THE HONBLE SRI JUSTICE NOOTY RAMAMOHANA RAO
WRIT PETITION Nos. 24556 of 2014
13-03-2015
M/s Victory Bar and Restaurant, Rep. by its Propritrix P.Anjana Devi
.Petitioner
The Government of Andhra Pradesh Rep. by its Principal Secretary, Revenue
(Excise-II) and others.. Respondents
Counsel for the Petitioner: M/s Bharadwaj Associates.Counsel for Respondents:
Government Pleader for Prohibition and Excise
#M/s Anand Nilayam Hotels Pvt. Ltd Rep. by its Managing Director
Smt.P.Swarnalatha .Petitioner
$The Government of Andhra Pradesh Rep. by its Principal Secretary, and
others.. Respondents
!Counsel for the Petitioner: Indus Law Firm
Counsel for Respondents: Government Pleader for Prohibition
and Excise
<Gist :
>Head Note:
? Cases referred:
(1975) 2 SCR 861
THE HONBLE SRI JUSTICE NOOTY RAMAMOHANA RAO
WRIT PETITION Nos.24556, 20384, 16417, 23451, 23501,
23508, 23453 and 23575 of 2014
COMMON ORDER:
In all these cases the petitioners challenge the action of the
respondents in not renewing the licences granted in their favour for
running a Bar in Ward Nos.5, 6 and 15 of Tirupathi City.
The petitioners herein were all granted the necessary licences
in Form-2B to run and operate Bar and Restaurant at the premises
mentioned in the respective licences, which are all located either in
Ward Nos.5, 6 or 15, as the case be in Tirupathi City. These licences
were granted in terms of and in accordance with A.P. Excise (Grant
of Licence of Selling by Bar and Conditions of Licence) Rules, 2005
(hereinafter for brevity referred to as Rules) during the year 2013-
14. For the ensuing Excise Year 2014-15 they sought for renewal of
the licences. In response thereto the petitioners have been informed
that the renewal of the licences will not be accorded unless the
premises are shifted out of Ward Nos.5, 6 or 15 as the case be.
Hence, these writ petitions are instituted.
It will be relevant to note that during the Excise Year 2012-13
retail outlets of liquor-A4 licensed shops were not notified in certain
wards of Tirupathi City. In those very localities the 7 Bars, which
are granted licences are now ordered to be relocated.
Heard Sri D.Prakash Reddy, learned senior counsel, Sri Vedula
Venkata Ramana, learned senior counsel, Sri O.Manohar Reddy,
learned senior counsel, Sri S.Laxmi Narayana Reddy and Sri
B.P.Mohan on behalf of the writ petitioners and Sri Moola Vijay
Bhaskar, learned Government Pleader for Prohibition and Excise.
Learned Senior Counsels have attacked the decision of the
non-renewal of the Bar licences of the petitioners by urging that
there is no policy decision taken by the State Government for
completely banning the establishment or operation of Bars in certain
localities or wards of Tirupathi City and in the absence of any such
policy decision, the refusal to renew the Bar licences notwithstanding
the compliance with all other requirements of the Rules, which
enable renewal of the licence, amounts to whimsical and arbitrary
decision on the part of the officers of the Excise Department. It is
further contended that grant of licences and their renewals is wholly
regulated by the 2005 Rules. Therefore, so long as there is no
provision available in the rules for unilateral decision to be taken for
non-renewal of the licences, the decision not to renew the licences
would amount to acting contrary to the legal regime. Further liquor
trade is a regulatory trade and hence any regulatory measure must
necessarily flow from the Statute or the Rules made thereunder and
in the absence of any such rule or provision in the Statute by an
executive fiat the renewal of the licence cannot be denied. It is
further contended by the learned senior counsels that only retail
shops are agreed not to be granted licences in certain
localities/wards of Tirupathi City and such a decision was taken
keeping in view the sentiments of the pilgrim public who visit
Tirupathi City enroute to the shrine at Tirumala.
It is significant to note that only retail outlets of liquor are
decided not to be allowed in certain localities which are normally
used by the pilgrims to reach Tirumala. The sale of retail liquor in
the City, as a whole, has not been banned. The decision taken by the
State Government in this regard is not relevant in so far as the Bars
are concerned. This apart the counter-affidavit filed in PIL.No.162 of
2013 clearly specified that Bars are allowed and only the retail
outlets are sought to be denied from being established in certain
localities of Tirupathi City. There is an essential distinction between
a retail liquor vend and a Bar. In retail liquor vend, liquor cannot be
sold in loose quantities, but it can only be sold in sealed bottles
containing specified quantities, whereas in a Bar-cum-Restaurant,
the liquor can only be sold in loose quantities. While the
consumption at retail liquor vend is not allowable, the consumption
of liquor is only permitted at the Bar. Therefore, taking preventive
measures for sale of liquor in retail vends stands entirely on a
different footing from that of consumption of alcoholic beverages at
the Bar premises. Hence, licences for Bars have got to be renewed.
It is further contended that the action of the Commissioner of
Prohibition and Excise in not granting renewal of licences to the Bars
in certain localities does not have any legal backing nor was it
justified in any manner. Sri Vedula Venkata Ramana, learned senior
counsel, would further urge that the Executive Power available to the
State under Article 162 of the Constitution is co-terminus with the
Statutory Power. In the absence of any specific power available in the
hands of the Commissioner in the Statute or the Rules made
thereunder for preventing renewal of licences, which has otherwise
complied with the other requisite stipulations is wholly unjust and
illegal. Sri Vedula Venkata Ramana, learned senior counsel, would
further submit that there should have been a proper aim, objective
and purpose which is sought to be achieved by not granting licences
to retail liquor vends, whereas obviously it is intended by the State
Government to ensure that liquor bottles are not carried to the
pilgrim shrine of Tirumala, whereas by renewing a Bar licence, there
is no way a pilgrim can carry liquor to the pilgrim centre, Tirumala.
Therefore, the action of not renewing the Bar licences in favour of the
petitioners is wholly unjust.
It is further contended that granting licences at certain
localities and denying similar grant/renewal of Bar licences in
certain other localities within the same city/town amounts to rank
discrimination.
