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Gauri Lal and Magan Behari Lal Vs. the State of Raj and ors. - Court Judgment

LegalCrystal Citation
SubjectCivil
CourtRajasthan High Court
Decided On
Case NumberS.B. Civil Writ Petition Nos. 524 and 624
Judge
Reported in1978(11)WLN651
AppellantGauri Lal and Magan Behari Lal
RespondentThe State of Raj and ors.
DispositionPetition dismissed
Cases ReferredSupreme Court P.N. Kushal v. Union of India
Excerpt:
.....have no claim to renewal of licence--held, no illegality committed by granting hence to ganganagar sugar mills.;no time limit is prescribed either in rule 9 of the prohibition rules or rule 72a of the excise rules for filing an application by a person, desirous of obtaining a licene for retail sale of indian made foreign liquor.;the term of the renewed licences granted to the petitioners expired on march 31, 1978. they have no claim to the renewal of their licences or for campers union for non renewal renewal thereof.; the excise commissioner, therefore, committed no illegality when he granted a licence to ganganagar sugar mills ltd. for retail vend off liquor under rule 8 of the prohibition rules.;(b) rajasthan foreign liquor (grant of wholesale and retail of licences) rules, 1972 rule..........the current year, i.e. 1978-79 for sale of indian made foreign liquor would be given to ganganagar sugar mills ltd., although the latter had not applied for licence, nor had deposited any amount on or before the i5th august, 1978. as the decision of the non-petitioners nos. 1 to 7 regarding grant of licence to ganganagar sugar mills ltd., is ab-initio void, illegal and without jurisdiction, the petitioner has invoked the writ jurisdiction of this court on various grounds, which are set out in detail in his writ petition.3. similar are the facts stated in s.b civil writ petition no. 624 of 1978 magan behari lai vs. the state of rajasthan and others. the petitioner in this writ petition obtained a licence under the rijasthan foreign liquor (grant of wholesale trade and retail licences).....
Judgment:

K.D. Sharma, J.

1. As common questions of facts and law are involved in these two writ petitions, they are disposed of together by a common order.

2. The facts stated in S.B Civil Writ Petition No. 524 of 78 Gauri Lal v. The State and Ors. are as follows : Gaurilal petitioner obtained a licence from the Excise Commissioner, Rajasthan, Udaipur Under Rule 8 of the Rajasthan Liquor Prohibition Rules 1967, (hereinafter referred to as the Prohibition Rules), for retail sale of Indian made foreign liquor for the financial year 1970-71 The licence was renewed every year by the Deputy Commissioner, Excise and Prohibition, in accordance with the said rules. The last renewal was upto March 31, 1978 After the expiry of the term of the renewed licence, the petitioner presented an application on February 20, 1978, for further renewal thereof He deposited in the Government Treasury, Banswara, a sum of Rs 3500/-, as fees for the renewal. The State Government brought about an increase in the fees for the renewal and directed the Excise Commissioner to recover the fees at the enhanced rate The Deputy Commissioner, Prohibition, thereupon, directed the non petitioner No 6, i.e. Assistant Excise and Prohibition Officer, Dungarpur, and the Excise Inspector (Prohibition), Banswara, to ask the petitioner to deposit th: enhanced fees so the formal orders regarding renewal of licence may be passed. The petitioner, therefore, deposited the required sum of Rs. 2000/-, vide challans Nos. 382 arid 383 dated March 10, 1978. As the renewed licences are issued at a date subsequent to the commencement of the financial year, i.e. April 1. the petitioner continued to sell liquor upto April 3, 1978 . Thereafter, a direction was issued to the petitioner to stop the sale of the foreign liquor which was in his possesion till further orders. The petitioner mads necessary enquiries from the Excise Inspector (Prohibition), Banswara and the Assistant Excise and Prohibition Officer, Dungarpur and the licencing authority as to why such a direction for stoopage of sale of liqaor was given to him. He came to know upon enquiry that the State Government was about to take some decision in the matter of fees for licence. Later on, he came to know that the Cabinet of the Rajasthan Government had taken a decision that the licence for the current year, i.e. 1978-79 for sale of Indian made foreign liquor would be given to Ganganagar Sugar Mills Ltd., although the latter had not applied for licence, nor had deposited any amount on or before the I5th August, 1978. As the decision of the non-petitioners Nos. 1 to 7 regarding grant of licence to Ganganagar Sugar Mills Ltd., is ab-initio void, illegal and without jurisdiction, the petitioner has invoked the writ jurisdiction of this Court on various grounds, which are set out in detail in his writ petition.

