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2003 DIGILAW 399 (MP)

Deenanath Sen v. State of M. P.

2003-03-10

A.K.SHRIVASTAVA, DIPAK MISRA

body2003
JUDGMENT : A.K. SHRIVASTAVA, J. 1. By this writ petition filed under Articles 226 and 227 of the Constitution of India, the petitioners have challenged the constitutional validity of the Rule 8(1)(b) of M.P. Foreign Liquor Rules, 1996 (hereinafter referred to as ‘the Rules’) as amended on 2-3-2002, being ultra-vires and unconstitutional. 2. The petitioners have filed this writ petition against the State of Madhya Pradesh and its functionary and sought the following reliefs:- (i) To issue appropriate Writ, order direction declaring Rule 8(1)(b) of M.P. Foreign Liquor Rules, 1996 as amended on 2-3-2002 ultra-vires and unconstitutional. (ii) This Hon'ble Court may kindly be pleased to quash the impugned direction/excise arrangement (Ann. P-2, P-3) for the year 2002-2003 so far as it is related with the petitioner. (iii) This Hon'ble Court may kindly be pleased to issue appropriate writ/direction/orders commanding the respondents to renew the petitioner's existing FL-2 Hotel Bar Licence on payment of prescribed licence fee of Rs. One Lakh as payable by the Hotels and Restaurants run by the M.P. Tourism Development Corporation. (iv) The respondents may kindly be directed to renew the petitioner's existing FL-2 Bar licences on the same terms and conditions/ scales/standards/norms as applicable in the case of hotel run by the M.P. Tourism Development Corporation. 3. So far as the relief No. 2 and 4 are concerned, they have been decided by us in Writ Petition No. 1652 of 2002, Shivraj Singh vs. State of Madhya Pradesh and others. We have already held in the case of Shivraj Singh (supra) as under:- “36. In view of our preceding analysis, we have no hesitation in holding that the excise policy floated for the year 2002-03 does not offend any of the provisions of the Constitution and the colossus complaint that it offends Article 14 being arbitrary, unreasonable and irrational does not hold water and, in fact, pales into total insignificance. Consequently, we hold the policy to be within points and limits of the constitutional provisions. 37. Another contention of the petitioner that the respondents have cancelled their licences also appears to as factually misconceived. We have already given our bestowed consideration that if the petitioner fulfils the required standard, scale and norms, his licence can be renewed and therefore the question of cancellation of the licence of either FL-3 or FL-2 does not bear any merit.” 4. We have already given our bestowed consideration that if the petitioner fulfils the required standard, scale and norms, his licence can be renewed and therefore the question of cancellation of the licence of either FL-3 or FL-2 does not bear any merit.” 4. Rule 8 prior to amendment reads as under:- “Rule 8 Sale of Foreign Liquor (a) Categories of Licences - Licences for the sale of foreign liquor shall be of the following categories and the mode of grant of these licences shall be as indicated hereunder:- (b) FL-2 (Public House or Restaurant Bar Licence) - FL-2 Licence holder may sell beer to the visitors to or customers of the restaurant for consumption on the licenced premises with meals or snakes.” Rule 8(1)(b) of the Rule as amended on 2-3-2002 reads as under:- Rule 8(1)(b) FL-2 (Public House or Restaurant Bar Licence). An FL-2 licencee shall sell foreign liquor to the customers of the restaurant for consumption on the licenced premises with meals or snakes. This licence may be granted to Madhya Pradesh Tourism Development Corporation and the holder of FL-1A/FL-1AAA Licence for restaurant of such scale and standard and subject to such guidelines, as may be determined by the State Government.” 5. The submission of learned counsel for the petitioners is that in the notification dated 21-2-2002, Annexure P-3, it has been mentioned that the licence fee for FL-2 licence will be Rs. 2.5 to 3.5 lakhs per annum payable in advance according to the population of the city, on the other hand, a different standard has been provided to the Madhya Pradesh Tourism Development Corporation (in short ‘the MPTDC’) and the licence fee for it has been fixed Rs. one lakh only payable in two instalments, hence the respondents had grossly discriminated by adopting different criteria while fixing the licence fee. It has been putforth by the petitioner that MPTDC is not a liquor contractor in the year 2002-2003 in any area of the State but their existing FL-2 licences would be renewed whereas the petitioners who are also sailing in the same boat would be deprived of the renewal of their FL-2 Bar Licence and, therefore, the action of the respondents and the amendment in Rule 8(1)(b) of the Rules are ultra-vires being discriminatory, arbitrary, mala-fide and guided by collateral consideration. It is also urged that the amended Rule is in violation of Article 14 and 19 of the Constitution of India. 