JUDGMENT - The petitioner in the above Special Civil Application was a partner in a firm called M Is. Gregorio Coutinho, carrying on business of Indian made foreign liquor at its shop situated at Silvassa, Dadra and Nagar Haveli. The only other partner in the firm was his father Gregorio Coutinho. In 1969, the Dadra and Nagar Haveli Excise Duty Regulation, 1969, came into force in the area which, inter alia, required the licence to be issued under the said Regulation before the petitioner could sell liquor. The petitioner's firm had already a licence for retail sale of Indian made foreign liquor registered as Licence No.1 since the year 1962-63, which was renewed from year to year till 1971. The licence stood in the name of the petitioner's father Gregorio Coutinho, who died on March 10, 1971. 2. By a letter dated March 17, 1971, Mrs. Airina Gregorio Coutinho, the petitioner's mother requested the Excise Commissioner, Dadra and Nagar Haveli, Silvassa, to transfer the said licence in her name. By another letter ·dated March 17,1971, the petitioner and the other heirs of the deceased Gregorio Coutinho stated to respondent No. 1 that they had no objection to the transfer of the licence in the name of their mother Mrs. Airina Gregorio Coutinho. This request was turned down in May 1971. On May 29, 1971, the petitioner made an application for transferring the licence to the name of the petitioner as he was the partner of the firm on whose behalf the licence was held by the petitioner's father l setting out all the facts relating to the firm and the partnership and the previous licence, contending that the transfer was a bona fide transfer which was allowed in all the Union territories and States of India and also in the alternative stating that as a partner he was the owner of· the licence along with his father and hence as a matter of equity and law, the licence should be transferred to his name as he was the eldest son of the deceased and also his partner. 3. He followed this application with several representations. The only reply which he got was an order refusing the transfer of the licence. 3. He followed this application with several representations. The only reply which he got was an order refusing the transfer of the licence. The said order dated August 18/21, 1972, is as follows: "With reference to your application dated 29-5-1971 addressed to the Excise Commissioner, Dadra and Nagar Haveli, Silvassa, on the subject cited above, I am directed by the Excise Commissioner. to inform you that your application is rejected. Your application is, therefore, filed." The letter further directed that the stock of Indian made foreign liquor lying with the petitioner's firm should be taken into possession immediately. The petitioner, therefore, rushed to this Court with the above petition dated September 26, 1972, praying for quashing and setting aside the decision of respondent No.1 dated August 18/21,1972. 4. The order was challenged in the petition on the ground that in not allowing the transfer of the said licence to the petitioner and directing the taking of the petitioner's stock of Indian made foreign liquor, respondent No. 1 .was acting illegally and unconstitutionally, violating the fundamental rights guaranteed by the Constitution under Article 19 (I) (f) and (g) and Article 31 (I) of the Constitution of India. It was contended that it was incumbent upon respondent No. I to transfer the licence to the petitioner under Rule 61 of the Regulation, which runs as follows: “Transfer of shop and licence:-(1) No liquor vendor shop shall be transferred from one licensed premises to another premises except under the permission granted by the Commissioner. (2) No licence for sale of liquor shall be transferred by the licensee to another person except under the permission granted by the Commissioner. (3) When the permission to transfer the shop or licence is granted, the description of new premises or the name of transferee, as the case may be, shall be noted in the licence." It was also contended that the impugned order was vitiated by the fact that although the order prejudicially affected the rights of the petitioner, no reasons whatsoever were given by respondent No. 1 for refusing the legal and just claim made by the petitioner. It was further argued that inasmuch as Rule 61 enabled respondent No. 1 to refuse a licence without disclosing the material on which the said decision was based and without giving an opportunity of rebutting such material, the rule itself imposed unreasonable restrictions and conferred an unfettered and arbitrary power upon the Licensing Authority and, secondly, Rule 61 violated the fundamental rights guaranteed by the Constitution under Article 19 (I) (f) and (g) and under Article 14 of the Constitution of India. 5. At the hearing of the petition, Mr. Sorabjee, the learned counsel for the petitioner, referred to the affidavit in reply filed by the Excise Commissioner and the order passed by the Excise Commissioner, annexed to the said affidavit as exh. 'A', which runs as follow: "ORDER This is an application in respect of the licence for the sale of liquor held by the late Shri Gregorio Coutinho who died on 10-3-1971. 