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Present : A. R. Cornelius, C. J., S. A. Rahman, B. Z. Kaikaus and Hamoodur

Rahman, JJ

Civil Appeal No. 72 of 1962, decided on 10th May 1963.

(On appeal from the judgment and order of the High Court of West Pakistan, Lahore, dated the 29th November 1960, in Writ Petition No. 689 of 1960).

, S. 59(f) (iii) read with S. 21(d)(10)‑Fixation of price of beer ex‑brewery‑Can only take place under S. 21 (d) (10) and not under S. 59 (f) (iii)‑Sub cl. (10) of cl. (d) of S. 21 a general power and not a power of imposition of a condition to grant of licence‑Section 21 overrides S. 59 (f ) (iii) in matters with which it. deals‑Power to issue Notification‑Wrong provision of statute cited in Notification Error "ordinarily" does not invalidate Notification Punjab Brewery Rules, 1932, r. 10'37‑Punjab Distillery Rules, 1932, r. 9'124 Punjab Liquor Licence Rules, r. 5'39 (40).

Atta Ullah Sajjad Additional Advocate‑General (Ihsanul Haq Advocate Supreme Court with him) instructed by Ijaz Ali

Attorney for Appellants.

Shabir Ahmad Senior Advocate Supreme Court (Nasim Hassan Shah Advocate Supreme Court with him) instructed by Zahir Abbas Attorney for Respondent.

Date of hearing : 10th May 1963.

‑This is an appeal by special leave against an order of the High Court of West Pakistan, Lahore, holding that a notification fixing the price of the beer which is being sold by the respondent, i.e., the Murree Brewery Company Limited., was ultra vires.

The respondent holds a licence for manufacturing beer. Previous to the impugned notification the respondent was selling beer at the rate of Rs. 20‑2‑0 per dozen quarts in quart bottles exclusive of the price of bottles. On 16th August 1960, the Director of Excise and Taxation purporting to exercise the powers vesting in him under sub‑clause (iii) of clause (f) of section 59 of the Punjab Excise Act (I of 1914) issued the impugned notification by which the price of beer was fixed at Rs. 18‑8‑0 per dozen quart bottles inclusive of the price of bottles. This notification was challenged by the respondent by a writ petition in the High Court of West Pakistan on a number of grounds. The ground that found favour with the High Court was that under section 59(f)(iii) the price could be varied only at the time of the grant of a licence or its renewal. The relevant portion of section 59 runs

"59. The Financial Commissioner may, by notification, make rules‑

(f) prescribing the authority by, the restrictions under and the conditions on, which any licence, permit or pass may be granted, including provision for the following matters :‑

(iii) the fixing of the strength of any intoxicants and the fixing of maximum or minimum prices or both for their sale."

Section 59 mentions the Financial Commissioner, but it is admitted that by a notification of 1956, the powers of the Financial Commissioner now vest in the Director of Excise and Taxation. The learned Judges of the High Court came to the conclusion, on the wording of section 59 (f) (iii), that the fixing of price was permissible only at the time of grant of a licence because under this provision the fixing of price could take place only in the form of imposition of a condition of the grant of a licence. The learned Judges were further of the opinion that the renewal of a licence amounted to a grant of a licence. It was argued before the learned Judges "that although under section 59 (f) (iii) the power of fixation of price could be exercised only as a condition of the grant of a licence there was another provision that is, section 21, which empowered the Financial Commissioner to fix the price to be charged by the licence of a Brewery. Section 21 of the Punjab Excise Act runs:

"21. Establishment or licensing of distilleries and breweries.‑-

The Financial Commissioner, subject to such restrictions or conditions as the Provincial Government may impose, may‑

(a) establish a distillery in which spirit may be manufactured under a licence granted under section 20 ;

(b) discontinue any distillery so established ;

(c) license the construction and working of a distillery or brewery ;

(d) make rules regarding‑

(1) the granting of licenses for distilleries, stills or breweries ;

