Rajendra Kumar Son of Shri Rampat v. State of Rajasthan Through The Secretary, Finance (Revenue) Department
2025-02-28
MANINDRA MOHAN SHRIVASTAVA, MUNNURI LAXMAN
body2025
DigiLaw.ai
JUDGMENT : (PER HON’BLE THE CHIEF JUSTICE): This common order shall govern disposal of the aforesaid two appeals. 2. The Special Appeal Writ No. 267/2023 [Rajendra Kumar Vs. The State of Rajasthan & Ors.] is directed against the order dated 19.01.2023 passed by the learned Single Judge in S.B. Civil Writ Petition No. 11550/2022, by which, the learned Single Judge has dismissed the writ petition in the matter of challenge to cancellation of the licence for selling country made liquor and in the matter of challenge to validity of Clause 13 of the Liquor Policy 2022-23 of the State Government promulgated vide order dated 05.02.2022. 3. As the issue raised in both the petitions is one and the same, on the basis of the order passed in S.B. Civil Writ Petition No. 11550/2022, the second writ petition registered as S.B. Civil Writ Petition No.11065/2022 between the same parties has also been dismissed vide order dated 19.01.2023. 4. Since the main order has been passed in S.B. Civil Writ Petition No. 11550/2022, we shall refer to the impugned order dated 19.01.2023 passed therein as also the pleadings and documents in that writ petition. 5. Petitioner-Rajendra Kumar filed petition aggrieved by the order dated 04.08.2022 passed by the District Excise Officer, Hanumangarh, whereby, his licence for selling country made liquor, issued in his favour, was cancelled. While filing the writ petition, the petitioner also laid challenge to the validity of Clause 13 of the Liquor Policy 2022-23 promulgated by State Government vide order dated 05.02.2022. 6. The averments necessary for decision of this appeal are that the writ petitioner/appellant is a Nagar Parshad (Lok Sevak) in Hanumangarh. He participated in auction proceedings for allotment of liquor shop and being a successful bidder, was issued a liquor licence for a period of one year commencing from 01.04.2022. However, before expiry of the period of licence, a show cause notice was issued to him on 07.07.2022 proposing to cancel the licence of liquor shop allotted to him on the allegation that as per the Liquor Policy for the year 2022-23, promulgated vide order dated 05.02.2022, on the eligibility conditions incorporated therein that a person in service of the State Government or Central Government or Local Bodies or in any other Government or Semi-Government institution or a public servant, would not be eligible for grant of licence.
It was also stated in the notice that as per the terms and conditions of e- auction, if an ineligible person participates in the auction and if any licence is granted to him, his licence will be liable to be cancelled upon receipt of information regarding ineligibility and all deposits made by him shall be liable to be confiscated. The report dated 04.07.2022 of the Excise Inspector, Circle Hanumangarh contained information regarding the appellant having been found to be elected as Parshad of Ward No.57. It was alleged that the appellant obtained licence by suppressing the fact. 7. In response to the notice, appellant vide representation dated 20.07.2022, informed that Parshad (Corporator) does not fall in the category of public servant nor holds an office of profit but he is a public representative and he does not derive any profit or remuneration from the State. 8. However, vide impugned order dated 04.08.2022, the licence was cancelled holding that the appellant was ineligible for grant of liquor licence. 9. Aggrieved by the order, the appellant preferred the writ petition. The writ petition, however, was dismissed giving rise to this appeal. 10. Learned counsel for the appellant argued that in absence of there being any ineligibility under the provisions of the Excise Act or Rules framed thereunder, it is wholly impermissible to lay down the conditions of ineligibility by way of policy. It is submitted that the Liquor Policy of 2022-23, promulgated vide order dated 05.02.2022, could not amend the eligibility criteria as prescribed under the Acts and Rules, inasmuch, the Liquor Policy is merely an administrative instruction issued by the State Government. It is a non-statutory policy and that policy, to the extent it adds new conditions of ineligibility, is inconsistent with the provisions contained in Rule 74 of the Excise Rules. The provisions contained in the Rule should neither be restricted nor enlarged by way of policy. If at all the State was desirous of including a new condition of ineligibility, the only way was to carry out amendment in the Act or in the Rules and the same could not be done by administrative instruction as it is a settled legal position that a thing which is required to be done in a particular manner should be done in that manner only.