6. We have heard Mr. Arvind Chouksey learned counsel for the petitioners and Mr. S.K. Yadav, learned Government Advocate for the State. 7. Before we proceed to consider the rivalised stands and submission, we think it is of immense of relevance to refer to certain decisions of the Apex Court rendered in connection with the liquor business. In the case of Cooverjee B. Bharucha vs. Excise Commissioner and the Chief Commissioner, Ajmer and Others, AIR 1954 SC 220 , it was held by the Constitution Bench of the Supreme Court that it was in the competence of the State Legislature to regulate the business of vending intoxicating liquor, to mitigate its evils or to suppress it entirely. On perusal of this decision, it would reveal that the citizen does not enjoy inherent right to sell liquor nor it is his privilege. 8. In the case of Amar Chandra Chakraborty vs. The Collector of Excise, Government of Tirpura and Others, AIR 1972 SC 1863 , the Supreme Court has held as under:- “10. 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, it may be pointed out, only forbids class legislation but reasonable classification does not come within the prohibition. Nothing convincing was urged at the bar to attract the prohibition embodied in Article 14.” 9. In the case of The State of Orissa and others vs. Harinarayan Jaiswal and Others, AIR 1972 SC 1816 , their Lordships have reiterated that there is no inherent right in a citizen to run business of liquor and the State may prohibit and restrain the trade which are illegal, immoral or injurious to health of human-being. In the case of The State of Orissa and others vs. Harinarayan Jaiswal and Others, AIR 1972 SC 1816 , their Lordships have reiterated that there is no inherent right in a citizen to run business of liquor and the State may prohibit and restrain the trade which are illegal, immoral or injurious to health of human-being. In the same context the case of Har Shankar and Others vs. The Deputy Excise and Taxation Commissioner and Others, AIR 1975 SC 1121 , Nashirwar vs. State of Madhya Pradesh and Others, AIR 1975 SC 360 , State of Madhya Pradesh and Others vs. Nandlal Jaiswal and Others, AIR 1987 SC 251 , Khoday Distilleries Ltd. and Others vs. State of Karnataka and Others, (1995) 1 SCC 574 , M/s Ugar Sugar Works Ltd. vs. Delhi Administration and Others, AIR 2001 SC 1447 are also to the point. Thus, on the anvil of the ratio decendi of aforesaid cases of the Apex Court, we have no hesitation to hold that a citizen does not enjoy any fundamental right to carry on the business of liquor. 10. Thus, the argument of the learned counsel for the petitioners that there is violation of Articles 19 of the Constitution of India is misconceived and totally devoid of any merit. 11. The second facet of argument of the learned counsel for the petitioner is that the respondents by fixing different licence fee has adopted a discriminatory approach and hence, the action of the respondents is in violation to Article 14 of the Constitution of India. On the first blush the said argument appears to be attractive but does not withstand close scrutiny. The complete answer of the argument of learned counsel for the petitioners, has been given in the case of Kerala Hotel and Restaurant Association vs. State of Karala, AIR 1990 SC 913 which has been heavily relied by Mr. S.K. Yadav, learned Government Advocate, wherein their Lordships while placing reliance upon the decision in the case of ITO vs. K.N. Takim Roy Rybai, AIR 1976 SC 670 came to hold that the mere fact that a tax falls more heavily on some in the same category, is not by itself a ground to render the law invalid. S.K. Yadav, learned Government Advocate, wherein their Lordships while placing reliance upon the decision in the case of ITO vs. K.N. Takim Roy Rybai, AIR 1976 SC 670 came to hold that the mere fact that a tax falls more heavily on some in the same category, is not by itself a ground to render the law invalid. It is only when within the range of its selection, the law operates unequally and cannot be justified on the basis of a valid classification, then there would be violation of Article 14. The Apex Court in this decision has placed reliance on the decision in the case of Federation of Hotel and Restaurant Association of India vs. Union of India, (1989) 178 ITR 97 , in which it has been held that “the test could only be one of palpable arbitrariness applied in the context of the felt needs of the times and societal exigencies informed by experience. Classifications based on differences in the value of articles or the economic superiority of the persons of incidence are well recognised. A reasonable classification is one which includes all who are similarly situated and none who are not. In order to ascertain whether persons are similarly placed, one must look beyond the classification and to the purposes of the law.” We think it apposite to refer to Paras 23, 24 and 29 of Kerala Hotel and Restaurant Association (supra) which read as under:- “23. A catena of decisions was cited at the bar on the point relating to valid classification and the test to be applied when hostile discrimination is alleged. It is not necessary to all those decisions which state the settled principles not in dispute even before us. The difficulty really is in the application of settled principles to the facts of each case. It is settled that classification founded on intelligible differentia is permitted provided the classification made has a rational nexus with the object sought to be achieved. In other words, those grouped together must possess a common characteristic justifying their inclusion in the group, but distinguishing them from those excluded; and performance of this exercise must been a national nexus with the reason for the exercise. 24. In other words, those grouped together must possess a common characteristic justifying their inclusion in the group, but distinguishing them from those excluded; and performance of this exercise must been a national nexus with the reason for the exercise. 24. The scope for classification permitted in taxation is greater and unless the classification made can be termed to be palpably arbitrary, it must be left to the legislative wisdom to choose the yardstick for classification, in the background of the fiscal policy of the State to promote economic equality as well. It cannot be doubted that if the classification is made with the object of taxing only the economically stronger while leaving out the economically weaker sections of society, that would be a good reason to uphold the classification if it does not otherwise offend any of the accepted norms of valid classification under the equality clause. 29. Thus, it is clear that the test applicable for striking down a taxing provision on this ground is one of “palpable arbitrariness applied in the context of the felt needs of the times and societal exigencies informed by experience” and the courts should not interfere with the legislative wisdom of making the classification unless the classification is found to be invalid by this test.” 12. Thus, on the anvil of the aforesaid premised reasons, we have no doubt that the separate criteria fixed by the respondents for licence fee in regard to the hotels run by MPTDC cannot be said to be in any manner arbitrary or discriminatory. The hotel belonging to the petitioner and those which fall within the scale and standard as prescribed by the respondents and the MPTDC and heritage hotels form two distinct classes and, therefore, the question of any discrimination does not arise. 13. Apart from the aforesaid grounds, be it noted that the MPTDC is a State Government undertaking and to promote the tourism and to develop its infrastructure in the State as well as to attract the tourists to remote locations so as to reach and to become aware about the culture and art of the State, the facility of providing different licence fee has been provided. The hotels and restaurants run by MPTDC are treated to form separate and distinct class. The hotels and restaurants run by MPTDC are treated to form separate and distinct class. Quite apart from the above when the State has the exclusive right in the trade of liquor and it confers privileges in that regard on the others who function only because of grant of licence, indubitably the State has the right to make a different criterion for the hotels run by it through its instrumentality that is run by others. The classification is quite distinct having an intelligible differentia and claim of parity by the individual licence holders is absolutely untenable and if we allow ourselves to say so, it is comparable to conceive of an ocean in the dry desert. There can be a miraze, but no ocean. Therefore, we do not find that there is any violation of Article 14 of the Constitution of India. 14. In view of the reasons assigned hereinabove, we are of the considered view that the petition is devoid of any force and the same is hereby dismissed without any order as to costs.