(2) the security to be deposited by the licensee of a distillery or brewery ;

(3) the period for which the license shall be granted ;

(4) the inspection and examination of such distillery or brewery and the warehouses connected therewith and of the spirit or fermented liquor made and stored therein ;

(5) the management and working of distillery or brewery;

(6) the form of accounts to be maintained and the returns to be submitted by the licensee ;

(7) the upkeep of buildings and plants ;

(8) the size and description of stills, and other plant ;

(9) the manufacture, storing and passing out of spirit, and the contents of passes ;

(l0) the prices to be charged by the licensee ;

(11) any other matters connected with the working of distilleries or breweries.

Clause (d)(10) of this section empowers the Financial Commissioner to make rules regarding the price to be charged by the licensee of a brewery. This is a general power and not a power of imposition of a condition to the grant of a licence. The impugned notification had been issued under section 59(f)(iii), but it was argued before the learned Judges on behalf of the West Pakistan Government that if there did exist a power of fixing the price the fact that a wrong provision was referred to in the notification would not make any difference. The learned Judges were of the opinion that section 59(f)(iii) controls section 21(d)(10) and that section 21(d)(10) was not intended to override what was implied in section 59(f)(iii) namely that the price could be fixed only as a condition attached to the grant of a licence. The learned Judges were, in arriving at this conclusion, moved by the general consideration that the fixation of a price during the term of a licence may injuriously affect the licensee who may have to sell at a loss.

We do not find ourselves in agreement with the view that section 59(f)(iii) controls section 21(d)(10). On the other hand we are of the opinion that section 21 contains a special provision with respect to distilleries and breweries and that it is section 21 which will override section 59(f)(iii) in respect of the matters with which it deals. It will be observed that the power which the Financial Commissioner exercises under section 21 is subject to such conditions and restrictions as may be imposed by the Provincial Government. On the other hand under section 59 the Financial Commissioner possesses uncon trolled power for making rules. If section 59(f)(iii) could empower the Financial Commissioner to fix the price of beer in the case of a brewery, the result would be that he would have absolute power of fixing such price and this is inconsistent with section 21(d)(10) which provides that the power of the Financial Commissioner to fix price is subject to the control of the Provincial Government. It is true that section 59 does not make any exception in the case of a brewery or a distillery, but section 21 and section 59 are to be read together and no part of section 21 which is a special provision can be allowed to be nullified by section 59 which is a general provision. The result is that the fixation of price of beer to be sold by a brewery can only take place under section 21(d)(10) and not under section 59(f)(iii). The impugned notification purports to be inl exercise of the power granted by section 59 (f) (iii).

Learned counsel for the West Pakistan Government attempted to justify the impugned notification with reference to two provisions. The first is rule 10.37 of the Punjab Brewery Rules, 1932. It runs :

"10.37. Licensees shall be bound by all additional rules for the control of breweries which may hereafter be prescribed under the existing law, or under any law which may hereafter be enacted, and by all special orders issued by the Financial Commissioner with regard to individual breweries; and shall cause all persons employed by them in their breweries to obey all such rules."

It is contended that by virtue of this rule the Financial Commis sioner can make "special orders" with respect to individual breweries and "special orders" will include an order relating to fixation of price. We are of the opinion that the special orders mentioned in this rule refer only to orders passed for the control of a particular brewery and the fixation of price is not a matter regarding such control. Under section 21(d)(10) the power to fix price can be exercised by the framing of rules and it is necessarily involved in this provision that the power could not be exercised except by the framing of a rule. We may in this connection refer to the Distillery Rules which contain a specific provision empowering the Financial Commissioner to fix price of the manufactured product. Rule 9.124 of the Punjab Distillery Rules runs

"9.124. The licensee shall duly comply with any directions that may, from time to time, be issued by the Financial Com missioner concerning the price or prices to be charged by him to licensed vendors, or shall, if and whenever so directed, forthwith reduce or enhance as the case may be, such price.

