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Neelam Wines Vs. Commissioner of Police, Chatta Bazar, Hyderabad - Court Judgment

LegalCrystal Citation
CourtAndhra Pradesh High Court
Decided On
Case NumberWrit Appeal No. 496 of 1980 and Writ Petn. No. 3907 of 1980
Reported inAIR1981AP191
ActsHyderabad City Police Act, 1348F - Sections 3 and 21(1); Constitution of India - Articles 19(1) and 226; Excise Act; Places of Public Resort Act
AppellantNeelam Wines
RespondentCommissioner of Police, Chatta Bazar, Hyderabad
Appellant AdvocateShankar Rao Bilolikar and ;Anil Kumar, Advs.
Respondent AdvocateGovt. Pleader for Home
.....order -article 19 (1) (g) of constitution of india and sections 21 (1) (f) and 3 (h) of hyderabad city police act, 1348 - application for running wine shop - commissioner refused license without giving ground for refusal - reasonable restriction can be imposed on citizen's right under article 19 (1) (g) - restrictions should be both substantially and procedurally reasonable -held, order restricting right should give reason for it. (ii) interpretation of statues - section 21 (1) (f) of hyderabad city police act, 1348 - 'public place of entertainment' in its natural construction does not include wine shop - inclusive definition is artificial but does not cease to be legal because of artificiality. - - , clearly supports the first contention of the writ petitioner and would, if.....p.a. choudary, j.1. the petitioner, under the name and style of m/s. neelam wines, desires to run a wine shop from a mulgi bearing municipal no. 15-7-280 of begum bazar, hyderabad. the proposed wine shop is only a place from where bottled liquor is to be sold. no liquor is to be consumed on the premises of the shop. for that purpose, the petitioner first obtained from the excise superintendent, hyderabad district, an excise licence no. 39 dated 12-12-79 after paying a huge licence fee of rs. 13,500. next he had also obtained permission from the municipal corporation of hyderabad on 16-11-79 a 'no objection' declaration from the landlady of the premises.2. additionally, on 25-1-80 he applied to the city commissioner of police, hyderabad for grant of a licence under the hyderabad city.....

P.A. Choudary, J.

1. The petitioner, under the name and style of M/s. Neelam Wines, desires to run a wine shop from a mulgi bearing Municipal No. 15-7-280 of Begum Bazar, Hyderabad. The proposed wine shop is only a place from where bottled liquor is to be sold. No liquor is to be consumed on the premises of the shop. For that purpose, the petitioner first obtained from the Excise Superintendent, Hyderabad District, an Excise Licence No. 39 dated 12-12-79 after paying a huge licence fee of Rs. 13,500. Next he had also obtained permission from the Municipal Corporation of Hyderabad on 16-11-79 a 'No Objection' declaration from the landlady of the premises.

2. Additionally, on 25-1-80 he applied to the City Commissioner of Police, Hyderabad for grant of a licence under the Hyderabad City Police Act. That application was rejected by the City Police Commissioner through his Memo dated 24-7-80. The petitioner now challenges in this writ petition the legality of that refusal order made by the City Police Commissioner. As this Writ Petition is concerned with the validity of that Memo, it is necessary to set out the Memo in its entirety which reads thus:--

'You are hereby informed that your request for grant of police licence to run a retail wine shop at premises No. 15-7-280 Begum Bazar, Hyderabad, is rejected from Jaw and order point of view'.

Two main arguments are advanced in support of this Writ Petition. It is first argued for the petitioner that for running of a wine shop in the City of Hyderabad, there is no legal obligation to obtain any licence under the above Hyderabad City Police Act (hereinafter called 'the Police Act'). It is said that the licence which the petitioner had already obtained from the Excise Superintendent under the Excise Act is enough in law to run a wine shop. Secondly, it is argued by the petitioners that in any case the order of the City Commissioner of Police refusing to grant licence from the view point of 'Law and Order', without giving any further particulars and justification, is illegal and ultra vires of his powers under the Hyderabad City Police Act.