3. Similar are the facts stated in S.B Civil Writ Petition No. 624 of 1978 Magan Behari Lai vs. The State of Rajasthan and others. The petitioner in this writ petition obtained a licence under the Rijasthan Foreign liquor (Grant of Wholesale Trade and Retail Licences) Rules, 1972, for salen of Indian made foreign liquor in Jodhpur in the year 1972. He got his licence renewed every year under the provisions of the said Rules. The term of hi renewed licence for the year 1977-78 expired on March 31, 1978. Upon expiry of the term of the iicence, he applied for renewal thereof on February 57, 1978, and deposited a fee of Rs. 3000/-, together with an amount of Rs. 1500/-, as vend fees in the State Bark of Bikaner and Jaipur on February 27, 1978 ' Later on, the Rajasthan Government introduced prohibition in Jodhpur District including Jodhpur City from April 1, 1978 Upon introduction of prohibition, the petitioner approached the District Excise Officer, Jodhpur. and requested him for renewal of his licence for a further period of one year. The petitioner was informed by the District Excise Officer that the matter regarding renewal of licences for the sales of Indian made foreign liquor is under consideration of the State Government and no useful purpose will be served by filing any fresh application for fresh grant of licence for sale of Indian made foreign liquor till the matter is finally decided by the State Government. The petitioner and other licencees are members of an Association, known as 'Jodhpur Wine Merchants' Association The said Association made several representations to the State Government as well as to the Excise Commissioner, Rajasthan, on their behalf regarding grant of licence for sale of liquor but the representations were riot considered. Later on, the petitioner came to know that the Rajasthan State has issued an order dated August 3, 1978, that licences for sale of Indian made foreign liquor will be given to Ganganagar Sugar Mills Ltd non-petitioner No 4 for all the areas where prohibition has been introduced By this order Ganganagar Sugar Mills Ltd. was allowed to open a shop for retail sale for Indian made foreign liquor at Jodhpur. As the Rajasthan State has granted monopoly for sale of liquor to a Company, namely Ganganagar Sugar Mills Ltd. vide its order dated August 3, 1978, the petitioner has invoked writ jurisdiction of this Court on the ground that the order passed by the State Government is wholly illegal and void for reasons set out in detail in the writ-petition.

4. S.B. Civil Writ Petition No. 524 of 1978 filed by Gauri Lal was put up for admission before this Court on August 30 1978. A notice was issued to the non-petitioners to show cause why the writ petition should not be admitted. In response to the notices, Mr. D.S. Shisodia appeared on behalf of non petitioners Nos 1 to 7 and filed a written reply. Mr. A.K. Mathur put in appearance on behalf of non-petitioner No. 8 and submitted a written reply to the writ-petition.

5. I have carefully perused the record and heard at length Mr. H.M. Parekh and Mr. D.L. Vlehta, learned Counsel for the petitioners and Mr. D Section Shisodia Government Advocate and Mr. A.K. Muhur for Ganganagar Sugar Mills Ltd. Firstly, it has been contended on behalf of the petitioners that under Rule 9 of the Prohibition Rules, if a person desires to obtain a licence in form R. Pn. 3, he shall have to apply to the Excise Commissioner through the District Excise Officer and the Excise Commissioner is empowered under Rule 8 to grant a licence for retail vend off brandy. According to the learned Counsel, the Ganganagar Sugar Mills Ltd did not submit any application under Rule 9 to the Excise Commissioner through the District Excise Officer prior to August i3 1978, for the grant of licence for retail sale of Indian made foreign liquor at Banswara and so the decision of the Rajasthan Government's Calinet and the subsequent steps taken the non-petitioners Nos. 4 and 5 to implement the said decision regarding grant of licence to Ganganagar Sugar Mills Ltd. or retail sale of the liquor is violative of Article 14 and 19 of the Constitution of India and is in direct contravention of the provisions of Rule 9A of the Prohibition Rules and Rule 72A of the Rajasthan Excise Rules, 1956 hereinafter referred to as the Excise Rules The above contention has no force, because no time limit is prescribed either in Rules 9 of the Prohibition Rules Rule 72A of the Excise Rules for filing an application by a person desirous of obtaining a license for tail use of Indian made foreign liquor. It is clearly stated in the written reply filed on behalf of the Ganganagar Sugar Mills that a regular application was made by the Ganganager Sugar Mills Ltd under the Prohibition Rules to the Excise Commissioner for obtaining licence for retail sale of Indian made foreign liquor and the Excise Commissioner issued the licence upon such application. Unless there is time-limit prescribed under the Prohibition Rules or under the Excise Rules for filing an application for obtaining such a licence, it is not open for the petitioners to contend that the Justice was granted to the Gar ganagar Sugar Mills in contravention of the said Rules The learned Counsel or the petitioners merely argued that no application for obtaining the license was presented by the Garganagar Sugar Mills Ltd. to the Excise Commissioner prior to August 16, 1978 It is not the caseof the petitioners that the licence was issued to the Ganganagar Sugar Mills Ltd without there being an application filed by it. Apart from this, the term of the renewed licences granted to the petitioners expired on March 31, 1978. They have no claim to the renewal of their licences or for compensation for the renewal thereof, as is evident from Section 37 of the Rajasthan Excise Act, herein after referred as the Act, which reads as follows:

