IN THE HIGH COURT OF KARNATAKA AT BENGALURU DATED THIS THE 13TH DAY OF FEBRUARY 2019 BEFORE THE HON’BLE MR. JUSTICE JOHN MICHAEL CUNHA CRIMINAL PETITION NO.8578 OF 2015 BETWEEN:
1. JOHN DISTILLERIES PRIVATE LIMITED HAVING ITS REGISTERED AND HEAD OFFICE AT 110, PANTHARAPALYA, MYSORE ROAD, BANGALORE - 560 039, REPRESENTED BY ITS MANAGING DIRECTOR, SHRI N.KRISHNAN.
2. SHRI C PUNEETH AGED ABOUT 31 YEARS, S/O CHANDREGOWDA, AT 110, PANTHARAPALYA, MYSORE ROAD, BANGALORE - 560 039.
3. SHRI SELVARAJ AGED ABOUT 50 YEARS, S/O NAGANGOUNDAR, AT 110, PANTHARAPALYA, MYSORE ROAD, BANGALORE - 560 039.
4. SHRI N KRISHNAN AGED ABOUT 63 YEARS, S/O NEELAKANTHAN, AT 110, PANTHARAPALYA, MYSORE ROAD, BANGALORE - 560 039.
... PETITIONERS (BY SRI: DHANANJAY JOSHI, ADVOCATE) AND 1. THE COMMISSIONER OF EXCISE GOVERNMENT OF KARNATAKA, 2ND FLOOR, TTMC BUILDING, ‘A’ BLOCK, BMTC, SHANTINAGAR, K.H.ROAD, BENGALURU - 560 027.
2. THE DEPUTY SUPERINTENDENT OF EXCISE, GANDHINAGAR SUB DIVISION, BENGALURU-560001.
... RESPONDENTS (BY SRI: I.S.PRAMOD CHANDRA, SPP-II) THIS CRL.P IS FILED U/S.482 CR.P.C PRAYING TO QUASH THE IMPUGNED FIR IN CASE NO. EXCISE/G SUB-D/ESP/FIR NO.59/2015-16, DATED 9.12.2015 FILED BY THE RESPONDENTS IN THE COURT OF THE HON'BLE 3RD ADDL. CHIEF METROPOLITAN MAGISTRATE, BANGALORE AND TO AWARD COSTS OF THIS PETITION TO THE PETITIONERS.
THIS CRL.P COMING ON FOR ADMISSION THIS DAY, THE COURT MADE THE FOLLOWING:-
O R D E R The petitioners have sought to quash the FIR registered in Case No.Excise/G Sub-D/ESP/FIR No.59/2015-16 dated 9th December, 2015 registered for the offence punishable under Section 36 of the Karnataka Excise Act, 1965.
2. The petitioners are manufacturers of fortified wine. They hold a winery licence issued by the Excise Department. On 09.12.2015, the winery of the petitioners was inspected and various violations were noticed as follows:-
(a) For the years 2012-13, 2013-14, 2014-15 and 2015-16, the actual ENA requirement for fortification of ‘Base Wine’ is 2,57,271 litres (to increase the alcoholic strength to 16% as permitted under Rule 1-A). However, 9,19,820 Litres has been consumed for the corresponding period, thereby using an excess of 6, 62,291 litres ENA.
(b) Not maintaining proper account of strength of alcohol in ‘Base Wine’.
(c) For the years 2012-13, 2013-14, 2014-15 and 2015-16, manufactured 67,59,350 litres Wine as against the permissible limit of 31,51,981 litres. The excess production of 36,07,369 Litres Wine has been done by diluting the ‘Base Wine’ with water.
(d) Not maintaining the proper account of ENA in Form MWG-1.
(e) Difference noted in the register of ENA stored in tanks and ENA procured as per requirement.
3. Learned counsel for the petitioners’ submits that the findings noted by the Inspection Authorities do not make out violation of Rules 2(1A), 7(8) and 7(9) of Karnataka Excise (Manufacture of Fortified Wine From Grapes) Rules, 1968 (for short ‘Rules’). As per the licence issued to the petitioners, the petitioners are required to add water as well as Ethanol Neutralised Alcohol(ENA) to enhance the alcohol strength to bring it upto permissible limit of 16%. In the instant case, the allegation against the petitioners is that they had added ENA of 9,19,820 litres during the years 2012-2016. The Rules referred by the respondents do not tally with the alleged violations. Therefore, the prosecution of the petitioners for the alleged offences is contrary to the Rules as well as the terms of the licence issued to the petitioners.
4. Refuting the contentions, learned SPP-II appearing for the respondents’ submits that in order to increase the alcohol strength, the petitioners were found adding huge quantity of ENA and thereby they have violated the conditions of licence granted to them.
Considered the submissions.