Sri O.Manohar Reddy, would add that as per the proviso to
Rule-6 (iii) the restrictions contained therein do not apply and hence
the question of non-renewal of the Bar licence amounts to acting
contrary to the Rules. It was also further contended by Sri
O.Manohar Reddy that the petitioner is a 3-star hotel and therefore it
provides food and accommodation to its guests. Tirupathi being an
important commercial destination in the region, several persons,
other than those who undertake a pilgrimage to Tirumala, would be
visiting Tirupathi City. As a part of hospitality services, that are
normally associated with a 3-star hotel, the petitioner is required to
provide the facility for consumption of alcoholic beverages at its hotel
premises. If the Bar licence of the petitioner is not to be renewed, the
petitioner-hotel would suffer loss of patronage by its guests and
consequently the petitioners rating as a 3-star hotel would become
redundant. Learned counsel would all uniformly contend that so long
as the requirement of the rules is complied with, the non-renewal of
the Bar Licence amounts to discrimination and illegal on the part of
the respondents.
A detailed counter-affidavit has been filed by the
Superintendent, Prohibition and Excise, Tirupathi, Chittor District,
on behalf of the respondents. The stand of the respondents in detail
is explained in paragraph No.3 of the counter-affidavit.
It appears an assurance has been held out by the Government
of Andhra Pradesh before the Andhra Pradesh Legislative Council
with regard to sale of liquor in certain localities in Tirupathi City. For
securing implementation of the assurance held out by the
Government of Andhra Pradesh, the APLC Assurance Committee met
on several occasions and reviewed the arrangements made in that
respect. When one such meeting took place on 09.04.2012 relating to
Assurance No.301-A relating to ban on liquor sales in Tirupathi city,
it was recorded by the Assurance Committee to take necessary action
not to permit establishment of retail liquor shops on the approach
roads to the entry points of Tirumala Hills while granting licences for
the retail shops in future. The Government accepted the
recommendations made by the Committee and accordingly the
Commissioner of Prohibition and Excise has been directed to take
necessary action by passing on instruction for the subordinate
officers while undertaking the exercise for granting licences for shops
during the Excise Year 2012-13 itself. Consequently, several shops
in certain areas/localities leading to Tirumala have not been notified.
Hence, the retail liquor vends for which A-4 licences have been
granted in Ward Nos.3, 6, 13, 15, 16 and 22 were re-located during
the Excise Year 2012-13 itself and those wards have been treated as
liquor free wards. In these wards of Tirupathi city 7 Restaurant-
cum-Bars are existing. In view of the assurance held out by the
Government of Andhra Pradesh for securing certain areas as liquor
free areas in Tirupathi City, the renewal of Bar Licences for the
Excise Year 2014-15 has not been undertaken.
It is clear from the stand taken by the respondents that the
State is desirous of ensuring certain areas/localities of Tirupathi City
are rendered free from availability of liquor. For reaching the Hills
shrine of Tirumala, all pilgrims will have to pass through Tirupathi
city. The Hill shrine of Tirumala can be reached either by road or by
foot. Therefore, certain areas/localities which are normally treated as
essentially used routes for this purpose, if, are to be rendered liquor
free, then there is no alternative except to re-locate the A-4 retail
shops and bars also. Accordingly, the retail shops were relocated.
There are 7 Bars which have been identified as lying in these very
localities.
In this context it would be appropriate to notice that Article 47
of the Constitution of India castes a duty on the State to endeavour
to bring about prohibition of the consumption, except for medicinal
purposes, of intoxicating drinks which are injurious to health.
Therefore, the State must take all necessary steps for purposes of
directing its policy which will help in securing the prohibition of
consumption of alcoholic beverages at any rate to the extent it is
appropriate and feasible. It is not merely the revenue generation
from the trade linked to sale of liquor, that would be the paramount
consideration for the State but the injury that is likely to visit the
society is of paramount consideration. The State, if it can secure to
its citizens as few opportunities as is permissible for consumption of
alcoholic beverages, it would be promoting the wellbeing and welfare
of the society.
The contention that there is no provision for imposing a ban on
sale of liquor does not hold much weight. It is beyond any pale of
doubt, in view of the authoritative pronouncement of Supreme Court
in NASHIRWAR SETHI WINE STORES P RAMACHANDRA
JOSEPH MICHAEL T GOVINDAN KUTTY MENON P M CHOKO VS.
STATE OF MADHYA PRADESH after considering its earlier
judgment in Cooverjee B. Bharucha v. Excise Commr, and the Chief
Commr., Ajmer (AIR 1954 SC 220) held that no fundamental right is
available with regard to sale of intoxicants. It is wholly appropriate to
take notice of the following passages therefrom.
This Court in Cooverjee B. Bharucha v. Excise Commr,
and the Chief Commr., Ajmer, 1954 SCR 873 = (AIR 1954 SC
220) held that the grant of a lease either by public auction or
for a sum is a regulation pertaining to liquor. It was
contended on behalf of the citizen in Bharucha's case (supra)
that every person has an inherent right to carry on trade in
intoxicating liquors and that the State has no right to create a
monopoly in them. In Bharucha's case (supra) the auction
sale of country liquor shop under Excise Regulation 1 of 1915
was challenged on the ground that the provisions of the
Excise Regulation and the auction rules were ultra vires
because the same purported to grant monopoly to trade to a
few persons. The Excise Regulation 1915 in that case
provided that the Chief Commissioner might lease to any
person the right of manufacturing or of supplying or of selling
by wholesale or retail any country liquor or intoxicating drug
within any special area. This Court said that laws prohibiting
trades in noxious or dangerous goods cannot be held to be
illegal as enacting a prohibition and not a mere regulation.
In Bharucha's case 1954 SCR 873 = (AIR 1954 SC 220)
(supra) this Court concurred with the observations in Crowley
v. Christensen, (1890) 34 Law Ed 620. Those observations
indicate that the sale of liquor has been at all times
considered as the proper subject of legislative regulation. A
license may be exacted and restrictions may be imposed as to
sale of liquor. There may be absolute prohibition of sale of
liquor. At the root lies public expediency and public morality.
The sanction is the police power of the State to regulate
business and to mitigate evils.
