Affidavit of service is kept on record.
The controversy in the instant writ petition centers around a notification issued by the Government of West Bengal dated 11th February, 2010 in relation to the West Bengal Excise (Change in Management) Rules, 2009. The writ petitioner has challenged an order of the Collector dated 18th April, 2018 and order of the Excise Commissioner dated 12th October, 2018 by which the writ petitioner was found to be in violation of Rule 4(2) of the notification stated above, and was directed to pay Rs.37 lakhs (as held by the Collector) within a period of
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five days of receiving the demand of the Collector.
Counsel appearing for the petitioners submits that the notification issued under the West Bengal Excise (Change in Management) Rules, 2009 dated 11th February, 2010, does not apply to the petitioner. Counsel relies on Rule 4(2) of the said notification which states that a license granted under the Bengal Excise Act, 1909 to a company ………….. shall stand determined on any change of membership of the company……………. unless in the case of the company, prior approval of the State Government………………. to such change is obtained.” Counsel further relies on Rules 4(3) and (5) of the said notification which talks of a “proposed transferee”. Counsel submits that from the said Rules it is clear that a change in membership of a company means a change in the shareholding pattern of the company. To show the bona fides of the petitioner, a cheque of Rs.37 lakhs was sent to the concerned respondent on 18th October, 2018 as has been recorded in a letter dated 18th October, 2018 sent by the petitioner to the District Magistrate and Collector, Asansol, West Bengal. In support of his contention that the notification does not apply to the writ petitioner at all, he relies on the order passed by the Collector on 18th April, 2018 which records the changes in the Board of Directors of the company namely, the resignations and appointments of five directors in the Board of Directors of the company. According to him, such changes in the composition of the Board of Directors cannot amount to a change of membership as envisaged under Rule 4(2) of the notification.
Counsel appearing for the petitioner further assails an order passed by the Collector on 22nd October, 2018 by which the operation of the writ petitioner has been directed to remain suspended for a month under Section 42(1)(b) of the Bengal Excise Act, 1909, as amended. He submits that the said order was passed despite a communication sent to the respondents on 16th October, 2018 informing them that a writ petition has been filed in this Court challenging the order dated 12th October, 2018. Following this intimation, a cheque of Rs.37 lakhs was also sent to the District Magistrate and Collector on 18th October, 2018 as stated above.
Mr. Abhratosh Majumder, learned Additional Advocate General, appearing for the State opposes the prayer in the writ petition and relies on Rule 4(2) of the notification which according to him mentions a change in the Board of Directors of the Company. He further submits that the petitioner was at liberty to go before the Secretary, Excise Department for redressal of his grievance as the appropriate appellate forum in relation to the orders impugned. Mr. Majumder further points to the alleged irregularity in the cheque which has been sent by the petitioner on 18th October, 2018 and submits that the present dispute can be sorted out if the petitioner is willing to furnish a bank guarantee for half of the amount which the petitioner has been directed to pay by the Collector and make a payment by way of epayment of the other half namely, Rs.18.5 lakhs.
Having heard Counsel appearing for the parties, although this Court is of the prima facie view that Rule 4(2) cannot apply to the petitioner since a change in the membership of a company can arise only upon a change in the shareholding pattern of the company or upon a transfer of to a transferee as mentioned under Rule 4(3) of the notification. The change in management or the change in the Board of Directors of the company has also been made subject to the primary requirement under Rule 4(2) envisaging a change in membership of a company. As mentioned in the order passed by the Collector on 18th April, 2018, the only changes not have been effected in the company are appointments and resignations of five directors. It is also in admitted position that there has been no change in the shareholding pattern of the company of transfers of shares of the company to another entity.
This Court however appreciates the fair stand taken by Mr. Majumder the livelihood of 400 workers employed with the writ petitioner have been put in jeopardy by the order dated 22nd October 2018. Even otherwise, any punitive action taken by the Collector upon being informed that the petitioner had filed the present writ petition in this Court, cannot be permitted to continue.
In view of the above, the impugned order dated 22nd October, 2018 passed by the District Magistrate and Collector at page 29 of the supplementary affidavit by the writ petitioner is stayed. The aforesaid is made subject to the writ petitioner furnishing Rs.18.5 lakh by way of a bank guarantee within a period of two weeks from date and making e-payment of the balance Rs.18.5 lakh in the accepted mode within a period of seven days from date. Payments made will of course be without prejudice to the rights and contentions of the petitioner. The petitioner will also have the liberty to approach Additional Chief Secretary, Finance Department as suggested by Mr. Majumder under the Bengal Excise Act, 1909.
The observations made herein will not influence the appellate forum.
W.P. 21990 (W) of 2018 is disposed of with the above direction.