Unless amendment is carried out in Section 41 of the Excise Act amending conditions of eligibility, the existing law could not be amended. Referring to the provisions contained in Section 41(3) of the Rajasthan Excise Act, it is argued that the amendment requires previous publication. Without complying with the provisions contained in Rules, no amendment in the Rule could be carried out. Therefore, incorporating conditions of ineligibility to apply and get liquor licence in the non- statutory administrative policy is dehors the provisions of law, illegal, inoperative and could not be made a basis to cancel the licence. 11. In support of his submissions, learned counsel for the appellant places reliance upon State of Rajasthan Vs. Banwari Lal Upadhyay [2001 (2) RLW (Raj) 1310], Chandra Kishore Jha Vs. Mahavir Prasad & Ors. [ 1999 (8) SCC 266 ], K. Kuppusamy & Anr. Vs. State of T.N. & Ors. [1998 (8) SCC 469], G.J. Fernandez Vs. State of Mysore & Ors. [AIR 1967 SC 1753] , and order dated 11.02.2022 passed by the High Court of Gujarat at Ahmedabad in the case of Gujarat Rajya Hotel Federation & 9 Ors. Vs. State of Gujarat & Ors. 12. On the other hand, per contra, learned counsel for the respondents relying upon the provisions contained in Section 71(2) of the Excise Act read with Rule 67-KKK(11)(d) of the Rajasthan Excise Rules, 1956 would submit that the respondent- State is authorized under the law to impose conditions of ineligibility. Further relying upon the provisions contained in Section 72, it is argued that the policy is a legal policy and has been issued by the State in exercise of statutory powers and has the force of law. He would submit that the policy laying the conditions of eligibility is within the law and that it is for the State to lay down appropriate conditions of eligibility/ineligibility in the matter of grant of liquor licence and such policy could not be challenged merely because it contains provisions of ineligibility that those who are representatives of the people will not be granted liquor policy. He would submit that the condition of ineligibility is based on public interest that those who have been elected to act as public representative and holding public office should not be allowed to hold liquor licence.
He would submit that the condition of ineligibility is based on public interest that those who have been elected to act as public representative and holding public office should not be allowed to hold liquor licence. It is also submitted that not only the policy for 2022-23 but also the policy for 2023- 24 and 2024-25 also contains similar conditions making public representative or holder of an office under the State Government, Central Government or any other Government, Semi-Government institutions, ineligible to hold liquor licence. 13. Lastly, it is submitted by the State counsel that even though the policy clearly prohibited grant of licence in favour of public representatives, the writ petitioner applied for grant of licence suppressing the aforesaid fact and when it was revealed, an enquiry was made, report was obtained and the licence was cancelled. 14. In support of his submissions hereinabove, reliance is placed on the order dated 08.12.2020 passed by this Court in the case of Satveer Choudhary Vs. State of Rajasthan & Ors. [D.B. Civil Writ Petition No. 10936/2020] , order dated 09.09.2020 in the case of Mukesh Saini Vs. State of Rajasthan & Ors. [D.B. Special (Writ) No.513/2022] , the order passed by Punjab and Haryana High Court in the case of International Spirits and Wine Association of India Vs. State of Haryana & Ors. [2017 (3) R.C.R. (Civil) 690] and the order passed by Bombay High Court in the case of M/s/ Mahalsa Services Vs. State of Goa & Ors. [2023 (4) AIR Bom. R. 554] 15. Learned Single Judge, vide impugned order, relying upon Clause 13 of the Excise Policy promulgated vide order dated 05.02.2022, has held that the appellant is not entitled for grant of licence for retail sale of liquor. Learned Single Judge also relying upon the provisions contained in Section 34, has repelled the contention made by learned counsel for the appellant/writ petitioner by holding that the policy promulgated by the State cannot be said to be dehors the law. 16. Grant of licences, permits and passes are governed by the provisions contained in Section 31 of the Rajasthan Excise Act, 1950 (hereinafter referred to as ‘the Act of 1950’). Section 31 of the Act of 1950, being relevant, is reproduced hereunder: “ 31. Form and condition of licences etc.