The observations in Crowley's case (1890) 34 Law Ed 620
(supra) which were laid down as a ruling of this Court in
Bharucha's case l954 SCR 873 = (AIR 1954 SC 220) (supra)
are these.
"There is no inherent right in a citizen to sell intoxicating
liquors by retail; it is not a privilege of a citizen of the State or
of a citizen of the United States. As it is a business attended
with danger to the community, it may, as already said, be
entirely prohibited, or be permitted under such conditions as
will limit to the utmost its evil. The manner and extent of
regulation rest in the discretion of the governing authority".
There is an earlier decision of this Court in State of
Assam v. A. N. Kidwai, 1957 SCR 295 = (AIR 1957 SC 414)
where it is said that no person has any absolute right to sell
liquor. In Kidwai's case (supra) this Court said that the
purpose of the Act and the Rules is to control and restrict the
consumption of intoxicating liquor. Such control and
restriction is said by this Court to be necessary for the
preservation of public health and morals and to raise revenue.
There are three principal reasons to hold that there is no
fundamental right of citizen to carry on trade or to do
business in liquor. First, there is the police power of the State
to enforce public morality to prohibit trades in noxious or
dangerous goods. Second, there is power of the State to
enforce an absolute prohibition of manufacture or sale of
intoxicating liquor. Article 47 states that the State shall
endeavour to bring about prohibition of the consumption
except for medicinal purpose of intoxicating drinks and of
drugs which are injurious to health. Third, the history of
excise law shows that the state has the exclusive right or
privilege of manufacture or sale of liquor.
Sale of intoxicants is a completely regulated trade. Sale of
liquor can be resorted to only under a licence granted. When once
sale of liquor is a completely regulated trade, the essence of such
regulation lies in, bearing in mind the larger interest of the society. It
is one thing to say that the rules on the subject have prohibited the
establishment of liquor vends in certain areas or in certain
circumstances. It is another aspect of the matter that a particular
locality/area/premises is not suitable for establishment of liquor
vend. It is altogether a different thing to render certain
areas/localities as free from sale of liquor.
A quick scan of the provisions contained in the Andhra
Pradesh Excise Act, 1968 (henceforth for short the Act) is essential.
The expression Bar is defined in sub-section (1-A) of Section 2 of the
Act as the privilege granted under the Act to an establishment, where
food is served, for sale of Indian Made Foreign Liquor and Foreign
Liquor in loose for consumption on the licenced premises. It is thus,
clear that a privilege to sell liquor in loose quantities is required to be
granted under the Act to an establishment where food is essentially
served. So that liquor can also be sold in loose for consumption on
the said premises. Firstly, it must be an establishment where food is
permitted to be served in accordance with a license/permit granted
by the local body concerned such as a Municipal Corporation,
Municipality or Gram Panchayat in accordance with the provisions
contained in the enactments concerning them and secondly a
privilege is required to be granted for sale of liquor in loose quantities
for consumption there under the Act. The expression Liquor is
defined in sub-section 21 of Section 2, in very vide terms. It includes
spirits of wine, denatured spirits, methylated spirits, rectified spirit,
wine, beer, toddy and every liquid consisting of or containing alcohol
apart from such other intoxicating substances which the
Government may, by notification, declare to be liquor for the purpose
of the Act. Under sub-section (1) of Section 3, the Government is the
competent authority to appoint an officer as the Commissioner of
Prohibition and Excise for the State, who subject to the general or
special orders of the Government shall be the chief controlling
authority in all matters connected with the administration of the Act.
The Commissioner so appointed shall have control of the
administration of the Prohibition and Excise Department. Section 13
of the Act prohibited the manufacture of excisable articles except
under a licence. Section 15 of the Act prohibited the sale or buying of
excisable articles without a licence. Section 17 of the Act empowered
the Government to grant exclusive privilege for a fixed period to any
person. The said exclusive privilege can be for manufacturing or
supplying or selling by wholesale, selling by shop, selling by Bar,
etc., any liquor or intoxicant specified in such order. Sub-section 4 of
Section 17 made it very clear that no grantee of any privilege under
sub-section (1) shall exercise the same unless the Commissioner of
Prohibition and Excise or any other officer authorized in that behalf
issues a licence. Therefore, Section 17 of the Act regulated the
exercise of granting the exclusive privilege for selling any liquor by
Bar. Section 17 in turn is conditioned by Section 28 as well as the
rules made by the Government. Section 28 merely sets out that every
licence under the Act shall be issued on payment of such fee for
such period subject to such restrictions and conditions and shall be
in such form and shall contain such particulars as may be
prescribed. Section 31 of the Act conferred power on the authority
granting any licence, the power to cancel or suspend such licence.
Sub-section (1) of Section 32, which has certain bearing upon
the controversy at issue, reads as under:
Whenever the authority which granted any licence under
this Act considers that such licence should be withdrawn for
any cause other than those specified in Section 31, it may
withdraw the licence on the expiration of not less than thirty
days notice in writing of its intention to do so.
Thus, power is conferred upon the licensing authority to
withdraw any licence for any cause other than those specified in
section 31.
On a careful consideration of this provision, it is clear that the
licensing authority, even in such cases where he was satisfied earlier
that a licence is otherwise desirable to be granted relating to sale of
liquor and even after granting any such licence, has been vested with
the power to withdraw such licence during its currency and
subsistence, it he is satisfied that any such withdrawal is warranted.
If a licence is to be withdrawn during its currency a notice is
required to be delivered to the licencee of a minimum of 30 days
duration informing the licencee of the intention of licencing authority
to withdraw the licence. To my mind, it is clear sub-section (1) of
Section 32 has conferred discretion on the licencing authority to
withdraw a licence for any cause other than the one specified under
Section 31 of the Act and such a discretion is conferred in very wide
terms.
When once sub-section (1) of Section 32 conferred upon the
licencing authority the power to withdraw the licence for any cause,
signifying that lot of discretion has been vested in the licencing
authority, does, this provision merely mean an enabling provision for
withdrawing the existing licence, but it does not relate to
withdrawing from indulging/exercising the very power of granting the
licence itself? Can such a narrow approach be made to this
provision?