37. No renewal of licence or compensation on determination or renewal licence claimable. - No person to whom a licence has been granted under this Act shall have any claim to the renewal of such licence, or to any claim for compensation on the determination or nonrenewal thereof.

The Excise Commissioner, therefore, committed no illegality when he granted a licence to the Ganganagar Sugar Mills Ltd. for retail vend off liquor under Rule 8 of the Prohibition Rules.

6. The next point urged by Mr H.M. Parekh, learned Counsel for the petitioners, is that the decision of the State Government taken on August 2, 1978, is inconsistent with the provisions of the Rajasthan Excise Act and the Rajasthan Prohibition Act and the rules made thereunder. According to his submission, the State Gevernment has no jurisdiction to interfere with the exercise of the statutory powers vested in the Excise Commissioner, who alone was empowered to grant the requisition licence for retail sale of liquor upon receipt of an application under Rule 72A of the Rajasthan Excise Rules filed by a person desirous of obtaining such a licence. It was further argued that there were arrears of excise outstanding against the Ganganagar Sugar Mills Ltd & so its application for licence must have been rejected for this reason as laid down by the Rajasthan Foreign Liquor (Grant of Wholesale Trade and Retail of Licence) Rules, 1972, which were made by the State Govt. in exercise of the powers under Section 41 of the Rajasthan Excise Act, 1950. The above contention also has no force. It is no doubt true that before a person becomes eligible to apply for a retail of licence he should not possess any of the disqualifications mentioned in Sub-rule (7) of Rule 3 of the Foreign Liquor Rules, 1972, One of the disqualifications mentioned in Sub-rule (7) of the said Rules is that if there are arrears of excise dues outstanding against the applicant, his application for licence shall be liable to be rejected for this reason. In the present case there is nothing on the record to show that at the time when retail licence for sale of foreign liquor was granted to the Ganganagar Sugar Mills Ltd., there were airears of excise dues outstanding againest it. Under Sub-rule (5) of Rule 3 of the Foreign Liquor Rules, the District Excise Officer was bound to record a note whether or not the applicant was suffering from any of the disabilities to hold a licence mentioned in Sub-rule (7) thereof The petitioner could not show that any such note was recorded by the District Excise Officer or tint the Excise Commissioner granted the licence to the Ganganagar Sugar Mills Ltd, despite such note regarding disabilities to hold a licence. Unless it is established that any sum was due from the Ganganagar Sugar Mills Ltd. towards arrears of excise dues, the licence cannot be said to have been illegally issued to it. Apart from this, if it is brought to the notice of the Excise Commissioner that the Ganganigar Sugar Mills Ltd. suffered from any of the disqualifications mentioned in Sub-rule (7) of Rule 3 of the Foreign Liquor Rules, 1972, but has purposely concealed it by giving a false declaration, he is empowered, after giving a reasonable opportunity of being heard to the petitioners, to cancel the sanction issued for grant of licence and forfeit the entire fees paid on its behalf. It will not be out of place to mention thar it is evident from Ex. B 2 that the licence was granted to the Ganganagar Sugar Mills Ltd. in accordance with the pnvisions of the Rajasthan Prohibition Act and the Prohibition Rules which applied to all prohibited areas in the State. Under the Prohibition Rules, there is no provision that an application for licence shall be liable to be rejected for the reason that there are arrears to excise dues outstanding against the applicant. Under Rile 8 of these Rules the Excise Gjmmis3ioner may grait a licence in form R-Fn. 3 for retail vend off brand v. Of course, under Rule 9 of these Rules he may, for reasons to be recorded in writing, refuse tp grant the licence Be that as it may, the licence granted to the Ganganagar Sugar Mills for retail sale of Indian made foreign liquor cannot be held to be invalid merely because the petitioner contends that there were some excise dues outstanding against it when the licence was granted, especially when the non petitioners Nos. 1 to 7 did not say that any such disqualification was possessed by the licencee.