16. Grant of licences, permits and passes are governed by the provisions contained in Section 31 of the Rajasthan Excise Act, 1950 (hereinafter referred to as ‘the Act of 1950’). Section 31 of the Act of 1950, being relevant, is reproduced hereunder: “ 31. Form and condition of licences etc. - Every licence, permit or pass granted under this Act, shall be granted- (a) by such authority, (b) on payment of such fees (if any), (c) subject to such restrictions and on such conditions, (d) in such form and containing such particulars, and (e) for such periods, as the [State Government] may prescribe by rules either generally or for any class of licences, permits or passes or as the [State Government] may direct for any particular licence, permit or pass.” 17. As provided under Clause (c), licence may be granted subject to such restrictions and on such conditions as the State Government may prescribe by rules either generally or in any clause of licence, permit or pass or as the State Government may direct for any particular licence, permit or pass. 18. Section 34 confers power to cancel and suspend licences. Section 34 does not provide for restrictions as may be imposed by the State Government in the matter of grant of licence but confers power on the authority granting any licence, permit or pass under the Act to cancel or suspend licence under any of the contingencies enumerated in Clauses (a) to (f). Section 35 provides for residuary power to cancel licence. Therefore, Sections 34 and 35 do not lay down the conditions on which licence can be granted but provides for the circumstances under which licence granted may be cancelled or suspended. 19. Section 41 confers rule making power of the State Government. Clause (e) and (f) of Section 41(2), read conjointly, confer rule making power on the State Government to regulate the period and locations for which a person to whom licences for the vend by wholesale or by retail or any excisable article may be granted as also prescribing the procedure to be followed and the matters to be ascertained before any licence for vend is granted for any locality. 20.
20. Section 72 provides that all rules made and notifications issued under the Act shall be published in the Official Gazette and shall thereupon have effect as if enacted under the Act from the date of such publication or from such other date, as may be specified in that behalf. 21. The statutory scheme grafted under Section 31, 34, 41 and 72 is that licence may be granted subject to such conditions and restrictions as may be laid down by rules framed by the State Government in exercise of its rule making power under Section 41 of the Act, which is required to be published in the Official Gazette. 22. In exercise of its rule making power, Government has framed the Rajasthan Excise Rules, 1956. Amongst various provisions contained therein, it also provides for grant of licences of different nature. Apart from regulating import and export, Chapter V deals with licences for foreign liquor and beer. This includes provisions with regard to licence for retail sale. Chapter VI deals with grant of licence of country liquor and intoxicating drugs. Chapter VII deals with procedure for action in the matter of grant of licences. Rule 63 provides for persons who are debarred from bidding in an auction. Chapter VII-A deals with licences under the guarantee system whereas, Chapter VII-B deals with licences on payment of lump sum instead of or in addition to duty. Rule 67-I(2) provides for grant of licence for exclusive privilege of selling country liquor at retail shop which could be granted by any of the modes as contained in Clause (a) to Clause (e). This includes grant of licence for selling country liquor at retail shop by inviting sealed tenders. Rule 67KKK(11) provides when an application for licence shall be liable to be rejected. The same being relevant, is reproduced hereinabove: “ 67-KKK. Procedure for invitation of applications.