2. The applicant's case is that he was a partner in the firm of M/s. Gregorio Coutinho and that, in view of the provisions of the Indian Partnership Act, he is entitled to continue the business on the same licence. He has brought on record a document to show that lhe partnership was registered in 1963 for the sale, inter alia of liquor and that he was being assessed for income tax for the sale of liquor along with the deceased partner, 3. It is admitted that the licence was issued in the name of Shri Gregorio Coutinho. If he carried on the business in partnership with the present applicant this was not done under the aegis of the Excise Department and cannot be taken into account here. It may also be noted that under section 42 of the Indian Partnership Act, a partnership firm is dissolved by the death of a partner, subject to the contract. There is nothing in the deed of partnership to suggest that this position is not automatically applicable in the present case. Therefore even if the applicant's contention that the licence should be deemed to have been granted to the. Partnership firm rather than to Shri Gregorio Coutinho personally is correct, the firm ' will now have ceased to exist. 4. One further point has also be considered. The licence was renewable annually. Therefore even if the applicant's contention that the licence should be deemed to have been granted to the. Partnership firm rather than to Shri Gregorio Coutinho personally is correct, the firm ' will now have ceased to exist. 4. One further point has also be considered. The licence was renewable annually. Even assuming that the licence was deemed to have been continued with the applicant, it would by now have expired not having been subsequently renewed. 5. For all the above reasons, it appears to me to be clear that the applicant has no automatic right to carryon retail business in liquor in terms of the licence granted to his father. 6. The application is rejected." Although the order further says that the applicant was to be intimated, all that was intimated about this order to the petitioner was the impugned order of respondent No. I dated August 18/21, 1972, which was not at all a speaking order. 6. Mr. Sorabjee submitted that the reasons given in the order exh. 'A' annexed to the Excise Commissioner's affidavit show that the Excise Commissioner failed to apply his mind to the law governing a partnership firm and the facts of the case. He also submitted that although the application was made for deleting the name of the deceased father and for substituting the name of the petitioner in the licence and to renew the licence, the Excise Commissioner erred in proceeding to decide the matter on the footing that the Excise Department could not take into consideration the existence of the partnership firm and even if it existed, it was dissolved by the death of the father, merely because in the deed of partnership, which was registered, it was not mentioned that on the death of a partner it should be continued. He referred to the facts of the case and contended that as all the heirs of the deceased were continuing the business, it could not be said that the Excise Department could ignore the existence of the firm because a contract to continue a partnership after the death of a partner may be express or implied; and in any event under section 45 of the Indian Partnership Act, until public notice was given, the petitioner shall continue to be liable as a partner of the firm to the heirs of the deceased partner. 7. 7. He fairly stated that in view of the declaration of the proclamation of the emergency by the notification of the President dated December 3, 1971 published in the Gazette of India, Extra-ordinary on the same day and having regard to the provisions of Article 358 of the Constitution of India, the petitioner could not rely on Article 19 of the Constitution. But he contended that the petitioner challenged the exercise of the executive power as incompetent and contrary to law. He relied on the decision of the Supreme Court in B. C. &: Co. v. Union of India1, where it is laid down that (p, 116): “.. Article 358 (of the Constitution) does not apply to executive action taken during the emergency if the same is a continuation of the prior executive action or an emanation of the previous law which prior executive action or previous law would otherwise be violative of Article 19 or be otherwise unconstitutional. Executive action which is unconstitutional is not immune during the proclamation of emergency." It was further held that although during the proclamation of emergency Article 19 was suspended, it would not authorise the taking of detrimental executive action during the emergency affecting the fundamental rights in Article. 19 without any legislative authority or in purported exercise of power conferred by any pre-emergency law which was invalid when enacted. Further every act done by the Government or by its officers must, if it is to operate to the prejudice of any person, be supported by some legislative authority. 8. He submitted that there was no rule contained in the Dadra and Nagar Haveli Excise Duty Regulation, 1969, which empowered the Excise Commissioner to refuse the legitimate request of the petitioner to transfer the licence from the name of the deceased father to his name, as he was the eldest male member of the deceased licence-holder's family and also his partner. Even assuming that he had such powers under Rule 61 or Rule 47, or Rule 48, respondent No.1 had exercised his power, in refusing the application of the petitioner, arbitrarily, without giving any valid reasons and in violation of principles of natural justice. 