Where a provision, particularly in a regulatory enactment,
confers power to withdraw a subsisting licence, it presupposes the
existence of power to withdraw from the very act of conferring the
privilege or licence at the first instance itself. The only limitation on
any such exercise conceived in the provision is when an existing
licence is sought to be withdrawn during the currency of its period, a
notice of 30 days duration is required to be delivered to the licencee.
In other words before the existing licence, for any reason or cause
other than those specified in Section 31 of the Act is to be
withdrawn, but however to mitigate any possible hardship to the
licencee, a prior notice of 30 days duration is what is contemplated.
When once an existing licence itself can be withdrawn for any cause
whatsoever, it is implied in that very provision necessary power in
the hands of the licensing authority to withdraw or restrain himself
from exercising the power to grant the privilege or the licence at the
very inception itself. The expression withdraw carries one of the
meanings as to retreat. (The living Webster Encyclopedic
Dictionary). The expression withdraw, therefore, has to be given its
due which would effectuate the States policy and the broader
objective sought to be secured by the legislature. I am of the opinion
that the word withdraw is comprehensive enough to connote a
complete retreat from granting a privilege itself. As is now firmed up
as a settled principle no person has got a fundamental right to carry
on business in intoxicants. And hence, as was noticed supra, sale of
liquor can only be indulged in under a licence. If the licensing
authority, for certain reasons, considers it appropriate to withdraw
from indulging in granting the very licence itself, no person who is
interested or intending to carry on any such business can have any
say in the matter. In other words, no prospective tradesman can
have a right to insist that the licence should invariably be granted
merely on the ground that he has satisfied all other prerequisite
conditions. It is one thing to assume that the licencee has not
suffered any disqualifying factors or features resulting in, in his
inability to secure the licence and it is altogether a different thing to
say that the licence should invariably be granted in his favour, in a
mechanical manner the moment the other prerequisites are met
with.
The spirit behind the contention canvassed by Sri Prakash
Reddy, Sri Vedula Venkata Ramana learned senior counsels and Sri
O.Manoher Reddy, learned counsel is that since the premises where
the licence was granted to them earlier has not attracted any of the
disqualifying features, their licences are required to be automatically
renewed. It is apt to remember that renewal of a licence tantamount
to granting a licence afresh. There is no difficulty to concede the fact
that the premises were the same where licence for running a Bar was
granted ealier and hence it presupposes that no disqualifying
features are attracted to such a premises. Otherwise, the license
would not have been granted at the very first instance. That is not
the only reason for granting a licence. To sub serve larger public
interest and sometimes with a view to respect the sentiments of the
general public, the Commissioner or for that matter the Government
may consider that it is not desirable to grant a licence at all. In such
an event, the power behind any such decision becomes clearly
traceable to Section 32(1) of the Act. I am, therefore, clearly of the
opinion that the decision exercised by the Commissioner not to
renew the bar licences in certain localities of Tirupati amounts to
withdrawing from indulging in the very exercise of granting licence.
The Legislative bodies in a democratic polity are the best
places where the aspirations of the people receive necessary
attention and later on manifest as the line of policy to be followed by
the State. In a democracy the State functions through various
institutions. Every State prefers to conduct its business subject to
the guidance secured through legislative exercise where the collective
will of the people will prevail and subject to the corresponding
legislative control. Once an attempt is made to regulate the activity of
the State by a legislature, the State prefers to carry on its business
within the bounds of authority and guidance conferred upon it by
the legislature. Sometimes, the State willingly subjects itself to
certain sanctions and injunctions by the Legislature, so that the
larger good of the society is achieved through such process. One
need not attribute any sinister motive or objective to any such
legislative guidance. In the instant case, the Legislature has been
urging the State to regulate the sale of liquor in Tirupathi. Hence, a
corresponding assurance has been held out by the State. Learned
counsel for the petitioners have strenuously urged that the
Legislature only wanted prevention of sale of liquor by retail shops
and that it never intended to prevent sale of liquor in loose
quantities, which is what is done at a licenced bar premises. I am of
the opinion that the distinction sought to be driven in this regard by
the learned counsel for the petitioners is an artificial one. If the State
Legislature intended to make sure that liquor is not sold in retail, at
least in certain localities of Tirupathi, particularly those which lead
to Alipiri, the foothill of the holy abode of the presiding deity of
Tirumala, the intention of the legislature is clearly manifest there. It
wants to make sure that liquor does not become available for
consumption for such of those people who are on their way to Alipiri,
the foothill of Tirumala. It is not merely intended to prevent people
from carrying liquor uphills. If that is the only intention of the
Legislative Council, they could have as well urged the State
Government to increase the screening points at various places on the
way to Tirumala so that carrying liquor bottles to Tirumala can be
very effectively prevented and achieved. For that purpose, license to
A-4 Retail Shops need not be withheld or withdrawn. By not granting
A-4 Retail Licenses, in certain localities, the State Legislature wanted
to secure non-availability of liquor for consumption. I quite see that
all those who visit Tirupathi may not necessarily go to Tirumala and
consequently they may not even require to approach Alipiri at all.
Keeping this factor in mind, perhaps, the State Government and the
Commissioner of Prohibition and Excise have not completely
banished sale of liquor either in retail or in loose for consumption in
the entire Tirupathi City. They only wanted to make sure that liquor
does not become available in certain localities for consumption to
those who are likely to approach Alipiri. Hence, those areas which
are proximately close to Alipiri or the roads in those localities which
lead to Alipiri have been chosen for this purpose. Simultaneously by
allowing sale of liquor by retail and also in loose quantities on the
premises of the bars in various other localities, the State and its
Commissioner of Prohibition and Excise have ensured that the other
consumers are not put to any excessive hardship for securing the
required quantities of liquor for their personal consumption. Hence,
the contention canvassed about discrimination is out of context. In
my opinion, steps taken by the Commissioner, Prohibition and
Excise by not renewing the Bar licence in few localities of Tirupathi,
the legislative sanction for ensuring non availability of liquor for
consumption for those who are likely to proceed towards Alipiri is
what is sought to be achieved. Hence, no sinister motive needs to be
attributed to the Commissioner.
I do not find any merit in the contentions canvassed before me.
Accordingly, the writ petitions are dismissed. No order as to costs.
The miscellaneous petitions, if any pending in these writ
petitions, shall stand closed.
