPORTS [2003] SUPP. 3 S.C.R.

A         regimental camps of exercises, etc., and shall be limited to the
          period during which such temporary or special occasions last.

          (5) Wholesale licences for the supply and sale of excisable articles
          may be granted for any numbers of years not exceeding five, as
          the Board may decide in each case.
B
          45. The number of licences which may be granted for any local
          area shall be regulated by the needs of the people of that area, and
          no licence for the sale of any excisable article in any local area
          shall be granted unless it is required either to meet an ascertained
c         demand for such article or to counteract supplythrough illicit
          sources.

          46. The general principles below stated shall be borne in mind,
          and shall be applied by Collectors, so far as possible, in fixing the
          number of licences to be granted for the retail sale of liquor for
D
          consumption on the premises of the vendor :

                 Liquor shops should not be so sparsely distributed as to give
          to each a practical monopoly over a considerable area, or at least
          such a monopoly should only be allowed when prices can be
E         effectively fixed. At the same time two or more shops should not
          be equally convenient to a considerable number of persons. In
          other words, liquor shops need not be so limited in number as to
          make it practically impossible for a resident in a particular area
          to get his liquor except from one particular shop; but it should only
F         be possible for him to get his liquor from two different shops at
          the cost of considerable inconvenience, and he ought to have as
          little freedom of choice in the matter as possible."

          Sub-section (I) of Section 5 of the Act.

G         "5.   Definition of retail and wholesale. -

          (I)   The Board may, by notification, declare, with respect either
                to the whole of State or to any specified local area, and as
                regards purchasers generally or any specified class of
H               purchasers, and either generally or for any specified occasion,
               S. K. BHAGAT v. STATE [B.P. SINGH, J.]                   663

              what quantity of any intoxicant shall for the purposes of this A
              Act, be the limit of a retail sale."

      It appears from Chapter VI of the Act that the provisions therein
contained deal with grant of licence for the retail sale of spirit etc. The
provisions of Chapter VI do not deal specifically with the grant of licence B
for wholesale vending in IMFL. However, Rule 44 refers to licences for
the wholesale or retail vend of excisable articles and sub-rule (5) provides
that wholesale licences for the supply and sale of excisable article may be
granted for any number of years not exceeding five as the Board may
decide in each case. Rule 45 refers to the number of licences which may
be granted for any local area but there is no reference of wholesale licences. C
Similarly, Rule 46 lays down the general principles for fixing the number
of licences to be granted for the retail sale of liquor for consumption on
the premises of the vendor. However, it appears thatthe statutory authorities
under the Act as well as the Board of Revenue have proceeded on the
assumption that the provisions of Chapter VI of the Act and those of Rules D
44, 45 and 46 apply as much to the grant of licence for retail sale as for
the grant of wholesale licence. We find that there is no specific provision
in the Act providing a procedure for the grant of wholesale licence to vend
IMFL. Apparently, for the grant of wholesale licence to vend liquor, the
same Rules are followed as are prescribed for the grant of licence for retail E
sale. We also, therefore, proceed on the same assumption.

      Section 34 of the Act which we have quoted earlier obliges the
Collector to consider the objections and opinions submitted under Rule 33.
After considering the same he may revive the existing list and decide for F
what places licences for the retail sale of spirit shall be granted and may,
 in his discretion grant licences accordingly. However, sub-section (2)
obliges him to submit forthwith the said list along with objections and his
own opinion to the Excise Commissioner. The Excise Commissioner is
required by Section 35 to consider the matters placed before him by the
Collector under Sub-section (2) of Section 34. He may, thereafter, modify G
or annul any order passed or licence granted by the Collector. The order
of the Commissioner as declared by Section 35 shall be final. Reading two
provisions together, it is apparent that after considering the objections and
opinions submitted, the Collector is required to finalize the list with regard
to the grant oflicences and he may in discretion grant licences accordingly. H
    664                   SUPREME COURT REPORTS (2003] SUPP. 3 S.C.R.
A However, his decision is not final and the matter is required to be further
    considered by the Commissioner of Excise. For this purpose, the Collector
    is obliged to place before the Excise Commissioner the objections and
    opinions received by him together with his own opinion. These matters
    have then to be considered by the Commissioner and it is within his
B   competence to modify or annul any order passed or licence granted by the
    Collector. The decision of the Commissioner is made final.