9. He submitted that the reasons mentioned in exh. A were not only illegal but were also contrary to the reasons which are now stated in the affidavit-in-reply filed by the Excise Commissioner. It is stated in para. 9. He submitted that the reasons mentioned in exh. A were not only illegal but were also contrary to the reasons which are now stated in the affidavit-in-reply filed by the Excise Commissioner. It is stated in para. 'II of the affidavit that he refused to exercise the power under Rule 61 (2) in exercise of his discretion for the following reasons: "Since the neighbouring States are following the policy of prohibition it was necessary to ensure that the import of Indian manufactured foreign liquor into the territory of Dadra and Nagar Haveli does not exceed the genuine liquor requirements. There are at present three licensees for Indian manufactured foreign liquor in this territory, two of them had been liven licences in July 1962, one at Silvassa and one at Khanvel, the third licence was given in November 1963 at Silvassa. The licence granted in 1968 was surrendered in February 1971. The licence granted in February 1968 was not renewed after licence holder migrated to Portugal in March 1970. No licence for Indian manufactured foreign liquor has been transferred so far. The territory has a population of 74170 and 87% belong to Scheduled Tribes. The population of Silvassa is 4494 and of Khanvel is 1747, The quota of Indian manufactured foreign liquor of the whole territory was formerly 4800 gallons a calender year and it was reduced in 1967 to 3200 gallons, with effect from 1-4·71 it was further reduced to 2400 lallons other than beer and 1500 bottles of beer amounting to about 210 gallons. The decision on the application of the petitioner was taken in conformity with the administration's policy that having regard to the needs of the population and curtailment in the quota and the fact that the surrounding States were following the policy of prohibition there was no need to transfer the licence." Mr. Sorabjee submitted that all these reasons were trotted out for the first time in the affidavit in-reply filed in this Court and were not at all germane' to the aims and objects of the Rules contained in the Dadra and Nagar Haveli Excise Duty Regulation, 1969. 10. Mr. Sorabjee submitted that all these reasons were trotted out for the first time in the affidavit in-reply filed in this Court and were not at all germane' to the aims and objects of the Rules contained in the Dadra and Nagar Haveli Excise Duty Regulation, 1969. 10. Mr. Lokur, the learned counsel appearing for the respondents, submitted that whether the application of the petitioner is treated as an original application for a licence, or as an application for renewal of a licence made under rule 47, or as an application for renewal of licence made under rule' 48 or even as an application for transfer of licence made under Rule 61, respondent No. 1 had discretion to refuse the licence to the petitioner without giving any reasons; and hence this Court should not interfere with the impugned order particularly because the petitioner cannot invoke the provisions of Article 19 during the emergency. He submitted that it cannot be said that there was any breach or violation of rules of natural justice, merely because the order communicated to the petitioner was not a speaking order, or because the reasons recorded by the Excise Commissioner were not communicated to the petitioner. He urged that it was open to the respondents to support the order by facts relating to the policy regarding the granting of licences which are stated in the affidavit-in-reply and contended that the petitioner has no right to move this Court under Article 226 to compel the respondents to grant him a licence and for to transfer the licence to his name. 11. We have carefully and anxiously considered these contentions of Mr. Lokur, and we find that there is no merit in any of them. The contentions made by Mr. Sorabjee must be upheld for the simple reason that there is ·no field of life today where some licence or other is not to be granted by some authority or the other whether during the emergency or other wise; and it is now well settled that such licences which affect the business and living of the people, cannot be cancelled or refused without any valid reason supported by law or mala fide or for reasons extraneous to the law under which licence is to be granted. In the present case, although the Excise Commissioner was not bound by any express provision of law to give reasons, the fundamental requirement of a good and fair administration expects an efficient and impartial officer exercising powers under any law to tell the citizen who has made an application for granting a licence as to why he is not being granted the licence, It ill not merely a matter of law but of elementary decency between a democratic Government and its citizen. 