5. The conditions of licence require the petitioners to ensure the following:-
(i) the kind and quantity of grapes and or sugar or jaggery used and also of the quantity of water added to them;
(ii) the period allowed for fermentation;
(iii) the names and quantities of other ingredients if any added before, during or after fermentation to the ‘Must’ or wine;
(iv) the period allowed for ageing;
(v) quantity of wine manufactured;
(vi) the quantity of wine issued from the manufactory with the dates of manufacture, issue, the name of the licensees to whom and the places to which the wine has been consigned;
(vii) the balance in stock after each transaction and ;
(viii) the quantity of residue and base and the manner of their disposal.
(b) the licensee shall maintain day-to-day accounts showing therein the stock of wine, bases or “Must” in the manufactory at the end of each day.
6. The allegations against the petitioners are that for the purpose of fortification of wine manufactured by the petitioners, they had added 9,19,820 litres of ENA as against the required ENA of 2,57,271.
7. These allegations, in my view, do not fall under Rule 2(1A), 7(8) and 7(9) of Karnataka Excise(Manufacture of Fortified Wine From Grapes) Rules, 1968.
8. Rule 2(1A) defines ‘Fortified Wine’ as under:-
2(1-A) “Fortified wine” means wine or fruit wine the alcoholic strength of which has been increased by the addition of neutral spirit or rectified spirit or pure grapes fruit brandy.
9. It is not the case of the respondents that the wine prepared by the petitioners was not meeting the requirements of alcohol strength. On the other hand, the allegation is that, the petitioners had added additional ENA to the total quantity of wine stored in the winery. It is not known on what basis, the respondents could arrive at the said conclusion, when it is the case of the respondents that the petitioners have not been maintaining the accounts as required under the licence. Both these allegations cannot be true.
10. Further, the allegations made in complaint do not fall either under Section 2(1A) or under Sections 7(8) or 7(9) of the Rules.
Rules 7(8) and 7(9) read as under:-
7(8) “An accurate account of all the articles required for the manufacture of wine brought into manufactory shall be maintained by the licensee and verified by the Officer-in-charge.
7(9) The entire process of manufacture including a correct account of materials used and the time taken or allowed for every stage of manufacture, shall be recorded by the licensee and verified by the Officer-in-charge.”
In this context, it may be relevant to refer to condition No.3 of the licence granted to the petitioner No.1, which reads as under:-
The licensee shall not dilute or adulterate the wine or store permit to be stored any wine which he knows to be diluted or adulterated. (Provided that wine may be fortified with neutral alcohol or rectified spirit or pure grape or fruit Brandy to increase the alcoholic strength of wine which shall not exceed 42 percent of proof spirit) It is not the case of the respondent that the petitioners have diluted or adulterated the wine. On the other hand, the petitioner No.1 is permitted to fortify the wine with neutral alcohol or rectified spirit so as to increase the alcoholic strength not exceeding 42 per cent of proof spirit. It is not the case of the respondent that the inspected wine contained excess alcoholic strength. In the said circumstance, there is absolutely no basis for the prosecution of petitioners.
The Rules do not provide for penal consequence for non- maintaining the accounts or for committing any violation of the said Rules.
11. Section 36 of the Karnataka Excise Act provides for penalty for mis-conduct of the licensee. Said provision read as under:-
36. Penalty for misconduct of licensee, etc-
(1) Whoever, being the holder of a licence or permit granted under this Act, or being in the employ of such holder and acting on his behalf,-
(a) fails to produce such licence or permit on the demand of any Excise Officer or of any other person duly empowered to make such demand; or (b) wilfully does or omits to do, anything in breach of any of the conditions of his licence, or permit, not otherwise provided for in this Act; or (c) save in a case provided for by section 32 wilfully contravenes any rule made under section 71; or (d) permits drunkenness, disorderly conduct or gaming in any place wherein any intoxicant is sold or manufactured; or (e) permits or suffers persons whom he knows or has reason to believe to have been convicted of any non-bailable offence, or who are reputed prostitutes or habitual offenders, to resort to, or assemble or remain in or on the premises where any excisable article is sold or manufactured; or (f) sells any intoxicant to a person who is drunk; or (g) sells or gives any intoxicant to any child apparently under eighteen years of age or permits or suffers such child or remain in or on the premises where any excisable article is sold, or manufactured; or (h) in contravention of section 20 employs or permits to be employed on any part of his licenced premises referred to in that section any child or women, shall, on conviction, be punished with imprisonment which may extend to three months or with fine which may extend to five hundred rupees, or with both.
(2) Where any holder of a licence or permit under this Act or any person in his employ or acting on his behalf is charged with permitting drunkenness on the premises of such holder, and it is proved that any person was drunk on such premises, it shall lie on the person charged to prove that the holder of the licence and the persons employed by him took all reasonable steps for preventing drunkenness on such premises.
12. As the allegations made against the petitioners do not prima facie indicate that the petitioners have violated any conditions of licence, in my view, the prosecution of the petitioners cannot be sustained.
Consequently, the petition is allowed. The proceedings initiated against the petitioners in Case No.EXCISE/G SUB- D/ESP/FIR No.59/2015-16 dated 09.12.2015 pending on the file of III Addl. Chief Metropolitan Magistrate, Bengaluru are quashed.
Sd/- JUDGE *mn/-