_______________________________________
JUSTICE NOOTY RAMAMOHANA RAO
13.03.2015
WRIT PETITION Nos. 24556 of 2014
13-03-2015
M/s Victory Bar and Restaurant, Rep. by its Propritrix P.Anjana Devi
.Petitioner
The Government of Andhra Pradesh Rep. by its Principal Secretary, Revenue
(Excise-II) and others.. Respondents
Counsel for the Petitioner: M/s Bharadwaj Associates.Counsel for Respondents:
Government Pleader for Prohibition and Excise
#M/s Anand Nilayam Hotels Pvt. Ltd Rep. by its Managing Director
Smt.P.Swarnalatha .Petitioner
$The Government of Andhra Pradesh Rep. by its Principal Secretary, and
others.. Respondents
!Counsel for the Petitioner: Indus Law Firm
Counsel for Respondents: Government Pleader for Prohibition
and Excise
<Gist :
>Head Note:
? Cases referred:
(1975) 2 SCR 861
THE HONBLE SRI JUSTICE NOOTY RAMAMOHANA RAO
WRIT PETITION Nos.24556, 20384, 16417, 23451, 23501,
23508, 23453 and 23575 of 2014
COMMON ORDER:
In all these cases the petitioners challenge the action of the
respondents in not renewing the licences granted in their favour for
running a Bar in Ward Nos.5, 6 and 15 of Tirupathi City.
The petitioners herein were all granted the necessary licences
in Form-2B to run and operate Bar and Restaurant at the premises
mentioned in the respective licences, which are all located either in
Ward Nos.5, 6 or 15, as the case be in Tirupathi City. These licences
were granted in terms of and in accordance with A.P. Excise (Grant
of Licence of Selling by Bar and Conditions of Licence) Rules, 2005
(hereinafter for brevity referred to as Rules) during the year 2013-
14. For the ensuing Excise Year 2014-15 they sought for renewal of
the licences. In response thereto the petitioners have been informed
that the renewal of the licences will not be accorded unless the
premises are shifted out of Ward Nos.5, 6 or 15 as the case be.
Hence, these writ petitions are instituted.
It will be relevant to note that during the Excise Year 2012-13
retail outlets of liquor-A4 licensed shops were not notified in certain
wards of Tirupathi City. In those very localities the 7 Bars, which
are granted licences are now ordered to be relocated.
Heard Sri D.Prakash Reddy, learned senior counsel, Sri Vedula
Venkata Ramana, learned senior counsel, Sri O.Manohar Reddy,
learned senior counsel, Sri S.Laxmi Narayana Reddy and Sri
B.P.Mohan on behalf of the writ petitioners and Sri Moola Vijay
Bhaskar, learned Government Pleader for Prohibition and Excise.
Learned Senior Counsels have attacked the decision of the
non-renewal of the Bar licences of the petitioners by urging that
there is no policy decision taken by the State Government for
completely banning the establishment or operation of Bars in certain
localities or wards of Tirupathi City and in the absence of any such
policy decision, the refusal to renew the Bar licences notwithstanding
the compliance with all other requirements of the Rules, which
enable renewal of the licence, amounts to whimsical and arbitrary
decision on the part of the officers of the Excise Department. It is
further contended that grant of licences and their renewals is wholly
regulated by the 2005 Rules. Therefore, so long as there is no
provision available in the rules for unilateral decision to be taken for
non-renewal of the licences, the decision not to renew the licences
would amount to acting contrary to the legal regime. Further liquor
trade is a regulatory trade and hence any regulatory measure must
necessarily flow from the Statute or the Rules made thereunder and
in the absence of any such rule or provision in the Statute by an
executive fiat the renewal of the licence cannot be denied. It is
further contended by the learned senior counsels that only retail
shops are agreed not to be granted licences in certain
localities/wards of Tirupathi City and such a decision was taken
keeping in view the sentiments of the pilgrim public who visit
Tirupathi City enroute to the shrine at Tirumala.
It is significant to note that only retail outlets of liquor are
decided not to be allowed in certain localities which are normally
used by the pilgrims to reach Tirumala. The sale of retail liquor in
the City, as a whole, has not been banned. The decision taken by the
State Government in this regard is not relevant in so far as the Bars
are concerned. This apart the counter-affidavit filed in PIL.No.162 of
2013 clearly specified that Bars are allowed and only the retail
outlets are sought to be denied from being established in certain
localities of Tirupathi City. There is an essential distinction between
a retail liquor vend and a Bar. In retail liquor vend, liquor cannot be
sold in loose quantities, but it can only be sold in sealed bottles
containing specified quantities, whereas in a Bar-cum-Restaurant,
the liquor can only be sold in loose quantities. While the
consumption at retail liquor vend is not allowable, the consumption
of liquor is only permitted at the Bar. Therefore, taking preventive
measures for sale of liquor in retail vends stands entirely on a
different footing from that of consumption of alcoholic beverages at
the Bar premises. Hence, licences for Bars have got to be renewed.
It is further contended that the action of the Commissioner of
Prohibition and Excise in not granting renewal of licences to the Bars
in certain localities does not have any legal backing nor was it
justified in any manner. Sri Vedula Venkata Ramana, learned senior
counsel, would further urge that the Executive Power available to the
State under Article 162 of the Constitution is co-terminus with the
Statutory Power. In the absence of any specific power available in the
hands of the Commissioner in the Statute or the Rules made
thereunder for preventing renewal of licences, which has otherwise
complied with the other requisite stipulations is wholly unjust and
illegal. Sri Vedula Venkata Ramana, learned senior counsel, would
further submit that there should have been a proper aim, objective
and purpose which is sought to be achieved by not granting licences
to retail liquor vends, whereas obviously it is intended by the State
Government to ensure that liquor bottles are not carried to the
pilgrim shrine of Tirumala, whereas by renewing a Bar licence, there
is no way a pilgrim can carry liquor to the pilgrim centre, Tirumala.
Therefore, the action of not renewing the Bar licences in favour of the
petitioners is wholly unjust.
It is further contended that granting licences at certain
localities and denying similar grant/renewal of Bar licences in
certain other localities within the same city/town amounts to rank
discrimination.