12. Dr. H. W. R. Wade, the leading British authority on Administrative Law, in his book on Administrative Law, 3rd edn., 1971 at p. 209 has discussed this problem as follows: "Licensing cases, in particular, contain a large element of policy, since in many cases a licensing authority will be free to grant or withhold licences as it thinks best in the public interest. Very extensive licensing powers are possessed by the central government, local authorities, the police, magistrates, tribunals and other authorities, and in many cases they give what might be called power of commercial life or death over a person's trade or livelihood. Yet there is a surprising absence of clear law about the procedure required when licences are refused or revoked, except where there is a formal tribunal such as the traffic commissioners. Occasionally the statute will provide that the appellant or licensee must first be given notice and offered a hearing. Sometimes it will give a right of appeal. More commonly it will say nothing. Nor have the Courts been able to fill this lacuna successfully ill the past. Relatively few cases have been reported, and it is in this area, as we have see., that there have been confused and unfortunate decisions. Since the Brighton case it seems that the principles of natural justice will in general apply to licensing in the same way as to other administrative powers. The bad decisions have been disapproved and the Courts are alive to the injustice of depriving anyone of liberty, property or livelihood without fair procedure. In a recent case the Court of Appeal had to consider the statutory licensing system governing gaming clubs, under which the Gaming Board must give a certificate of consent before a gaming club can apply to the magistrate for a licence. In a recent case the Court of Appeal had to consider the statutory licensing system governing gaming clubs, under which the Gaming Board must give a certificate of consent before a gaming club can apply to the magistrate for a licence. The Court decided that in refusing a certificate for reasons concerning the character and suitability of the applicants the Board must act fairly and obey the principles of natural justice. Liquor-licensing, on die other hand, has been in the hands of magistrates since the sixteenth century and has made a full contribution to the case-law of natural justice." 13. Another well-known authority on Constitutional and Administrative Law, Prof. S. A. de Smith in his latest book styled "Constitutional and Administrative Law" published in 1971 had made the following observations (p. 562) : “. Wide discretionary powers were assumed to be inconsistent with a duty to act judicially, irrespective of their impact 00 individual interests unless there was a 'triangular' situation with X deciding a dispute between Y and Z, in which ease a duty to observe natural justice was superimposed upon a pre-existing statutory, duty to bold hearing or inquiry. In the early 1950s the rules of natural justice seemed to have been consigned to the lumber room. The Controller of Textiles in Ceylon could cancel a textile dealer's licence if he had reasonable grounds fur believing him to be unfit to hold a licence; no procedural duty was explicitly cast on him; the Privy Council rejected the contention of a dispossessed licence holder that the Controller was under all implied duty to give him a fair hearing before depriving him of his licence; no judicial duty was cast upon the Controller, who was merely taking 'executive action to withdr'lw a privilege' (Nakkuda Ali v. M. F DeS. jayaratne 2). In Parker's case 3 the Divisional Court of the Queen's Bench Division held that the Commissioner of Metropolitan Police, who had a discretionary power to cancel cab-drivers licences, was under no duty to observe natural justice in arriving at his decisions; his powers were administrative and disciplinary. A slum landlord's legal rights in a tumbledown house had been accorded better legal protection than the 'privilege' of a man to earn his livelihood. In the early 1960s the Courts began to move towards a more flexible position; and in 1963 came the turning point. A slum landlord's legal rights in a tumbledown house had been accorded better legal protection than the 'privilege' of a man to earn his livelihood. In the early 1960s the Courts began to move towards a more flexible position; and in 1963 came the turning point. In Ridge v. Baldwin 4, the House of Lords held that the Chief Constable of Brighton, the holder of a public office from which he was removable only for cause (neglect of duty or inability) could not validly be dismissed by the local police authority in the absence of notification of a charge and an opportunity to be heard in his defence. This was in part a reversion to the old line of authority on deprivation of a 'freehold' office; in part a rejection of the mistaken ideas that natural justice could be imported only into a 'triangular' situation in which there was an express statutory duty to hold a hearing or inquiry, and that the duty to act judicially could exists only where the act or decision was analytically 'judicial'; and, above all, a recognition that the underlying basis of the audi alteram partem rule was a common-law obligation to act fairly. Since Ridge v. Baldwin the Courts have widened the ambit of the duty. They have held, for example, that Ministers in Ceylon had an implied duty to observe the rule before taking over the assets of a denominational