This includes grant of licence for selling country liquor at retail shop by inviting sealed tenders. Rule 67KKK(11) provides when an application for licence shall be liable to be rejected. The same being relevant, is reproduced hereinabove: “ 67-KKK. Procedure for invitation of applications. xxxx (11) An application for licence shall be liable to be rejected,- (a) if it has not been signed by the competent person or is incomplete; (b) if there are arrears of excise dues outstanding against him; (c) if applicant is below the age of 18 years; (d) if applicant is in the employment of the Central Government, State Government, Enterprises of Government of India or State Government, Corporation and Companies of Government of India or State Government; and (e) if applicant is convicted of any offence punishable under the Rajasthan Excise Act, 1950 or any other law for the time being in force relating to revenue or of any cognizable and non-bailable offence or any offence punishable under the Narcotic Drugs and psychotropic Substances Act 1985 or any law relating to merchandise marks or of any offence punishable under Section 482 to 489 (both inclusive) of the Indian Penal Code, 1860.” 23. Chapter IX makes general provisions with regard to grant of licences and Rule 74 thereof provides for persons who are debarred from holding licence, which reads as under: “ 74. Persons debarred from holding licences Without the previous written sanction of the Excise Commissioner:- (i) No person holding or having an interest in a licence for the manufacturer sale or supply of foreign liquor in a district may hold or possess any interest in a licence for the retail sale of country Liquor in the same district. (ii) No person holding an interest in a licence for the retail sale of opium [denatured spirit,] or intoxication drugs in a district may hold or possess any interest in a licence for the whole sale or retail manufacture or sale of foreign or country liquor in the same district.
(ii) No person holding an interest in a licence for the retail sale of opium [denatured spirit,] or intoxication drugs in a district may hold or possess any interest in a licence for the whole sale or retail manufacture or sale of foreign or country liquor in the same district. (iii) No person shall hold or have an interest in two or more shops for the retail sale of the same excisable articles in the same village, or in the same city or town, and (iv) No person holding or having an interest in a licence for the manufacture of country liquor or supply thereof from a distillery or retail vendor shall hold or have an interest in a licence for the retail sale of country liquor in the area in which the distillery is established in any area supplied from such distillery. [(v) No person whose tender or bid at an auction for grant of licence under the Act or these Rules has been accepted but who fails to deposit within the time allowed. The security amount required to be deposited according to the conditions of tender or auction [deleted] shall be entitled to hold any licence under the Act or these rules for a period of three years from the last date allowed for deposit of such security].” 24. While grant of licence for foreign liquor and beer is contained in Chapter V, grant of licence for country liquor and intoxicating drugs is regulated by the provisions contained in Chapter VI. Rule 58 thereof reads as below: “ 58.
While grant of licence for foreign liquor and beer is contained in Chapter V, grant of licence for country liquor and intoxicating drugs is regulated by the provisions contained in Chapter VI. Rule 58 thereof reads as below: “ 58. Licensing Authority - Licences for the retail sale of excisable articles shall be granted by the [District Excise Officer] concerned in accordance with the procedure described in these rules or any other system as may be sanctioned by Government and shall authorise the licensee to purchase such articles from the warehouse to which shop is attached or, with the permission of the [Excise Commissioner] from any other warehouse in Rajasthan provided the transport of excisable article to his shop is covered by an entry in his pass book signed by the officer-in charge of the warehouse and is effected with in the period mentioned in such entry.” The aforesaid provisions reveal that licences for the retail sale of excisable articles may be granted by the District Excise Officer concerned in accordance with the procedure described in the rules or in other system as may be sanctioned by the Government. 25. Admittedly, in the present case, the appellant was granted composite liquor shop for sale of country liquor and other liquor and beer, the provisions contained in Chapter VI and Chpater VII-B shall be applicable. 26. Rule 67KKK(11)(d) provides that if applicant is in the employment of the Central Government, State Government, Enterprises of Government of India or State Government, Corporation and Companies of Government of India or State Government, his application shall be liable to be rejected. The provisions contained in Rule 74 are general in nature providing for persons who are debarred from holding licences. 27. Conjoint reading of Rule 58, 67KKK(11)(d) and 74 delineate the statutory policy under the rules framed in exercise of powers under Section 41 of the Excise Act regulating grant of licence for composite shop for country liquor and other kind of excisable articles. While certain categories of persons, whose applications are liable to be rejected or who are debarred from holding licence, has been specifically provided under Rule 67KKK (11)(d) and Rule 74 thereof, Rule 58 confers powers on the State Government to provide for other conditions in addition to what has already been provided in the rules. 28.
