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1982 DIGILAW 224 (RAJ)

Raju Wine Stores etc. v. State of Rajasthan

1982-05-01

G.M.LODHA

body1982
JUDGMENT 1. These five writ petitions have been filed for challenging the validity of Rajasthan Foreign Liquor (Grant of Whole-sale Trade and Retail of Licences) Rules, 1982, (hereinafter referred to as `the Rules, 1982'). These rules have been framed under Section 41 of the Rajasthan Excise Act, 1950, (Rajasthan Act II of 1950), hereinafter called to be as `the Act, 1950'. Earlier to it, grant of licences for foreign liquor was governed by the Rajasthan Foreign Liquor (Grant of Whole-sale Trade and Retail of Licences) Rules, 1972, which were also framed under Section 41 of the Act, 1950. 2. Earlier rules provided for a procedure of grant of licence, both, for the wholesale and retail on payment of fixed fees and thereafter there was provision of renewal of the same every year. 3. According to the Rules, 1982, auction procedure has been provided under R. 4. Rule 8 of the Rules, 1982 expressly mentions that in case there is any conflict between the provisions of these rules and the Rajasthan Excise Rules, 1956, the former shall prevail. R. 9 of these Rules repealed the Rules of 1972. However, Rr. 6 & 7 of the Rules, 1982 provide for exemption from auction in respect of persons holding licences for sale of foreign liquor on the date of coming into force of these rules. Whereas R. 6 provides for exemption, R. 7 provides for renewal by resort to R. 72(A) of the Rajasthan Excise Rules, 1976. Rr. 6 & 7 of Rules, 1982 may be reproduced below for ready reference : R. 6 Exemptions-(1) The provision of these rules shall not apply to the Canteen Stores Department (India) of the Commanding Office of the Armed Forces of the Union of India or the Border Security Force Personnel stationed in Rajasthan who are holding requisite licence under the provisions of Rajasthan Excise Rules, 1956. (2) The provisions relating to grant of licence by auction in rule 3 of these rules shall not be applicable in respect of persons holding licence for sale of foreign liquor on the date of coming into force of these rules. R. 7. Fees for the renewal of licences.-(1) A licence granted or deemed to have been granted under these rules shall expire on the 31st day of March. R. 7. Fees for the renewal of licences.-(1) A licence granted or deemed to have been granted under these rules shall expire on the 31st day of March. (2) A person seeking renewal of the licence shall apply in accordance with rule 72-A of the Rajasthan Excise Rules, 1956 and such application shall be accompanied by a treasury receipt showing the payment of : (a) renewal fees at the rates prescribed by the State Government from time to time. (b) the usual licence fees payable under rule 69(1) of the Rajasthan Excise Rules, 1956. 4. The amendments were introduced in these rules, 1982 by notifications dated the 24th March, 1982. The present petitioners, all of whom claimed to be existing licensees under the Rules of 1982, applied for the renewal of the licences in pursuance of the provisions mentioned above. On March 31, 1982, an important amendment was introduced in Rules of 1982, by which sub-rule 2 of Rule 6 providing for exemption was deleted and a proviso was added to sub-rule 2 of R. 7 which reads as under : "Provided that where the licensing authority has renewed the licence for a part of the year, the licenssee shall pay the prescribed proportionate fee for such part of the year and the excess amount, if any, deposited by him while applying for license for the whole of the year shall be refunded to him." R. 3 was added for grant of licence for exclusive privilege of selling foreign liquor both by wholesale and retail either by auction or by private negotiation or on commission basis or any other system sanctioned by the Government from time to time. 5. The cumulative effect of Rules and of amendment to Rules of 1982 which were earlier promulgated on February 20, 1982 was that the State Government which were earlier committed to exemption to the existing licensees and provided for renewal, took a somersault and deleted the provisions of exemption and made it express that there cannot be any claim for renewal. Armed with the above amendment of March, 31, 1982, the respondents are proceeding with auction of foreign liquor licences in all the areas where the petitioners have got their existing licences either of wholesale or of retail trade under the provisions of Rules, 1982, and under which rules, they have applied for renewal for the year 1982-83. 6. Armed with the above amendment of March, 31, 1982, the respondents are proceeding with auction of foreign liquor licences in all the areas where the petitioners have got their existing licences either of wholesale or of retail trade under the provisions of Rules, 1982, and under which rules, they have applied for renewal for the year 1982-83. 