ROPAN SAHOO Vs ANANDA KUMAR SHARMA .
Bench: K.S. RADHAKRISHNAN,DIPAK MISRA
Case number: C.A. No.-000615-000615 / 2013
Diary number: 37816 / 2009
Advocates: SHIBASHISH MISRA Vs
G. RAMAKRISHNA PRASAD
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Reportable
IN THE SUPREME COURT OF INDIA
CIVIL APPELLATE JURISDICTION
CIVIL APPEAL NO. 615 OF 2013 (Arising out of S.L.P. (C) No. 34902 of 2009)
Ropan Sahoo & another ... Appellants
Versus
Ananda Kumar Sharma & others ...Respondents
WITH
CIVIL APPEAL NO. 616 OF 2013 (Arising out of S.L.P. (C) No. 35166 of 2009)
State of Orissa & others ....Appellants
Versus
Ananda Kumar Sharma & others ....Respondents
J U D G M E N T
Dipak Misra, J.
Leave granted in both the special leave petitions.
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2. Questioning the legal acceptability of the order dated
16.9.2009 passed by the Division Bench of the High
Court Orissa at Cuttack in WP(C) No. 3913 of 2009
whereby the High Court entertained the writ petition
preferred by the first respondent herein and quashed
the grant of exclusive privilege and the licence
granted in favour of Ropan Sahoo and Mukesh
Kumar, the respondent Nos. 5 and 6 in the writ
petition, the present appeals have been preferred by
the grieved persons as well as by the State.
3. Shorn of unnecessary details the facts which are
requisite to be stated are that Mukesh Kumar, the
respondent No. 6 before the High Court, had
submitted an application for grant of licence to open
an IMFL “Off” shop in Ward No. 16, Bargarh Town for
the year 2007-08 on 28.1.2008. As a report was
submitted that the proposed site was violative of sub-
rule 1(c) of Rule 34 of Orissa Excise Rules, 1965 (for
short “the Rules”), the said respondent chose to
withdraw the application for the aforesaid year by
indicating personal reasons. In respect of the next
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financial year he again submitted an application for
grant of licence at the same place. The Collector,
Bargarh, invited objections and pursuant to the same
the writ petitioner filed his objection on 18.10.2008.
The Inspector of Excise submitted a report on
2.2.2009 stating about the existence of a bathing
ghat, Vishnu temple, bus stand and petrol pump
within the prohibited distance, but recommended for
relaxation of restrictions. The Collector, Bargarh,
recommended for opening of the shop for remaining
part of the year 2008-09 in relaxation of the
restrictions and the Excise Commissioner also
recommended to the Government on 19.2.2009 for
sanction by relaxing of the restrictions. As the
factual matrix would reveal, the State Government
on the basis of the recommendations invoked the
power of relaxation under Rule 34 of the Rules and
granted licence in favour of the said respondent for
the remaining period of 2008-09. Be it noted, in a
similar manner relaxation was granted for opening of
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the IMFL/Beer (‘ON’ shop) at Hotel Sawadia for the
period from 2.3.2009 to 31.3.2009.
4. Being grieved by the grant of said licences, the first
respondent invoked the jurisdiction of the High Court
under Article 226 of the Constitution principally
contending that the report submitted by the Excise
Inspector with regard to certain aspects, namely,
location of the bathing ghat, etc. were not factually
correct; that the recommendations made by the
authorities were highly improper and unwarranted;
and that the relaxation had been granted in an
extremely arbitrary manner and, therefore, the grant
of exclusive privilege and the licence deserved to be
axed. The High Court perused the documents
brought on record, called for the record to satisfy
itself in what manner the power of relaxation was
exercised, and after perusal of the record and on
consideration of to various recommendations, came
to hold that as far as the respondent No. 5 was
concerned for sanction of a beer parlour ‘ON’ shop
licence for the remaining period of 2008-09, no order
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was passed relaxing the Rules before the grant of
exclusive privilege. As far as the sanction of IMFL
Restaurant licence in respect of 6th respondent was
concerned, the High Court expressed the similar
view. We think it apt to reproduce the ultimate
conclusion recorded by the High Court: -
“13. Proviso to Rule 34 specifically prescribes that restriction on the minimum distance as mentioned in Clause (d) and (e) may be relaxed by the State Government in special circumstances. There being no order by the State Government relaxing the aforesaid two Clauses in relation to the minimum distance between the proposed shops and the place of worship i.e. the Vishnu Temple, petrol pump and bus stand, the order of the State Government approving the sanction/grant of exclusive privilege in favour of opposite parties 5 and 6 cannot be sustained in law.”