Sri O.Manohar Reddy, would add that as per the proviso to
Rule-6 (iii) the restrictions contained therein do not apply and hence
the question of non-renewal of the Bar licence amounts to acting
contrary to the Rules. It was also further contended by Sri
O.Manohar Reddy that the petitioner is a 3-star hotel and therefore it
provides food and accommodation to its guests. Tirupathi being an
important commercial destination in the region, several persons,
other than those who undertake a pilgrimage to Tirumala, would be
visiting Tirupathi City. As a part of hospitality services, that are
normally associated with a 3-star hotel, the petitioner is required to
provide the facility for consumption of alcoholic beverages at its hotel
premises. If the Bar licence of the petitioner is not to be renewed, the
petitioner-hotel would suffer loss of patronage by its guests and
consequently the petitioners rating as a 3-star hotel would become
redundant. Learned counsel would all uniformly contend that so long
as the requirement of the rules is complied with, the non-renewal of
the Bar Licence amounts to discrimination and illegal on the part of
the respondents.
A detailed counter-affidavit has been filed by the
Superintendent, Prohibition and Excise, Tirupathi, Chittor District,
on behalf of the respondents. The stand of the respondents in detail
is explained in paragraph No.3 of the counter-affidavit.
It appears an assurance has been held out by the Government
of Andhra Pradesh before the Andhra Pradesh Legislative Council
with regard to sale of liquor in certain localities in Tirupathi City. For
securing implementation of the assurance held out by the
Government of Andhra Pradesh, the APLC Assurance Committee met
on several occasions and reviewed the arrangements made in that
respect. When one such meeting took place on 09.04.2012 relating to
Assurance No.301-A relating to ban on liquor sales in Tirupathi city,
it was recorded by the Assurance Committee to take necessary action
not to permit establishment of retail liquor shops on the approach
roads to the entry points of Tirumala Hills while granting licences for
the retail shops in future. The Government accepted the
recommendations made by the Committee and accordingly the
Commissioner of Prohibition and Excise has been directed to take
necessary action by passing on instruction for the subordinate
officers while undertaking the exercise for granting licences for shops
during the Excise Year 2012-13 itself. Consequently, several shops
in certain areas/localities leading to Tirumala have not been notified.
Hence, the retail liquor vends for which A-4 licences have been
granted in Ward Nos.3, 6, 13, 15, 16 and 22 were re-located during
the Excise Year 2012-13 itself and those wards have been treated as
liquor free wards. In these wards of Tirupathi city 7 Restaurant-
cum-Bars are existing. In view of the assurance held out by the
Government of Andhra Pradesh for securing certain areas as liquor
free areas in Tirupathi City, the renewal of Bar Licences for the
Excise Year 2014-15 has not been undertaken.
It is clear from the stand taken by the respondents that the
State is desirous of ensuring certain areas/localities of Tirupathi City
are rendered free from availability of liquor. For reaching the Hills
shrine of Tirumala, all pilgrims will have to pass through Tirupathi
city. The Hill shrine of Tirumala can be reached either by road or by
foot. Therefore, certain areas/localities which are normally treated as
essentially used routes for this purpose, if, are to be rendered liquor
free, then there is no alternative except to re-locate the A-4 retail
shops and bars also. Accordingly, the retail shops were relocated.
There are 7 Bars which have been identified as lying in these very
localities.
In this context it would be appropriate to notice that Article 47
of the Constitution of India castes a duty on the State to endeavour
to bring about prohibition of the consumption, except for medicinal
purposes, of intoxicating drinks which are injurious to health.
Therefore, the State must take all necessary steps for purposes of
directing its policy which will help in securing the prohibition of
consumption of alcoholic beverages at any rate to the extent it is
appropriate and feasible. It is not merely the revenue generation
from the trade linked to sale of liquor, that would be the paramount
consideration for the State but the injury that is likely to visit the
society is of paramount consideration. The State, if it can secure to
its citizens as few opportunities as is permissible for consumption of
alcoholic beverages, it would be promoting the wellbeing and welfare
of the society.
The contention that there is no provision for imposing a ban on
sale of liquor does not hold much weight. It is beyond any pale of
doubt, in view of the authoritative pronouncement of Supreme Court
in NASHIRWAR SETHI WINE STORES P RAMACHANDRA
JOSEPH MICHAEL T GOVINDAN KUTTY MENON P M CHOKO VS.
STATE OF MADHYA PRADESH after considering its earlier
judgment in Cooverjee B. Bharucha v. Excise Commr, and the Chief
Commr., Ajmer (AIR 1954 SC 220) held that no fundamental right is
available with regard to sale of intoxicants. It is wholly appropriate to
take notice of the following passages therefrom.
This Court in Cooverjee B. Bharucha v. Excise Commr,
and the Chief Commr., Ajmer, 1954 SCR 873 = (AIR 1954 SC
220) held that the grant of a lease either by public auction or
for a sum is a regulation pertaining to liquor. It was
contended on behalf of the citizen in Bharucha's case (supra)
that every person has an inherent right to carry on trade in
intoxicating liquors and that the State has no right to create a
monopoly in them. In Bharucha's case (supra) the auction
sale of country liquor shop under Excise Regulation 1 of 1915
was challenged on the ground that the provisions of the
Excise Regulation and the auction rules were ultra vires
because the same purported to grant monopoly to trade to a
few persons. The Excise Regulation 1915 in that case
provided that the Chief Commissioner might lease to any
person the right of manufacturing or of supplying or of selling
by wholesale or retail any country liquor or intoxicating drug
within any special area. This Court said that laws prohibiting
trades in noxious or dangerous goods cannot be held to be
illegal as enacting a prohibition and not a mere regulation.
In Bharucha's case 1954 SCR 873 = (AIR 1954 SC 220)
(supra) this Court concurred with the observations in Crowley
v. Christensen, (1890) 34 Law Ed 620. Those observations
indicate that the sale of liquor has been at all times
considered as the proper subject of legislative regulation. A
license may be exacted and restrictions may be imposed as to
sale of liquor. There may be absolute prohibition of sale of
liquor. At the root lies public expediency and public morality.
The sanction is the police power of the State to regulate
business and to mitigate evils.
The observations in Crowley's case (1890) 34 Law Ed 620
(supra) which were laid down as a ruling of this Court in
Bharucha's case l954 SCR 873 = (AIR 1954 SC 220) (supra)
are these.
