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1979 DIGILAW 177 (PAT)

Bachha Prasad v. State of Bihar

1979-08-16

P.S.SAHAY, S.K.CHOUDHURI

body1979
JUDGMENT P.S. Sahay, J. The petitioners, who ere licensees of foreign liquor in the districts of Patna, Bhojpur, Rohtas and Dhanbad, have moved this Court for quashing Annexure 2 dated 31.2.79, a circular issued by the State Government to all the District Magistrates and Deputy Commissioners, laying down the criteria for the grant of licence for the sale of foreign liquor to foreigners and permit-holders under the provisions of the Bihar and Orissa Excise Act, (hereinafter called the Act), and also for quashing Annexures 4 and 4/1, the rules framed by the Board of Revenue under the power vested in it by the Act. 2. It will be necessary to state some facts in order to appreciate the points involved in this application. The petitioners as I have said were licences of foreign liquor at different places, and their licences were renewed up to 31.3.79. In January 1979 all of them applied for renewal of their licence in the prescribed procedure. The State Government decided to introduce complete prohibition in the State with effect from 1.4.79. Certain items like, tody and pachwai manufactured by Adibasis were exempted on certain terms and conditions. In that connection a letter was issued to all the District Magistrates on 28.3.79 (Vide Annexure 1). A detailed instruction was given in that letter. Thereafter, another letter (Annexure 2) dated 31.3.79 was issued for the grant of licence to limited persons for sale to permit-holders and foreigners. One Off-Shop was to be opened at each district headquarter and also one each in the industrial belt of Jamshedpur, Bokaro and Barauni. The following terms and conditions have been mentioned: (i) applicants must be licensees for 7 years or more prior to 1978-79. (ii) They must have good record. (iii) For Ranchi, Dhanbad, Giridih, Patna, Muzaffarpur, Darbhanga, Bhahalpur and Monghyr, 10 persons were to be selected having licence for 7 years on the basis of turnover for the years 1975-76, 1976-77 and 1977-78, and the settlement was to be done by means of lottery. (iv) For Jamshedpur 10 persons were to be selected on the above terms within the Sub-divisional limits of Jamshedpur, and 5 persons were to be selected for Barauni and Bokaro. For the rest of the districts 5 persons had to be selected. There were other directions, with which we are not concerned in this application. 3. (iv) For Jamshedpur 10 persons were to be selected on the above terms within the Sub-divisional limits of Jamshedpur, and 5 persons were to be selected for Barauni and Bokaro. For the rest of the districts 5 persons had to be selected. There were other directions, with which we are not concerned in this application. 3. The respondents, after having received the notice, filed a counter-affidavit in which it was stated that the Board of Revenue, in exercise of the powers conferred upon it under section 90 (9) of the Act, and in accordance with the Government letter (vide Annexure-2) laid down the procedure for settlement of special type of foreign liquor shops, taking into consideration the population, requirement, existing licences and the areas concerned. After receiving the counter-affidavit the petitioners filed a petition under section 151 of the Civil Procedure Code, praying for amendment of the main writ application. In the said application prayer has been made for quashing Annexure 4 and 4/1, the rules framed by the Board dated 25.4.79 which, according to them were null and void, and not made in exercise of the powers of a legislative character conferred on the Board, they were in fact a replica or the administrative instructions issued by the State Government (vide Annexure-2). 4. Mr. B. P. Singh, learned counsel appearing for the petitioners, has submitted that the petitioners have a fundamental right to carry on trade under Article 19 of the Constitution and the direction of the State Government abridges their right. He has further contended that the criteria of 7 years and the turn over of 3 years for the grant of licence are not at all germane for the object of the Act, and has no rational relationship with the object sought to be achieved. He has also urged that the provisions setting out the selective list are partly in the nature of gamble and partly having no nexus with the end, namely, to regulate the sale under the scheme of the prohibition. Thus, according to him, there is a clear violation of Articles 14 and 19 of the Constitution. He has also urged that the provisions setting out the selective list are partly in the nature of gamble and partly having no nexus with the end, namely, to regulate the sale under the scheme of the prohibition. Thus, according to him, there is a clear violation of Articles 14 and 19 of the Constitution. The learned Government pleader, on the other hand, has contended that various considerations had to be taken into account by the State Government before laying down the criteria, and the Board has also framed rules as contained in Annexures 4 and 4/1, and there is no violation of any fundamental right guaranteed under the Constitution in the instant case. 5. Before I take up for discussion the points that have been raised at the Bar, I would refer to section 22 of the Act, which