3. The learned Government Pleader, on the other hand, has contended that to run a wine shop in Hyderabad obtaining of a licence from the City Commissioner of Police is a legal requirement under the Hyderabad City Police Act and that that requirement is in addition to the requirement to obtain a licence under the Excise Act. In answer to the petitioner's second contention, the learned Government Pleader said that although the order of the Commissioner of Police is laconic still it can be supported and sustained by a reference to the records which show that there is really a law and order problem in the area justifying refusal.


4. The first question that this Writ Petition raises is whether or not a police licence is required to run a wine shop in Hyderabad. This question is no longer res Integra. It has been the subject-matter of two unreported decisions recently rendered by this Court. In Cri. M. P. No. 872 of 1977 dated 1-8-1977 Sambasiva Rao J.. (as he then was) ruled that when once the Commissioner of Excise grants to a person a licence under the Excise Act to run a wine shop from a particular premises in the City of Hyderabad, law does not require of him to obtain any further licence under the provisions of the Hyderabad City Police Act. According to this ruling of Sambasiva Rao J., the Excise licence is sufficient to run a wine shop. This judgment of Sambasiva Rao J., clearly supports the first contention of the writ petitioner and would, if accepted, render consideration of the second question in this case unnecessary. But recently a Division Bench of this Court consisting of Jayachandra Reddy, J., and P. Rama-chandra Raju J., in Crl. A. No. 962 of 1979 dated 26-9-1980 took exactly a contrary view to the one taken by Sambasiva Rao, J. The learned Judges construing Section 21 (1) (f) (i) and Section 3 (h) of the Hyderabad City Police Act and the Rules made by the City Police Commissioner under that Act held that obtaining of a police licence in addition to the Excise Licence is also a requirement of the law to run a wine shop in the City of Hyderabad.

5. Does the petitioner require a licence additionally to the licence he had already had under the Excise Act? That is the first question in this case.

6. A licence may be prescribed by law for the purpose of regulating an activity which is otherwise open to and permissible to a citizen. Such a requirement may extend to obtaining of more than one licence. It is common knowledge that to run a hotel attached with bar, more than one licence is required; and to run an amusement park under the Places of Public Resort Act, more than one licence is required. So it is, to run several industries.

7. Examples can easily be multiplied, Laotse, the great Chinese Philosopher thought that the art of Government was to leave the people alone. He advised 'Govern a country as you would fry a small fish'. (See- 'Lin Yutang's 'From Pagon to Christian' P. 127). But with the vast expansion in the State regulatory activity and the ever-increasing exercise of police power by the State both necessitated by the advent of a welfare State into our midst, we cannot afford to be left alone. After all, freedom is the recognition of necessity. We are today governed from our cradle to grave by some State regulation or other. As a result, we are today more a Nation of licenced men rather than a Nation of free men. We, therefore, find the requirement to obtain two licences to run one business is in no way extraordinary or special about running of a wine shop: particularly so, when the object of the Excise Act is to protect the State revenues while the object of the police Act is to maintain law and order. We cannot, therefore, accept the first part of the argument of the petitioner's counsel on the basis of his somewhat general and metaphysical reasoning.

8. In order to decide the present controversy, what we have to examine is the language of the Hyderabad City Police Act, 1348 F. If the language of the Act requires a licence to run a wine shop the petitioner must obtain it.

9. The Preamble of the Police Act shows that that Act was passed as an effective means for prevention and detection of crimes and maintenance of peace. In order to achieve that objective, Section 21 of the Act empowered the City Police Commissioner to make rules with respect to certain enumerated matters. One of such matters is to be found in Clause. (f) (1) of Section 21 (1). It reads as follows:--

'the keeping of a place of public amusement or place of public entertainment.'

