P.A. CHOUDARY, J.

(1) THIS Writ Petition, w. P. No. 5971/80 has been filed challenging the order of the Excise Superintendent, mahaboobnagar in Rc. No. 8184 of 1980 dated 11. 11. 1980 by means of which the licence of Toddy shop T. C. S. Maddur bearing licence No. 56 dated 6. 9. 1980 was suspended pending passing of the final orders. The allegation against the petitioner-Society was that the toddy in the shop of the petitioner had been adulterated with chemicals, it is argued by the learned counsel for the petitioner that there is no statutory power vested in the authorities to suspend the licence as an interim measure. Licence can only be cancelled as a punishment under Sec. 31 of the A. P. Excise Act, 1968. Sec. 31 of the A. P. Excise Act, 1968 speaks of the power of the licensing authority to cancel or suspend licence in the event of any branch by the holder thereof, or by any of his servants or by any one acting on his behalf of any of the terms and conditions thereof. This section can be made use of only where a breach by the holder of the conditions of the licence is established. Before establishing such a breach by the holder this section does not authorise the suspension or cancellation as an interim measure. In other words, under Sec. 31 of the A. P. Excise Act, 1968, the suspension must follow a finding that conditions of the licence had been breached by the holder thereof or with his consent, as envisaged in that section. In this case, the licence has been suspended without there being any finding arrived at in a due enquiry. The Government pleaders attempt to support to this suspension on the basis of the language under sec. 31 of the A. P. Excise Act, 1968 cannot be sustained. But the judgment of a Division bench consisting of Sambasiva Rao, 3, and Narasinga Rao, J. in Writ Appeal no. 587 of 1977 and batch dated 7. 12. 1977 was cited to show that the Excise authorities have such a power to suspend licence as an interim measure. The reasoning of the judgment is that whoever has the power to suspend a licence finally will also have the power to suspend the licence as an interim measure. I am unable to agree with this reasoning. A suspension of licence, whether interim suspension or final suspension will have the same legal effect. In fact, Sec. 31 of the A. P. Excise act, 1968 uses the word "suspension" in centra-distinction to cancellation of licence. A licence which has been suspended under Sec. 31 of the A. P. Excise Act, 1968 can be used after a specified period of time. Under such an order of suspension for a specified period the licensee would atleast know and would be able to use his licence after a specified time. But the so-called interim suspension for an indefinite time does not have even that virtue in it, because it would be in operation till the inquiry has been completed. I do not therefore agree with the Division bench holding that suspension can be awarded as an interim measure without there being any express authority of law authorising it. The judgment of the Division bench relies upon Rule 36 of the A. P. (Arrack and Toddy Licences General Conditions)Rule, 1969. That Rule authorises any officer of the Excise and Police Departments who is competent to inspect to seize or prohibit arrack or toddy from being sold when he finds the same unfit for human consumption or to have been adulterated or diluted in any manner. In my opinion, this rule has nothing to do with the suspension of a licence which has definite legal consequences. A licensee will have a right not merely to sell the liquor but also to purchase the same from the Depot and to store it in his arrack or toddy shop. A licensee prohibited from selling arrack or toddy will not legally be deprived of his right to purchase and store liquor. Therefore the right to prohibit the sale of arrack or toddy is not the same as the right to suspend a licence. Further it appears to me that this reasoning would not be of any help to the Government, because the question whether the power under Rule 36 of the A. P. (Arrack and and toddy Licences General Conditions) Rules, 1969 should be exercised after notice and inquiry is not. adverted to by the division Bench. In addition to the above, the language of Rule 36 of the A. P. (Arrack and Toddy Licences General Conditions)Rules, 1969 empowers the Excise officials or the Police Department officials from prohibiting the selling of arrack or toddy found unfit for human consumption or to have been adulterated or diluted in any manner. Under that Rule there is no general power in the Excise authorities to prohibit the sale of any toddy or arrack adulterated or not. In view of the above I refer this to a bench for an authoritative opinion on this question. The Court made the following order:- Having heard the counsel of the parties, we are of the view that the opinion expressed by a Bench of this Court, to W. A. N0. 5s7/77, Judgment Dt. 7. 12. 1977 requires to be reconsidered by a Full bench. Par K. Madhava Reddy, C. J. (Dissenting with Majority):- These matters come up before the Full Bench on reference by our learned Brother Choudary, 3. The short question that falls for consideration in W. P. No. 5971/10 is whether a licence issued under Sec. 15 of the A. P. Excisea ct, IMS (Act XVII of 1968) hereinafter referred to as " the" read with "the andhra Pradesh Excise (Lease of Right to Sell Liquor in Retail) Rules, 1969 hereinafter referred to as "the Retail Rules" and the Andhra Pradesh Arrack and Toddy licences General Conditions Rules, 1969 hereinafter referred to as "the General rules" and the Andhra Pradesh Excise (Tapping of Trees and Toddy Shops Special canditions of Licence) Rules, 1969 hereinafter referred to as "the Special Rules" could be suspended pending enquiry under sec. 31 of the into the allegations of contraventions of the conditions of licence. The opinion on this point arising year after year in respect of several licences issued under the Andhra Pradesh excise Act has not been uniform.

(2) A Division Bench of this Court disposing of W. A. No. 587/77 and batch by Judgment dated 7th December, 1977 held "that the appropriate Excise Officer has the power to suspend the licence as an interim measure which is incidental or ancillary to the power to cancel or suspend the licence". When this question came up before our learned brother Choudary, J. , in W. P. No. 5971 of 1980 and the Government Pleader sought to support the suspension of the licence on the language of Sec. 31 of the andhra Pradesh Excise Act, 1968 and relied upon the above judgment, unable to agree with the reasoning of that judgment and being of the view that suspension cannot be ordered as an interim measure without an express provision of law authorising it, referred the matter to a Bench for an authoritative opinion on this question.

(3) IN W. P. No. 3883/83 the licences of Adoni group of toddy shops for the Excise year 1982-83 consisting of 51 shops were suspended. This action was based on a report of the Chemical Examiner in respect of the samples seized and sent to him for opinion by the Sub Inspector of Excise, adoni. When this Writ Petition came up before a Bench of this Court, it was found that a view contrary to the one expressed in W. A. No. 587/77 dated 7. 12. 1977 was taken by another Division Bench of this court in Government of Andhra Pradesh v. y. Narayona Rao, (1979)2 A. P. L. J. 62 (Short Notes). Hence this reference to full Bench.

(4) TO appreciate the contention raised, suffice it to mention a few facts in W. P. No. 5971/80. The petitioner is Toddy Tappers co-operative Society, Madoor in Mahaboobnagar district. This society comprises of 65 Toddy Tappers who eke out their livelihood by tapping toddy trees and selling toddy. It was granted a three lease of toddy shop covering Excise years from 1980-81, 1981-82 and 1982-83. Officials of Excise Department have been taking samples of the toddy sold in the toddy shops of the said society from time to time and sending them under R. 24 of the General Rules for analysis to the chemical Examiner to ascertain if the toddy offered for sale was adulterated. Every time the Chemical Examiner found the samples free from chloral hydrate and unadulterated. On 28th October, 1980 the Sub Inspector of Excise, Nalgonda (Enforcement) visited Village Madoor. It is alleged that he took three samples of toddy from the hut of one carpenter and brought them to the licensed shop of the petitioner Society and prepared a make-believe panchanama as if the samples were taken from the shop of the Society. He gave one of the sample bottles to the person vending toddy at the shop and took away the two other sample bottles. It is stated that those samples were sent to the Chemical Examiner for analysis and the report is awaited, for the meanwhile he made a report to the Excise Superintendent, Mahaboobnagar and the Excise Superintendent by his proceedings Rc. No. Bi/s12/80 dated 11. 11. 1980 served on the petitioner Society on 23. 11. 1980 suspended the licence of the petitioner Society pending enquiry into the allegations of adulteration of toddy. It is this action of the respondent that is challenged in the Writ Petition. It may be noticed at the outset that there is no specific provision either under the act or the Rules authorising the suspension of a licence granted thereunder pending enquiry under Sec. 31 of the.

(5) THE question whether a licence may be suspended pending enquiry into the allegations of contraventions of licence and the provisions of the must, therefore, necessarily be adjudged in the background of the provisions of the and the Rules under which the licence is issued.

(6) THE A. P. Excise Act is an Act intended to consolidate and amend the law relating to the production, manufacture, possession, transport, purchase, and sale of intoxicating liquor and drugs, the levy of duties of excise and countervailing duties on alcoholic liquor for human consumption and to provide for matters connected therewith in the state of Andhra Pradesh. This object is sought to be achieved by regulating the sale of intoxicants including liquor and toddy by prohibiting the production, manufacture, possession, transport, purchase and sale thereof except under a lease and/or licence granted under the. Under the definition of "liquor" toddy is also included. Permits are required to be obtained under Chapter III of the for import and export and transport of all intoxicants. Sec. 9 prohibits import, export and transport of intoxicants except under a permit issued by an Officer not below the rank of the excise Superintendent. For the manufacture, possession and sale of intoxicants including toddy A is obligatory to obtain a licence under Sec. 13 of the. Sec. 13 of the act reads as follows:-"13. MANUFACTURE etc. OF EXCISABLE articles PROHIBITED EXCEPT UNDER a LICENCE; (1) No person shall:---------- (a) manufacture or collect an intoxicant. (b) cultivate hemp plant; (c) tap an excise tree or draw toddy from any such trees: (d) construct or work a distillery or brewery. (e) bottle liquor for sale; or (f) use, keep or have in his possession, any materials; stills; utensils, implements of apparatus, whatsoever for the purpose of manufacturing any intoxicant other than toddy, except under the authority and subject to the terms and condition of a licence granted by such Officer, not below the rank of an Excise Superntendent, as may be prescribed. (2) A licence granted under this Section shall extend to and cover servants and other persons employed by the licensee and acting on his behalf. (3) Notwithstanding anything in Sub-sec. (1) the Government may, by notification, direct that in such area as may be specified therein it shall not be necessary to take out a licence for the manufacture of liquor for bona fide home consumption of the manufacturer. "