school in arrears with the payment of teachers' salaries, and before dissolving a municipal council for incompetence; that a local constituency party was entitled to the benefit of the rule before being suspended or disaffiliated by the national party organization; and that university students who failed an examination but could be allowed to resit at the discretion of the examiners had to be given a fair opportunity to put their own case against being refused permission to re-register. There are dicta to the effect that the holder of a permit or licence should be given an opportunity to be heard before non-renewal or revocation if he had a legitimate expectation that he would retain his permit or licence. " 14. There are dicta to the effect that the holder of a permit or licence should be given an opportunity to be heard before non-renewal or revocation if he had a legitimate expectation that he would retain his permit or licence. " 14. In Breen v. A. E. U.5, dealing with the refusal of district committee to a trade union to endorse member's election as shop steward, while holding that the functions of committee under union rules were discretionary l it was laid down by the Court of Appeal consisting of Lord Denning M. R., Edmund Dayies and Megaw L. JJ. : "A domestic body set up by the rules of a powerful association, such as a trade union, which was given a discretion by those rules, must exercise the discretion fairly even though its functions were not judicial or quasi-judicial but only administrative, and should it not act fairly the Courts could review its decision; accordingly the district committee were required to observe the rules of natural justice in that they had to act fairly in exercising their discretion to refuse approval of the plaintiff as a shop steward." Lord Denning, who dissented from the majority view, reviewed the development of law in England for over twenty-two years and observed (p. 1153) : " .. .It may truly now be said that we have a developed system of administrative law, These developments have been most marked in the review of decisions of statutory bodies; but they apply also to domestic bodies. Take first statutory bodies. It is now well settled that a statutory body, which is entrusted by statute with a discretion, must act fairly. It does not matter whether its functions are described as Judicial or quasi-judicial on the one hand, or as administrative on the other hand, or what you will. Still it must act fairly. It must, in a proper case, give a party a chance to be heard: see Re K. (H) (an infant)6 per Lord Parker C. J. in relation to immigration officers; and Reg. v. Gaming Board, Ex. p. Benaim7, by us in relation to the gaming board. The discretion of a statutory body is never unfettered. It is a discretion which is to be exercised according to law. That means at least this: the statutory body must be guided by relevant considerations and not by irrelevant. v. Gaming Board, Ex. p. Benaim7, by us in relation to the gaming board. The discretion of a statutory body is never unfettered. It is a discretion which is to be exercised according to law. That means at least this: the statutory body must be guided by relevant considerations and not by irrelevant. It its decision is influenced by extraneous considerations which it ought not to have taken into account, then the decision cannot stand. No matter that the statutory body may have acted in good faith; nevertheless the decision will be set aside. That is established by Padfield v. Minister of Agriculture. Fisheries and Food8, which is a landmark in modern administrative law." After holding that those principles will also apply to domestic bodies, Lord Denning M. R. continued the discussion as follows (p. 1154): "Then comes the problem: ought such a body, statutory or domestic, to give reasons for its decision or to give the person concerned a chance of being heard? Not always, but some times. It all depends on what is fair in the circumstances. If a man seeks a privilege to which he has no particular claim-Such as an appointment to some post or other-than he can be turned away without a word. He need not be heard. No explanation need be given see the cases cited in Schmidt v. Sec. of State, Home Affairs9. But, if he is a man whose property is at stake, or who is being deprived of his livelihood, then reasons should be given why he is being turned down, and he should be given a chance to be heard. I go further. If he is a man who has some right or interest, or some legitimate expectation, of which it would not be fair to deprive him without a hearing, or reasons given, then these should be afforded him, according as the case may demand. The giving of reasons is one of the fundamentals of good administration. Again take Padfield's case. The dairy farmers had no right to have their complaint referred to a committee of investigation, but they had a legitimate expectation that it would be. The House made it clear that if the Minister rejected their request without reason, the Court might infer that he had no good reason: and, that if he gave a bad reason, it might vitiate his decision." 15. The House made it clear that if the Minister rejected their request without reason, the Court might infer that he had no good reason: and, that if he gave a bad reason, it might vitiate his decision." 