In a simpler language, Clause. (f) (i) of Section 21 (1) of the Act enables the City Police Commissioner to make rules requiring any person keeping 'a place of public entertainment', to obtain a licence. The Police Commissioner, acting under Section 21 of the Act, did make a rule requiring a person who desires to keep a place of public entertainment in Hyderabad to take a licence under the Act. Now, Section 3 (h) of the Act, by an inclusive definition, defines 'Public place of entertainment,' as including a 'wine shop.' It follows that to run a wine shop a licence would be required to be taken provided the City Police Commissioner made the appropriate rule as it has been admittedly made in this case. There is little doubt, that this definition of a place of public entertainment as including a wine shop, is artificial Viewing from the point of the preambulatory objectives of the Act, it is difficult to see how the running of a wine shop where liquor is merely sold in bottles without its being consumed on the premises could ever have anything to do with 'law and order'.

Further, a wine shoe where bottled liquor is merely sold without being consumed cannot normally be called a ''place of public entertainment'. In selling or buying a liquor bottle as different from consuming its contents, no element of public or private entertainment could he involved even for an ardent and devoted drunkard. But the Statute thought otherwise. The wine shop is expressly included under the inclusive definition of place of public entertainment under Section 3 (h) of the Act. Such a definition may be artificial but does not on that account cease to be legal. The office of an inclusive definition Clause is to make something to mean other than what it normally conveys. Its meaning cannot therefore be rejected on the ground that it is unnatural.

In Dilworth v. Stamp Commissioner, 1899 AC 99 (105) it was said that the word 'includes' is generally used in interpretative clauses of a Statute in order to enlarge the meaning of the words or phrases occurring in the body of the Statute. It follows, that for the purpose of the Hyderabad City Police Act, a wine shop should be regarded as a 'place of public entertainment.' However unnatural this inclusion may be, we have to take that meaning for the present purpose. Doing so, we must further hold that because a wine shop is a place of public entertainment, its running requires a licence to be obtained under the Police Act. In other words, no wine shop can be run in Hyderabad without obtaining a police licence as required by the rules made by the City Police Commissioner, Hyderabad. The upshot of all this is that for running of a wine shop in Hyderabad, it is not sufficient to obtain a licence under the Excise Act, though it may be necessary. A wine shop can be run in Hyderabad only under a police licence in addition to other required licences.

This is the clear and direct result of Section 3 (h) read with Section 2V (1) (f) (i) of the Hyderabad City Police Act further read with the rules made by the City Police Commissioner. We, therefore, find it rather difficult to agree with the view of Sambasiva Rao J. (as he then was) that no licence is required to be obtained under the Hyderabad City Police Act by a person intending to run a wine shop with an Excise licence already in his possession. The learned Judge's Judgment does not disclose that the above statutory provisions of the Hyderabad City Police Act, which appear to us to be rather clear and specific on the point were brought to his notice. The first contention of the writ petitioner based as it is on the judgment of Sambasiva Rao J, must therefore be rejected and consequently it should be held that the police licence must be obtained by the petitioner for running his wine shop.


10. This leads us to a consideration of the correctness of the second argument of the petitioner. The petitioner challenges the validity of the order of the Police Commissioner rejecting his application for grant of a licence under the above Police Act. As we have already held that no wine shop can be legally run in the city of Hyderabad without obtaining a police licence, the refusal of the Police Commissioner to grant such a licence would clearly result in preventing the petitioner from doing the business of running a wine shop. It is needless to say that an act of the State authorities fraught with such serious consequences for the citizen can only be permitted to be done in strict accordance with the requirements of the law. The notion that the one who has discretion to licence or refuse to licence may exercise his discretion according to his whim, will or fancy is clearly untenable in law. The power to licence being a Statutory power, the authority that seeks to exercise such a power must exercise it subject to the limitations expressed or implied by the Statute.

Whatever may be the width of the language of a Statute used in conferring discretionary power that its exercise is strictly limited to the purposes of the Statute judicially gathered is now authoritatively decided by such well-Known cases as those in Padfield v. Minister of Agriculture. (1968) 1 All ER 694 (HL) and Rohtas Industries Limited v. S. D. Agarwal, : [1969]3SCR108 . The same principle is also sometimes expressed by saying that law recognizes no unlimited discretion as was done in the well-known case of Khudiram v. State, : [1975]2SCR832 .

