The Hindu : T.N. to extend licences of IMFL shops till Aug. 31

Online edition of India's National Newspaper
Saturday, Aug 10, 2002

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T.N. to extend licences of IMFL shops till Aug. 31

By Our Legal Correspondent

NEW DELHI AUG. 9. Even as the Supreme Court today declined to stay a judgment of the Madras High Court directing the Tamil Nadu Government to renew the licences of about 7,000 IMFL shops, the State Government gave an undertaking to extend the licences till August 31.

During `mention' time on July 30, when the Bench declined to stay the impugned judgment, an undertaking was given that the licences would be extended till August 15 and the special leave petition (SLP) against the High Court judgment was directed to be listed for hearing on August 9.

During the hearing today of the SLP, a Bench comprising Justice G.B. Pattanaik and Justice Ruma Pal pointed out to the senior counsel for the State, K.K. Venugopal, that the High Court had upheld all the clauses in the G.O. which were intended to augment the revenue and quashed only that clause which was arbitrary.

Citing a Supreme Court judgment, counsel said that licence renewal was not automatic, and the `renewal clause' was brought about by a change of policy, under which the minimum offtake for each licencee was fixed.

The Bench observed "this is a method of arm-twisting, it is not for augmenting the revenue of the State but for something else.'' But Mr. Venugopal told the Bench that this was an "uncharitable remark.''

Counsel submitted that the directions issued by the High Court would cause serious financial loss to the State to the tune of about Rs. 505 crores both from the point of view of realisation of the privilege amount and on account of inability of the licencees to lift the minimum stock.

Senior counsel for the respondent-licencees, P. Chidambaram, submitted that nowhere in the G.O. the condition of lifting of minimum stock was mentioned and for the first time the Government was putting out this reason for not renewing the licences.

The Bench thereafter issued notice to the respondents for their reply by August 13 and rejoinder, if any, in two days and directed listing of the matter on August 16.

In the meanwhile, it recorded an undertaking from Mr. Venugopal that the licences would be extended till August 31.

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