"There is no inherent right in a citizen to sell intoxicating
liquors by retail; it is not a privilege of a citizen of the State or
of a citizen of the United States. As it is a business attended
with danger to the community, it may, as already said, be
entirely prohibited, or be permitted under such conditions as
will limit to the utmost its evil. The manner and extent of
regulation rest in the discretion of the governing authority".
There is an earlier decision of this Court in State of
Assam v. A. N. Kidwai, 1957 SCR 295 = (AIR 1957 SC 414)
where it is said that no person has any absolute right to sell
liquor. In Kidwai's case (supra) this Court said that the
purpose of the Act and the Rules is to control and restrict the
consumption of intoxicating liquor. Such control and
restriction is said by this Court to be necessary for the
preservation of public health and morals and to raise revenue.
There are three principal reasons to hold that there is no
fundamental right of citizen to carry on trade or to do
business in liquor. First, there is the police power of the State
to enforce public morality to prohibit trades in noxious or
dangerous goods. Second, there is power of the State to
enforce an absolute prohibition of manufacture or sale of
intoxicating liquor. Article 47 states that the State shall
endeavour to bring about prohibition of the consumption
except for medicinal purpose of intoxicating drinks and of
drugs which are injurious to health. Third, the history of
excise law shows that the state has the exclusive right or
privilege of manufacture or sale of liquor.
Sale of intoxicants is a completely regulated trade. Sale of
liquor can be resorted to only under a licence granted. When once
sale of liquor is a completely regulated trade, the essence of such
regulation lies in, bearing in mind the larger interest of the society. It
is one thing to say that the rules on the subject have prohibited the
establishment of liquor vends in certain areas or in certain
circumstances. It is another aspect of the matter that a particular
locality/area/premises is not suitable for establishment of liquor
vend. It is altogether a different thing to render certain
areas/localities as free from sale of liquor.
A quick scan of the provisions contained in the Andhra
Pradesh Excise Act, 1968 (henceforth for short the Act) is essential.
The expression Bar is defined in sub-section (1-A) of Section 2 of the
Act as the privilege granted under the Act to an establishment, where
food is served, for sale of Indian Made Foreign Liquor and Foreign
Liquor in loose for consumption on the licenced premises. It is thus,
clear that a privilege to sell liquor in loose quantities is required to be
granted under the Act to an establishment where food is essentially
served. So that liquor can also be sold in loose for consumption on
the said premises. Firstly, it must be an establishment where food is
permitted to be served in accordance with a license/permit granted
by the local body concerned such as a Municipal Corporation,
Municipality or Gram Panchayat in accordance with the provisions
contained in the enactments concerning them and secondly a
privilege is required to be granted for sale of liquor in loose quantities
for consumption there under the Act. The expression Liquor is
defined in sub-section 21 of Section 2, in very vide terms. It includes
spirits of wine, denatured spirits, methylated spirits, rectified spirit,
wine, beer, toddy and every liquid consisting of or containing alcohol
apart from such other intoxicating substances which the
Government may, by notification, declare to be liquor for the purpose
of the Act. Under sub-section (1) of Section 3, the Government is the
competent authority to appoint an officer as the Commissioner of
Prohibition and Excise for the State, who subject to the general or
special orders of the Government shall be the chief controlling
authority in all matters connected with the administration of the Act.
The Commissioner so appointed shall have control of the
administration of the Prohibition and Excise Department. Section 13
of the Act prohibited the manufacture of excisable articles except
under a licence. Section 15 of the Act prohibited the sale or buying of
excisable articles without a licence. Section 17 of the Act empowered
the Government to grant exclusive privilege for a fixed period to any
person. The said exclusive privilege can be for manufacturing or
supplying or selling by wholesale, selling by shop, selling by Bar,
etc., any liquor or intoxicant specified in such order. Sub-section 4 of
Section 17 made it very clear that no grantee of any privilege under
sub-section (1) shall exercise the same unless the Commissioner of
Prohibition and Excise or any other officer authorized in that behalf
issues a licence. Therefore, Section 17 of the Act regulated the
exercise of granting the exclusive privilege for selling any liquor by
Bar. Section 17 in turn is conditioned by Section 28 as well as the
rules made by the Government. Section 28 merely sets out that every
licence under the Act shall be issued on payment of such fee for
such period subject to such restrictions and conditions and shall be
in such form and shall contain such particulars as may be
prescribed. Section 31 of the Act conferred power on the authority
granting any licence, the power to cancel or suspend such licence.
Sub-section (1) of Section 32, which has certain bearing upon
the controversy at issue, reads as under:
Whenever the authority which granted any licence under
this Act considers that such licence should be withdrawn for
any cause other than those specified in Section 31, it may
withdraw the licence on the expiration of not less than thirty
days notice in writing of its intention to do so.
Thus, power is conferred upon the licensing authority to
withdraw any licence for any cause other than those specified in
section 31.
On a careful consideration of this provision, it is clear that the
licensing authority, even in such cases where he was satisfied earlier
that a licence is otherwise desirable to be granted relating to sale of
liquor and even after granting any such licence, has been vested with
the power to withdraw such licence during its currency and
subsistence, it he is satisfied that any such withdrawal is warranted.
If a licence is to be withdrawn during its currency a notice is
required to be delivered to the licencee of a minimum of 30 days
duration informing the licencee of the intention of licencing authority
to withdraw the licence. To my mind, it is clear sub-section (1) of
Section 32 has conferred discretion on the licencing authority to
withdraw a licence for any cause other than the one specified under
Section 31 of the Act and such a discretion is conferred in very wide
terms.
When once sub-section (1) of Section 32 conferred upon the
licencing authority the power to withdraw the licence for any cause,
signifying that lot of discretion has been vested in the licencing
authority, does, this provision merely mean an enabling provision for
withdrawing the existing licence, but it does not relate to
withdrawing from indulging/exercising the very power of granting the
licence itself? Can such a narrow approach be made to this
provision?
Where a provision, particularly in a regulatory enactment,
confers power to withdraw a subsisting licence, it presupposes the
existence of power to withdraw from the very act of conferring the
privilege or licence at the first instance itself. The only limitation on
any such exercise conceived in the provision is when an existing
licence is sought to be withdrawn during the currency of its period, a
notice of 30 days duration is required to be delivered to the licencee.