5. After so stating the High Court referred to Section 41
of the Bihar and Orissa Excise Act, 1915 (for brevity
“the Act”) and observed as follows: -
“Rule 34 of the Rules castes a statutory duty on the Department to pass order with reasons relaxing the restrictions. When there has been infraction of such statutory duty, the same cannot be covered under Section 41 of the Act.”
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6. Being of the aforesaid view, the High Court quashed
the privileges and the licences granted in favour of
the private respondents therein.
7. We have heard Mr. Bhaskar P. Gupta, learned senior
counsel for the beneficiaries of the grant, Mrs. Kirti
Renu Mishra, learned counsel for the State and Mr. G.
Ramakrishna Prasad, learned counsel appearing for
the respondent No. 1 in both the appeals.
8. At the very outset we may note that it is the
admitted position that both the proposed sites come
within the prohibited area as envisaged under Rule
34(1)(d) and (e) of the Rules. Rule 34 of the Rules
stipulates that the places in respect of which licences
for consumption of liquor on vendor’s premises
should not be granted. The said Rule reads as
follows: -
“34. Licences for shops for consumption of liquor on vendor’s premises not to be granted at certain places : (1) No new shop shall be licensed for the consumption of liquor on the vender, premises –
(a) in a marketplace, or
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(b) at the entrance to market place, or
(c) in close proximity to a bathing-ghat, or
(d) within at least five hundred meters from a place of worship, recognized educational institution, established habitant especially of persons belonging to scheduled castes and labour colony, mills and factories, petrol pumps, railway stations/yard, bus stands, agricultural farms or other places of public resort, or
(e) within at least one kilometer from industrial, irrigation and other development projects areas, or
(f) in the congested portion of a village :
Provided that the restriction on the minimum distance as mentioned under clauses (d) and (e) may be relaxed by the State Government in special circumstances.
(2) So far as practicable, an established liquor shop licensed for the consumption of liquor on the premises shall not be allowed to remain on a site which would not under sub-rule (1) be permissible for the location of a new shop.
(3) In areas inhabited by Scheduled Tribes, country spirit shops shall not be licensed to be placed immediately on the side of a main road or in any other prominent position that is likely to place temptation in their way.”
9. On a perusal of the aforesaid Rule, it is crystal clear
that the State Government has been conferred with
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the power to relax the restriction on the minimum
distance as mentioned in clauses (d) and (e)
pertaining to the minimum distance. As has already
been indicated hereinbefore there is no cavil that the
material on record pertained to the relaxation of the
restriction as prescribed under clauses (d) and (e) of
sub-rule (1) of Rule 34 of the Rules. The High Court,
as the impugned order would reflect, has quashed
the order of approval/sanction and the consequent
grant of licences on the foundation that there has
been no order relaxing the restrictions on the
minimum distance as mentioned in Clauses (d) and
(e) relating to the proposed shops in exercise of
powers of the said Rule by the State Government
and, in any case, no reasons have been ascribed.
Thus, the question that emanates for consideration is
whether the High Court has appositely appreciated
the note sheet in the file and arrived at the correct
conclusion or not.
10. The High Court, as demonstrable, has reproduced
the communications made by the Joint Secretary to
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the Government by fax vide memo No. 1159/Ex. dt.