(7) SEC. 15 of the prohibits of sale or buying of intoxicant which includes toddy except under the authority and in accordance with the terms and conditions of a licence granted in this behalf. It reads as follows:-"sec. 15 ; SALE OR BUYING OF EXCISEABLE article WITHOUT LICENCE prohibited: no person shall sell or buy any intoxicant except under the authority and in accordance with the terms and conditions of a licence granted in this behalf. Provided that a person having a licence to draw toddy from an excise tree, may sell such toddy to a person licensed to buy toddy under this ct without obtaining a licence for such sale but subject to such restrictions and conditions as the Commissioner may, by general or special order, specify. (2) A licence for sale or buying under sub section (1) shall be granted: (a) by the Excise Superintendent, if the sale or buying is within a district. (b) by the Dy. Commissioner, if the sale or buying is in more than one district within his jurisdiction and: (c) by the Commissioner, if the sale or buying is in an area within the jurisdiction of more than one Dy. Commissioner. Provided that subject to such conditions as may be determined by the Commissioner, a licence for sale or buying granted under the excise law in forte in any other part of India may be deemed to be a licence granted under this Act. (3) Nothing in this section shall apply to the sale of any liquor lawfully procured by any person for his private use and sold by him or on his behalf or his representatives in interest upon his quitting a station or after his decease. CO Notwithstanding anything in sub-sec. (l)and (2), no club or a hotel shall supply liquor to its members of customers on payment of a price or any fee or subscription except under the authority and in accordance with the terms and conditions of a licence granted in that behalf by the Commissioner on payment of such fees as may be fixed by him according to scales of fees prescribed therefor". Section 28 of theoccuring in Chapter iv relating to licences and permits lays down the form and conditions of licence and permits and it is required to contain such particulars as may be prescribed by Rules. It reads as follows:-"sec. 28; FORMS AND CONDITIONS of LICENCE ETC. (1) Every permit issued or licence granted under this Act shall be issued or granted on payment of such fees, for such period, subject to such restrictions and conditions, and shall be in such form and shall contain such particulars, as may be prescribed; (2) The conditions prescribed under sub-sec. (1) may include provision of accommodation by the licensee to excise officers at the licenced premises on the payment of rent or other charges for such accommodation at or near the licenced premises and the payment of the costs, charges and expenses (including the salaries and allowances of the Excisd Officers) which the government may incur in connection with the supervision to ensure compliance with the provisions of this Act, the rules made thereunder and the licence". Sec. 72 authorises the Government to frame the rules in this behalf.

(8) LEASE of toddy shops is governed by sec. 17 of the which empowers the government to grant, for a fixed period, any person, at any place, a lease, among others, for the sale of any intoxicants including toddy. Such lease, however, would not take effect until a licence is issued under the by the Competent officer. Sec. 17 reads as follows:-"17. POWER TO GRANT LEASE; (1) The Government may, subject to such conditions as they may deem fit to impose, grant for a fixed period to any person, at any place a lease jointly or severally for the supply, manufacture or sale of any intoxicant. Explanation : A lease shall not take effect until the Collector or any other competent officer has issued a licence under this act. (2) The Government may confer on any officer the power mentioned in Subsection (1)". Rule 3 of Retail Rules governing lease of right to sell liquor in retail lays down that every lease of right to sell liquor in retail shall be granted by public auction duly notified and such lease shall ordinarily be for a period one Excise Year. Rule 3 (1) insofar as it is material for our present purpose reads as follows:-"r. 3: LEASE OF RIGHT TO SELL IN retail; subject to the provisions of these rules, every lease of right to sell liquor in retail shall be granted by public auction duly notified. The lease shall ordinarily be for a period of one excise year. Provided that where the Commissioner considers it necessary to grant the lease of right to sell liquor in retail in any other manner, he shall do so with the prior approval of the Government. . . . . . . . . . . . . . . . . . . . Such a licence is granted ordinarily by way of public auction. But Rule 3 (1) authorises the Excise Commissioner to grant leases to Co-operative Societies of toddy tappers for more than one year otherwise than by way of auction in accordance with the Excise Policy laid down for the relevant excise year by the Government. Te petitioner-Society was granted a lease of right to sell toddy for a period of three years and licence was accordingly issued to the petitioner-Society which was valid until the Excise year 1982-83 which ended on 30th September, 1983. Although the period for which the licence was issued to the petitioner-Society expired during the pendency of the Writ Petition, as the consequences flowing from the suspension of the licence pending enquiry into the allegations of the contraventions of the licence under Sec. 31 and the ultimate order made thereunder, extend beyond the period for which the licence is valid, the issue is still live and must be decided. Further, as already observed, the question arises much too frequently and calls for consideration.

(9) SEC. 31 authorises cancellation or suspension of the licence if there is contravention of any condition of licence. That provision reads as follows;--"section 31; POWER TO CANCEL or SUSPENDED LICENCE. ETC. (1) Subject to such restrictions as may be prescribed, the authority granting any licence or permit under this act may cancel or suspend it, ---- (a) if any duty or fee payable by the holder thereof is not duly paid; or (b) in the event of any breach by the holder thereof or by any of his servants or by anyone acting on his behalf with his express or implied permission, of any of the terms and conditions thereof; or (c) if the holder or any of his servants or anyone acting on his behalf with his express or implied permission, is convicted of any offence under this Act; or (d) If the holder thereof is convicted of any cognizable and non-bailable offence or of any offence under the Dangerous Drugs Act, 1930, or under the Medicinal and Toilet preparations (Excise Duties) Act, 1955, or under the Trade and Merchandise marks Act, 1958 or under sec. 481, Sec. 482, Sec. 483, Sec. 484, sec. 485, Sec. 486, Sec. 487, Sec. 488 or Sec. 489 of the Indian Penal Code or of any offence, punishable under sec. 112 or Sec. 114 of the Customs act, 1962, or (e) if the conditions of the licence or permit provide for such cancellation or suspension at will. Provided that no licence or permit shall be cancelled or suspended unless the holder thereof is given an opportunity of making his representation against the action proposed. (2) Where a licence or permit held by any person is cancelled under clause (a), clause (b), clause (c) or clause (d)of sub-section (1), the authority aforesaid may cancel any other licence granted or permit issued to such persons under this Act or under the Opium Act, 1878. (3) The holder of a licence or permit shall not be entitled to any compensation for its cancellation or suspension nor to the refund of any fee paid or deposit made in respect thereof. " however, while specific power conferred on the licensing authority to suspend a licence may be exercised only on proof of the contravention of the conditions of the licence no such specific power is conferred to suspend the licence, pending enquiry into the alleged contraventions. It was, therefore, argued that the power to suspend a licence pending enquiry under sec. 31 must be implied as an incidental or consequential power to the one conferred under Sec. 31 of the. In deciding whether such power exists or not regard must be had to several factors including the scheme of the and the specific provisions of the, and the Rules, the nature of the licence, the mischief sought to be remedied and the consequences of suspending the licence. As observed by s. A. De Smith in Judicial Review of Administrative action (3rd Edn.) at Page 198: "whether suspension of a licence should be preceded by notice and opportunity to be heard may depend on various factors - e. g. , the degree of urgency involved, the duration of the suspension, whether suspension involves a finding of guilt, whether it entails material financial loss and whether it is a purely temporary measure pending full review" (Hlookoff v. City of Vancouver (1968)67 d. L. R. (2d) 199).