In other words before the existing licence, for any reason or cause
other than those specified in Section 31 of the Act is to be
withdrawn, but however to mitigate any possible hardship to the
licencee, a prior notice of 30 days duration is what is contemplated.
When once an existing licence itself can be withdrawn for any cause
whatsoever, it is implied in that very provision necessary power in
the hands of the licensing authority to withdraw or restrain himself
from exercising the power to grant the privilege or the licence at the
very inception itself. The expression withdraw carries one of the
meanings as to retreat. (The living Webster Encyclopedic
Dictionary). The expression withdraw, therefore, has to be given its
due which would effectuate the States policy and the broader
objective sought to be secured by the legislature. I am of the opinion
that the word withdraw is comprehensive enough to connote a
complete retreat from granting a privilege itself. As is now firmed up
as a settled principle no person has got a fundamental right to carry
on business in intoxicants. And hence, as was noticed supra, sale of
liquor can only be indulged in under a licence. If the licensing
authority, for certain reasons, considers it appropriate to withdraw
from indulging in granting the very licence itself, no person who is
interested or intending to carry on any such business can have any
say in the matter. In other words, no prospective tradesman can
have a right to insist that the licence should invariably be granted
merely on the ground that he has satisfied all other prerequisite
conditions. It is one thing to assume that the licencee has not
suffered any disqualifying factors or features resulting in, in his
inability to secure the licence and it is altogether a different thing to
say that the licence should invariably be granted in his favour, in a
mechanical manner the moment the other prerequisites are met
with.
The spirit behind the contention canvassed by Sri Prakash
Reddy, Sri Vedula Venkata Ramana learned senior counsels and Sri
O.Manoher Reddy, learned counsel is that since the premises where
the licence was granted to them earlier has not attracted any of the
disqualifying features, their licences are required to be automatically
renewed. It is apt to remember that renewal of a licence tantamount
to granting a licence afresh. There is no difficulty to concede the fact
that the premises were the same where licence for running a Bar was
granted ealier and hence it presupposes that no disqualifying
features are attracted to such a premises. Otherwise, the license
would not have been granted at the very first instance. That is not
the only reason for granting a licence. To sub serve larger public
interest and sometimes with a view to respect the sentiments of the
general public, the Commissioner or for that matter the Government
may consider that it is not desirable to grant a licence at all. In such
an event, the power behind any such decision becomes clearly
traceable to Section 32(1) of the Act. I am, therefore, clearly of the
opinion that the decision exercised by the Commissioner not to
renew the bar licences in certain localities of Tirupati amounts to
withdrawing from indulging in the very exercise of granting licence.
The Legislative bodies in a democratic polity are the best
places where the aspirations of the people receive necessary
attention and later on manifest as the line of policy to be followed by
the State. In a democracy the State functions through various
institutions. Every State prefers to conduct its business subject to
the guidance secured through legislative exercise where the collective
will of the people will prevail and subject to the corresponding
legislative control. Once an attempt is made to regulate the activity of
the State by a legislature, the State prefers to carry on its business
within the bounds of authority and guidance conferred upon it by
the legislature. Sometimes, the State willingly subjects itself to
certain sanctions and injunctions by the Legislature, so that the
larger good of the society is achieved through such process. One
need not attribute any sinister motive or objective to any such
legislative guidance. In the instant case, the Legislature has been
urging the State to regulate the sale of liquor in Tirupathi. Hence, a
corresponding assurance has been held out by the State. Learned
counsel for the petitioners have strenuously urged that the
Legislature only wanted prevention of sale of liquor by retail shops
and that it never intended to prevent sale of liquor in loose
quantities, which is what is done at a licenced bar premises. I am of
the opinion that the distinction sought to be driven in this regard by
the learned counsel for the petitioners is an artificial one. If the State
Legislature intended to make sure that liquor is not sold in retail, at
least in certain localities of Tirupathi, particularly those which lead
to Alipiri, the foothill of the holy abode of the presiding deity of
Tirumala, the intention of the legislature is clearly manifest there. It
wants to make sure that liquor does not become available for
consumption for such of those people who are on their way to Alipiri,
the foothill of Tirumala. It is not merely intended to prevent people
from carrying liquor uphills. If that is the only intention of the
Legislative Council, they could have as well urged the State
Government to increase the screening points at various places on the
way to Tirumala so that carrying liquor bottles to Tirumala can be
very effectively prevented and achieved. For that purpose, license to
A-4 Retail Shops need not be withheld or withdrawn. By not granting
A-4 Retail Licenses, in certain localities, the State Legislature wanted
to secure non-availability of liquor for consumption. I quite see that
all those who visit Tirupathi may not necessarily go to Tirumala and
consequently they may not even require to approach Alipiri at all.
Keeping this factor in mind, perhaps, the State Government and the
Commissioner of Prohibition and Excise have not completely
banished sale of liquor either in retail or in loose for consumption in
the entire Tirupathi City. They only wanted to make sure that liquor
does not become available in certain localities for consumption to
those who are likely to approach Alipiri. Hence, those areas which
are proximately close to Alipiri or the roads in those localities which
lead to Alipiri have been chosen for this purpose. Simultaneously by
allowing sale of liquor by retail and also in loose quantities on the
premises of the bars in various other localities, the State and its
Commissioner of Prohibition and Excise have ensured that the other
consumers are not put to any excessive hardship for securing the
required quantities of liquor for their personal consumption. Hence,
the contention canvassed about discrimination is out of context. In
my opinion, steps taken by the Commissioner, Prohibition and
Excise by not renewing the Bar licence in few localities of Tirupathi,
the legislative sanction for ensuring non availability of liquor for
consumption for those who are likely to proceed towards Alipiri is
what is sought to be achieved. Hence, no sinister motive needs to be
attributed to the Commissioner.
I do not find any merit in the contentions canvassed before me.
Accordingly, the writ petitions are dismissed. No order as to costs.
The miscellaneous petitions, if any pending in these writ
petitions, shall stand closed.
_______________________________________
JUSTICE NOOTY RAMAMOHANA RAO
13.03.2015
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