15. These 'are very relevant principles in the administration of justice and particularly guidelines for this Court when exercising its powers under Article 226 of the- Constitution of India. 16. In the present case, we find that the reasons given by the Excise Commissioner have shifted from silence in the order communicated to the petitioner to erroneous conceptions relating to the law of partnership stated in the order exh. A; and finally to the policy of prohibition in the neighbouring States mentioned in the affidavit. In our judgment, in the circumstances, it must be held that principles of natural justice were violated not only because the petitioner was not given any opportunity to meet any of these reasons given by the Excise Commissioner but also because having regard to the nature of the application made by the petitioner and the circumstances in which he had made it, it was the duty of the Excise Commissioner to pass a speaking order giving the reasons why he refused the licence. 17. This was a simple case where a son applied for renewal of the licence in his name after the death of his father, who also happened to be a partner. There is no specific provision anywhere in the Rules for such an application. It cannot be said to be an application under Rule 47, because there was already a licence and Rule 47 applies only to a fresh licence. It· was not an application under Rule 48, because it was not merely for a renewal of licence but for substituting the name of the petitioner with that of his father. It was consequently not an application under Rule 61 as has been erroneously supposed by the Excise Commissioner in his affidavit, because none of the clauses of Rule 61 applies to the application made by the petitioner. Clause (1) applies where a liquor vendor's shop is to be transferred. That was not the case here. Clause (2) applies where the holder of a licence intends to transfer the same. Here the holder was dead. Clause (3) applies where there are new premises. That also is not the question. Clause (1) applies where a liquor vendor's shop is to be transferred. That was not the case here. Clause (2) applies where the holder of a licence intends to transfer the same. Here the holder was dead. Clause (3) applies where there are new premises. That also is not the question. In the absence of any Rule, which specifically empowered the Excise Commissioner to refuse to grant the request of the petitioner, the petitioner ought to have been held to be entitled to continue the shop under the old licence granted to his father; and his name ought to have been substituted. It was the duty of the Excise Commissioner to substitute the name of the petitioner, unless there was some rule or law which prohibited the petitioner from holding the licence. Nothing is cited before us as prohibiting the petitioner from holding the licence. We are, therefore, of the opinion that in the facts and circumstances of the case, the petitioner's request was refused illegally and without any authority of law. 18. In the interest of good administration and fair play, it was desirable that if the reasons given by the Excise Commissioner were the basis of the order communicated by respondent No. 1 to the petitioner, which is challenged in the above petition, then the reasons at exh. A ought to have been communicated to the petitioner along with the order. No explanation whatsoever is given as to why these reasons' were not communicated when the impugned order was communicated to the petitioner. There was nothing of a secret nature in the reasons. There was no public interest involved in not giving the reasons. "Even the policy which is mentioned in the affidavit-in-reply is not referred to in the order. We do not see any reason whatsoever as to why the reasons contained in exh. A were withheld from the petitioner, a citizen of the country, who was, having regard to the facts and circumstances, clearly entitled to have the licence changed to his name with a view to continue the family business, which undisputedly was being run from 1962-63, under the Deed of Partnership dated November 16, 1963. 19. [His Lordship, after negativing each and every reason advanced by the Excise Commissioner, proceeded.] For these reasons, the order passed by the Collector and Excise Commissioner, Dadra and Nagar Haveli, dated August 16. 19. [His Lordship, after negativing each and every reason advanced by the Excise Commissioner, proceeded.] For these reasons, the order passed by the Collector and Excise Commissioner, Dadra and Nagar Haveli, dated August 16. 1972 and the impugned order dated August 18/21, 1972, are quashed and set aside. A writ of mandamus shall be issued against the respondents directing them to renew the licence by either substituting the name of the petitioner in the licence of the petitioner's shop mentioned above, or by issuing .& fresh licence in his name so as to enable him to carryon his business. The licence shall be issued 'lr transferred to his name, on the petitioner's paying to respondent No. 1 the renewal fees for 1971, 1972 and 1973 in accordance with Rules 1. e. Rs. 600. The licence shall be issued in the name of the petitioner forthwith after the deposit of the amount with respondent No. 1. Rule made absolute. Mr. Sorabjee does not press for costs. Rule made absolute.