(10) UNDER the Andhra Pradesh Excise act the lessee enters into an agreement with the Government in the Excise Department through the competent officer pursuant to the lease. On fulfilment of the conditions as to payment of the requisite deposits and fee, the lessee is granted a licence. On grant of lease which is either by way of accepting the highest bid at a public auction or on the determination of the rentals payable by the Toddy tappers Co-operative Society based on the previous years rentals, the lessee would have to deposit 2% of the annual money if it is by public auction and earnest money together with one months rentals. Where the shop is assigned to Toddy Tappers co-operative Society it shall pay 2% of annual money together with half months rentals fixed by the Government on or before the date prescribed for completion of formalities as laid down in Rule 16 of the Retail Rules. The other requirement to be fulfilled by the auction purchaser are the payment of two months rental in cash or in fixed deposit certificates for the period of lease. In case the shop is leased out to the Toddy Tappers Cooperative society, it need not comply with these requirements. Rules 16 and 18 of the Retail Rules govern such deposit and they read as under:-"r. 16 PAYMENT OF RENTAL BY THE auction PURCHASER; (1) The auction purchaser shall pay 2% of the annual rental as earnest money together with one months rental on the day of the auction immediately after the acceptance of the tender or bid as the case may be. The earnest money and one months rental shall be in addition to the rental deposit required in Rule 18. In case of failure to remit the earnest money if any and one months rental on that day, the shop or group of shops shall be reauctioned. (2) Where a shop is assigned to a Tappers co-operative Society, the Tappers Co-Society shall pay 2% of annual rentals as earnest money together with half months rental fixed by the Government on or before the date prescribed for completion of formalities. " "r. 18 ; OTHER REQUIREMENTS; (1) Within ten days from the date of auction the auction purchaser shall deposit two months rental in cash or in fixed deposit certificates obtained from a scheduled Bank, a District Cooperative central Bank for the period of lease and in case of a bank guarantee is offered, such guarantee shall be in force for such period till all proceedings or claims arising from the auction also are finally settled and disposed of. Provided that where the auction is conducted after the 20th September in any year, the deposit referred to shall be made within fifteen days of auction, or before the expiry of the said month whichever is earlier. (2) The auction purchaser shall also be required in all cases where the monthly bid is in excess of Rs. 10,000/- to furnish a non-encumbrance certificate in respect of properties shown in his affidavit with stipulation that during the currency of the relevant lease the properties shown therein shall not be alienated. (3) Where a shop is assigned to a Tappers co-operative Society or a Tribal. Arrack co-operative Society or under Tree for Tapper Scheme or is withdrawn from auction and allotted to Tappers co-operative Society or Tribal Arrack co-operative Society, the Society need not deposit two months rentals. It shall however pay the annual rentals in equal monthly instalments commencing from october. (4) All the interest accuring on fixed deposit receipts shall vest in the Government and may be adjusted towards the government dues including interest, if any outstanding against the auction purchaser, and if there be no such dues, it shall be refunded to the auction purchaser at the end of the lease period. " the lease amount or rental payable by the licence is very heavy while the licencee fee is nominal. Rentals form a substantial part of the Excise Revenue of the State. Under the agreement the lessee undertakes to abide by all the provisions of the Andhra pradesh Excise Act, 1968 and the rules and orders thereunder existing and also those that would be issued from time to time in this respect. He also binds himself to abid by all the general conditions applicable to the sale of intoxicants, special conditions, applicable to toddy/arrack shops/indian and Foreign liquor shops/ denatured spirit shops conditions relating to Tapping licence as are existing and as may be amended from time to time. He further agrees to be bound to pay any enhanced duty gallonage fee or excise duty in the form of tree tax, rent to owners of exise trees and the like as may be levied from time to time. One of the conditions imposed under the licence is that if the licencee fails to pay rental on the excise duty, owners rent or penalities, if imposed, and any other dues or make any efforts to evade payment of these amounts, the licensing authority may reduction the shop, a group of shops obtained by him and realise the entire amounts so due by way of forfeiting the deposit and by way of distraining his moveable and irnmoveable properties whatsoever. The licence issued for toddy-shops is one prescribed under Rule 3 (2)of the Special Rules. Among other conditions that licence issued in Form TS-1 stipulates that it is subject to the General conditions and Special conditions applicable to toddy shops as are in force and that may be enforced from time to time and the licence shall be bound to observe the provisions of the said conditions. Rule 5 of the Special rules prohibits adulteration of toddy in the following terms: "r. 5; Adulteration of Toddy Prohibited; the licensee shall not mix in toddy chloral Hydrate or any other article in the shop or deposit or outside, except sugar, not shall he sell or offer for sale adulterated toddy in any shop. The licensee shall not keep within the premises of the shop phloral Hydrate or any other article injurious to health, which may be used for adulteration of toddy. " the allegation against the petitioner is that he has contravened Rule 5 of the special Rules which constitutes one of the conditions of the licence issued to him and, therefore, his licence is liable to be cancelled under Sec. 31 (1) (b) of the act.

(11) IT would be seen that Sec. 31 provides for cancellation or suspension of the licence on any of the grounds mentioned therein. That order may be made only after giving an opportunity to the licensee of making his representation against the auction proposed to be taken for the allegation of breach of the conditions of the licence. It envisages an enquiry into the allegations made and an opportunity being given to the licensee to rebut the allegation. Only upon proof of the allegation of the contravention of the conditions of the licence- in this case, upon proof of the licences having adulterated toddy with Chloral hydrate, the licence is liable to be cancelled or suspended. Cancellation or suspension of a licence is thus an evil consequence visited upon the licensee for the contravention of the conditions of the licence. Such contravention exposes the licensee even to prosecution under Sec. 34 of the act (Chapter VII), and on conviction he may be sentenced to imprisonment and to pay fine. When a licence is cancelled under Sec. 31 not only his right to sell liquor is taken away, but any other licence which he may be holding under the or under the Opium Act, 1878 are also liable for cancellation as laid down in sub-Sec. 2 of Sec. 31. Further Sub-sec. 3 of Sec. 31 declares that upon such cancellation or suspension he would not be entitled to any compensation or for refund of any fee or deposit made by him in respect thereof. The other consequences of cancellation of a licence are laid down under r. 38 and R. 39 of the General Rules. It entails reauction of the right to vend the liquor. The reauctions would be subject to the same conditions and liabilities as are prescribed in Retail Rules. Any resultant loss on account of reauction or other arrangement to run the shop would be recoverable from out of the properties of the defaulting licencee. The deposits are also liable to be forfeited. . Rules 38 and 39 Jay down as follows-R. 38. CANCELLATION OF LICENCE. "where a licence is cancelled under the provisions of the or the rules made thereunder the right of sale shall be re-auctioned subject to the same conditions and liabilities laid down in the Andhra Pradesh Excise (Lease of right to Sell Liquor in Retail) Rules, 1969. Any resultant loss on account of taking management under the Collector or reauction of the lease shall be recoverable out of the properties of the defaulting licensee. In case of any gain the defaulting licensee, shall have no right to receive it. The cancellation of a licence shall automatically render the lease and all other ancillary permits determined. " r. 39. FORFEITURE OF DEPOSITS. "where a licence is cancelled, the deposit and earnest money made in respect thereof may be forfeited to Government either in whole or in part. " the consequences of suspension of licence under Sec. 31 are thus far reaching. However, after an enquiry into the allegation of contravention of conditions of licence even if the contravention is proved, it is not obligatory upon the Excise authorities to cancel the licence. They may choose to impose only the lesser "penalty" of suspension of the licence for a certain period and during that period the licensee would not be entitled to sell liquor. On the expiry of the period of suspension he would be entitled to resume his business under the licence. The question is whether even during the pendency of an enquiry into the allegations, such a licence issued under the provisions of the and the rules made thereunder could be suspended.

(12) SEC. 31 of the Excise Act, thus, envisages suspension of a licence on the conclusion of an enquiry into the allegations of contra-vention of the conditions of licence. The enquiry itself must be after notice to the licensee and after giving an opportunity to the licensee to make his representation against the action of suspension or cancellation of the licence proposed to be taken. The licence authorising sale of liquor does not provide for its cancellation or suspension at will. Even in the case of a licence or permit, which expressly provides for cancellation or suspension at will, proviso to Sub-sec. (l) of Sec. 31 enjoins such an opportunity being given to the licensee before cancellation or suspension is ordered. The suspension envisaged by sec. 31 is not a suspension pending enquiry, but is one visited upon the licensee for contravening the conditions of licence which include the provisions of the and the Rules. Not only there is no express provision in the or the Rules empowering the licensing authority or any other authority under the ct to suspend the licence as an interim measure, or pending enquiry into the allegations of contravention of the conditions of licence, there is also no provision for suspension of licence without notice. It is argued that such a power need not be expressly conferred. It is an incidental or ancillary power which must be presumed to have been impliedly vested in the licensing authority. When a suspension of a licence as envisaged by Sec. 31 of the could be ordered only after notice to the licensee and enquiry into the alleged contravention and only on proof of the contravention of conditions of the licence, could it be assumed that the suspension even pending such enquiry could be made and that too without notice. If the licence is suspended, during the period of suspension, the licensee would have no right to vend liquor or toddy. Whether suspension is pending enquiry into the allegations of contravention of the conditions of licence or on proof of the contraventions, the consequences would be the same, viz. , the licensees right to vend liquor would stand suspended. In other words, he would loose his right to cary on his business and be deprived of the income which he could reasonably expect by virtue of the licence. In the case of toddy tappers who are the members of the petitioner-society invariably this income is their only means of livelihood. Further, while the order of suspension made as a final order under Sec. 31 of the is for a fixed period, any suspension pending enquiry would be for an uncertain period lor no time limit within which an enquiry should be completed is fixed either under the or the Rules. The so-called interim suspension may in the ultimate analysis prove far more penal than penalty which the licensing authority may impose even on proof of the contravention of the conditions of the licence. In my view, the power to suspend a licence pending enquiry could not have been intended to be invested by Sec. 31 which provides for cancellation or suspension of a licence only on proof of contravention of the conditions of licence. On the other hand, that provision would give an indication that any suspension of a licence could only be upon the conclusion of the enquiry and upon proof of contravention of the conditions of licence and not even while an enquiry into the allegations is pending. In my opinion, that intention of the Legislature must be necessarily deduced from the fact that the licence to vend liquor and toddy is granted not on the payment of a nominal fee, but on the acceptance of the highest bid to pay rental or on the determination of the rental to be paid by the Toddy Tappers Co-operative society as per Rules. This rental is usually very high. Only when a lease is granted, as discussed above, the lessee becomes entitled to obtain a licence on payment of nominal fees. Rental is the main consideration for the grant of lease and the issuance of the consequent licence. The excise Act is intended to raise revenue. Under the vending of liquor is prohibited, except under a licence granted by the government on payment of rental and licence fee. As held in Assam State v. Sristikar, 1957 S. C. R. 295 : 1957 S. C. J. , 345: a. I. R. 1957 S. C. 414, rental forms the consideration for the grant of lease and the right to sell liquor is thus, so to say, purchased by the licensee from the Government. That right subsists so long as the licence granted subsists and so long as the licence is in force the licensee alone has the exclusive right to sell liquor in that particular area; no one else can compete with him. It is a valuable right acquired by paying consideration in the shape of rental. Such a right, in my opinion, could not be taken away without following the elementary principles of natural justice. H. W. R. Wade in his celebrated Book on "administrative Law (5th Edn.) at Page 506 observes: "only an arbitrary boundary can be drawn between cases where the right to a fair hearing is excluded by the nature of the subject-matter and cases where there is some special exception. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . In truth the lesson of the host of cases that have been brought before the Courts is that exceptions are conspicuous by theit absence wherever genuine administrative power has been exercised under statute with any serious effect on a mans property, liberty or livelihood". He remarks: "where a right to be fairly heard has been, denied, it is more probably a case of a bad decision than of a true exception. The rule must come close to deserving the judicial tribates quoted earlier; a principle of universal application, a duty lying upon every one who decides anything. " "the application of natural justice, testing as it does upon statutory implication, must always be in conformity with the scheme of the and with the subject-matter of the case. in the application of the concept of fair play there must be real flexibility. " (Re. Pergamon Press ltd. (1970)3 W. L. R. 792 : (1970)3 All e. R. 535 : 1971 Chancery 388 at 403). "but in principle natural justice should play its normal part, subject to administrative exigencies and to any implication to the contrary that can fairly be inferred from the scheme of any particular Act of Parliament. (Vide N. R. A. Wade on administrative Law" at Page 497)" when a licence could not be cancelled or suspended as laid down in Sec. 31 of the except on proof of contravention of the conditions thereof, merely because an enquiry is pending, it cannot be inferred that the licensing authority or any superior authority may suspend the licence. Such a suspension would, not only offend the principles of natural justice but it would deprive him of a very valuable right acquired on payment of valuable consideration, on a mere allegation that he had contravened the conditions of licence.