7. The next contention put forward by the learned Counsel for the petitioners is that the dealing in liquor is a business and the petitioners are entitled to do business in this commodity subject to imposition of reasonable restrictions on the said right by any law made by the State in the public interest. It was further urged that the decision taken by the State Government for giving a licence to the Ganganagar Sugar Mills Ltd. for retail sale of country made liquor of the premises violeted the principle of equality before the law and contravened the provisions contained in Articles 14 and 19(1)(f) and (g) of the C institution of India, because no guide-lines were laid down in the Prohibition Act or the Prohibition Rules in, the matter of exercise of discretion vested in the Executive. According to the learned Counsel for the petitioners, the notification issued by the State Government and the subsequent action taken by the Excise and Prohibition Commissioner, non-petitioner No. 5, resulted in creating a monopoly in favour of the Ganganagar Sugar Mills Ltd. for retail sale of Indian and foreign liqtaory in direct contravention of the provisions of Article 14 of the Constitution of India. In support of his above contention, Mr. H.M Parekh relied upon Nashirwar v. State of M.P. : [1975]2SCR861 Her Sharker vs. Dy. E. & T. Commr. : [1975]3SCR254 Devi Lal v. The State of Rajasthan 1978 RLW 23, Gehlot Engineering Wire Store v. The Side of Rajasthan 1978 RLW 53, Cooverjee v. Excise Commissioner, Ajmer : [1954]1SCR873 , State of orissa v. Harinaraiyan : [1972]3SCR784 , Oudh Sugar Mills Ltd. v. Union of India : AIR1970SC1070 , & Gordhan Lal v. State 1975 WLN 821 and contended on their strength that the petitioners, being old licencees with a char slate, were intitited to receive a prefencial treatment, but they were not given the treatment which is given to the equals. Mr D.S. Shishka and Mr. A K. Mathur appearing on behalf of the non-petitioner, on the other hand, contended that it has been repeatedly held by if the Supreme Court that Articles 14 and 19 of the Constitution of India are not attracted to the trade or business liquor in which a citizen has no fundamental right. According to them, the State Government has absolute power to enforce prohibition and manufacture and sale of intoxicating liquirs on the grounds of public morality & social welfare. It was further argued that the petitioners have no right to file the writ petitions, as the State Government was competent to lay down a policy to vend liquor in dry areas through its agency i.e. Ganganagar Sugar Mills Ltd. Reliance in support of the above contention was placed on Krishna Kumar J. & K. State : [1967]3SCR50 , District Collector Hyderabad v. Ibrahim and Co. : AIR1966AP310 . Sasbihari v. State of Orissa : [1969]3SCR374 , Her Sharker v. Dy. E.T. Commr. (Supra) and Guruswamy v. State of Mysore : [1955]1SCR305 .

8. I have car fully gone through all the authorities cited at the bar. In my opinion, the State is empowered to prohibit trade or business in liquor, as it is injurious to health and welfare if the public & as no person has a fundamental right to deal in liquor. Certain trades and activities can be excluded fit m the purview of Article 19(1)(g) of the Constitution of India on the ground of their adverse and injurious effects on public health and morality and one of those trades and activities is the trade or business in liquor. Reference in this connection may be made to Har Shannker v. Dy. E & T. Commr. (Supra), wherein their Lordships were pleased to make the following observations after taking into consideration the previous decisions of the Supreme Court on this point:

There is no fundamental right to do trade or business in intoxicants The State, under its regulatory powers, has the right to prohibit absolutely every form of activity in relation to intoxicants its manufacture, storage, export, import, sale and possession. In 'all their manifestations, these rights are vested in the State and indeed without such vesting there can be no effective regulation of various forms of activities in relation to intoxicants. In 'American Jurisprudence', Volume 30 it is stated that while engaging in liquor traffic is not inherently unlawful, nevertheless it is a privilege and not a right, subject to the Governmental control, (page 538. This power of control is an incident of the society's right to self-protection and it rests upen the right of the State to care for the health, morals and welfare of the people. Liquor traffic is a source of pauperism and crime.