2.3.2009 addressed to the Excise Commissioner
about the Restaurant “ON” shop licence in favour of
Mukesh Kumar at “RASSOI RESTAURANT” in the
premises of Hotel ‘Sawadia Palace’, Ward No. 11,
Bargarh Municipality over Plot No. 1622, Khata No.
2542/362, in the district of Bargarh for the remaining
period of 2008-09 and also the memo No. 1161/Ex.
dated 2.3.2009 in respect of Beer Parlour “ON” shop
licence in favour of Ropan Sahoo over Plot No.
1391/2260, Khata No. 393 in Ward No. 16 of Bargarh
Municipality, in the district of Bargarh for the
remaining period of 2008-09. The communication
that has been made in favour of Mukesh Kumar reads
as follows: -
“In inviting a reference to your letter No. 1214 dt. 19.2.09 on the subject cited above, I am directed to say that Govt. after careful consideration have been pleased to grant IMFL Restaurant “ON” shop Licence in favour of Sri Mukesh Kumar at “RASSOI RESTAURANT” in the premises of Hotel “Sawadia Palace”, Ward No. 11, Baragarh Municipality over Plot No. 1622, Khata No. 2542/362, in the district of Baragarh for the remaining period of 2008-09 by relaxing rule 34 of the Orissa Excise Rules,
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1965 and fixation of MGQ as per Excise Duty, Fee Structure and Guidelines for 2008-09. The Excise Administration may be held responsible if the existing nearby excise shops are affected by the new “ON” shop.”
As far as grant of beer parlour “ON” shop in favour of
Ropan Sahoo is concerned, the communication vide memo
No. 1161/Ex. dated 2.3.2009 is as follows: -
“In inviting a reference to your letter No. 1380 dt. 25.02.09 on the subject cited above, I am directed to say that Govt. after careful consideration have been pleased to sanction Beer Parlour “ON” shop Licence in favour of Sri Ropna Sahoo over Plot No. 1391/2260, Khata No. 393/330 in Ward No. 16 of Bargarh Municipality, in the district of Bargarh for the remaining period of 2008- 09 subject to condition that the district excise officials will be held responsible if the nearby existing excise shops are affected by opening of the new shop.”
11. As no reasons were assigned, the High Court called
for the file. On a perusal of the file the High Court
referred to the recommendations and, eventually,
opined that no order had been passed relaxing the
Rule in respect of the said shops by the
Commissioner-cum-Secretary to Government,
Department of Excise. The thrust of the matter is
whether any order has been passed relaxing the
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restrictions imposed by the Rules and does it contain
reasons. As the first communication would reveal, it
is clearly mentioned therein that the Government has
relaxed the restrictions under Rule 34 and as far as
the second communication is concerned, it has been
stated that the Government has sanctioned grant of
licence. The learned counsel for the State has
referred to the note sheet to highlight that the orders
had been passed in consonance with the proviso to
Rule 34(1) of the Rules and on that basis the
communications were issued.
12. We have bestowed our anxious consideration and
carefully perused the note-sheet. On a studied
scrutiny of the same it is luculent that the Excise
Commissioner, Orissa, Cuttack, had recommended
the proposals and in support of the same had
furnished seventeen documents. The note sheet has
referred to the report which states that the proposed
site exist at 350 meters from Vishnu Temple, 250
meters from the petrol pump, 200 meters from the
private bus stand and 50 meters from the irrigation
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canal. The recommendation which forms part of the
note sheet reads as follows: -
“The Collector, Bargarh, in his report at P- 84/C has stated that the local consumers demand for consumption of liquor within the hotel premises. Illegal liquor cases have been booked in the nearby area and hence, there is demand for the “ON” shop. The apprehension that the existing IMFL “OFF” shop will be affected after opening of the proposed “ON” shop is ruled out, because the consumers of “OFF” shop are different from “ON” shop. The customers of “ON” shop has to consume liquor inside the Hotel premises with peg system and pay service charge, whereas such a facility is not available with “OFF” shops. Besides, the bathing ghat is not nearby as objected. But only one irrigation canal is flowing at a distance of about 50 meters. Therefore, Collector has recommended for relaxation of rule 34 of Orissa Excise Rules, 1965 for sanction of the proposal in the interest of Govt. revenue and to check illegal liquor trade.”
