Sanchayita Lahkar

The High Court of Bombay at Aurangabad Single Bench of Justice Kishore C. Sant quashed a ministerial order that directed the transfer of an excise license to a business partner who was not the original license holder. The Court held that the respondent had no legal right to obtain the license, as the license was initially issued in the name of the petitioner and never transferred to the partnership firm. Consequently, the Court allowed the writ petition and set aside the impugned order, stating that only the petitioner was entitled to apply for and obtain renewal of the license.

The matter concerns a dispute over the entitlement and ownership of FL-II and CL-III liquor licenses originally granted to Prabhakar Mohiniraj Wabale in 1973. Due to operational challenges, Wabale entered into a partnership with Respondent No.5, Vitthal Janardan Phadke, in 1984 under the firm name "M/s. Kailas Wines." The partnership, declared to be at will, was not initially accepted by the Excise Collector, leading to the execution of a new agreement in 1992. Despite this, the liquor license continued to be issued solely in Wabale's name.

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Following disputes, a legal notice for dissolution of the partnership was issued in 1993. The Excise Collector suspended the license in 2000. An appeal and revision filed by Respondent No.5 led to temporary relief allowing him to operate the business pending dispute resolution. However, a writ petition by Wabale in 2001 reversed this interim relief. The respondent’s subsequent Letters Patent Appeal (LPA) was resolved in 2003, with the High Court allowing the respondent to continue business to safeguard government revenue, without granting him a right in the license.

In subsequent years, the State Government’s Review Application confirmed that only the petitioner had the authority to apply for license renewal. The Supreme Court dismissed the respondent’s Special Leave Petition (SLP), and the Arbitration Tribunal ruled in favour of the petitioner, affirming dissolution of the partnership. The Collector suspended the license again in 2012, and although temporary relief was once more granted by the Minister, the High Court instructed a fresh decision to be taken without affecting earlier orders.

A decision by the Collector in 2016 reaffirmed that the license could only be held by the petitioner, with the respondent permitted to operate it only until March 2017. This decision was upheld by the Commissioner of Excise. However, the Minister’s order dated 30 July 2019 reversed these findings, directing the deletion of the petitioner’s name and continuation of the license in the respondent’s favour. This order formed the subject of the current writ petition.

Justice Kishore C. Sant recorded: "The short question involved in this petition is as to whether the Respondent No.5 has any right to have license in his name? Merely because he happened to be partner for some time."

The Court examined the licensing history, observing: "There is no dispute that the license was granted to deceased Prabhakar Wabale. It was only for some reason, the deceased Prabhakar Wabale could not start business though he had the license in his name. He therefore entered into a partnership with Respondent No.5."

Further, the Court noted the legal significance of the partnership being at will and dissolved through due notice, stating: "In the arbitration proceedings, there is an award now passed in favour of the petitioner." The Court also remarked: "This Court in Writ Petition as well as in LPA clearly held that the Respondent No.5 had no right to continue with the business."

Justice Sant stated that the Collector was empowered under a 1996 notification to decide on inclusion or exclusion of partners in a license, and Rule 40(1) of the Bombay Foreign Liquor Rules, 1953 confirmed the authority’s right to refuse recognition of partnerships not declared prior to license grant.

On the Minister’s interpretation that capital contribution converted the license into partnership property, the Court distinguished the precedent in Addanki Narayanappa v. Bhaskara Krishnappa, stating: "In the present case, the partnership firm was only to run the business, that will not make license a property of the partnership firm."

The Court also addressed a letter from 1984 and a Collector’s statement regarding the respondent’s addition as partner, noting: "However, the fact remains that, at no point of time, the license was granted or renewed in the name of partnership firm."

In relation to other judgments cited by the respondent, the Court held that: "So far as the decisions in Sachin Jaisawal, Yunus Abdulla and Laxman Kamble are also not applicable to the facts of the present case."

Justice Kishore C. Sant issued the following directions:

"Writ Petition is allowed in terms of prayer clause (A)."

"The impugned order dated 30th July 2019 passed by the Hon’ble Minister, Excise and Drugs Department, Mantralaya, Mumbai, in Revision Application No.FLR-1217/RA-14/ RAUSHU-2, are quashed and set aside."

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"The respondent No.5 has no right to get the license in his favour. The petitioner shall be entitled to apply for and obtain renewal of the license in accordance with law."

"In view of disposal of writ petition, Civil Applications do not survive and are accordingly disposed off."

"Rule is made absolute in the above terms."

The Court also granted a four-week stay on the operation of its order to accommodate any further legal action by the respondent.

Advocates Representing the Parties:

For the Petitioners: Mr. Arun Longani, Mr. S. Mukherjee, Mr. Yogesh Kumar, Advocates

For the Respondents: Mr. K. S. Patil, Assistant Government Pleader; Mr. Rajendra Deshmukh, Senior Advocate with Mr. Ashwini Deshmukh, instructed by Mr. S. V. Natu

Case Title: Prabhakar Mohiniraj Wabale (deceased) through LR Vimalbai Prabhakar Wabale v. The State of Maharashtra & Ors.

Neutral Citation: 2025: BHC-AUG:15499

Case Number: WP No. 14861 of 2019

Bench: Justice Kishore C. Sant

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