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1999 DIGILAW 921 (RAJ)

Daljit Singh Choudhary v. State of Rajasthan

1999-07-23

P.K.TEWARI, P.P.NAOLEKAR

body1999
Honble NAOLEKAR, J.–All petitioners are holder of licence for the retail on sale of beer at restaurants. Petitioners are aggrieved by the policy decision taken by the government not to renew the licences of the petitioners to sale the beer from their respective restaurants. (2). With a view to enact for Rajasthan a uniform law relating to export, import, transport, manufacture, sale and possession of intoxicating liquor the Rajasthan Excise Act, 1950 was enacted and was brought into force with effect from 1.7.1950. Some of the provisions regulating sale and possession of the intoxicating liquor are contained in the following Sections of the Act of 1950. Section 19 of the Act prohibits possession of excisable articles in excess of the prescribed limits otherwise than the permits granted by the Excise Commissioner. Likewise Sections 20 and 21 prohibits sale of excisable articles without licence from the competent authority. Section 24 empowers the Excise Commissioner to grant a licence for the exclusive privilege of manufacture and sale of country liquor, foreign liquor or intoxicating drugs. Section 26 permits the grant of such exclusive privilege to let or assign any portion of his privilege which is subject to the licence by the Excise Commissioner. Section 28 provides for excise duty and Section 31 authorises imposition of restriction on a licence that the licence shall be subject to the payment of fees and shall be subject to such conditions as may be described by the State Government under the Rules. Section 34 gives power to the licensing authority for cancellation or suspension of any licence. Section 37 lays down that no person to whom a licence has been granted under the Act shall have any claim to the renewal of any such licence or to any claim for compensation on the determination or non-renewal thereof. Section 41 is a rule making power for regulating the period and localities for which licence for sale of excisable article may be granted. Procedure to be followed and matters to be ascertained before granting any such licences, prohibiting sale of any excisable article to any person or class of persons, for preventing drunkens or disorderly conduct in or near any licensed premises. Sub-section (3) provides that rule making power shall be exercised with previous publication. Procedure to be followed and matters to be ascertained before granting any such licences, prohibiting sale of any excisable article to any person or class of persons, for preventing drunkens or disorderly conduct in or near any licensed premises. Sub-section (3) provides that rule making power shall be exercised with previous publication. The proviso thereto, however, provides that any such rule may be made without previous publication if the State Government considers that it should be brought into force at once. (3). In exercise of the powers conferred by Section 41 of the Rajasthan Excise Act, 1950 (Rajasthan Act II of 1950) the State Government, has made the Rajasthan Excise (Grant of Hotel Bar/Club Bar/Restaurant Beer Bar Licences) Rules, 1973 (hereinafter referred to as `the Rules of 1973). (4). It would be useful to reproduce Rule 2 of the Rules of 1973 in its entirety, which reads as under:- ``2. (a) Hotel means all Tourist Bungalows and hotels run by the Department of Tourism and Hotel Corporation of the State Government and the Government of India including Hotels recognised by the Government of India as Heritage Hotels and shall also include any other hotel with at least 20 bedrooms which is adjudged to be of at least Two State Category by the Department of Tourism, Government of India or any other authority authorised specially for this purpose by the Government of India. (b) Hotel Bar/Club Bar/Restaurant Beer Bar Licence means a ``retail on licence for the sale of foreign liquor granted to a hotel which makes sales to foreign and Indian tourists and visitors staying or residing in it for consumption in a room earmarked for serving liquor or dining hall or drawing room or such other part of the hotel as may be approved by the State Government. (c) ``Club means a duly registered association of persons for social and recreational purposes or for the promotion of some common object on joint expenses. (d) ``Club Bar Licence means a licence granted to a club for retail sale of foreign liquor by it, to its bonafide members for consumption in the club premises. (dd) ``Restaurant means any place to which the public are admitted for the consumption of food or drink, for consideration. (ddd) ``Restaurant Licence means a ``retail on licence for the sale of Beer granted to a Restaurant which makes sale to customers for consumption in a Restaurant. (dd) ``Restaurant means any place to which the public are admitted for the consumption of food or drink, for consideration. (ddd) ``Restaurant Licence means a ``retail on licence for the sale of Beer granted to a Restaurant which makes sale to customers for consumption in a Restaurant. (e) The words and expressions defined in the Rajasthan Excise Act, 1950 and Rajasthan Excise Rules, 1956 and not defined in these rules shall have the meaning as defined in the Rajasthan Excise Act, 1950 (Rajasthan Act II of 1950) and the Rajasthan Excise Rules, 1955 as the case may be. (5). Under Rule 2 the competent authority is authorised to issue hotel licence for sale of foreign liquor, club bar licence and the restaurant licence. The petitioners are the holder of the restaurant licence for sale of beer to the customers for consumption in the