While certain categories of persons, whose applications are liable to be rejected or who are debarred from holding licence, has been specifically provided under Rule 67KKK (11)(d) and Rule 74 thereof, Rule 58 confers powers on the State Government to provide for other conditions in addition to what has already been provided in the rules. 28. Under Section 31 of the Act, licence may be granted subject to such restrictions and on such conditions as the State Government may prescribe by rules either generally or for any class of licences, permits or passes. Reading of the aforesaid provision reveals that it also confers on the State Government the power to lay down conditions as the State Government may direct for any particular licence, permit or pass. Thus, on fair and logical interpretation of the provisions contained in Section 31 of the Act, the restrictions and conditions may either be provided generally under the rules or the State Government may direct for any particular licence, permit or pass. 29. The statutory scheme, as revealed from the provisions of the Act and the Rules framed thereunder, which have been referred to hereinabove, reveals that while certain terms and conditions have already been laid down under the Act and the Rules made thereunder, the State Government has been granted authority under Section 31 of the Act read with Rule 58 of the Rules to lay down restrictions and conditions under any direction or order which may be issued by it for any licence, permit or pass, including grant of licence for retail sale of country liquor. 30. The Excise Policy issued by the Government vide order dated 05.02.2022, is clearly referable to the powers as specified hereinabove. Amongst various provisions, one of the provision is that the person who is a public servant, he would not be eligible for grant of licence. Rule 67KKK(11)(d) also provides that those who are in employment of the Central Government, State Government, Enterprises of Government of India or State Government, Corporation and Companies of Government of India or State Government, are ineligible for grant of licence. Therefore, the intention of the rule is that those who are in public employment are not entitled to grant of licence.
Therefore, the intention of the rule is that those who are in public employment are not entitled to grant of licence. The provision is made in public interest to ensure that those who are holding public office should not be allowed to hold the licence for sale of liquor, including sale of country liquor or for that matter, any other liquor. 31. Rule 74 is limited in nature which does not contain any absolute bar but only provides that without the previous written sanction of the Excise Commissioner, persons enumerated in (i) to (iv) shall be debarred from holding licence. Therefore, the provisions contained in Rule 67KKK(11)(d) and Rule 74 operate in different field. While Rule 67KKK(11)(d) is an absolute bar, it is not so under Rule 74. 32. As held hereinabove, the provisions contained in Section 31 of the Act read with Rule 58 and keeping in view the spirit of provisions contained in Rule 67KKK(11)(d) are clear indication that the State is empowered under the Act as well as under the Rules to lay down additional restrictions and conditions, which has been done in the present case by promulgating Excise Policy vide order dated 05.02.2022. 33. Once we hold that there exists power to prescribe additional restrictions and conditions subject to which licence can be granted, it is not necessary for us to deal with other submissions made by learned counsel for the appellant, with reference to various decisions cited at the bar. There is one additional feature in the present case which does not entitle the appellant to seek indulgence of this Court, that even though the State Government, vide Excise Policy/order dated 05.02.2022, clearly laid down that a person holding public office shall not be entitled to grant of liquor licence, the appellant suppressed this fact and applied for the same and succeeded in getting liquor licence. It was only when a complaint was made that an enquiry was held and it was revealed that the appellant is a Nagar Parshad (Corporator). A Corporator, undoubtedly, is a public servant and holding a public office. The policy that a person in public employment or a public servant shall not be entitled to grant of liquor licence is based on sound public policy that those who are holding public office should not be allowed to be engaged in the trade of liquor for personal gains and profits. 34.
The policy that a person in public employment or a public servant shall not be entitled to grant of liquor licence is based on sound public policy that those who are holding public office should not be allowed to be engaged in the trade of liquor for personal gains and profits. 34. In view of the above consideration and for the reasons additionally assigned by us, action of the respondents in cancelling the licence of the appellant does not warrant any interference. 35. Therefore, the appeal is dismissed. Consequently, D.B. Special Appeal (Writ) No.321/2023 is also dismissed.