13. The objections of A.K. Sharma and that of the
Secretary, Human Society, Bargarh have also been
considered. Thereafter, the Joint Secretary has
recommended thus: -
“In the above circumstances and in view of recommendation of the Excise Commissioner, Orissa, Cuttack, it may kindly be considered to grant IMFL Restaurant “ON” shop licence in favour of
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Sri Mukesh Kumar at “Rasooi Restaurant” in the premises of Hotel “Sawadia Palace” Ward No. 11, Bargarh Municipality over Plot No. 1622, Khata No. 2542/362, in the district of Bargarh, for the remaining period of the year 2008-09 by relaxing rule 34 of Orissa Excise Rules, 1965 and MGQ fixed as per the Excise Duty, Fee Structure and Guidelines for 2008-09. The District Excise Administration may be held responsible if the existing nearby excise shops are affected by the new “ON” shop.”
14. The Commissioner-cum-Secretary to Government,
Excise Department, has endorsed the same in the
following terms: -
“Notes from P.10/N explain. We had received a representation from Shri A.K. Sharma, Exclusive Privilege Holder of IMFL ‘Off Shop’ No. 4 of Bargarh (P.23-22/C) against the proposal received from Collector, Bargarh and endorsed by the Excise Commissioner, Orissa for opening of IMFL ‘On Shop’ at Rasoi Restaurant in the premises of Hotel Sawadia Palace, Ward No. 11 of Bargarh. The objections raised by Shri Sharma have been enquired into by the District Administration. In this regard, the letter received from Collector, Bargarh at P.34-32/C may please be glanced through. The objections of Shri Sharma are found to be devoid of merit. The report received from the Excise Commissioner, placed below, may also be perused. The Excise Commissioner had recommended to consider the sanction of IMFL ‘On Shop’ at Rasoi Restaurant in favour of Shri Mukesh Kumar situated in the premises of Hotel Sawadia Palace,
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Ward No. 11 of Bargarh. The proposal may kindly be considered and approved.”
15. The same has been signed by the Minister of Excise
and Tourism, Orissa. As far as the second shop is
concerned, the note sheet referred to the
recommendations of the Collector, which reads as
follows: -
“...the Collector, Bargarh has reported that both the petrol pumps are situated in such a manner that the shops will have no effect at all on the proposed Bar and hence he has suggested for relaxation of restrictive provisions of rule-34 of Orissa Excise Rules, 1965.
The Collector, Bargarh has also reported that the proposed Beer Parlour shall cater to the needs of the consuming people of the locality besides fetching Govt. revenue and checking illicit sale of Beer, since the population of the area is increasing. Only 3 (three) IMFL “OFF’ shops, one IMFL ‘ON’ and one Beer Parlour are functioning in the entire town area having population of more than one lakh. There is feasibility and potentiality for opening of the Beer Parlour ‘ON’ shop, since illegal sale of liquor has been detected in the area. The proposed shop will check illicit trade of liquor. He has also stated that the opening of new Beer Parlour will not affect the nearby IMFL shops in the Municipality.”
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16. The Joint Secretary after referring to the objections
and the recommendations of the Excise
Commissioner has passed the following order in the
note sheet: -
“In the above circumstances and in view of recommendation of the Excise Commissioner, Orissa, Cuttack, it may kindly be considered to sanction Beer Parlour ‘ON’ shop licence in favour of Sri Ropna Sahu over plot No. 1391/2260, Khata No. 393/330 in Ward No.16 of Bargarh Municipality in the district of Bargarh for the remaining period of 2008- 09 subject to condition that the district excise officials will be held responsible if the nearby existing shops are affected by opening of the new shop.
Government orders may kindly be obtained in the matter.”