gives power to the State Government to grant licence. Section 22 runs as follows : "22. Grant of exclusive privilege of manufacture and sale of country liquor or intoxicating drugs- (1) The State Government may grant to any person, on such conditions and for such period as it may think fit, the exclusive privilege - (a) of manufacturing, or supplying wholesale, or (b) of manufacturing and supplying whole sale or (c) of selling, wholesale or retail, or (d) of manufacturing or supplying wholesale and selling retail, or (e) of manufacturing and supplying wholesale and selling retail, any country liquor or intoxicating drug within any specified local area, Provided that public notice shall be given of the intention to grant any such exclusive privilege, and that any objections made by any person residing within the area affected shall be considered before an exclusive privilege is granted. (2) No grantee of any privilege under sub-section (1) shall exercise the same unless or until he has received a licence in that behalf from the Collector of the Excise Commissioner." Section 89 of the Act, gives power to the State Government to frame rules, and under Section 90 powers have been given to the Board of Revenue to frame rules. Annexures 4 and 4/1 have been framed under section 90 (9) which is as follows: "90. Annexures 4 and 4/1 have been framed under section 90 (9) which is as follows: "90. Power of Board to make rules—The Board may make rules— x x x x (i) for prescribing the restrictions under which or the conditions on which any licence, permit or pass may be granted, and in particular, and without prejudice to the generality of this provision, may make rules for-- prohibiting the admixture with any intoxicant of any article deemed to be noxious or objectionable. (ii) regulating or prohibiting the reduction of liquor by a licensed manufacturer or licensed vendor from a higher to a lower strength. (iii) prescribing the nature and regulating the arrangement of the premises in which any intoxicant may be sold, and prescribing the notices to be exposed at such premises. (iv) prohibiting or regulating the employment by the licensee of any person or class of persons to assist him in his business (v) prescribing the days and hours during any licensed premises may or may not be kept open, and providing for the closing of such premises on special occasions. (vii) prescribing the accounts to be maintained and the returns to be submitted by licensees, and (viii) regulating the transfer of licenses, x x x x 6. Now, I propose to consider whether the letter (Annexure 2) and the rules framed by Board of Revenue (Annexures 4 and 4/1) abridge the fundamental rights of the petitioners in carrying on their trade guaranteed under Article 19 or 14 of the Constitution. This point has been considered in a number of cases by the Supreme Court. In Nashirwar Vs. State of Madhya Pradesh, it has been held, "'Trade in liquor historically stood on a different footing from other trades. Restrictions which are not permissible in other trades ate lawful and reasonable so far as the trade in liquor is concerned. That is why even prohibition of the trade in liquor is not only permissible but is also reasonable. The reasons are public morality, public interest and harmful and dangerous character of the liquor. The State possesses the right of complete control over all aspects of intoxicants, viz. manufacture, collection, sale and consumption. The State has exclusive right to manufacture and sell liquor and to sell the said right in order to raise revenue." 7. The reasons are public morality, public interest and harmful and dangerous character of the liquor. The State possesses the right of complete control over all aspects of intoxicants, viz. manufacture, collection, sale and consumption. The State has exclusive right to manufacture and sell liquor and to sell the said right in order to raise revenue." 7. In the case of Har Shankar vs. The Deputy Excise and Taxation Commissioner, their Lordships considered the case of The State of Bombay vs. P.N. Balsara, Gooverjee B. Bharucha vs. Excise Commr. And Chief Commer. Ajmer, State of Assam vs. A.N. Kidwai, Nagendra Nath vs. Commr. of Hills Division, Amar Chandra Chakrabarty vs. Collector of Excise, Government of Tripura, State of Bombay vs. R.M.D. Chamarbangwala, State of Orissa vs. Harinarayan Jaiswal and the case of Nashirwar, Supra. And they have held as follows: “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, 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.” 8. In the State of Orissa vs. Harinarayan Jaiswal the method of settlement of shops was challenged. Their Lordships, while considering section 22 of the Act, (Bihar and Orissa Excise Act) held that the State has exclusive power to sell the privileges. It has further been held that if the Government is the exclusive owner of these privileges, reliance on Article 19 (1) (g) of Article 14 becomes irrelevant, Citizens cannot have any fundamental right to trade or carry on business in the properties or rights belonging to the Government nor can there be any infringement of Article 14, if the Government be able to get the best available price for its valuable rights. Their Lordships have further held that the power given to the Government by the Act, to sell the exclusive privilege, in such other manner as it thinks fit, is a very wide power. That power is unrestricted. It undoubtedly includes the power to sell the privileges in question by private negotiation. 