This rule it will be observed expressly refers to the fixation of price. The Punjab Brewery Rules came into force on the 1st of July 1932, while the Punjab Distillery Rules had already come into force on the 5th May 1932. If the intention was that in respect of a brewery also the Financial Commissioner should have power to fix a price there is no reason why the provision with respect to a distillery should not have been repeated in the Brewery Rules. The omission of a provision similar to rule 9.12 '4 in the Brewery Rules appears to be deliberate.

The second provision on which reliance has been placed by the appellant is rule 5.39 (40) of the Punjab Liquor License Rules.

It runs:

"5'39 (40). The licensee shall sell liquor at such rates as may from time to time be fixed by the Excise Commissioner, Punjab."

This rule occurs in Part "D" of the Punjab Liquor Licence Rules gild the heading of Part "D" is : "

APPLYING TO ALL LICENSES".

The opening part of rule 5.39 runs

"5.39. Every license under these rules is granted subject to the conditions set forth in this rule."

There follow a number of conditions including the one reproduced above contained in rule 5.39 (40). Learned counsel for the x appellants, relying upon the heading "

", argued that sub‑rule (40) of rule 5.39 governs all licences and, therefore, the price of beer can at any time be fixed under this rule. The defect in this argument is that rule 5.39 in spite of the heading of Part "D", applies by its wording only to licences issued under the Punjab Liquor Licence Rules. The heading properly interpreted, in spite of the use of the words "ALL LICENCES" refers only to licences issued under the Punjab Liquor Licence Rules. The licence for a brewery is not one issued under the Punjab Liquor Licence Rules.

There is yet another argument to be considered before the legality of the impugned notification is decided which though not developed during argument is apparent on the record. While at the beginning of his argument learned counsel for the appel lants did say that if the reference to section 59(f)(iii) was inappropriate the notification will still be valid if it was within the power granted by section 21(d)(10), during the course of argument, when it was pointed out to him that the power of fixing a price could be exercised only by the framing of rule he did not reply that the notification in question was in fact a rule. He relied upon it only as an order fixing price which had been passed by the Director of Excise and Taxation and tried to bring it within the "special order" mentioned in rule 10.37. It was open, however, for him to argue that the notification in question was also a rule under section 21(d)(10). The power vested in the Financial Commissioner under section 59 is a power of making rules and by means of this notification he had purported to make a rule. It is not necessary that a rule must relate to all breweries though a rule ought to be of a general nature. In fact in Pakistan there is only one brewery and it may well be said that by fixing the price of beer to be sold by the respondent the Director of Excise and Taxation was fixing generally the ex- brewery price of beer.

Assuming that the notification in question is a rule it cannot be validated on the ground that although a power to make rules in respect of this matter did not exist by virtue of section 59(f)(iii) it did exist under section 21(d)(10). Ordinarily when a power does exist in a public authority the reference to a wrong provision does not invalidate the exercise of that power. The rule is however subject to qualifications and will not validate every wrong reference to the source of power. It will be inapplicable to a case where the two powers that is the power that the officer purports to exercise and the power that in fact exists are not of the same quality or are mutually exclusive of each other. The power which the Financial Commissioner has by virtue of section 59 is an absolute power. He can make rules as he likes without any control by any other authority. The power under section 21(d)(10), however, is subject to control by the Provincial Government. When the Financial Commissioner purports to exercise a power under section 59 the Provincial Government is not called upon to consider whether any conditions or restrictions should be imposed on the exercise of that power by the Financial Commissioner. If on the other hand the Financial Commissioner wants to exercise the power which vests in him under section 21(d)(10) he will, in order to comply with section 21 refer the case to the Provincial Govern ment for its approval before he passes orders. If we were to condone the wrong reference in such a case the result would be that the Financial Commissioner will exercise full control over price without reference to the Government. We would hold, therefore, that the fixation of price cannot in this case be justified by reliance on section 21(d)(10).

We are of the view that the notification was ultra vices and was of no effect and we dismiss this appeal with costs.

A. H. Appeal dismissed.

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