(13) THAT this could not have been the intention of the Legislature could be deduced if the matter is viewed from another angle also. If at the conclusion of the enquiry into the allegations it is found that the licensee has not contravened any condition of licence, but pending enquiry the licence is suspended, the licensee would be exposed to grave and irreparable loss, as a result of total stoppage of his business. There is no time limit fixed within which the enquiry should be completed. There is no provision to make good the loss incurred by the licensee on account of such suspension. The licensee cannot sue any one for illegally suspending his licence. In fact, Sub-sec. (3) of Sec. 32 says that the holder of a licence or permit shall not be entitled to claim refund of any fee paid or deposit made in respect thereof. No doubt, this provision relates to cancellation or suspension at the conclusion of the enquiry and not as an interim measure. Whether business is stopped at the conclusion of enquiry or pending the enquiry, the licensee suffers loss all the same. There is no provision for grant of compensation in any event. Further sec. 69 of the specifically protects every action taken under the in the following words:-"no suit or other legal proceeding shall lie against the Government or any Excise officer or any other person empowered to exercise powers or to perform the functions under this Act for anything in good faith done or intended to be done under this Act. " if the action of the Excise authorities in suspending the licence pending enquiry is held to be one envisaged by the, even if ultimately the allegations against the licensee are not proved, the action taken by him would be protected under sec. 69 of the, and the licensee would be left without any remedy, even to compensate himself by claiming damages against the Officer or against the Government. Equally, if on the other hand, such an act is not protected, then the Excise officials would expose themselves to grave risk, if in discharge of their official duties they suspend a licence pending enquiry into the allegations. Either way, in our opinion, the could not have envisaged creating a situation where the licensee would be left without any remedy if the action is taken in good faith by the Excise authorities, and the Excise authorities would be exposed to a claim for damages or for compensation if the action taken by them is not protected under the.

(14) YET another aspect of the matter is that the Excise authorities constituted under the cannot claim to have any inherent powers. They have only such powers as are vested in them specifically under the and the Rules made thereunder. In Guruswamy v. State of Mysore, (1955)1 s. C. R. 305 : 1954 S. C. J. 644 : A. I. R. 1954 S. C. 592, dealing with the question whether the Excise authorities have any inherent power to lease out shops, otherwise than in accordance with the and the rules, held that they have no such inherent power. The Act and the Rules make it plain that liquor licensing in the State of Mysore as in Andhra Pradesh can only be done in certain specified ways and such discretion as is left to the authorities is strictly controlled by Statute and Rules. It is evident that there is a policy and a purpose behind it all and it is equally evident that the fetters imposed by legislation cannot be brushed aside at the pleasure of either Government or its Officers. The Rules bind the State and subject alike. So too in the matter of suspension of a licence any inherent or ancillary power cannot be said to be vested in them.

(15) IN the absence of any specific provision empowering the licensing authority or any superior authority to suspend a licence pending enquiry into the allegations of contravention of the conditions of the licence or the provisions of the and the Rules, no licence or the provisions of the and the Rules, no licence granted under Sec. 15 read with Sec. 28 of the act, in our opinion, could be suspended, under any theory of implied or incidental or consequential power.

(16) OUR learned brother Ramachandra rao, J. , in N. Viswanadha Goud and another supdt. of Excise, RR District, W. P. No. 3176/ 1979 dealing with a case where the licensees complained that their request to send for analysis and report under Rule 24 of the General Rules, one of the sealed sample bottle taken from the licensees shops and given to the licensees, was not complied with, held:-"that the respondent is bound to send the sample given to the petitioners for chemical examination and take action only in the light of the result of analysis of the said sample. If any Departmental action is taken even before the sample given to the petitioners is sent for chemical analysis and the report is received, it will amount to disposing of the case prematurely and it will also be contrary to principles of fair-play". In that view of the matter he gave directions to send the sample for the report of the chemical Analyst and restrained the respondent from taking any action to cancel or suspend the licence. Though in that judgment the question whether the licence could be suspended pending enquiry was not specifically argued, the learned Judge, in our opinion, rightly observed that any departmental action taken before the receipt of the report of Chemical Analysis with respect to the sample, would be contrary to the principles of fair-play, and rightly restrained the cancellation of the licence until the report was received.

(17) IN Government of A. P. v. Y. Narayana rao, (1979)2 A. P. L. J. 62 (Short Notes) (supra.), a Division Bench of this Court dealing with the power of the Excise authorities to cancel or suspend a licence under Sec. 31 read with Rule 28 (1) held, that the power of cancellation or suspension of a licence can be exercised only after giving the holder of the licence to make a representation against the proposed action. Apart from the general application of the Rules, natural justice requires the Excise authorities to give a reasonable opportunity to the licensee to make his representation against suspending or cancelling the licence under Sec. 31 of the and Rule 28 (1) of the. General Rules. A statutory duty is cast on the Excise authorities to provide such a reasonable opportunity to the licence holder before exercising the power of suspension or cancellation of licence. Ofcourse in that judgment also there was no occasion to consider whether the Court had power to suspend the licence pending enquiry into an allegation of contravention of the conditions of licence. But when consequences of suspension pending enquiry are the same as that of a final order of suspension, there should be no difference in the applicationof this principle. It may be noticed that Rule 28 (1) of the General rules envisages cancellation or suspension of a licence for non-remittance of rental by 20th of the month. But even that rule envisages giving of an opportunity to the holder thereof to make a representation before the end of that month against the proposed action. That rule also does not envisage cancellation pending enquiry. In W. P. No. 5644/80, Toddy Tappers Co-op. Society, Kunsi v. Supdt. of Excise, judgment dated 11. 11. 1980, the Court held that the Excise Authorities were not invested with the power to suspend a licence.

(18) IT is, however, argued that, when the Excise authorities are empowered to grant and also to revoke a licence, they must be conceded the incidental power to suspend the licence pending enquiry into the allegations that the licensee has contravened the conditions of licence. Thus according to the learned Government pleader it is necessary to concede as they have substantive power to grant and cancel a licence and if this power is not conceded it would render the enquiry ineffective and defeat the ultimate order or cancellation under Sec. 31. Before conced-ing such power we must consider what are the consequences of conceding the power of suspension pending an enquiry in respect of such a licence. First it denies a notice and an opportunity to make a representation and a hearing. It puts him out of his business. It denies the tapper of his livelihood. He suffers heavy pecuniary loss. The suspension is for an indefinite period. There is no provision for compensating for the loss sustained due to such suspension. The licencing authorities are immune from all legal pcoceedings, even if licensee is ultimately found to have not contravened the conditions of licence and is exonerated under Sec. 31 and the licence is restored. We do not see why it. is necessary to concede such a power when even the act and the Rules envisage cancellation of suspension only on proof of contravention of conditions of licence. In order to make an enquiry into the allegations against the licensee, the licensee need not be put of business by suspending the licence. The enquiry may still go on and the licensee could in no way hamper the enquiry. It has never been the case of the licensing authorities that if the licence is not cancelled, he would be in a position to interfere with the enquiry. He has no power, authority or control over the witnesses that may be required to be examined to prove the allegations against him. The Excise Officials are independent of the licensee. In fact, the licensee is subject to their control, power and authority.

(19) IT is also urged that, after all, no person has a fundamental right to carry on business in liquor. It is a privilege conferred by the State in accordance with the and the Rules. Such a privilege can be withdrawn and, therefore, when an allegation of contravention is made, the privilege can be suspended. No doubt, a citizen has no fundamental right to carry on business in liquor, as repeatedly held by the Supreme Court and reiterated in Amar Chandra Chakrabarty v. The collector of Excise, Government of Tripura, agartala and others, (1973)1 S. C. R. 533: a. I. R. 1972 S. C. 1863. After reviewing the entire case law it was reaffirmed in Har sankar and others v. The Dy. Excise and taxation Commissioner, (1975)1 S. C. C. 737: 1975 Tax L. R. 1569 : A. I. R. 1975 S. C. 1121 and in Lakhanlal v. The State of Orissa, (1976)4 S. C. C. 660 : (1977)1 S. C. R. 811; 1977 Tax L. R. 1701 : A. I. R. 1977 S. C. 722, that the grant a licence is grant of a privilege to vend liquor. There can be no dispute about this proposition. But, the Supreme Court nowhere laid down that after the privilege is granted, that privilege could be withdrawn unilaterally without observing the principles of natural justice, merely because there is an allegation of contravention of the conditions of licence. S. A. De Smith in Judicial Review of administrative Action (III Edn.) at Page 195, considering this aspect observes "some of the analytical concepts used by the Courts have blurred the issues. A licence or permit has often been characterised as a privilege, granting, refusing or revoking a privilege is not taking a decision which affects rights; a duty to act judicially arises only where the decision affects rights; hence licencing authorities are under no implied duty to give notice or opportunity to be heard or to disclose relevant information to those affected. This kind of conceputal reasoning can easily lead to an unjust result. To equate a decision summarily to revoke a licence with a decision not to grant a licence in the first instance may be still more unrealistic. Here the privilege concept may be peculiarly apposite, and its aptness has not been enhanced by the manner in which it has been employed in some modern cases. There ought to be a strong presumption that prior notice and opportunity to be heard should be given before a licence can be revoked. It should be especially strong where revocation causes deprivation of livelihood or serious pecuniary loss, or is dependent on a finding of misconduct. That presumption should be rebuttable in similar circumstances to those in which summary interference with vested property rights may be permissible. " the privilege to vend liquor by grant of a licence need not be conferred and no citizen can claim it as of right. But, once the privilege is granted and the licence is issued on payment of valuable consideration, that right can be suspended or taken away only in accordance with law and after observing the principles of natural justice. When it is sought to be withdrawn by way of punishment for contravention of the conditions of licence, it is no answer to say that since a citizen has no right to vend liquor, the privilege granted to the licensee may be cancelled at any time, irrespective of whether ultimately the allegations are proved or not. It cannot be forgotten that the licensee pays considerable, amount by way of rental to augment the excise revenue, and acquires and right to vend liquor in accordance with the Rules. When those Rules do not expressly authorise suspension of the licence pending enquiry into any allegations, the excise authorities could not be empowered to suspend the licence on mere allegations. The right to suspend such a licence pending enquiry does not follow as a corollary to the dicta that no citizen has a right to vend liquor and that grant of a licence is only grant of privilege.