6. All the learned counsel for the petitioners have challenged the above amendment deleting the provisions of R. 6(2) and making amendment in R. 7 on the ground that this purports to take away vested right of the existing licencees who have invested huge amount both by payment of initial fees of Rs. 50,000/- or more for the period of less than one year under the express undertaking that they would be allowed to continue for selling foreign liquor for the year 1982-83 always on payment of renewal fees which has also been accepted by the District Excise Officer. The argument is based on doctrine of promissory estoppel and the submission is that the existing rules which were suddenly amended on 31st March, 1982 cannot be applied retrospectively for the existing licencees and further the Government and its functionaries themselves, repeatedly asked the licensees to apply for licence, pay the huge amount of Rs. 50,000/- invest the money to the tune of lacs by establishment of a shop and purchase foreign liquor and other thing apparatus with the express covenant that the renewal would be made. This was a promise of the State and its functionaries evidenced by various documents submitted by the petitioners and now by this amendment of 31st March, 1982 by deletion of exemption clause and amendment of renewal clause, they are estopped by selling the licence by auction and depriving the petitioners from renewal for the period 1982-83. 7. The petitioners relied upon the judgment of the apex court in (1) M/s Motilal Padampat Sugar Mills Co. Ltd. v. State of Uttar Pradesh and others AIR 1979 SC 621 . However, Shri Ashok Mathur, the learned Advocate General, refuted the above contentions of the learned counsel for the petitioners and submitted that the doctrine of promissory estoppel as enunciated in M/s. Motilal Padampat Sugar Mills Co. Ltd. v. State of U. P. and others (Supra) has been drastically curtailed and watered down in (2) M/s Jitram Shive Kumar and others v. State of Haryana AIR 1980 SC 1285 . Ltd. v. State of U. P. and others (Supra) has been drastically curtailed and watered down in (2) M/s Jitram Shive Kumar and others v. State of Haryana AIR 1980 SC 1285 . The learned counsel for the petitioners then relied upon the principles of reasonableness and natural justice as enunciated in (3) M/s Kastoorilal Lakshmi Reddy v. State of J & K & others AIR 1980 SC 1992 and another judgment of the apex court in (4) Parasram v. Ram Chandra : 1982 (1) SCC 627 where the Apex court insisted that if any radical change is made in system of Scheme of allotment, opportunity of hearing should be given. The learned counsel for the petitioners submitted that amendment of 31st March, 1982 has been made denying all such opportunities and is also, therefore, void and ultravires. 8. I have given my thoughtful consideration to the above submission of the learned counsel for the parties which I have extracted in a very brief and precise term. It is established law that right to do their trade or the business of liquor is not fundamental right and it is so well established by series of cases of Supreme Court that the petitioners' counsel did not dare to make that tall claim. That being so, power of amendment cider Section 41 of the Act, 1950 also cannot be challenged and the delegated authority of legislature in the form of Government was competent to make the amendments of 31st March, 1982. The right to property is also not fundamental right under the Constitution now and by the amendment of 31st March. 1982 no vested right was taken away so far as the fundamental rights are concerned. The exemption granted by the provisions contained in R. 6 of the Rules, 1982 was a creation of rule making authority which was exercising the power of delegated legislature and it could very well take away the exemption. Since the renewals were to take effect only from 1st April, 1982, the amendment of 31st March, 1982 is also prospective and not retrospective in nature. 9. So far as the question of "promissory estoppel" is concerned in view of the law laid down by the Apex court referred to above, it is clear that there cannot be any such promissory estoppel muchless against the statute. 9. So far as the question of "promissory estoppel" is concerned in view of the law laid down by the Apex court referred to above, it is clear that there cannot be any such promissory estoppel muchless against the statute. The doctrine of promissory estoppel as enunciated in M/s Motilal Padampat Sugar Mills Co. v. State of U.P. (supra) in 1979 has undergone a radical change in 1980 in the above mentioned case and is no longer available to the petitioners. Even otherwise, there cannot be any estoppel against the statute and this principle is so well established that no further discussion is necessary. 10. It is true that all the petitioners might have invested huge amounts on account of various tempting notices and offers issued by the District Excise Officer Commissioner and also earlier decision of the Government. It is unfortunate that the Government changed its policy so soon and abruptly later on bored to the detriment of those licensees who bona fidely believed that they can invest lacs of rupees and pay huge money amount to Rs. 50,000/- as initial fees even for 2-3 months or for a few days so that they may get renewal for 1982-83. Undoubtedly such an action of the State Government in taking a sudden somersault against the expressed declaration resulted in upsetting several retail licencees, a fact which was appreciated by the Advocate General also, during the arguments. However, that may be an act, propriety of which may be debatable but legality of which is beyond doubt. 11. I am not persuaded to accept the contention, that for amendment of the rules the Government was required to adopt the principles of natural justice by hearing licensees and giving them opportunities to show cause. The amendment of the Rules is a legislative function of a delegated legislature and the principles of natural justice or the right of hearing or opportunity to show cause cannot be extended to it. I am unable to derive any such deduction from the above two decisions of the Supreme Court in M/s Kastoorilal Lakshmi Reddy's case (supra) and Paras Ram Thakur dass v. Ram Chandra (supra) in which the principles of reasonableness and natural justice in that context have been discussed. 