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SUPREME COURT OF INDIA
J.C. SHAH, K.S. HEGDE AND A.N. GROVER, JJ.
Ram Chandra Rai, Appellant
State of M.P. and others, Respondents.
Civil Appeal No. 429 of 1970. D/-12-8-1970.
Mandamus - Liquor Licensee - License Fee Recovery
Fact of the Case:
The appellant, a liquor shop licensee, sought a writ of mandamus to prevent the excise department from recovering license fees for days when no liquor was supplied. The High Court summarily rejected the petition, stating that any breach of contract by the government should be addressed elsewhere.
Finding of the Court:
The High Court's rejection was set aside, and the case was directed to be decided on its merits. Correspondence revealed that the State had not insisted on recovering the license fee for days when liquor was not supplied.
Issues: The main issue was whether the rights and obligations arising under a liquor license issued under statutory authority were purely contractual.
Ratio Decidendi: The court found that the High Court erred in summarily rejecting the petition and directed a full consideration of the case on its merits.
Final Decision: The appeal was allowed, and there was no order as to costs.
Judgment
SHAH, J.:- The appellant who is a licensee of a liquor shop applied to the High Court of Madhya Pradesh for a writ of mandamus directing the excise department of the State not to recover license fee for those days in respect of which liquor was not supplied to the appellant. The High Court summarily rejected the petition observing that the supply of liquor to the appellant was under a contract to the Government and "if the Government had committed a breach of the contract the remedy is elsewhere". It cannot, without further investigation, be said that the rights and obligations arising under a licence issued under a statutory authority are purely contractual. In our judgment the High Court was in error in summarily rejecting the petition.
2. We set aside the order of the High Court and direct that the High Court do issue Rule to the State and decide the case on the merits.
3. In this Court the appellant has filed copies of certain correspondence relating to the payment of compensation in respect of those days on which liquor was not supplied. It appears from a perusal of that correspondence that the State had not adopted the attitude that they will insist upon recovering, or retaining the licence fee notwithstanding that they had not supplied the liquor to the liquor shopkeepers.
4. The appeal is allowed. There will be no order as to costs.
Appeal allowed.
For Citation : AIR 1971 SC 128
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