         So far as the Rules are concerned, Rule 45 provides that the number
  of licences which may be granted for any local area shall be regulated by
  the needs of the people of that area. No licence forthe sale ofany excisable
C article in any local area shall be granted unless it is required either to meet
  an ascertained demand for such article or to counteract supply through
  illicit sources. These two considerations are to some extent co-related
  inasmuch as supply through illicit sources may increase if supply through
  the authorised sources is not sufficient to meet the demand. Thus, the
D primary consideration appears to be that a licence may be granted, if the
  needs of the people of that area, so demand. In sum and substance, both
  the Collector as well as the Commissioner while granting licence for the
  retail sale or wholesale vend of IMFL must keep in mind the needs of the
  people of the area concerned. If the supply of IMFL through the existing
E licencee is not adequate to meet the demand, they may be justified in
  granting an additional licence or licences. The true test, therefore, is
  whether the additional licence has been granted having regard to the needs
  of the people of that area with a view to counteract supply through illicit
  sources. The use of the words "to meet an ascertained demand for such
F article" only means that the authorities must make an assessment as to
  whether the demand for the excisable article in question has increased and
  whether supply of such excisable article, in the instant case IMFL,can be
  met with the existing licencees. The ascertainment of demand is not
  required to be made with mathematical precision. It is sufficient if the
  authorities have applied their mind to the extent of need of the people and
G the adequacy of the arrangement to meet such need through existing
  licencees. For this purpose, no doubt, they must take into account the
  increased consumption of the excisable article concerned in any local area.

         As we have noticed earlier, the Collector in his recommendation for
H   the grant of additional wholesale licence no doubt referred to the




                                                                                    -
              S. K. BHAGAT v. STATE [B.P. SINGH, J.]                 665

augmentation of licence revenue and the need to provide competition in A
view of increase in consumption of liquor. In his recommendation he had
not detailed the material on the basis of which he had come to the
conclusion that an additional licence is required to meet the needs of the
people of the area. But it is quite evident that when called upon to submit
his comments, he had disclosed the material on the basis of which he had B
recommended the grant of an additional licence. The Excise Commissioner
had also called for the comments of the Excise Superintendent and the
relevant file for his consideration. Similarly, before the Board of Revenue
as well, the Collector had placed all the relevant material to satisfy him
that the recommendation made by him for grant of additional licence was C
on the basis of relevant considerations under Rule 45 of the Rules. The
comments of the Collector and the material placed by him before the
Commissioner and other material placed before the Commissioner were
duly considered by him before granting his approval to the recommendations
made by the Collector. The factual position as to the tremendous increase
in consumption of IMFL was before him and it appeared thereform that D
since 1984, there had been a steep increase in the consumption of IMFL
and yet there was only one wholesale licencee for vending of IMFL in the
entire district. It also appeared from the material placed before him that
in other comparable and neighbouring districts there were at least two and
in some as many as seven wholesale licencees. Under these circumstances E
and on such material as were placed before the Commissioner, if he came
to the conclusion that the grant of an additional licence was justified, we
cannot find fault with his decision. In the decision making process he has
taken into consideration only relevant considerations and, therefore, the
conclusion reached by him cannot be faulted. The High Court found that F
Rule 45 had not been complied with in as much as in the recommendation
made by the Collector, he had not mentioned that an additional licence
should be granted since there was a steep rise in the demand for IMFL,
or that it was so necessary to counteract supply through illicit sources. The
letter simply referred to the increase in State revenue by way of licence
fee and promotion of competition in view of the increased demand for G
IMFL. The High Court was of the view that the letter of recommendation
made by the Collector should in itself be complete and must show that all
considerations relevant under Rule 45 have been taken into account while
making a recommendation. Since, the letter of the Collector making the
recommendation did not contain these particulars, he could not be permitted H
    666                   SUPREME COURT REPORTS [2003] SUPP. 3 S.C.R.

A to supplement his recommendation by the comments submitted by him
    before the Commissioner of Excise.