17. Thereafter, the Commissioner-cum-Secretary to
Government in the Department of Excise has
endorsed the same and the Minister, Excise and
Tourism has signed in approval thereof and
thereafter the movement of the file took place. On
the basis of the aforesaid orders the communications
have been sent.
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18. On a keen scrutiny of the entire note sheet we have
no hesitation in our mind that the Commissioner-
cum-Secretary had accepted the recommendations
of the Collector and the Excise Commissioner, and
upon perusal of the note sheet of the Joint Secretary
had recommended for consideration and approval by
the Minister of Excise and Tourism. The Minister, as
stated earlier, has signed and thereafter, the file had
travelled back for communication. We really fail to
fathom the reasons ascribed by the High Court that
there is no order whatsoever relaxing the Rules
before the order of grant of exclusive privilege was
passed. After the Minister had signed on the file on
the basis of the recommendations sent by the
Commissioner-cum-Secretary which was founded on
the recommendations of the Joint Secretary who had
concurred with the recommendations of the Collector
and the Excise Commissioner, communications were
made by the Joint Secretary. The note sheet clearly
indicates application of mind to the relevant facts
which pertain to the restrictions on the distance from
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the proposed site and the endorsement by the
Minister. In this context, we may refer with profit to
the decision in Tafcon Projects (I) (P) Ltd. v.
Union of India and others1, wherein the High
Court, after taking note of the order passed by the
Secretary who, in anticipation of the formal approval
by the Minister concerned, had allowed the party to
go ahead for appointing the appellant therein as
“Event Manager”. This Court referred to the earlier
order passed by the Secretary granting permission
and the latter order in which he had mentioned that
the party may be allowed to go ahead with the
proposal for making the preliminary arrangement in
anticipation of the formal approval of the Minister
and expressed the view that the High Court had
erred in coming to hold that the Secretary had not
taken any final decision with regard to the appellant
therein as the Event Manager. Thereafter, the Court
adverting to the justification of the conclusion of the
High Court that no final decision had been taken by
the Minister expressed thus :- 1 (2004) 13 SCC 788
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“12. It appears also from the record as noted by the High Court, that the file had been pending with the Minister for some time and despite expressions of urgency, the Minister did not sign the file since he was busy with “elections and other important matters”. What the High Court has overlooked is that the relevant file was again placed before the Minister on 30.8.1999 by JS&FA with a note which stated that Tafcon had been appointed as the “Event Manager” for three years. This was signed by the Minister with the endorsement “file returned”.
13. The High Court deduced from this signature of the Minister that no approval was in fact granted by him to the appointment of M/s. Tafcon either expressly or impliedly. We are unable to agree. Where the Minister has signed the various notes put up before him seeking his approval, his signature, without more, must mean that he has approved the steps taken by the Department.”
19. Be it noted, in the said case, the Court referred to
Rule 3 of the Transaction of Business Rules, 1961
which provided for all business to be conducted on
general or special directions of the Minister-in-
charge.
20. In the case at hand, Rule 7 of the Orissa Government
Rules of Business made under Article 166 of the
Constitution confers the power on the Minister to
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pass an order in respect of a matter pertaining to his
portfolio. The effect of such a delegation has been
dealt with by a three-Judge Bench in Narmada
Bachao Andolan v. State of Madhya Pradesh2
wherein it has been held that: -
“The decision of any Minister or Officer under the Rules of Business made under Articles 77(3) and 166(3) of the Constitution is the decision of the President or the Governor respectively and these Articles do not provide for `delegation’. That is to say, that decisions made and actions taken by the Minister or Officer under the Rules of Business cannot be treated as exercise of delegated power in real sense, but are deemed to be the actions of the President or Governor, as the case may be, that are taken or done by them on the aid and advice of the Council of Ministers.”
21. The Bench to fructify its opinion has placed reliance
on State of U.P. & Ors. v. Pradhan Sangh
Kshettra Samiti & Ors.3 and pronouncement by
the seven-Judge Bench in Shamsher Singh v.