9. Their Lordships have further held that the power given to the Government by the Act, to sell the exclusive privilege, in such other manner as it thinks fit, is a very wide power. That power is unrestricted. It undoubtedly includes the power to sell the privileges in question by private negotiation. 9. In Panna Lal vs. State of Rajasthan, it has also been held that the State has exclusive right to manufacture and sell liquor and to sell the right in order to raise revenue; and for that purpose it can be done either by auction or by private treaty. 10. In the case of Amar Chandra Chakraborty (Supra), it has been held that trade or business in country liquor has from its inherent nature been treated by the State and the society as a special category requiring legislative control which has been in force in the whole of India since several decades. In view of the injurious effect of excessive consumption of liquor on health this trade or business must be treated as a class by itself and it cannot be treated on the same basis as other trades while considering Article 14. This classification is founded on an intelligible differentia having a rational relation to the object to be achieved by the control imposed on the trade or business in country liquor. Article 14 only forbids class legislation, but reasonable classification does not come within the prohibition. 11. Thus, on a careful consideration of the authorities discussed above, I am of the opinion that the petitioners have no fundamental right to carry on any trade in intoxicant, and neither Article 14 nor Article 19 of the Constitution is violated. 12. The decision, Rasbihari Panda vs. State of Orissa, on which much reliance has been placed by the learned counsel appearing on behalf of the petitioners, does not support the case of the petitioners. That was a case relating to trade in Kendu leaves, and various executive and legislative measures were taken to regulate the trade. Certain conditions were imposed which disentitled persons to carry on the trade, and thus a monopoly was created in the trade. The business was, therefore, confined to certain individuals on certain terms and condition and shut out a number of persons who were already in the trade from before and also new entrants who wanted to join the trade. Certain conditions were imposed which disentitled persons to carry on the trade, and thus a monopoly was created in the trade. The business was, therefore, confined to certain individuals on certain terms and condition and shut out a number of persons who were already in the trade from before and also new entrants who wanted to join the trade. In that context it was held to be ex facie discriminatory and violative of Articles 14 and 19 of the Constitution. There was no restriction on the trade of Kendu leaves, and therefore, it was held that the executive order was discriminatory in nature. But, in the instant case, a person can trade only after obtaining a licence from the proper authority and, as I have said earlier, no person has any right to carry on this trade. Now that the prohibition has been introduced in the State, it has been rightly contended by the learned Government Pleader that the trade is banned and business is an exception, and that privilege of business can be given by the State Government on certain terms and conditions and not as a matter of right. The other decision of P.N. Kaushal vs. Union of India, has no application because different conditions were laid down for private and Government licensees, and in that context it was held to be bad; but that is not the position in the instant case. 13. Learned counsel for the parties have cited a number of decisions of the Supreme Court in support of their case regarding classification under Article 14 of the Constitution and they are M/S Murthy Match Works vs. The Assistant Collector of Central Excise, The State of Gujarat vs. Shri Ambica Mills, Mohd. Shujat Ali vs. Union of India, M/S Erusian Equipment & Chemicals Ltd. vs. State of West Bengal and Anant Mills vs. State of Gujarat. But, as I have held earlier, there is no violation of Article 14 of the Constitution, and, therefore, it is not necessary to discuss those decision in detail, and they do not apply to the instant case. 14. But, as I have held earlier, there is no violation of Article 14 of the Constitution, and, therefore, it is not necessary to discuss those decision in detail, and they do not apply to the instant case. 14. From the discussions and conclusions arrived at, it would be wholly irrelevant to consider whether the rules framed by the Board (vide Annexures 4 and 4/1) are based on intelligible differentia and bas reasonable nexus with the object of the Act, and whether the Board has taken into account irrelevant considerations while framing the rules. 15. Thus, on a careful consideration of the points that have been raised in this case, I find that no ground for interference by this Court under the writ jurisdiction has been made out by the petitioners. The application, therefore, fails and is dismissed; but, in the circumstances of this case, there will be no order as to costs. S.K. Choudhuri, J. I agree. Application dismissed.