Any other interpretation of a Statute would clearly endanger the validity of the parent Act. It follows that the licensing authority must first inform itself of the purposes sought to be achieved by the law's insistence on possessing a licence and should refuse an application only far the furtherance of those purposes. The stated purposes of the Police Act in this case are to preserve peace and prohibit crime. The question is whether these legally articulated objectives are furthered by the refusal to grant a wine shop licence

A wine shop, as we have already noted, is not a place where liquor is consumed. It is merely a place where it is sold, People would not normally crowd there. People would come to such a wine shop, purchase a bottle and walk away. As crowds would not congregate at such a place, the running of such shop constitutes no greater threat to law and order than opening a medical stores or a general stores. In our opinion, this order of the Police Commissioner refusing to grant licence to the petitioner to open a wine shop is clearly unrelatable to the statutory purposes of preserving peace and is therefore ultra vires of the Statutory powers of the City Police Commissioner.

11. We are not oblivious to the possibility of some unruly elements gathering around the wine shop and disturbing peace. But we hold that it is not normally permissible to the State to prevent a person from doing his lawful business or carrying on his lawful activity on the basis that some other person or persons might be provoked to disturb peace, because of those lawful acts. Where such a situation develops or is likely to develop, the clear duty of the police would be to afford protection to the lawful activities and to pot down those who are the lawbreakers. The police by totally prohibiting the carrying on both the legal activity as well as the illegal activity would only bring about peace of the graveyard. That cannot be the purpose of the Act. In fact that would be contrary to the general objects and ideals of the police system itself. The celebrated one-hundred old judgment of a Divisional Court in England in Beatty v. Gill Banks, (1382) 9 QBD 308 is a dear Judicial authority for this fundamental legal position.

In that case, members of the Salvation Army marched to a meeting which they intended to conduct lawfully and peaceably however knowing fully well that their marching was likely to be opposed and disturbed by a so called Skeleton Army. Apprehending breach of public peace Magistrates had prohibited the march by the Salvation Army. But the Salvation Army disregarded not only the threat of disturbance and disorder from their rival army but even the prohibitory orders from the Magistrates that it should not march. For this act of disobedience of the magisterial orders their leaders were charged with the offence of unlawful assembly. The Divisional Court held that a man might not be punished for acting lawfully even if he acts in the knowledge that by his so doing he might lead another man to act unlawfully. In effect, the Divisional Court in that case held that the police could not disperse an otherwise lawful assembly simply because of opposition from another body and directed that the police should direct their attention to dealing with the unlawful counter-demonstration. Where there is no time for dispersal of the unlawful crowd probably different consideration might arise. The commendatory comments of Holmes J., on this case in Queen v. Justices of London-Deny, (1891) 23 LR Ir 440 are rather illuminating:

'The principle underlying the decision seems to me to be that an act innocent in itself, done with innocent intent, and reasonably incidental to the performance of a duty, to the carrying on of business, to the enjoyment of legitimate recreation, or generally to the exercise of a legal light, does not become criminal because it may provoke persons to break the peace, or otherwise to conduct themselves in an illegal way'. (See-- Dicey's 'Law of the Constitution', Wade's Edition (9th) p. 276.)

O'Brien J., in the above Irish case said of the Salvation Army rule thus:--

'If danger arises from the exercise of lawful rights resulting in a breach of the peace, the remedy is the presence of sufficient force to prevent that result, not the legal condemnation of those who exercise those rights.'