12. I am unable to derive any such deduction from the above two decisions of the Supreme Court in M/s Kastoorilal Lakshmi Reddy's case (supra) and Paras Ram Thakur dass v. Ram Chandra (supra) in which the principles of reasonableness and natural justice in that context have been discussed. 12. I have got no doubt that the petitioners have got no prima facie case requiring detailed consideration in respect of their challenge to the validity of' the amendment of March 31, 1982 to Rr. 6 & 7 of the Rules, 1981 and I hold that the amendment introduced to Rr. 6 & 7 by notifications of March, 1982 are valid, intravires and enforceable. 13. The learned counsel also argued that the Prohibition Act was not properly scribed and the Act by which the Prohibition Act was repealed, is invalid. I have not been able to understand and appreciate the reasons for such a claim and in any case, I am of the view that it is irrelevant for the present controversy. 14. The learned counsel for the petitioners further argued that the Rules of 1956 applies but that submission is devoid of any force in view of the express provisions in Rules, 1982 in the form of R. 8 which reads as under:- "8. Rules to have overriding effect.-In case there is any conflict between the provisions of these Rules and the Rajasthan Excise Rules 1956 the former shall prevail." I am also persuaded to accept the contention of Shri Mathur that Section 37 of the Rajasthan Excise Act, 1 950 provided a complete protective umbrella to the respondents, in as much as it, expressly enables the State functionries to refuse the renewal of licence as it says that no licensee can have any right to claim for renewal. Section 37 of' the Rajasthan Excise Act reads as under: Section 37. No renewal of licence or compensation on determination 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 non-renewal thereof." 15. Section 37 of' the Rajasthan Excise Act reads as under: Section 37. No renewal of licence or compensation on determination 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 non-renewal thereof." 15. It is established law that the Rules cannot override the Act and therefore, in view of Section 37 whatever promise might have been made or impressions given to the licensees for renewal, no legal right is created and the respondents can certainly reject the prayer for renewal and go ahead with the auction proceedings according to the amendment of 31st March, 1982. 16. A feeble and faint argument was also made that the renewal fees was accepted by the District Excise Officer and, therefore, in law it will be deemed that the licences have been renewed for 1982-1983. I am of the opinion that the ministerial act of permitting a challan to be deposited in the treasury cannot be equated with an order for renewal by application of mind to the application for renewal. Admittedly, There is no order of renewal. 17. The result of the above discussion is that all the above submissions the learned counsel for the petitioners are untenable and devoid of any All the five writ petitions are therefore, dismissed in limine at admission stage summarily but, without any order as to costs. 18. It was on account of the above view to which I had tentatively rived yesterday after hearing the arguments but before dictating the judgment that I have already dismissed the stay applications and permitted the responder is proceed with their programme of auction of the foreign liquor licence both or Whole-sale and retail trade. Though I have dismissed the writ petition and the stay application, I must observe before parting with the case that the manner in which sudden radical alteration was made in policy by switching over to auction and depriving several licensees who had invested the huge money and paid full licence fees as initial fees, even without enjoying it for few months has resulted in serious financial loss to hundreds of licensees amongst whom may be petty licensees being retail traders also. 19. The Wets v. Drys " controversy is now over and now Wets are claiming relief from Wets. 19. The Wets v. Drys " controversy is now over and now Wets are claiming relief from Wets. Drys having lost their battle again by scrapping of prohibition. 20. It would be therefore in consonance with equity and justice, if the respondents consider and take some decision to refund the proportionate fees from the initial deposit of fees. I am glad that the learned Advocate General appreciated and realised these hardships and did mention that though no commitment can be made, the Government as a welfare state of people would apply its mind objectively and consider this aspect of the case to find out what can be done to give relief to such hard cases. 21. . May I expect that this assurance of the learned Advocate General, fairly made during his first maiden appearance, would be promptly accepted, to strengthen the impression that the state or its functionaries are equally fair and never wanted to play game of "hide or seek", "approbate or reprobate" by first extracting huge sums of initial fee licence money by giving allurements and temptations and then switching over to "auction system" by disowning the legitimate still born child, is race of augmenting revenue. Functionaries of a. "Socialistic Welfare State" as proclaimed by "Preamble" of our sacred Constitution, should while augmenting revenue also maintain balance of "fairness and reasonableness twins", of Article 14, as Judges are supposed to do so, for scales of justice, and the learned Advocate General's gesture is in consonance with it, provided it is accepted by the Government. *******