restaurant. By policy decision taken by the Government it is this licence which was decided not to be renewed. Rule 2 (b) defines the expression `Hotel bar/Club Bar/Restaurant Beer Bar licence to mean on retail on licence for the sale of foreign liquor granted to a hotel which make sale to Indian and Foreign tourists and visitors. Rule 2 (dd) defines the expression `Restaurant to mean any place to which the public are admitted for consumption of food or drink for consideration. Rule 2 (ddd) defines the expression `Restaurant Licence to mean a `retail on licence for sale of beer granted to a Restaurant which makes sale to the customers for consumption in a Restaurant. (6). It is urged by the counsel for the petitioners that it is a settled law that the executive instruction can supplement a statute or cover an area to which the statute does not extent but they cannot run contrary to the statutory provisions or whittle down there effect and the Government cannot over rule or supersede statutory rules by administrative instructions in the nature of policy. The government is only authorised to fill up the gapes and supplement the rules and issue instructions not inconsistent with the rule framed. When the Rules permits issuance of restaurant licence, the State Government has no authority or jurisdiction to spell out a policy which contravenes the Rules. The government is only authorised to fill up the gapes and supplement the rules and issue instructions not inconsistent with the rule framed. When the Rules permits issuance of restaurant licence, the State Government has no authority or jurisdiction to spell out a policy which contravenes the Rules. It is not open for the executive by policy decision to change or alter the policy which has been declared and laid down in the Act or the Rules. The Government has already laid down a policy of issuance of the beer bar licences to the restaurants under the Rules which cannot be whittle down by issuance of the policy decision of non renewal. It is submitted by Mr. K.S. Rathore, Additional Advocate General, that petitioners have no Fundamental right to carry on trade in liquor. The Rules of 1973 does not in any way permits trade in liquor as of right. The Rules of 1973 recognise right to apply for Restaurant Licence if offered and nothing more. (7). The Supreme Court has considered the entire case law relating to right to carry on trade and business in potable liquor in the case of Khodia Distilleries & others vs. State of Karnataka & Others (1). Honble Mr. Justice P.B. Sawant speaking for the constitution bench has said that rights protected under Article 19(1) of the Constitution of India are not absolute but qualified. The right to practice any profession or to carry on any profession, trade or business does not extend to practising a profession or carrying on an occupation, trade and business which is inherently vicious and pernicious and condemned by all civilised societies. It does not entitle citizens to carry trade and business in activities which are immoral and criminal and in article or goods which are obnoxious and injurious to health, safety and welfare of general public. There cannot be business in crime. A citizen has, therefore, no fundamental right to do trade or business in liquor. Hence the trade or business in liquor can be completely prohibited. The State has, therefore, power to completely prohibit the manufacture, sell, possession, distribution and consumption of potable liquor as a beverage except when it is used and consumed for medicinal purposes. A citizen has, therefore, no fundamental right to do trade or business in liquor. Hence the trade or business in liquor can be completely prohibited. The State has, therefore, power to completely prohibit the manufacture, sell, possession, distribution and consumption of potable liquor as a beverage except when it is used and consumed for medicinal purposes. For the same reason, State can create a monopoly either in itself or in the Agency created by it for the manufacture, possession, sell and distribution of the liquor as beverage and also sell the licence to citizens for the said purpose by charging fees. This can be done under Article 19 (6) or even otherwise. The restrictions and limitations can extend to the State carrying on the trade and business itself to the exclusion of and elimination of others and/or to preserving to itself the right to sell licence to be trade or business in the same, to others. (8). In the matters of State of Bombay vs. F.N. Balsara (2), Cooverjee B. Bharucha vs. Excise Commissioner and Chief Commissioner (3), The State of Assam vs. Sristikar Dowerah & others (4), Nagendra Nath Bora vs. Commissioner Hills Division & Appeals (5), Amar Chandra Chokraworti vs. Collector of Excise (6), and State of Bombay vs. R.M.D. Chamarbaugwala (7) , the Apex Court has also held, that there is no fundamental right to do trade and 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 sell 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. (9). It is thus clear that the State has absolute right to prohibit trade in liquor and also to carry on the business itself to the exclusion and elimination of others or to sale the licence to the citizens for such purpose. No one can claim as against the State right to carry on trade and business in any intoxicants nor the State can be compelled to part with its exclusive right or privilege of manufacture, sell, storage of liquor. The State can part with that right or privilege to others consistent with the principles of equities enshrined under Article 14 of the Constitution of India. (10). The State can part with that right or privilege to others consistent