(20) IT is also urged that this power must be implied to exist in public interest. It is argued that such a power must be conceded for it may become necessary to exercise such power to save the public from being offered adulterated liquor which sometimes proves fatal to the consumers. According to them if the power to suspend licence pending enquiry into allegation that adulterated toddy or arrack is being sold by the licensee is not conceded, then the public at large to whom such toddy or liquor is offered for sale, would be exposed to great hazards. If action to prevent the sale could be taken only at the conclusion of the enquiry, it may be too late. The adulterated toddy may take a heavy toll by the time the enquiry is completed, if the licensee is allowed to vend adulterated toddy unchecked by suspending the licence. No doubt, as observed by N. R. A. Wade in "administative Law", sometimes urgent action may have to be taken on grounds of public health or safety, for example to seize and destroy bad meat exposed for sale (as was done in while v. Redfem, (1879)5 Q. B. D. 15), or to order the removal to hospital of a person with an infectious disease (R. vs. Davy, (1899)2 Q. B. D. 301). As noticed by de Smith in Judicial Review of Administrative action (III Edition) at page 168: "the interests of public safety or public health may similarly justify summary interference with property rights, as where an inspection from the Ministry of Agriculture destroys infected crops, or a dangerous nuisance is abated without notice in the exercise of common law powers, or a public official deifests verminous articles offered for sale (See while v. Redfern (1879)5 Q. B. D. 15). Food suspected of being unfit for human consumption may be seized by a council officer, but condemnation is a matter for Magistrate only. (R. V. Gornwall Q. S. Ex p. Karely, (1956) 1 W. L. R. 906 : (1956)2 all E. R. 872. That ungency may warrant disregard of the audi alteram partem rule in oher situations is generally conceded. (De Verteuil v. Knaggs, A. /. R. 1918 P. C. 67: 1918 A. C. 557". But this contention of the learned counsel based on the above* authorities ignores the fact that the Excise Rules specifically provide for confiscation of toddy and arrack which the Excise authorities suspect as adulterated. Rule 36 of the General rules empowers the Officers of the Excise and Police Department to inspect and also to seize or prohibit sale of arrack or toddy unfit for human consumption or adulterated or diluted in any manner. The danger and hazard pointed out by the learned Government as necessitating the investing of an implied power in the excise authorities to suspend even pending enquiry, is amply taken care of by making the above provision. Such adulterated stock of arrack or toddy could always be seized and the danger averted. For that purpose, the licence need not be suspended pending enquiry. It may be noticed that Rule 24 which entitles the excise Authorities to take samples on a complaint or suspicion that the toddy offered for sale by the licensee is adulterated does not expressly provide for suspension of licence, either before or immediately after taking of the samples. On the other hand, it envisages sending of the samples for Chemical analysis and giving one sample to the licensee from whom the sample is taken. This is obviously, intended to protect the licensee for malicious and false complaints and to vest in the licensee a right to claim that the sample taken from his shop and given to him be sent for Chemical Analysis to disprove the allegation that it is adulterated. This procedure ordained by the Rules only goes to establish that until the enquiry is completed, a licence cannot be suspended. In fact, where it was intended to vest such a power in respect of some of the licenses issued under the, such a provision was expressly made under the rules. Under Rule 24 of the Andhra Pradesh denatured Spirit and Denatured Spirituous preparations Rules, 1971, such a provision is made and it is in the following words:-"in case of breach of the or the rules is detected in the licensed premises, or if any licensee commits any breach of the or the Rules, the Commissioner or an Officer authorised by him in that behalf shall be competent to suspend the licence pending investigation and disposal of the case. A licensee shall not be entitled to any compensation or refund of the fee paid towards the licence under any circumstances. " the absence of such a provision in the act and the Rules in respect of licences governing the sale of arrack and toddy further goes to establish that it was never the intention of the Legislature or the rule making Authority to suspend such a licence pending enquiry under Sec. 31. The Excise Authorities can always withdraw arrack and toddy suspected to be adulterated from circulation. In the face of this specific provision it is not necessary to concede the power to suspend the licence pending enquiry as a power incidental or ancilliary or consequential to the main power to cancel the licence.

(21) NOTWITHSTANDING the above, it is argued that, just as a disciplinary authority which can impose a punishment of dismissal or removal from service, may in public interest suspend an employee pending enquiry into grave charges, the authority which has issued a licence can always suspend the licence/pending enquiry into allegation of contravention of conditions of licence when the and the Rules and the licence provides for cancellation or suspension. We are find that this anology is not apt. That apart even in cases of disciplinary proceedings against public servants, the Supreme Court in R. P. Kapur v. Union of India, (1964)5 S. C. R. 431 : a. I. R. 1964 S. C. 787, held as follows:--"disciplinary matters may reasonably include suspension pending enquiry. On general principles the Government like any other employer would have a right to suspend a public servant in one of two ways. It may suspend any public servant pending departmental enquiry or pending criminal proceedings. This may be called interim suspension. On the Government may proceed to hold a departmental enquiry and after his being found guilty order suspension as a punishment if the rules so permit. This will be suspension as a penalty. These general principles will apply to all public servants, but they will be subject to the provisions of Art. 314. The authority entitled to appoint a public servant would be entitled to suspend him pending a departmental enquiry into his conduct or pending a criminal proceeding. . . . . . This suspension pending enquiry must be distinguished from suspension as a punishment which is different matter altogether depending on the rules on that behalf. " while such a power may be assumed to be impliedly vested in a Disciplinary Authority, the same presumption, in my view cannot be imported in the case of a liquor licence, for the position of an employee vis-a-vis the employer is different from that of a licensee, who purchases the exclusive right to vend toddy for very valuable consideration. An employee who is accused of mis-conduct is in the service of the employer. The employer may remove him for his misconduct and pending enquiry into mis-conduct he may not like to avail of his employees services and. suspend him. Such suspension has been repeatedly held to be not a punishment. If at the conclusion of the enquiry, mis-conduct is not proved, he is reinstated in service and the entire monetary loss suffered by the employee is restored to him. But even in the case of employees, the Supreme court cautioned in Taraknath case, 1971 lab I. C. 487 : (1971)3 S. C. R. 715 : A. I. R. 1971 S. C. 823, that the suspension should not be ordered, for it has, certainly, some evil consequences, and damage the reputation though the monetary loss may be compensated or restored later. In the case of a licensee the damage caused to the employee by suspension pending enquiry is more or loss the same as that caused by suspension on proof of allegation of contravention. The licence may be restored, but the loss suffered is not compensated. While the right to employment proceeds from the order of appointment, the right to vend liquor under the licence is purchased for valuable consideration; it is subject to the statute governing the sale of intoxicants and the conditions of the licence granted thereunder. That right can only be suspended under the provisions of the act and the Rules and not otherwise. The Supreme Court in S. D. O. Faizabad v. S. N. Singh, (1970)1 S. C. R. 151 : (1970)1 S. C. J. 285 : A. I. R. 1970 S. C. 140, in the case of elected Pradhan held that since his right to be in office stems from his election by a majority of the electroal, he cannot be suspended pending enquiry into any allegations under any notion of implied or ancillary power. He cannot be removed from his post, except under the statute on proof of allegations. So also a licence granted for consideration under the provisions of the, cannot be tinkered with pending enquiry. 21-A. In support of the contention that it is an incidental ancillary power, reliance is placed upon the judgment of a learned single Judge of this Court of Chinnappa reddy, J. , as he then was in W. P. No. 3235/ 1968 and batch. Dealing with the suspension of a licence (granted under the Andhra pradesh Foodgrains Dealers Licensing order, 1964) pending enquiry into the some irregularities noticed on a surprise inspection of the shop and the godown of the licensee, said: "the licensing authority is, therefore, authorised to grant or refuse a licence, impose terms and conditions on the licensee and punish the licensee by way of cancellation or suspension of licence, of course, after due enquiry. In my opinion implicit in the power to grant or refuse a licence, the power to impose conditions and the power to punish for breach of the conditions is the power to suspend a licence pending enquiry. Having reghard to the various powers conferred on the licensing authority the power to suspend a licence pending further enquiry must be considered as incidental to the power to cancel or suspend a licence by way of punishment and it need not, therefore, be separately conferred. " the learned Judge also further held: "it is not necessary to give an opportunity to the licensee before suspending his licencee pending further enquiry. "