        In our view, the High Court was not justified in reaching this
  conclusion. The Act and the Rules do not provide any particular from in
B which recommendation has to be made by the Collector for the grant of
  additional wholesale licence to vend IMFL.The Act and the Rules only
  provide the procedure to be followed and the matters to be taken into
  consideration while granting an additional licence. The Act also makes it
  clear that the final decision has to be taken by the Commissioner and the
C recommendation of the Collector is subject to the final decision of the
  Commissioner of Excise. Any decision taken by the Collector, and any
  licence granted by him, is expressly made subject to the final decision of
  the Commissioner of Excise. In view of such legal provisions, for
  successfully challenging the grant of additional licence by the Commissioner
  of Excise and the recommendation of the Collector, it must be shown that
D the Collector and, or, the Commissioner while granting the additional
  licence had not acted on the basis ofrelevant considerations. It matters little
  whether the recommendation made by the Collector incorporated the
  matterial on the basis of which he had made a recommendation for the. grant
  of an additional licence. He was only making a recommendation and not
E taking a decision. In any event, while considering the recommendation
  made by the Collector, the Commissioner called for the relevant record and
  the comments of the Collector, and all the relevant material was actually
  placed before the Commissioner for his consideration. On the basis of such
  relevant material he took a final decision to approve the grant of additional
F licence. Thus, the recommendation of the Collector, which in any event
  was only a recommendation and not a final decision, was approved by the
  Commissioner who was authorized to take a final decision, only after
  app:ication of mind to all relevant considerations by the decision making
  authority. We are of the opinion that the requirements of the provisions
  of the Act and Rule 45 have been complied with. We must, therefore, reject
G the submission urged before us by counsel for respondent No. 5 that the
  grant of additional licence was bad for non-compliance with Rule 45 of
  the Rules.

          Counsel for respondent No. 5 then submitted that the matter has
H become infructuous since the licence granted to the appellant was only
              S. K. BHAGAT v. STATE [B.P. SINGH, J.]                 667
valid till 31st March, 2003. Th period of the licence having run out, there A
was nothing left to be decided in this Appeal, which also has become
infructuous. This submission is also misconceived. So far as the grant of
wholesale licence to vend IMFL is concerned, under the Rules the same
may be granted for any number of years not exceeding five years, as the
Board may decide in each case. It is not as if each year a fresh notice is B
issued for the grant of wholesale licence. In fact, respondent No. 5, as
admitted by her, holds a wholesale licence since the year 1984, and the
same is being renewed from time to time. In these circumstances, there is
no justification for the argument that the period for which the licence was
issued to the appellant has run out and the appeal has become infructuous. C

       He then submitted that a fresh ascertainment may be made since the .
earlier ascertainment was not objective as it was based solely on the report
of the Collector, and no materials have been placed before the Commissioner
by the Excise Officers. We find no merit in this submission. As we have D
noticed earlier in this judgment, though not mentioned in his letter of
recommendation, the Collector had made an ascertainment of the needs of
the people of the area in question and had come to the conclusion that there
had been a tremendous increase in the consumption of IMFL which
justified the grant of an additional licence for the wholesale vend of IMFL.
The year-wise figures relating to increase in consumption of IMFL for the E
area concerned were ascertained by him and the same was placed before
the Commissioner for his consideration. The criticism, therefore, that the
ascertainment was not based on an objective consideration is not justified.
Moreover, the Commissioner had called for the relevant administrative file
from the Excise Office and he had also perused the same. After perusing F
the records of the Collector, Begusarai, the comments sent by him, and the
administrative file of the Excise Office, he came to the conclusion, having
regard to the considerations enumerated in Rule 45 of the Rules, that there
was need for granting an additional wholesale licence. Obviously, the
Commissioner found that the Collector had placed before him all the G
relevant material on the basis of which he was justified in making the
recommendation.

    Even assuming that there was some technical defect by reason of
some omission on the part of the Collector, inasmuch as he did not mention H
    668                  SUPREME COURT REPORTS [2003] SUPP. 3 S.C.R.

A all the relevant facts in the letter ofrecommendation itself, the same cannot
  invalidate the licence granted by the Excise Commissioner. The omission
  to mention all the relevant material, which in fact existed, in the letter of
  recommendation itself, was at best a technical defect or omission and did
  not vitiate his recommendation in view of the provisions of Section 41 of
B the Act.
         In the result, this appeal is allowed, the judgment and order of the
    High Court is set aside. The writ petition filed by the respondent No. 5 is
    dismissed. There will be no order as to costs.

    R.P.                                                      Appeal allowed.