with the principles of equities enshrined under Article 14 of the Constitution of India. (10). It may be seen that under the Rules of 1973 the licensing authority is being authorised to issue a restaurant licence for the sale of beer to the customers for consumption in the restaurant. Neither the Excise Act nor the Rules framed thereunder confirms any authority on the petitioners to have the retail on licence to sale the beer as a matter of right. The petitioners have only a right to apply, the issuance of licences is left to the decision of the licensing authority. Right to apply licence for retail on sale is not a same thing as to right to get the licence. The Government may exercise the powers or may not do so. The Rules of 1973 only authorise the licensing authority to issue three types of licences that does not mean that he is bound to issue licence whenever it is applied for. The State Government may or may not issue particular type of licence, unless and until there is a right to get a licence it cannot be said that the Government by policy decision has taken away that right. The declaration of policy under the Rules of 1973 was to the effect that retail on licences may be issued for sale of beer to the customers for consumption in restaurant, that cannot be read as licence will be issued whenever applied for or invitation shall be made for issuance of licence. The Government is free to exercise its discretion whether to issue the licence or not to issue the licence in the particular form and if the Government has taken a decision not to renew the beer bar licences as a matter of policy it cannot be challenged as encroaching upon the policy decision taken by the Government under the Rules by executive policy decision. The policy decision taken by the Government not to renew the licences cannot be said to be contrary to the Rules of 1973. The petitioner having no right to have the trade in liquor, it is upto the State whether to issue licence for carrying on business in liquor. The policy decision taken by the Government not to renew the licences cannot be said to be contrary to the Rules of 1973. The petitioner having no right to have the trade in liquor, it is upto the State whether to issue licence for carrying on business in liquor. If the State decides not to part with its right to carry on trade and business in liquor by issuing/renewing Restaurant licence to others, State cannot be forced to part with that right. (11). It is submitted by Mr. Mahendra Singh counsel appearing for one of the petitioners that if the State decides to part with its right then it has to follow the principle enshrined in Article 14 of the Constitution of India. Once the State permits trade and business in potable liquor with or without limitations the citizens have a right to carry on trade and business subject to the limitation, if any, and the State cannot make discrimination between the citizens. The argument proceeded on the foundation that since the State has permitted to sell the liquor and beer by the hotel licence holder the restriction of not renewing the licence and thereby not permitting the restaurant licence holders to carry on business in liquor, tantamounts to discrimination and is not permissible under Article 14 of the Constitution of India. The counsel relied on the judgments of the Apex Court reported in State of M.P. & others vs. Nand Lal Jaiswal & others (8), where it has been held that the grant of licence for manufacture and sell of liquor should be in consonance with Article 14 of the Constitution of India Dungaji & Company vs. State of M.P. & Others (9), wherein the Supreme Court has laid down that when the State has decided to part with the right to carry on trade and business in intoxicants the State can regulate such right or privilege to the others consistent with the principle of equities enshrined under Article 14 of the Constitution and any infraction in this behalf at its pleasure, arbitrarily, violates Article 14. In Kodai Distilleries & Others vs. State of Karnataka & others (supra), the Supreme Court has held that when the State permits the trade and business in potable liquor with or without limitation the citizen has a right to carry on trade and business subject to the limitations, if any, and the State cannot make discrimination between the citizens who are qualified to carry on the trade and business. (12). There cannot be a discrimination amongst the equals. Similarly if the unequals are treated as equals then that will amount to discrimination within the meaning of Article 14. Rules of 1973 authorises the State to issue three classes of licence for sell of foreign liquor or beer, hotel licence, club bar licence and a restaurant licence. The requisite standard and requirements for issuance of the hotel licence, club bar licence or restaurant licence are different. The hotel licence, club bar licence or the restaurant licence cannot be equated with each other. Moreover the Rule itself classified them as different licences, to be issued on fulfilling different conditions. Differentiation of licences under the Rules is not under challenge. Thus it cannot be said that since the State has permitted retail on licence to hotel to be issued or a club bar licence to be issued to club, the State has discriminated by policy decision prohibiting renewal of the restaurant licence. All three licences stand on different footings and they are of different class. The restaurant licence is not similar to that of hotel licence or club licence. We are of the view that there is no discrimination on the ground that equals are being treated unequal. (13). It is urged by Mr. Singh that the policy decision taken by