(22) REFERRING to this decision, a Bench of this Court in V. Manesham v. The State of a. P. , (1974)2 A. P. L. J. 366 with reference to a a licence granted under the Andhra Pradesh foodgrains Dealers Licensing Order, 1964, and of the Andhra Pradesh Sugar Dealers licensing Order, 1963, expressed its full agreement with the view taken by the learned single Judge in the following words: "the dominant object and intendment of these Control Orders imposing some restrictions on the traders and businessmen is to secure equitable distribution and availability at fair prices of essential commodities like rice, wheat and sugar to the general public. . . . . . . . . By the impugned order the licensing authority while temporarily suspending the licences ordered the remaining quantities of essential commodities held by the petitioner and the cards to be transferred to another fair price shop and stoppage of supply of further quantities of essential commodities to the petitioner. This, the authority has done obviously to ensure the fair distribution of the remaining quantities of essential commodities. . . . . . . . . This power to a licensing authority to suspend the licences temporarily is very essential to prevent the licensees immediately from further indulging in malpractices in distribution of essential commodities whenever they are noticed. In the absence of any such power to the licensing authorities there will not be any scope for them to ensure the smooth running of the distribution of essential commodities to the general public". In that context the Court applied the principle: "if an authority is entitled to do an act as expressly authorised, it is also entitled to do that which is reasonably incidental to or consequential upon it.- The power of licensing authority to suspend the licence temporarily pending enquiry and decision on certain irregularities alleged against the licensee is incidental or consequential to the power of the licensing authority to refuse or grant licences imposing conditions and cancel or suspend the same in case of contravention of any conditions of the licence and it need not, therefore, be separately conferred. "

(23) ANOTHER Division Bench in Raja Narsimloo and another v. The Commissioner of Excise, 1978 A. P. L. J. H. C. (Notes) 6 : 1978 Tax l. R. 2090 : W. A. No. 587/77 and batch, judgment at. 7th December, 1977, applied this principle to the case of a licence granted under the Andhra Pradesh Excise act and upheld the suspension of a licence pending enquiry into allegations that the licensee had adulterated the toddy with chloral hydrate. Sambasiva Rao, J. , (as he then was) speaking for the Bench expressly referring to the above judgment of the division Bench and the Judgment of another learned single Judge in W. P. No. 3224/1974, dated 26. 11. 1974 held that the appropriate excise Officer has the power to suspend the licence as an interim measure. The bench observed: "it cannot be said that the licensing authority which had the power to issue licences and to revoke, cancel or suspend, does not have the incidental power to suspend the licence or permit as an interim measure pending further action when some contravention of the law of the licence has been detected. " the Bench further held: "the authority concerned is empowered under R. 36 to prohibit the toddy from being sold when it found the toddy to have been adulterated. Manifestly the officer concerned has power to prohibit the sale of such adulterated toddy. Therefore, there is no doubt whatsoever that the authority, who has suspended the licence pending final order, is fully empowered under the law to prohibit the sale. Prohibition of sale also includes the power to suspend the sale which is another form of enforcing prohibition of sale. We are, therefore, satisfied that apart from Sec. 31 (l) (b), the Excise authority has power to suspend the activities of the licence holder in selling toddy. " in our opinion, power conferred to prohibit the sale of toddy is not the same thing as suspending the licence. Rule 36 expressly authorises the Excise Officer to prohibit sale of adulterated arrack or toddy even without suspending the licence. From that it can never be implied that the excise authority may even suspend the licence, which has far more serious consequences than mere prohibition of sale of toddy. In that judgment only the general principle that an authority empowered to issue a licence has also the power to revoke it was taken as sufficient to empower that authority to suspend the licence even pending enquiry. That in our opinion, with due respect, does not necessarily follow. The suspension or revocation of licence contemplated by sec. 31 of the is ordered on proof of the contravention of conditions of licence and the order made under Rule 36 prohibiting sale of toddy does not amount to suspension of licence. The judgments relating to suspension of licences issued under the Essential Commodities act read with Foodgrains Dealers Licensing orders dealing with other Essential Commodities, cannot, in my opinion, be applied with all their rigour to the licences issued under the Excise Act. The licences issued under the Essential Commodities Act or the Licensing Orders made thereunder are not issued for considerations They are intended to regulate supply and distribution of commodities essential to the community at large. The licences issued under the Excise Act are issued for consideration and deal with liquor, arrack or other intoxicants and are intended to regulate, among others, the sale thereof. These commodities are not essential to the life of the entire community, but only to such persons who choose to consume those intoxicants. These factors which make all the difference have not been taken note of in any of the above decisions. Thus the only Division Bench judgment in in raja Narasimmoo and others v. The Commissioner of Excise (W. A. No. 587/77 and batch; judgment dt. 7. 12. 1977, 1978 A. P. L. J. H. C. (Notes; 6 : 1978 Tax L. R. 2090, which specifically dealt with the question of suspending an Excise licence did not take note of the peculiar nature of the licence granted under the Excise Act and the absence of any provisions to restore the status quo ante in the event of the allegations not being proved. Our learned brother Choudary, J. , in his order dt. 29. 9. 1981 referr in W. P. No. 5971/80, if we may say so, rightly pointed out that "the right to prohibit sale of arrack or toddy is not the same as the right to suspend a licence". A licence which has been suspended under Sec. 31 of the ndhra Pradesh Excise act, 1968 can be used after a specified period of time. "under such an order of suspension for a specified period the licensee would atleast know that he would be able to use his licence after a specified time. But the so-called interim suspension for an indefinite time does not have even that virtue in it, because it would be in operation till the enquiry is completed". We may add that there being no provision prescribing the period within which an enquiry initiated under the in respect of an allegation of contravention of conditions of licence, may be completed, the enquiry may be prolonged indefinitely and the licence which is valid generally for a period of only one year may itself expire. The suspension of licence whether interim or final, will have the same effect and hence the preconditions imposed under sec. 31 for suspension of a licence must necessarily be imported into any order of interim suspension made pending enquiry. I find myself in agreement with the above observations of Choudary, 3.

(24) IT must therefore be held that a licence issued under the Andhra Pradesh Excise act read with the Andhra Pradesh Excise (Lease of Right to Sell Liquor in Retail rules read with the Andhra Pradesh Excise (Tapping of Trees and Toddy Shops) Rules, cannot be suspended pending enquiry under sec. 31 of the into the allegation that the licensee had contravened the conditions of the licence. It may be suspended only on proof of the alleged contravention enquiry into which must be made after notice to the licensee and after giving him an opportunity of making his representation.

(25) IN view of the above discussion, I am of the opinion that the judgment in rajanarasimhloo and another v. The Commissioner of Excise, W. P. A. No. 587/77, judgment dt. 7. 12. 1977, 1978 A. P. L. J. H. C. (Notes) 6 : 1978 Tax L. R. 2090, which holds that the licensing authority vested with the power to issue, revoke, cancel or suspend a license under the has also the power to suspend every licence or permit issued under that Act as an interim measure without notice even pending enquiry into the alleged contravention of the law governing that licence, is not correctly decided and accordingly must be over-ruled; that can be suspended only upon a finding that the licensee has contravened the conditions of licence which finding must be arrived at after giving the licensee an opportunity of being heard.

(26) IN all these writ petitions, the licences were suspended without prior notice and even pending enquiry into the allegation of contravention of the conditions of licence and as such the orders of suspension are illegal and without jurisdiction. These writ Petitions must accordingly be allowed, and the impugned orders of suspension quashed; but in the circumstances without costs. Advocates fee Rs. 250/- in each. Majority view: P. Kodandaramayya, J. , on behalf of himself and Lakshmana Rao, J:- My lord the Chief Justice in his judgment has referred all the facts fully leading upto this reference and hence we need not re-state them.

(27) THE short question that falls for consideration by the members of this full Bench is whether the licencing authority under the Andhra Pradesh Excise Act 17 of 1968 hereinafter called the has got power to suspend a licence or permit pending enquiry without giving an opportunity to the holder thereof, in view of the specific provision in Sec. 31 (l)Proviso which states that no licence or permit shall be cancelled or suspended unless the holder thereof is given an opportunity of making his representation against the action proposed. In other words whether the said proviso operates as a prohibition against the powers of the licencing authority to pass such orders as an incidental or ancillary power of granting such licence or permit or of passing final orders of suspension or cancellation. The view of the Division Bench inwrit Appeal No. 588/77 dated 7. 12. 77 answering the question in the affirmative is challenged and that was why the reference was made.

(28) IN order to answer this question we must examine (1) the nature of licencing power generally with particular reference to the licencing in liquor, (2) the distinction between a suspension as a penalty and a suspension as a temporary measure and (3) whether the incidental or ancillary powers of suspension are excluded in the present case.

(29) VERY extensive licencing powers are possessed by State Governments, local authorities, police and Magistrates and some times as Wade puts it "they give what might be called the power of commercial life or death over a persons trade or livelihood". The Courts must examine whether the powers of licencing authority while granting, withholding or cancelling is exercised bona fide, reasonably and without negligence and within the powers conferred on them under the Statute. The degree of discretion of the licencing authority may vary concerning the nature of the subject. In this connection it is pertinent to note that the distinction between a right and a privilege was well illustrated in the licencing area as some courts have held that some licences are rights which could not be withdrawn without opportunity of hearing. The licence to sell liquor or operate a dance hall may fall under the category of privileges. The distinction between rights and privileges assumed considerable importance in recent years in England. The judgment of the privy Council in Nakkuda Ali v. Jayaratne, 1951 Appeal Cases 66 where the Privy Council described the cancellation of a trading licence by the textile Controller as with-drawing the privilege, though criticised by later judgments and writers, stood by itself as an illustration pointing out the degree of applicability of the rule of audi alteram partem to a right as distinguished from a privilege. To the same category r. v. Metropolitan Police Commissioner, 1953 (2) AII. E. R. 717 : (1953)1 W. L. R. 1150, belongs Lord Goddard, C. J. , held that the decision of a Commissioner, Metropolitan police revoking a licence of a cab driver was held to exercise disciplinary power and accordingly observed that "it is most undesirable, in my opinion, that he should be fettered by threats of orders of certiorari and so forth, because that interferes with the free and proper exercise of the disciplinary powers which he has. " Similarly, the Court of Appeal in R. vs. Gaming Board, (1970)2 All. E. R. 528, upheld the refusal to give a certificate of consent by the gaming Board without necessity of assigning any reasons for the decision. In our country when an administrative action of a licensing authority is challenged the right to carry on any occupation, trade or business guaranteed under Art. 19 (1) (g) of the Constitution of India provides an additional dimension to Judicial Review. But in the case of intoxicants the Government has got full control and the State has got power to part with those rights for a consideration as privileges, and Art. l9 (1) (g) has no application the judicial review of the administrative action if the violation is not a right but a privilege will be undoubtedly of a different degree and content. Hence under the impugned proceedings the petitioners have to establish the violation of statutory provisions in respect of their privilege conferred upon the State under the licences granted to them.