12. The impugned order is liable to be set aside for procedural reasons also.

13. On the authority of Jaffer, we hold that selling liquor is never held by common law to be a nuisance per se (Jailer's 'Judicial Control of Administrative Action', p. 533). No doubt, it can, in our Republic by Statute, be completely prohibited as per our Directive Principles. But a system of licensing which the Hyderabad City Police Act establishes is not a prohibition. Under that Act, some are permitted, some others are not permitted to sell the liquor. That is all. The Hyderabad City Police Act does not make the selling of liquor into a nuisance. Every citizen has therefore a right under Art. 19(1)(g) of our Constitution to engage himself in such a trade. The State power to impose reasonable restrictions on such a right is undoubted. But the exercise of that power on this right must be reasonable both substantively and procedurally. Procedurally this State power to impose reasonable restrictions can be exercised only by following a fair procedure. That fair procedure, in our opinion, clearly requires of the City Police Commissioner to articulate the reasons for which and the facts on which he was refusing to grant the licence to this particular applicant. This is the minimum which procedural fairness would require of him. Otherwise, refusal would be arbitrary and therefore, unconstitutional as we hold it to be in this case.

14. The same result can also be reached by a different process of reasoning. The petitioner made an application under the Police Act for the grant of a licence. That application was rejected by the Police Commissioner. The Police Commissioner can only reject the application on the basis of existence of certain facts. There is thus a controversy about the existence of these facts. In other words, there is a proposition by the petitioner and opposition to that proposition by the Police Commissioner. (See Hoosain Kasam Dada case : 1983(13)ELT1277(SC) ). This is can be resolved only by an application of State quasi-judicial power. But State quasi-judicial power can be exercised only subject to certain implied conditions. It is an important condition for the exercise of quasi-judicial power that its exercise is adequately articulated and founded on objective facts. That means the Police Commissioner's order ought to have given facts and reasons in support of his refusal to grant licence. As that was not done, it amounts to the Commissioner exercising power without respecting the limitations. Obviously, that cannot be legal.

15. Ultimately, a Nation can endure only so long as its citizens give willing co-operation to it. Nothing is better calculated to exact the consent of a citizen than his feeling of identity with the means adopted by the Nation in its administration. A speaking order makes him a participant either directly or indirectly in its affairs. It helps to suffice the entire Republic with a feeling that a citizen's inalienable right to be governed by law and law alone forms vital part of the foundations of the Republic. A speaking order ensures him at least the dignity of decent Consideration of his grievances. Unspeaking order is an avowed enemy of his basic rights and is based not on respect for him. Caesar might have attempted to justify his refusal to go to the Senate by declining to disclose the cause and by saying that cause was in his will. But the will of a modern constitutional functionary in a Democratic Republic must be founded in his stated cause.

It is for that reason that the American Federal Administrative Act requires all administrative decisions to include a statement of findings and conclusions and reasons and the Court of Appeals for the District of Columbia has declared 'The necessity for administrative agencies to provide a statement of a fundamental principle of administrative law.' (See -- Bernard Schwartz's 'Administrative Law', p. 423).

16. The impugned order, in our case, records no findings and recites no reasons. It is not based on respect for a citizen. We, therefore, hold it invalid and set it aside.

17. The Government Pleader, no doubt, invited us to go through the records to satisfy ourselves about the existence of the circumstances that would justify the City Police Commissioner's order. Following the well-known judgment of the Supreme Court in Commr. of Police v. Govardhan Das Bhanji, : [1952]1SCR135 , we declined with thanks this invitation. In that case, the Supreme Court ruled that public orders must be construed objectively with reference to the language used in the impugned order itself. It would not therefore be open for us to justify the impugned action except on the basis of the language of the order. This principle was reiterated by our Supreme Court in subsequent decisions. In fact, the American decisions such as those reported in Burlington Truck Lines v. United States (1962) 9 L Ed 2d 207 (215) show this to be a universal principle of administrative law in all constitutional States. Objectively construed, the impugned order cannot be upheld and it is accordingly quashed.

18. A writ of mandamus will issue directing the City Police Commissioner, Hyderabad to issue the licence to the petitioners to run a wine shop.

19. The respondent shall pay the costs of these proceedings. Advocate's fee Rs. 200. W. A. No. 496/80:--

20. This Writ Appeal is against the orders of our learned brother Raghuvir J., dismissing an interlocutory application.

21. In view of the order passed in the above writ petition, no separate orders are necessary to be passed in this writ appeal. It is accordingly dismissed, but without costs.

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