In view of the referred to authoritative decisions of the Supreme Court it cannot be held that the State has no exclusive privilege in respect of manufacture, possession, sale or consumption of intoxicating liquors and drugs. As the State Government has such exclusive privilege no question of infringement of Article 19(1)(g) or Article 14 of the Constitution of India does arise. Consequently, the State Government committed no illegality in graning exclusive right to vend liquor to the Ganganagar Sugar Mills Ltd., on such Urms as it required expedient. Their Lordships of the Supreme Court in he referred to above judgment further observed in para 54 thereof that if the State Government has a wider right to bring about absolute prohibition of the consumption of liquor, it possesses the narrower right also to allow dealings in liquor on such terms as it may deem fit and expedient.

9. Mr H.M. Parekh relied upon an authority of the Supreme Court Krishan Kumar v. J. & K. State (Supra) and contended on its Strength that a citizen has a right to do business or trade in liquor, subject of course, to any reasonable restriction imposed on the said right by the State in public interest. The aforesaid authority was considered by the Supreme Court in Har Sharker's case and, upon consideration thereof, it was held that in that case the Court did not hold that the citizens possess the fundamental right to do business in liquor arid the State has no right to enforce a-n absolute prohibition on manufacture or sale of intoxicants or to permit dealing' in liquor or. such thems as it may deem expedient. In support of the proposition that the petitioners naze a right to carry on trade or business in liquor reliance has been placed on one recent authority of the Supreme Court P.N. Kushal v. Union of India AIR 1979 SC. From a bare perusal of para 42 of this ruling it is evident that no decision was given on the man contention of the petitioner that a citizen has a fundamental right to deal in intoxicants, but it was clearly observed that the prepderant view of the Supreme Court has been that no such right can be claimed by a citizen to carry on highly obnoxious trade or bus ness such as alcohol business or trade in dangerous commodities As the question of fundamentally of such right was raised in other batches of writ petitions before the Supreme Court, their Lordships proceeded on the assumption, for the sake of argument, that there is a fundamental right to can or trade or business in liquors. While proceeding on the footing that there is such a fundamental right, their Lordships further observed that they do act agree that there is such a right. The following observations made by their Lordships are quoted below in extensor to show that no support can be derived by the petitioners before us from this authority:

42 The main contention. - The primary submission proceeded on the assumption that a citizen had a fundamental right to carry on trade or business in intoxicants, The learned Addl, Solicitor General urged that no such fundamental right could be claimed regard, having regard to noxious substances and consequences involved and further contended that, notwithstanding the observations of Subba Rap C.J. in Krishna Kumar Manila etc, v. The State of Jammu & Kasmir : [1967]3SCR50 the, preponderant view of this Court, precedent and subsequent to the 'amber' observations in the aforesaid decision, has been that no fundamental right can be claimed by a citizen in seriously obnoxious trades, offensive businesses or outraging occupations like trade in dangerous commodities, trafficking in human flesh, horrifying exploitation or ruinous gambling. Even so, since the question of the fundamentality of such right it before this Court in other batches of writ petitions which are not before us, we have chosen to proceed on the footing, argued, that there is a fundamental right in liquor trade for the petitioners Not that we agree not that Shree Sorarbjee concedes that there is such a right but that, for the sake of narrowing the scope of the colossal number of writ petitions now before us, this question may well be skirted.

In view of this legal position, I an unable to hold that the State has no right to grant licence to the Ganganagar Sugar Mills Ltd. for retail sale of country-made foreign liquor for a specified period and in doing so, the State contravened any provisions of the Excise Act or the Prohibition Act or the rules made thereunder or violated Article 14 or Article 19(1)(g) or any other provision of the Constitution of India Under Rule 57 of the Excise Rules, licences for theretill sale of excisable articles can be granted either by auction in accordance with procedure under the Rules in the Chapter on Auction or on Commission basis or on any other system sanctioned by the Government from time to time. Rule 66 of the said Rules further empowers the Excise Commissioner to direct the adoption in a particular case of a method other than auction for the grant of a licence. The contention of Mr. H M Parekh that the Slate Govt. created a monopoly in the business of retail sale of country made liquor in favour of the Ganganagar Sugar Mills Ltd, also is devoid of substance, because the State possesses the exclusive right or privilege of manufacture and sale in liquor and such tight or privilege can be granted by it to any person in the form of a licence, either by public auction or on private negotiations or by adopting any other method. The decision of the State Government in this case cannot be challenged on that ground that it created or purported to grant monopoly to one person for selling intoxicating liquors as the petitioners have no fundamental right or inhere t right to do a business in intoxicating liquor which business is injurious to the public health and its welfare.

13. The writ-petitions have, therefore, no force and are herby dismissed in limine.


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