State of Punjab & Anr.4 For the sake of
completeness, we may note with profit what has
2 AIR 2011 SC 3199 3 AIR 1995 SC 1512 4 AIR 1974 SC 2192
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been stated in paragraph 27 of the aforesaid
decision: -
“27. In Dattatraya Moreshwar v. The State of Bombay & Ors.5, a Constitution Bench of this Court held that an omission to make and authenticate an executive decision in the form mentioned in Article 166 does not make the decision itself illegal, on the basis that its provisions were directory and not mandatory.”
22. In this regard we may quote a passage from Sethi
Auto Service Station and another v. Delhi
Development Authority and others6 : -
“14. It is trite to state that notings in a departmental file do not have the sanction of law to be an effective order. A noting by an officer is an expression of his viewpoint on the subject. It is no more than an opinion by an officer for internal use and consideration of the other officials of the department and for the benefit of the final decision-making authority. Needless to add that internal notings are not meant for outside exposure. Notings in the file culminate into an executable order, affecting the rights of the parties, only when it reaches the final decision-making authority in the department, gets his approval and the final order is communicated to the person concerned.”
5 AIR 1952 SC 181 6 (2009) 1 SCC 180
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23. In State of West Bengal v. M. R. Mondal and
another7 it has also been held that an order passed
on the file and not communicated is non-existent in
the eye of law.
24. In the present case it is luminous that the file had
travelled to the concerned Joint Secretary of
department who had communicated the order. The
High Court has opined that there is no order by the
State Government relaxing the restrictions enshrined
in clauses (d) and (e) of Rule 34(1) of the Rules in
relation to the minimum distance between the
proposed shops and the Vishnu Temple, petrol pump
and bus stand and at a latter part of the judgment
has expressed the opinion that there has been
infraction of statutory Rule, namely, Rule 34 which
casts a statutory duty on the department to pass on
order with reasons relaxing the restrictions. We are
disposed to think that the High Court, as far as the
first part of the opinion is concerned, has been
guided by the factum that the Commissioner-cum-
7 AIR 2001 SC 3471
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Secretary in his recommendation to the Minister of
Excise and Tourism had not specifically referred to
clauses (d) and (e) of Rule 34(1) of the Rules. It is
pertinent to state here that it is perceptible from the
note sheet that the Secretary had referred to the
proposal received from the Collector, endorsement
made by the Excise Commissioner, the objections
raised by the objectors and also expressed the view
that the said objections were devoid of merit and,
accordingly, recommended for approval. The
cumulative effect of the note sheet goes a long way
to show that every authority was aware of the
distance and recommended for relaxation of clauses
(d) and (e) of sub-rule (1) of Rule 34 and the
concerned Minister had endorsed the same. Non-
mentioning of the Rule or sub-rule, in our considered
opinion, does not tantamount to non-passing of an
order. The dominant test has to be the application of
mind to the relevant facts. The second part of the
order, if properly appreciated, conveys that no
reasons have been ascribed. The proviso to Rule
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34(1) lays a postulate that the distance as mentioned
under clauses (d) and (e) may be relaxed by the
State Government in special circumstances. The
recommendations made by the Collector refers to
the circumstances, namely, that there is a demand
for consumption of liquor within the hotel premises;
that illegal liquor cases have been booked in the
nearby area; and that the proposal is in the interest
of the Government revenue. The said
recommendations, as is reflectible, have been
concurred with by the higher authorities and, hence,
there can be no trace of doubt that they constitute
the special circumstances.
25. In view of our aforesaid analysis, the appeals are
allowed and the order passed by the High Court is
set aside. It is further clarified that if the
Government, if so advised, can invoke the power
under the proviso to Rule 34(1) of the Rules for the
purpose of relaxation for grant of exclusive privilege
and licence pertaining to the said shops in respect of
current and subsequent financial years. In the facts
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and circumstances of the case, the parties shall bear
their respective costs.
……………………………….J. [K. S. Radhakrishnan]
……………………………….J. [Dipak Misra]
New Delhi; January 22, 2013
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