the State Government of non-renewal of the restaurant licence is not reasonable. Any policy decision taken by the State Government should be in conformity with the principle of Article 14 of the Constitution of India. It must be just, fair, reasonable and in public interest, and in consonance with the constitutional conscience and socio-economic justice. (14). On the other hand it is submitted by the counsel for the State that the policy decision to stop the sale of beer from the restaurant bar is taken in the public interest and is a public policy. The courts would not interfere in such matters. (14). On the other hand it is submitted by the counsel for the State that the policy decision to stop the sale of beer from the restaurant bar is taken in the public interest and is a public policy. The courts would not interfere in such matters. The petitioners are not protected under the doctrine of legitimate expectation or by promissory stopple. In fact Section 37 expressly declares that holder of a licence do not have any right of renewal. (15). A policy decision taken by the State Government of non-renewal of the licence of restaurants for sale of beer is alleged to curb and curtail the tendency amongst the youth to consume alcoholic beverage and to check increasing law and order problems. (16). It has been held by the Apex Court in Tata Cellular vs. Union of India (10), that the judicial quest in administrative matters has been to find the right balance between administrative discretion to decide matters whether contractual or political in nature or issues of social policy, thus they are not essentially justiciable. Therefore, it is not for the court to determine whether a particular policy or particular decision taken in the fulfilment of that policy is fair. It is only concerned in the manner in which those decisions have been taken. The judicial review is concerned with reviewing not the merit of the decision in support of which the application of judicial review is made but the decision making process itself. Judicial review is not in regard to the merits of the decision but in the manner in which the decision was taken. Whether a particular policy is wise or foolish the court is not concerned with it. It can only interfere to persue if it is beyond the powers of the authority. The policy would not be unreasonable in the legal sense merely because the court thinks it is unwise. (17). Thus the decision taken by the Government laying down any policy could be challenged if the decision maker does not understand correctly the law that regulated his decision making power. The policy would not be unreasonable in the legal sense merely because the court thinks it is unwise. (17). Thus the decision taken by the Government laying down any policy could be challenged if the decision maker does not understand correctly the law that regulated his decision making power. If the policy is irrational, namely wednesbury unreasonableness i.e. the decision of the public authority will be liable to quash or otherwise dealt with by an appropriate order in judicial review proceedings where the court concludes that decision is such that no authority properly directing itself on the relevant law and acting reasonably would have reached and that there is procedural impropriety. It is now well settled that the citizen does not have any fundamental right to carry on trade or business in the liquor. There is nothing in the Act or the Rules whereby the petitioners have a right to carry on business in liquor once the licence is granted to them. In other words the petitioners do not have any right to have their licences renewed. In fact Section 37 of the Rajasthan Excise Act, 1950. Specifically lays down that no person to whom a licence has been granted under the Act shall have any claim to renewal of such licence. The policy decision taken by the Government not to renew the licence of restaurant bar is in accordance with the powers vested in the State in law. The petitioners have failed to show any procedural impropriety in the matter of taking policy decision. The liquor as a beverage is an intoxicating and depressant which is dangerous and injurious to health and is, therefore an article which is inherently harmful. If the State takes steps to reduce and minimize sell of beer and easy access to a place to consume it, taking into consideration and balancing the earning of the exchequer through liquor trade, steps taken in that direction by policy decision would certainly be in a public interest. It is well known fact that the liquor shall be consumed more if it is easily available and there is a comfortable place available for consumption of the same. The restaurant licence is issued for the sale of beer which is to be consumed in the restaurant. It is well known fact that the liquor shall be consumed more if it is easily available and there is a comfortable place available for consumption of the same. The restaurant licence is issued for the sale of beer which is to be consumed in the restaurant. In restaurant beer is easily available with the facility to consume it, therefore, the steps taken by the State Government in the direction of reduction of the sale and consumption of the beer is in public interest. The policy decision taken by the Government being in public interest it is not open for this Court to sit on judgment and decide merit or demerit of that policy which is within the domain of executive authority of the State. The policy decision does not suffer with any irrationality or procedural impropriety. (18). For the reasons stated above, all the writ petitions fail and are hereby dismissed. There shall be, however, no order as to costs.