(30) THE next question to be examined is whether the rule of audi alterem partem is excluded in the case of an order suspending a licence as a temporary measure but not as a penalty. This distinction was brought out clearly in Furnell v. Whangarei high Schools Board, 1973 Appeal Cases 860 ; (1973)1 All. E. R. 400 : (1973)2 W. L. R. 92, where the complaint of a school teacher suspending him pending determination of the charges was negatived holding that the suspension cannot be classified as a penalty. In Lewis v. Heffer, (1978)1 w. L. R. 1061 : (1978)3 All. E. R. 354, the court of Appeal expressly held that the right to a hearing depends on the distinction between a suspension as a temporary measure or as a penalty. In that case lord Denning, MR accepting the view of Megary, J. , in John v. Rees, (1969)2 all. E. R. 274 : (1969)2 W. L. R. 1294, that an expulsion of a member protanto operates as a penalty and the rules of natural justice applies, observed that "those words apply, no doubt, to suspensions which are inflicted by way of punishment, as for instance when a member of the Bar is suspended from practice for six months, or when a solicitor is suspended from practice. But they do not apply to suspension which are made, as a holding operation, pending enquiries. Very often irregularities are disclosed in a government department or in a business house; and a man may be suspended on full pay pending enquiries. Suspicion may rest on him; and so he is suspended until he is cleared of it. No one, so far as I know, has ever questioned such a suspension on the ground that it could not be done unless he is given notice of the charge and an opportunity of defending himself, and so forth. The suspension in such a case is merely done by way of good administration. A situation has arisen in which something must be done at once. The work of the department or the office is being affected by rumours and suspicions. The others will not trust the man. In order to get back to proper work, the man is suspended. At that stage, the rules of natural justice do not apply. " this extract clearly shows the distinction between a suspension as a penalty and a suspension as a tentative measure pending final orders.

(31) THE rule of natural justice is similarly excluded where preliminary proceedings are taken for further enquiry. In Wisemen vs. Borneman, 1971 Appeal Cases 297 : (1969)3 w. L. R. 706 s (1969)3 All. E. R. 275, Lord reid observed "every public officer who has to decide whether to prosecute or raise proceedings ought first to decide whether there is a prima facie case, but no one supposes that justice requires that he should first seek the comments of the accused or the defendant on the material before him. So there is nothing inherently unjust in reaching such a decision. in the absence of the other party. " No doubt the observation relates to the initiation of the proceedings but not passing adverse orders. In Pearlberg v. Varty (Inspector of Taxes), (1971)1 W. L. R. 728 : (1971)2 aii. E. R. 552 (CA), the same question was answered by Lord Denning in the following words: "i would go so far with him as to say that, in reaching a prima facie decision, there is a duty on any tribunal to act fairly: but fairness depends on the task in hand. Take an application to a Court which by statute, or by the rules, or, as a matter of practice, is made ex parte. The Court itself is the custodian of fairness. If the matter is so urgent that an order should be made forthwith, before hearing the other side, as in the case of an interim injunction or a stay of execution, the Court will make the order straight away. We do it every day. We are always ready, of course, to hear the other side if they apply to discharge the order. But still the order is made ex parte without hearing them. It is a prima facie decision. " The above judgment was affirmed by House of Lord in Pearlbergs case, (1972)1 W. L. R. 534 : (1972)2 All. E. R. 6 (H. L.) and Lord Hailsham of St. Marylebone l. C. described the provisional nature of the decision as a significant factor in deciding whether there was a right to a hearing, although, not, as stressed in Wiseman v. Borneman, 1971 A. C. 297, the conclusive factor.

(32) THE power of the Court to grant ex parte injunctions and stays are well known instances of excluding the rule of natural justice. The granting of ex parte stay of an execution of a decree is undoubtedly passing an order prejudicial to the respondent without hearing but it is not a final order, but a tentative one and the violation of natural justice cannot be complained. So these illustrations clearly show that rules of natural justice can be excluded as a part of preliminary enquiry as a tentative measure when it is not intended to operate as a penalty. De-Smith in his judicial Review of Administrative Action, fourth Edition at page 199 observes "where an act or proposal is clearly the first step in a sequence of measures which may culminate in a decision detrimental to a persons interests, the Courts will generally decline to accede to that persons submission that he is entitled to be heard in opposition to this initial act, particularly if he is entitled to be heard at a later stage. " Again at page 216 the same author states. "desirable though it may be to act judicially before deciding to interfere with private rights, summary action may be justifiable when an urgent need for protecting the interests of other persons arises. The owners of the wrecked oil tanker, the Torrey Canyon, which was polluting the Engine Coastline, were not allowed the benefits of the audi alterant partem but before the British Government ordered the ship to be bombed. " No doubt the author observes at page 225 "whether suspension of a licence should be preceded by notice and opportunity to be heard may depend on various factors-e. g. , the degree of urgency involved, the duration of the suspension, whether suspension involves a finding of guilt, whether it entails material financial loss and whether it is a purely-temporary measure pending full review. " So it is clearly seen that if the denial of opportunity is only postponed considering the urgency, the law allowed it, as the public interest will be defeated if prior notice of opportunity is necessary as a condition precedent in every case. We are now examining whether the power to suspend pending enquiry exists or not. It is not as if, that such power can always be exercised invariably. If orders are passed which constitute abuse of power or excess and unreasonable, this Court can always interdict the proceedings, we have seen that the rule of audi alteram partem is excluded when the impugned order is not a measure of punishment but a tentative decision pending final order.

(33) NOW, we must examine the statute to see whether such power is excluded by virtue of the proviso in question.

(34) THE above question depends upon the rule of construction viz. , whether Sec. 31 (1)proviso excludes the incidental and ancillary power of the licencing authorities to pass such orders.

(35) IT is now settled that the power to pass an order stay pending an appeal is an incidental or an ancillary power as held by the Supreme Court in I. T. Officer v. Mohd. Kunhi, 71 ITR 815 [LQ/SC/1968/278] : (1969)1 ITI 458 : (1969) 1 SCJ 772 : AIR 1969 sc 430 [LQ/SC/1968/278] . A question arose whether the appellate Tribunal has got power to grant stay even though the Incometax Act, 1961 is silent on that question. Their lordships ruled "an express grant of statutory power carries with it by necessary implication the authority to use all reasonable means to make such grant effective. The powers which have been conferred by Sec. 254 on the Appellate Tribunal with widest possible amplitude must carry with them by necessary implication all powers and duties incidental and necessary to make the exercise of those powers fully effective". Their Lordships having held that such incidental and ancillary powers of granting stay exists laid down the limits of such power. "the power of stay by the Tribunal is not likely to be exercised in a routine way or as a matter of course in view of the special nature of taxation, and revenue laws. It will only be when a strong prima facie case is made out that the tribunal will consider whether to stay the recovery proceedings and on what conditions and the stay will be granted in most deserving and appropriate cases where the tribunal is satisfied that the entire purpose of the appeal will be frustrated or rendered nugatory by allowing the recovery proceedings to continue during the pendency of the appeal. " Similarly even though the power of suspension pending enquiry is taken to be ancillary and incidental power it cannot be used in every case as a routine procedure but it must be justified on reasonable grounds. The suspension of a licence brings the business or trade to a stand still. It undoubtedly operates as a stay but it was contended that such power of suspension is not necessary for exercising the final orders of punishment of suspension or cancellation and for that the learned counsel for the petitioners relied upon S. D. O. Faizabad v. S. N. Singh, (1970)1 S. C. R. 151 : (1970)1 S. C. J. 285: a. I. R. 1970 S. C. 140, where their Lordships ruled that the State Government has no power to suspend a Pradhan of a Gaon sabha pending enquiry into the charges levelled against him. Dealing with the implied powers Their Lordships held: "it is well recognised that where an Act confers a Jurisdiction, it impliedly also grants the power of doing all such acts, or employing such means as are essentially necessary to its execution. But before implying the existence of such a power the Court must be satisfied that the existence of that power is absolutely essential for the discharge of the power conferred and not merely that it is convenient to have such a power. " They held that suspension of a Pradhan cannot be said to be absolutely essential for the proper exercise of the power pending final orders of punishment. It was a case where a person elected to an office was sought to be removed. They also held that initially the Government did not appoint him and there is no jural relationship of master and servant and hence the Government has no power to remove him though they have got a power to punish him as a penalty for the breach of any statutory powers. As ruled in the very same case, the test is the Court must be satisfied that the existence of the power is absolutely essential for the discharge of the powers conferred. The trade in liquor is only a privilege conferred upon the citizen. There may be an urgent need to prevent any further sale or trade in the goods of the holder of a licence to prevent public injury or deaths if the liquor is proved or even suspected to be poisonous.

(36) IT is argued that Rules 34 and 36 of Andhra Pradesh (Arrack and Toddy Licences general Conditions) Rules 1969 which provide for inspection and seizure of arrack would be a sufficient measure and suspension of a licence is wholly unnecessary. Though we respectfully disagree with the view expressed by the Division bench in Writ Appeal No. 588/77 dated 7. 12. 77 on the construction of the above rules 34 and 36 we are clearly of the opinion that the above rules would not justify the denial of the incidental and ancillary powers of suspension pending enquiry. Rules 34 and 36 are in the following terms: "34. INSPECTION:-- (1) Any Excise officer or Police Officer not below the rank of a Sub Inspector shall be competent to enter and inspect the shop and examine the licence or test or measure the arrack or toddy therein. (2) The licensee shall, furnish necessary receptacles at the time of inspection for the measurement of arrack or toddy and shall afford all facilities for such inspection. 36. SEIZURE OF ARRACK OR TODDY unfit FOR HUMAN CONSUMPTION:-Any officer of the Excise and Police departments who is competent to inspect shall also be competent to seize or prohibit arrack or toddy from being sole when he finds the same unfit for human consumption or to have been adulterated or diluted in any manner. " the above Rules disclose that the officer may be able to seize the goods which are visible or known to him. The stocks undisclosed and not seized are liable to be sold under the licence so long the licence is not suspended. It may not be physically possible to seize all the stocks known and unknown. Further the officer may not have come to the conclusion whether the goods are adulterated or not. Even the liquors suspected of poison should not be allowed to be used pending final orders. A mere possibility of seizure of goods in his custody is not a sufficient measure effective for preventing public injury or danger if the goods are ultimately found to be adulterated and prohibited. The holder of a licence may seek sometime to file objections on a notice issued by the authority. Prima facie any denial of such opportunity may appear to be unreasonable. If time is granted the holder of the goods may make good the entire stock that is liable to be seized. Since we rule that Rules 34 and 36 are not intended to cover all circumstances to prevent the holder of such licences to effectively carry on the business till final orders are passed, it is wholly unjust prohibiting the licencing authority to take tentative action.

(37) THE point that can be argued in favour of the petitioners is that once the Legislature prohibited suspending a licence without opportunity it will imply that incidental and ancillary powers to pass an order even as a tentative measure is excluded. For this we must see the correct rule of interpretation of incidental and ancillary powers.

(38) THE doctrine is wellknown in Constitutional law while construing legislative powers. But this doctrine is also applied in the execution of statutory powers. In Small v. Smith, (1884)10 Appeal cases 119 (H. L.), it was observed that "when you have got main purpose expressed, and ample authority given to effectuate that main purpose, things which are incidental to it, and which may reasonably and properly be done and against which no express prohibition is found, may and ought, prima facie, to follow from the authority for effectuating the main purpose by proper and general means. " No doubt this ancillary power cannot be exercised if a specific provision governs the subject or it is inconsistent with the other powers granted to the authorities. In determining whether the power framed by the statutory authority can be held to be incidental to powers expressly conferred by a statute the Court must see not only that such power may be derived by reasonable impliacation from the provisions of the but also whether such power is necessary for carrying out the purpose of the. In Baroness Wenlock v. River Dee Company, (1885)10 Appeal Cases 354, it was observed "whenever a corporation is created by act of Parliament, with reference to the purposes of the, and solely with a view to carrying these purposes into execution, I am of opinion not only that the objects which the Corporation may legitimately pursue must be ascertained from the itself, but that the powers which the Corporation may lawfully use in furtherence of these objects must either be expressly conferred or derived by reasonable implication from its provisions. " in Assistant Collector, C. E. v. N. T. Company of India Limited, 1973 Tax L. R. 1607: air 1972 SC 2563 [LQ/SC/1972/358] , it was laid down that a power to do something essential for the proper and effectual performance of the work which the statute has in contemplation may be implied. While construing section 33 (c) (2) of the Industrial Disputes act. Their Lordships of the Supreme Court invoked this doctrine of implied powers and held that Sec. 33 (c) (2) of the Industrial disputes Act takes within its purview cases of workman who claimed that the benefit to which they are entitled should be computed in terms of money even though the right to the benefit on which their claims is based is disputed by their employers.

(39) IN this connection it is also necessary to note two Division Bench rulings. In v. Manesham v. State of A. P. , (1974)2 a. P. L. J. 366, a Division Bench consisting of Obul Reddy, C. J. (as he then was)and Ramachandra Raju, J. , examined the power of licensing authority raising the identical questions. Clause 7 of the sugar Dealers Licensing Order and Clause 8 of the Foodgrains Dealers Licensing order provided that licence can be cancelled or suspended after giving an opportunity of stating the case against the proposed cancellation. When the suspension of the licence pending final orders was questioned, the above Division Bench ruled: "this power to a licensing authority to suspend the licences temporarily is very essential to prevent the licensees immediately from further indulging in malpractices in distribution of essential commodities whenever they are noticed. In the absence of any such power to the licensing authorities there will not be any scope for them to ensure the smooth running of the distribution of essential commodities to the general public. If an authority is entitled to do as expressly authorised it is also entitled to do that which is reasonably incidental to or consequential upon it. The temporary suspension order passed by the second respondent pending enquiry, we have no doubt, is reasonable in the circumstances of the case and it is incidental or consequential to the power of the licensing authority to refuse or grant licences imposing conditions and to cancel or suspend the same in case of contravention of any of the conditions of the licence. " again in K. Venkataratnam v. District revenue Officer, A. I. R. 1975 A. P. 359, a similar though not identical question was raised under the Essential Commodities act of sale of essential commodities seized pending Sec. 6-A enquiry. It was ruled that: "the sale of essential commodity, as an interim measure, does not in any way affect the rights of the dealer in the property, for the sale proceeds are there in the event of his being found not guilty. " in two unreported judgments Chinnappa reddy,j. , as a Judge of this Court held that the power to suspend licence is implicit in the power to grant or refuse a licence.

(40) RECENTLY the Supreme Court while sustaining the Constitutional validity of a provision in Punjab Foodgrains Dealers licensing and Price Control Order, 1978 providing suspension pending enquiry observed in M/s. Sukhwinder Pal Bipan Kumar vs. State of Punjab, (1982)1 S. C. C. 31 : A. I. R. 1982 S. C. 65, that the power of suspension is a necessary concmitant of the power to grant a privilege or a licence and the power of suspension is a necessary adjunct of the power to grant a licence.

(41) THE power of suspension which is concomitant or adjunct is no doubt restricted by the statutory provision under the proviso in question to pass final orders of suspension but that power cannot be said to have taken away the power to pass an interim order of suspension not intended to be a penalty but only interim measure to pass effective orders. This conclusion of ours applies with greater force when we notice that we are concerned with the liquor licences in which the citizen has no right guaranteed under Art. 19 (1) (g)of the Constitution of India but only a privilege. No doubt once a licence is granted valuable right would accrue to him and that can be taken away as per the provisions of the. But as a rule of construction the proviso cannot have a larger effect than it intended to govern the final disciplinary proceedings of suspending or cancelling a licence or permit. Rule 18 of. the Andhra Pradesh Rectified spirit Rules, 1971 is as follows:-"18. (1) If the licensee or permit-holder under these rules is guilty of breach of any of the rules, his licence or permit is liable for cancellation and he will also be prosecuted under the relevant provisions of the: provided that subject to the provision of Sec. 47 of the, the licensing authority may accept from any person guilty of breach of any provision of the or the rules or from any person whose property is liable to confiscation, such compounding fees as may be necessary, subject to a maximum of Rs. 1,000/-, in lieu of punishment for breach of any of the provision of the or of the Rules or of confiscation of the property. (2) The licence is also liable to be suspended by the licensing authority pending investigation or enquiry into breach of these rules or licence conditions by the licensee or by any person in his employ: provided that revocation under Sub-rule (1) and suspension under Sub-rule (2)shall not be made until the holder of the licence has been given an opportunity showing cause against the action proposed to be taken. (3) Every such order shall be in writing and shall specify the reasons for the suspension or revocation and shall be communicated to the licensee. (4) When a licence is cancelled or suspended under this rule, the holder of the licence shall not be entitled to claim from the government any compensation or refund of licence fee for such cancellation or suspension. " it is clear that the rule provides suspension pending an investigation and a proviso enjoins the authorities to give opportunities. The question is would this rule lend support to the petitioner. To our mind it is not. If the proviso to Sec. 31 (1) is sufficient and the authorities are bound to issue the notice even for suspension pending enquiry the Sub-rule (2) with its proviso is unnecessary as the law presumes such power pending enquiry. The rule specially provided an opportunity even for suspension pending enquiry. It shall be noticed that under Rule 18 there is no suspension as a substantive punishment but provides only lor cancellation and a suspension pending enquiry. Further it is not permissible rule of construction to cpnstrue the power under the statute with reference to the rule made by the Executive even though the rules have statutory powers. Hence we are clearly of the opinion that the licensing authority can suspend, a licence or permit pending final orders.

(42) HOWEVER we must make it clear that this incidental or ancillary powers cannot be exercised in a routine way or as a matter of course. The licensing authority is bound to exercise the discretion reasonably, bona fide and without negligence considering the circumstances of the case when such interim suspension is necessary. If it is possible to give an opportunity to the petitioner and the circumstances do not warrant such a drastic step, the licensing authority is bound to aflord an opportunity as the power of suspension pending enquiry should not be exercised as an invariable rule or mode of making an enquiry. Further, the suspension pending the enquiry should not be allowed to continue for an unduly Jong period. The authorities are bound to complete the enquiry as early as possible and any undue delay when it constitutes abuse of power makes the order liable to be set aside. Whether the suspension of licence must be preceded by notice or opportunity must depend upon various factors such as, degree of urgency involved, the duration of suspension, the nature of the breach, public danger to be avoided, and other similar circumstances which warrant an immediate action where it is not feasible or possible or even advisable to give an opportunity to the holders of the licences before passing interim orders of suspension.

(43) HENCE we answer the reference holding that the licensing authority has got ancillary and incidental powers of suspending a licence or permit pending enquiry in a given case if the circumstances clearly warrant taking into account the urgency in the case.

(44) IN the result, all these writ petitions where the interim order of suspension is challenged are liable to be dismissed and accordingly they are dismissed without costs. Advocates fee Rs. 250/- in each. The Order of the Full Bench was delivered by the Honble the Chief Justice:-In view of the majority opinion, the writ petitions and the writ appeal stand dismissed, but, in the circumstances, without costs. Advocates fee Rs. 250/- in each. Writ petitions and Writ appeal dismissed.